Bank Secrets Cracked - 12 December 2007

New report reveals alarming investment practices by financial groups

Today, the financial watchdog Netwerk Vlaanderen NGO (B) launches the report ‘Bank Secrets’. The dossier details the investments by 121 financial groups in companies violating fundamental human rights. The investors channel money to 13 companies selling weapons to dictators, denying people access to land and clean water, co-operating with armed rebel groups and being involved in forced relocations and heavy and irreversible pollution.

International banks involved

121 banks from 24 different countries play a role in the financing of these companies, including banks based in Abu Dhabi, Australia, Belgium, Canada, China, DRC, France, Germany, India, Indonesia, Italy, Japan, Kuwait, Malaysia, Mauritius, The Netherlands, Peru, Singapore, South Africa, Spain, Switzerland, Taiwan, the UK, the US and the multilateral World Bank.

Netwerk Vlaanderen reports that for the period 2003 – 2007, loans add up to a total of US$13 billion. Furthermore, during the period 2004-2007 banks have arranged and underwritten bond issues to a total value of US$ 28.4 billion. During the same period, the companies were assisted in issuing shares to a total value of US$ 14.8 billion.

Investors complicit to human right abuses

Although the human rights abuses are well documented, financiers keep on supporting the involved companies.

The lack of sustainability standards in their investments policies, allows them to channel money to companies like AviChina, which sells military material to China, Burma and Sudan.
Because of violations of human rights in these countries, the European Union decided on an arms embargo. By financing AviChina, investors undermine this embargo.

Other reported investments include the support to mining companies which systematically pollute the environment. The Australian company Emperor Mines, for example, exploits a gold and silver mine in an ecologically and culturally precious area in Papua New Guinea. Emperor Mines dumps monthly 14.000 tons of toxic waste - containing lead, chromium, arsenic, cadmium, nickel and copper - in the local river. Thousands of people depend on the water for fishery and small scale agriculture. This does not stop several major international financial groups from backing the company financially.

These are just some examples of the practices detailed in the report ‘Bank Secrets’. The overall picture is staggering and continues to provoke fierce reactions from bank personnel and clients.

Bank personnel and clients react

In Belgium the report was launched in co-operation with the largest union in the financial sector. Stefaan Decock, spokesperson from the union LBC-NVK/CNE, states: “These kind of investments can no longer be tolerated. We think that financial institutions should take important environmental and human rights norms into consideration in their investment decisions. We continue to work for an ethical bottom line: no money for dictators, serious environmental destruction, controversial arms or violations of labour rights.”

“Investors should not wait until they are found legally responsible for the violations of human rights and serious environmental damage. They should make sure they don’t generate profit from such controversial practices. Financial institutions have a huge leverage power and can contribute to positive change.”, said Inez Louwagie from Netwerk Vlaanderen.

Follow your money around the world at www.banksecrets.be

Spokesperson: Inez Louwagie, Netwerk Vlaanderen NGO, inez@netwerk-vlaanderen.be

Netwerk Vlaanderen is member of BankTrack, an international movement for sustainability in the financial sector. www.banktrack.org

Netwerk Vlaanderen - Brussels, 6 November 2007

International Coalition to Ban Uranium Weapons & Netwerk Vlaanderen. Action at Bank of New York Mellon (Brussels) to oppose investment in Uranium Weapons

New Report 'Risky Business' can be downloaded from http://www.netwerkvlaanderen.be/. Action photos can be downloaded from http://fme.sincerethought.org/

Activists from the Belgian and International Coalitions to Ban Uranium Weapons, Netwerk Vlaanderen and Friends of the Earth today organised a “radioactive buffet” for staff in the entrance hall of the Brussels offices of The Bank of New York Mellon. The buffet was organised to oppose the involvement of the bank in funding the production of controversial depleted uranium weapons. These weapons are both chemically toxic and radioactive, and have caused serious health consequences for both military and civilians.

