Money Laundering, LIBOR Banking Scandal, Destruction of Indigenous Lands
Multinational bank HSBC is known for scandals as much as for global banking.
In the summer of 2012 the British multinational bank HSBC was exposed for laundering money for drug cartels, Iran, and moving money for an al-Qaida linked Saudi bank. A report presented to the Senate’s Permanent Subcommittee on Investigation in July 2012 detailed HSBC subsidiaries transporting billions of dollars in armored vehicles, clearing suspicious checks, and assisting drug cartels in buying planes through Cayman Island accounts. At the hearing David Bagley, HSBC’s head of compliance, resigned in front of the committee stating that, “Despite the best efforts and intentions of many dedicated professionals, HSBC has fallen short of our own expectations and the expectations of our regulators.” In the wake of the investigation and 335-page report HSBC was fined $1.9 billion.
In July 2012 the news broke that HSBC, along with RBS, JP Morgan, Deutsche Bank and other banks were involved with manipulating the London Interbank Offered Rate (LIBOR)giving off a false impression of credit and providing them with a hefty profit. The European Commission launched an investigation into the claims and now the banks have begun to receive fines for their role in the theft. As of this article eight banks have been fined a total of $2.3 billion dollars, including American banks CitiGroup $95 million and JP Morgan for $107 million. HSBC has not been fined yet but may face fines soon.
Funding violent drug cartels, and financial theft are not the only complaints lodged against HSBC. HSBC is now finding itself the enemy of environmental and indigenous rights activists. The Rainforest Action Network has detailed how an HSBC financed company is forcing the development of oil palms on the lands of indigenous communities in Papua New Guinea.
HSBC-financed palm oil company Kuala Lumpur Kepong (KLK) recently claimed ownership of three land development licenses within traditional indigenous lands. KLK brought in palm oil seedlings and is believed to have begun planting seeds without permission. KLK has been accused of using slave labor in Borneo and child plantations in Sumatra.
Although community representatives filed a complaint with the Roundtable on Sustainable Palm Oil (RSPO), the organization charged with overseeing land development within the Palm Oil Industry, the Collingwood Bay case has been largely ignored by the RSPO. It should be noted that HSBC sits on the board of the RSPO. Critics accuse the RSPO of being a mere formality that attempts to legitimize the activities of palm oil firms and their financiers.
The people of Collingwood Bay have responded to the actions of KLK and HSBC with global calls for support. Adelbert Gangai, representative of the over 7,000 people from 326 clans in 22 villages, stated that, “(We) have been marginalized and become slaves on their own land. We do not wish this for the people of Collingwood Bay.”
The Environmental Investigation Agency (EIA) released a report,Banking on Extinction, that found HSBC leading the financing of palm oil firms, and the development of indigenous lands. HSBC lent $470 million to palm oil company Triputra Agro. The company has moved forward with plans to clear forest inhabited by endangered gibbons and other species. A rescue mission for gibbons found the animals close to death from starvation believed to be attributed to the destruction of their natural habitat, in Borneo. According to HSBC’s own forest policy they are forbidden from funding activities that destroy “high conservation value areas”.
As the EIA forests spokesman Jago Wadley said: “HSBC’s 60 million customers around the world would be surprised and appalled to learn that such a high-profile and trusted brand is profiting from large-scale deforestation even as it projects a wholesome public image of sustainability.”
Make no mistake, HSBC is not the only criminal financial institution still doing business. These firms have become too big to fail and too big to jail. Banking institutions bankroll governments and finance corporations around the world with ease. Their relationships are further blurred by owning Non-Governmental Organizations (NGOs) and sitting on the boards of various watchdog agencies. As long as there is an oligarchical, corporatist state existing, the people will continue to be robbed, and mistreated.
As individuals we can choose to take actions that will free us in our daily lives and begin limiting the power of these financial institutions that continue to wreak havoc. Stop using the banks and watch them fail. Invest in your community and cut ties with the big banks. It sounds simple because it is. We have the power to choose what we do with our money and how much we let our desire for goods override our ability to create a more free, compassionate, connected world.
Derrick Broze is an investigative journalist, community activist, gardener and promoter from Houston, Texas. He is the co-founder of The Houston Free Thinkers, and co-host of Free Thinker Radio. Broze also hosts and produces a weekly podcast under the name the Conscious Resistance Live. His writing can be found on TheConsciousResistance.com, The Liberty Beat, Activist Post, and other independent media sources.