The HSBC bank has come under fire from environmental and indigenous groups for its involvement in the public listing of Malaysian timber company Samling Group, which they claim is a major culprit of global forest destruction.

Global Witness, an advocacy group that investigates extractive industries and their impact on the environment and human rights, said HSBC's coordination of Samling's stock exchange listing in Hong Kong appeared to be violating its own forest sector guidelines.

"While HSBC is planting trees to reward its retail customers for requesting online statements, Samling is cutting them down," said Global Witness campaigner Anthea Lawson in a statement today.

"By helping Samling to raise a war-chest for new logging projects, HSBC is turning its own environmental commitments into meaningless greenwash," she added.

Official trading in Hong Kong of Samling shares is set for March 7, from which the timber company is expecting to raise US$280 million that will be used to expand and repay its debts.

International campaign

Groups had kicked off an international campaign on Feb 23 against the public listing, citing fears that the funds raised would serve to expand logging activities that are already the subject of controversy and protests.

The campaign was launched with a march by the groups to the headquarters of another bank coordinating Samling's public listing, Credit Suisse in Zurich, Switzerland.

Citing HSBC's 2004 'Forest Land and Forest Products Sector Guideline', Global Witness said HSBC had declared it will not provide facilities and other forms of financial assistance, including in debt and equity capital markets activities and advisory roles, in respect of commercial logging operations in:

- primary tropical moist forest

- high conservation value forest

- or logging operations that are in violation of local or national laws in respect of illegal logging.

Terminate relationship

Global Witness noted, however, that logging primary tropical forest "is precisely what Samling and its related companies have done for years in Cambodia, Malaysia, Guyana and Papua New Guinea."

"In Sarawak, Samling is one of the companies logging the last remaining areas of primary forest," said the group, which also cited the on-going dispute between the Penan community in Sarawak and Samling over logging concessions.

Global Witness also noted that in January 2007, a Samling subsidiary operating in Guyana had its FSC certification suspended after an independent audit found 'systematic major non-conformities' with FSC requirements.

Global Witness said this went against HSBC's written policy of preferring to deal with clients in the forestry sector who are operating managed forests certified by the Forest Stewardship Council (FSC), or the equivalent FSC recognised standard.

"HSBC's association with Samling makes a mockery of its forest policy and commitments on climate change. HSBC must terminate its relationship with Samling with immediate effect, and consider carefully what to do with the profits raised from this listing," said Lawson.