The radioactive buffet was one of many events taking place around the world to mark the publication of 'Too Risky for Business. Financial Institutions and Uranium Weapons', a report that details the role that 47 international banks support the manufacture of uranium weapons. The report shows the involvement of the Bank of New York Mellon in supporting uranium weapon producers ATK, General Dynamics and GenCorp.

Activists wearing tuxedos and ball gowns distributed “radioactive” food and drinks to the staff of the bank, while musicians played classical music. The action was organised to highlight the consequences of the bank’s investment in the US arms companies ATK, GenCorp, and General Dynamics. These companies are three major producers of uranium weapons, which contain radioactive and chemically toxic depleted uranium.

The dangers of Uranium Weapons
Depleted uranium is a radioactive and chemically toxic waste product from the nuclear industry. It is used in anti-tank weapons and in the armour of tanks. The use of these weapons creates clouds of tiny metal particles that contaminate the battlefield and surrounding environment for millions of years. Scientific research has shown that depleted uranium causes cancer, birth defects, and other serious health problems. These effects have been recorded in both soldiers and civilians, and are evident well after the end of the armed conflict leaving a legacy of disaster..

Towards a ban
There is a growing awareness that these weapons violate the most fundamental human rights. Military trade unions, human rights organisations and the environmental and peace movements are all calling for a world-wide ban on the production of uranium weapons.
In June 2007 Belgium published a law that bans depleted uranium weapons. Belgium became the first country in the world to implement a ban on the manufacture, use, storage, sale, acquisition, supply and transport of uranium weapons. The ban on uranium weapons also raises questions about financial institutions that are contributing to the production of these deadly weapons.

Too risky for Business?
The companies who produce these weapons are readily supplied with capital by large financial groups, investments that make the production of these weapons possible. This is the conclusion of the report 'Too Risky for Business. Financial Institutions and Uranium Weapons.', published today by Netwerk Vlaanderen (B), the International Coalition to Ban Uranium Weapons (ICBUW), and BankTrack.

The research report shows that more than 40 financial institutions are currently investing in producers of uranium weapons. Three US stock market listed companies: Alliant Techsystems, GenCorp and General Dynamics, are supported by financiers from Canada, the US, Japan, Great Britain, France, Germany, Taiwan, Singapore and Italy.

In the period July 2004 – June 2007, these institutions guaranteed credit facilities worth a total of at least 3 billion US $. The financial institutions have also underwritten the issuing of 4.2 billion US $ in bonds and 120 million US $ in shares in these companies. Various financiers also hold significant shareholdings in the producers of uranium weapons.

David Heller, of Friends of the Earth stated: “The civilian and military community calls on investors to act responsibly and put an end to their support for the production of Uranium Weapons. A number of investors have already taken this step. Others will hopefully follow. Governments also have an important role to play here. Just as with a ban on investments in weapons such as anti-personnel mines and cluster munitions, governments can ensure that banks are no longer legally able to invest in producers of uranium weapons.”

Via actions in many countries, the International Coalition to Ban Uranium Weapons calls on the banks mentioned in this report to take a positive step and implement an investment policy that no longer allows this sort of investment.

Contacts:
ICBUW, Willem van den Panhuysen, tel:0032 473 71 75 18, willem@motherearth.org
Netwerk Vlaanderen, Inez Louwagie, tel 0032 498 68 29 40, inez@netwerk-vlaanderen.be, www.netwerkvlaanderen.be/en
Friends of the Earth, David Heller, tel 0032 472 34 24 63, david@motherearth.org, www.motherearth.org
BankTrack, David Barnden, tel 0031 302 33 43 43, david@banktrack.org, www.banktrack.org

The research report “Too Risky for Business. Financial Institutions and Uranium Weapons”, Netwerk Vlaanderen, ICBUW, BankTrack, November 2007 can be downloaded from: www.mymoneyclearconscience.be

Charity Bank comes North with Mission to deliver Sustainability - 16/10/2007

Charities, voluntary groups and community enterprises are being invited to the public launch of Charity Bank’s first regional office, with its mission to transform the future of third sector organisations in Yorkshire and Humber.

