Economy & Trade, Environment, Europe, Financial Crisis, Headlines, Human Rights

ECONOMY: Don’t Bank On Them

David Cronin

BRUSSELS, Nov 18 2008 (IPS) - Public confidence in Belgian banks has eroded considerably over the past few months. A series of multi-billion euro rescue plans, reports of lavish executive bonuses and investigations into whether shareholders were misled about solvency levels have fuelled fears that the savings of the hard-pressed ordinary citizen are anything but safe.

Less noticed, though arguably more disturbing, are revelations that the country’s banks invest in projects that damage the environment and abuse elementary human rights.

By visiting the ‘Bank Secrets’ website (www.bankgeheimen.be), savers can monitor what is done with the money they lodge in their accounts. It says that there is a “very high” chance that Fortis, Citibank and ING invest in harmful projects, and a “high” risk that Dexia and KBC do.

Netwerk Vlaanderen, the Flemish human rights organisation which set up the website, has used four main criteria to assess projects that banks finance: if they involve the manufacture of weapons; if they respect the employment standards recommended by the International Labour Organisation; if they are ecologically destructive and; if they involve cooperation with repressive regimes.

Netwerk campaigner Matthias Bienstman says that the financial crisis presents a “real opportunity for change” in the investment policies of banks, given that the bailouts they have received from the exchequer should make them more responsive to public concerns.

Some positive developments have occurred in recent years. After a Netwerk report was published in 2007 detailing finance given to the production of cluster bombs – weapons that cause horrific injuries by literally slicing their victims’ limbs off – guarantees were given by the five largest Belgian banks that they would cease investing in this activity. The federal parliament also approved a law forbidding investment in cluster bombs, which most countries have subsequently agreed to ban under an international agreement reached in Dublin, Ireland, earlier this year.

Yet the case of Fortis illustrates that there are huge barriers which still have to be overcome before proper ethical investment policies can be introduced. Among the shareholdings held by the financial services giant are a 320 million dollars stake in Total, the energy company that has signed agreements with the brutal military junta in Burma to exploit the Yadana gasfield. It has also given loans to a mining company alleged to have provided transport to Congolese troops accused of vicious attacks on civilians, and to European weapons manufacturers that have equipped combat helicopters destined for Burma, Nepal and Sudan.

Vincent Vanwijnsberghe, a spokesman for Fortis, said the bank “takes its responsibility to society very seriously.” It is particularly committed to tackling climate change and poverty and “we have made significant progress in implementing initiatives reflecting these priorities,” he added. But he said it is “too early” to say if any policy changes will be introduced as a result of the 11.2 billion euros (14.1 billion dollars) capital injection it secured from the governments of Belgium, Luxembourg and the Netherlands in September.

According to Netwerk Vlaanderen’s analysis, the most ethically sound bank operating in Belgium is a small one named Triodos. Formed in the Netherlands in 1980, it has a policy of only providing money for artistic and cultural projects or those that bring a demonstrable benefit to society and the environment. Its loans range in scale from 50,000 euros to small theatres to 25 million euros for renewable energy schemes. It refuses to give any loans to arms companies or to firms that use child labour or have a track record of disregarding ecological standards.

Triodos is probably the only financial institution here that can genuinely claim to be doing well out of the economic crisis. During October, it attracted about a thousand new customers – a big number given that it has only 30,000 account holders in Belgium.

Olivier Marquet, Brussels director with Triodos, says that while the bank placed advertisements in newspapers recently to explain the merits of ethical investment, it normally adopts a low-key approach to marketing. “I strongly believe in the power of mouth-to-mouth publicity,” he says. “Our new clients are mainly people who have been thinking for a long time about transferring their account to Triodos. They are no cherry pickers. They were interested in what we stood for and needed the very last motivation to switch from their existing bank.”

Marquet contends that it would be “a scandal” if mainstream banks do not undertake a fundamental rethink of their investment policies. “I don’t see Triodos as a model but we can provide interesting answers about transparency and investing in the real economy.”