The launch of Charity Bank in the North, which will be held at Doncaster Race Course on Friday 9 November, in the presence of Cabinet Office Minister, Ed Miliband, marks a step-change in the way Charity Bank will be working with third sector organisations in the region.

Thanks to support from the regional development agency Yorkshire Forward, and partners in the region, Charity Bank in the North aims to enable third sector organisations to travel up and down a staircase of funding and support services, giving them the ability to develop, grow and prosper long-term.

With Charity Bank generating over £100 million in loan enquiries in 2006 alone, Charity Bank in the North aims to make over £20 million of funding available to the third sector within the Yorkshire and Humber region.

More details of the new programme will be announced at the public launch of Charity Bank in the North and those organisations in the region interested in attending the event in Doncaster on 9 November should contact Emma Ivory on 01732 774040 or via emmaivory@charitybank.org.

For more information on how Charity Bank can offer support to organisations, or how individuals or organisations can support the Bank’s work, visit the website at www.charitybank.org.
Oikocredit now open for UK £ investments - 10/09/07

Oikocredit, a worldwide cooperative based in the Netherlands, can now accept investments from the UK in pounds. Their mission is to promote global justice by challenging people, churches and others to share their resources through socially responsible investments. Oikocredit provides a channel through which people can invest in sustainable work for people in need.

Currently, investments amount to around 5 million Euro in the UK. Oikocredit has worldwide funds of 276 million Euro from its membership of 27,000 people. Today there are more project partners needing finance than funds available, and all of the Oikocredit member capital is utilized. With this fast growing demand for credit for development, particularly microfinance, Oikocredit seeks to attract more investors and setup structures in additional countries.

Patrick Hynes, Oikocredit’s UK representative, has extensive experience in banking, social enterprise and education. He also worked voluntarily for 10 years as a representative and moderator for the Shared Interest organisation in the UK, which has promoted Oikocredit actively in the past, but recently decided to focus exclusively on Fair Trade.

For further information please contact: Patrick Hynes - Oikocredit UK - PO Box 809, Preston, PR3 1TU, Tel: +44(0)1995 602806, Email: uk.so@oikocredit.org
TCX: local currency innovation in developing countries - Oikocredit, Amsterdam, September 4

Oikocredit joins a global partnership of financiers, led by Dutch development bank FMO. This initiative creates a large and innovative fund to develop local currency products in developing countries worldwide. The Currency Exchange Fund N.V. (TCX) will start up with a transaction capacity of US$ 1.2 billion for long-term local currency financing by its investors. The result: drastically reduced default probability, improved business sustainability and a major contribution to the development of local capital markets.

TCX will be launched in Amsterdam tomorrow, in a closing ceremony attended by senior representatives of the eleven participating institutions.*

The technicalities
This fund is created to offer long-term currency and interest rate hedging in (sub)emerging market currencies to international investors. These parties will use these hedges to create and/or increase their local currency denominated product offering to clients in developing countries and emerging markets.

TCX is a unique cooperative effort of a large number of (sub) emerging market investors, enjoying clear benefits of size and scope. The investors joining TCX such as Oikocredit, KfW Bankengruppe, DEG and Confides in the first close will commit in aggregate approximately US$ 300 million in equity. Initial transaction capacity will reach up to US$ 1.2 billion, increasing with expected further commitments in the short term.

TCX investors will pay special attention to the Sub-Sahara Africa region, and to the microfinance, housing and infrastructure sectors.

Addressing Market Failure
Numerous financial crises attest to the real existence of the currency risk to entrepreneurs and their local banks. Well-known hyper-devaluations in Asia, Turkey, Russia and Argentina in the late 1990s and early 2000s illustrate the devastating effects that unstable financial systems can have on the local and regional economy. Many companies found themselves unable to service suddenly very expensive dollar and euro debt after such a crisis. This instability also has a profound effect on the economy and society as a whole: it can take a developing country up to 10 years to recover from such a set back.

A solution to this problem has now been found by this joint initiative. TCX assumes the currency risks previously transferred by international financiers to the local entrepreneurs and their local banks, and by doing so improves their business sustainability and reduces defaults. The upsides are profound to both financier and companies alike. Companies are no longer exposed to currency risks that they cannot manage and systemic risk becomes limited. At the same time, financiers such as Oikocredit have a much broader commercial market to address with long-term local currency products.

Spread the risk
TCX research proves that the risk of investing in a spread portfolio including a large number of currencies and interest rates, diversified across all regions in the developing world, is only 25% of the risk of investing in any single currency. In other words: true global risk diversification works much better than regional diversification, especially under very stressed market circumstances. By pooling local currency risk, TCX is the first to introduce the concept of a well diversified portfolio of developing country currencies.

Competition needed
The market for local currency financing is large, and TCX will not be able to provide for it alone. It is expected that the initiative will spark interest from others who will follow suit rapidly. Local currency hedging mechanisms such as TCX have the potential to create very positive economic impact in developing countries. Furthermore, TCX’s substantial hedging requirements will have a substantial effect development of local capital markets.

For Oikocredit this investment, as well as being an investment in a viable development oriented institution, will make it possible to extend the number of loans in local currencies as Oikocredit will be able to hedge part of its local currency risks through TCX.
 

Triodos incorporates FACET consultancy in the Triodos Group - Zeist, 14 June 2007 – Triodos takes a majority importance in consultancy company FACET.

From 14 June 2007, the services of FACET will be continued under the name Triodos-Facet.
FACET Consultancy has been specialised for more than 15 years in coaching and advising entrepreneurs and enterprises in developing countries.
Triodos was co-founder of FACET. They both have been working together for many years.
Advice and service to microfinance institutions, banks for small and medium enterprises, fair trade, local entrepreneurs and development projects have a growing demand for an inclusive approach. Triodos-Facet completes financial and banking knowledge with advice in non-financial areas with a broad, incorporated vision on sustainable entrepreneurship.

Klaas Molenaar, general director of Triodos-Facet: ‘Sustainable entrepreneurship will not only be an issue in The Netherlands or in Europe, but more and more become a challenge in developing countries. For already more than 15 years, we have an active role as an advisor in that part of the world where we see a growing interest in the practical interpretation of sustainability everyday.’

Molenaar: ‘Not only good financial and banking services are important for SME-entrepreneurs in developing countries. Effective and professional company advice is a firm aspect for their success. Whereas financial institutions make more and more requirements to these entrepreneurs and their business plans, they also must establish themselves more enterprising on the market. They are in search of new forms of advice and coaching; and here in the West we can still learn much of the knowledge acquired in the South. To make social renewal possible in society, there’s a need for strong entrepreneurship supported by experienced SME consultants and coaches. This is what Triodos-Facet has to offer.’

Peter Blom, Chairman of the Executive Board of the Triodos Bank: ‘Worldwide, sustainable business and entrepreneurship are growing from being a small concern to a big issue. Triodos Bank endeavours the development of an integrated concept of Banking on Values. As a consequence, we are not only asked to finance sustainable enterprises and projects, but also to advice and coach them. That on itself is a complete profession. That’s the profession Facet understands well and for this reason Facet is a much appreciated contribution to our sustainable activities”.

Sustainable banking
Triodos Bank is an independent bank, which stands for sustainability and transparency in banking. The bank, founded in The Netherlands in 1980, is not exclusively interested in a good financial return in the short term, but values also an interest for people and planet in the conviction that they reinforce each other profitable in the long term. Triodos Bank stood at the cradle of the successful tax stimulation regulations for green, social-ethical and cultural projects. Triodos bank launched the first green fund and culture fund of the Netherlands and is an authority in the field of microfinance in developing countries among others by means of Triodos Fair Share Fund.

Triodos Bank has 124,000 customers and 4,000 loans to sustainable enterprises and projects in portfolio. Triodos Bank is an international bank with branches in The Netherlands, Belgium, the United Kingdom, and Spain and an agency in Germany. The bank has 350 employees.

With more than 30 advisors Triodos-Facet works worldwide in among others in Central America, Tanzania, Madagascar, and Europe. Triodos-Facet has built up a network of sister companies in Guatemala, Indonesia and The Netherlands.
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For more information or an interview appointment with Klaas Molenaar or Peter Blom you can contact: Thomas Steiner, telephone +31 30 693 65 20 (direct) or +31 6 534 888 13 (mobile)
E-mail: thomas.steiner@triodos.nl, www.triodos.nl
 

YORKSHIRE FORWARD INVESTS £10 MILLION IN REGIONAL BANK FOR THE THIRD SECTOR - Charity Bank, UK, 20 June 2007

Yorkshire Forward has invested £10 million in a regional charity bank to support third sector organisations in Yorkshire and Humber.

This investment in a ‘regional’ office of Charity Bank, a national organisation that aims to support social enterprise, is the first of its kind by a Regional Development Agency.
Unique in being a registered general charity and an authorised bank, Charity Bank was launched five years ago with the aim of creating a sustainable source of loan funds for charities and social enterprises that commercial lenders generally can’t or won’t assist.

Yorkshire Forward’s investment will improve the resource base for local community enterprise by providing access to loan finance. It will also help to counter the effects of the new European Funding programme, which will significantly reduce the level of funding available for community economic development.
The money will be used as investment capital that will lever in other investment from the private sector to provide affordable loans for enterprising charities, community organisations and social enterprises operating within the third sector.

Thea Stein, Executive Director of Economic Inclusion for Yorkshire Forward said:
“This is a ground breaking project for Yorkshire Forward that will ensure that there are financial instruments in place to aid third sector organisations away from grant dependency and into sustainable self sufficiency.
“We will be working with Regional Development Agencies in other regions to help them to develop their own additional resources for third sector organisations, and make a similar system of funding available across the country.”

Malcolm Hayday, Chief Executive of Charity Bank said:
“We welcome the innovative lead that Yorkshire Forward has taken to open up access to finance for organisations throughout the region, and which adds another element to the ‘funding mosaic’, enabling these organisations to move between investment readiness, small grants support, longer-term investment and loan finance.
“We are looking forward to helping transform the opportunities for community groups and social enterprises wherever they work and to making the Charity Bank in the North, a permanent feature of the northern financial sector. “

It is expected that the Leeds office of Charity Bank, its first ever regional headquarters, will be open for business in the autumn, but third sector organisations in Yorkshire and Humber wanting further information should contact Charity Bank on +44 (0)1732 774040.

Media contact for Charity Bank:
Sarah Graham on +44 (0)7775 568201 / sgraham@charitybank.org
Or Mark Howland on +44 (0)1732 774040, or at mhowland@charitybank.org

Oikocredit, the Netherlands - 15 June 2007

Oikocredit  has just passed the mark of 300 million euros approved with more than 600 project partners.
It is quite unique for a financial organisation such as Oikocredit to have nearly one third of the total amount outstanding in local currency loans. By offering these types of loans Oikocredit carries the risk of exchange rate fluctuations, rather than the project partners who earn their income in local currency. This enables them to focus on their enterprises rather than worry about currency devaluation.

Read more: www.oikocredit.org

CALL FOR UNCLAIMED ASSETS TO BE RELEASED NOW TO FUND CHARITIES - Charity Bank, UK, 4 June 2007

Good causes could already be benefiting from the millions of pounds lying unclaimed in bank accounts while the wrangling over the funds continues, the UK’s first not-for-profit bank told a committee of MPs today (Tuesday 15 May).
Charity Bank told the Treasury Select Committee inquiry into the definition, identification and collection of unclaimed assets within the financial system that while it supports the proposal to create a buffer fund for the unclaimed assets, this needs to be set up quickly and administered independently on behalf of good causes.
Speaking at the evidence session the bank’s Chief Executive, Malcolm Hayday, said that the overriding priority must be to reunite owners with their assets.
However, he added that rather than waiting for months or even years for the sums to be determined and distributed, the targeted funds could be working now, on a revolving basis, to build stronger communities.

Hayday also highlighted the distinction between unclaimed assets that may ultimately be given away, and funds that may need to be repaid – but that could still work for society’s benefit.

Said Hayday: “The money being held back to meet claims, and which is not needed to generate operating income for the buffer fund, could be placed on deposit with community development finance intermediaries, such as Charity Bank and others. This would both strengthen those community ‘banks’ and enable them to increase their lending to good causes.”
And he added that these funds could also be used to kick-start the proposed social investment bank, ahead of any distribution, by lending it funds to begin its work.
In its evidence to the Select Committee, Charity Bank, the only community finance organisation invited to give evidence to the enquiry, outlined proposals for a panel of Commissioners, drawn from across the business, charity, academia and civil service sectors, and recruited to determine how the money is distributed and what should be retained, if any, to meet future claims.

Says Hayday: “No-one doubts that charities and voluntary sector organisations provide an effective means of reinvesting unclaimed assets back into society. But they can benefit even more if we don’t confine our thinking purely to the money that can be given away.
"This ‘social investment bank’ style approach reflects the fact there is an emerging market of local community organisations that are increasingly looking outside of traditional methods of grant-aid or gift-giving and are waking up to the opportunities available to them through the community finance sector.”

The not-for-profit bank additionally recommended that the scheme should be extended to all financial institutions and ultimately to governmental and public bodies and companies that may hold unclaimed assets.

And it proposed that as the money is not owned by Government or the banks, but by the public, the programme should be subject to the scrutiny of the people through Parliament.

CHARITY BANK ANNOUNCES MAJOR GROWTH PLANS FOR NEXT FIVE YEARS - 17 May 2007

The UK’s only not-for-profit bank today announced ambitious plans to more than double in size by 2012.

Charity Bank is undertaking a major capital initiative in order to deliver a sustainable funding regime for social enterprises and voluntary organisations, with the aim of instilling confidence and freeing them to concentrate on their mission-related activities.

Speaking at the organisation’s AGM, held at one of the Bank’s borrowers, the Attlee Youth and Community Centre in London, Chief Executive Malcolm Hayday outlined some of the bank’s successes of the previous 12 months, including:

An overall growth rate of just under 5% during 2006
An increase in net lending of 50% in 2006, to £16.4 million
Even stronger growth in approved facilities which totalled almost £15m during the year
An unprecedented increase in loan enquiries, exceeding £100m for the first time
Repayment of more than 40% of the previous year’s loan book in 2006
Said Hayday: “Our significant increase in lending last year shows that borrowing is clearly becoming a mainstream source of finance for many charities and social enterprises. This reflects a broader change in the way that they manage their finances and underlines why we need to expand to meet this need.
We will continue to educate our potential stakeholders – charities, depositors and investors – that borrowing can play a fundamental part in good financial management. But we also need to demonstrate to grant makers and gift givers that we are worth investing in because we can make their money work harder and go further.”

Added Hayday: “Additionally, social enterprises need to educate people that increasingly, no one funder is going to be the whole answer to meeting the needs of good causes, but that together we can provide a holistic solution, with organisations like Charity Bank bringing together funding mixes to meet that need.”

Hayday also unveiled a re-organisation of the Bank’s structure with the development of a more widespread regional network, to create closer on-the-ground working relationships with loan applicants, investors, depositors and other stakeholders.

And he outlined Charity Bank’s 12-step road map towards a comprehensive reporting system, working in partnership with Accountability.

Signalling its commitment to implementing a system of measuring the social outcomes and impact of its activities, the organisation has undertaken a wide consultation process with its stakeholders and is in the process of developing a values statement. This will form the basis of the social reporting system and further details will be announced next year.