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ING bank dumps divisive 1.7 billion paper mill project

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Dodgy deals
By CEDHA | Amsterdam, Netherlands, Apr 13 2006

Dutch banking giant ING announced in a letter to Friends of the Earth International, CEDHA and  BankTrack that it is pulling out of a divisive venture opposed by environmentalists and local communities in Uruguay and Argentina.
 
The ING Group wrote in an April 12 letter that its participation in the 1.7 billion USD controversial paper mill project of Finnish company Botnia in Uruguay "is no longer under consideration".
 
The ING Group had an advisory role to the company and was to arrange a  USD 480 million loan package from private banks for the project. The  paper mill has been strongly criticized in Uruguay and Argentina for its severe negative environmental impacts.
 
Botnia has already started to build a paper mill on the Uruguay river, at the border with Argentina. The project will have strong environmental impacts as it will pollute air and water and contribute to the increase in damaging monoculture plantations.
 
 The project has led to hot protests in both countries. Activists built roadblocks on bridges across the river linking the two countries. The project also brought relations between the governments of Argentina and Uruguay to a breaking point, with both governments indicating that they want to bring the case to the International Court of Justice in the Hague for violation of an international treaty governing the Uruguay river.
 
Friends of the Earth International, Center for Human Rights and Environment (CEDHA, from Argentina) and BankTrack told ING that they were going to inform the ING shareholders meeting on April 25, 2006 about the negative impacts of the project.
 
Just two weeks before the ING shareholders meeting, ING informed the three organizations in an April 12 letter that "ING´s advisory and coordinating role has been concluded ... and further participation in the process - whereby funds would be made available to the project - is no longer under consideration".
 
According to Daniel Taillant from CEDHA "This decision is another serious blow for Botnia. Recently the International Finance Corporation, the private arm of the World Bank, announced that it would postpone consideration of loans to the paper mill project until new identified shortcomings of the environmental and social impact studies could be addressed".
 
"We are pleased to see that ING has decided not to finance this controversial project. The paper mill constitutes a clear violation of the Equator Principles for private investments which ING signed on to," according to Paul de Clerck of Friends of the Earth International.
 
"The paper mill is exactly the sort of project that should not pass the Equator Principles test. At a time when major banks debate a revision of the Equator Principles it is a very welcome signal that ING took its social and environmental responsibilities seriously" said Johan Frijns, coordinator of BankTrack.

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contact

Jorge Daniel Taillant, CEDHA, Ph: + 54 9 351 625 3290, E-mail: jdtaillant@cedha.org.ar Paul de Clerck, FoE International, Ph: + 32 2 5426107, E-mail: paul@milieudefensie.nl Johan Frijns, BankTrack, Ph: + 31 6 12421667, E-mail: coord@banktrack.org

CEDHA Website

ING
ING (an abbreviation of Internationale Nederlanden Groep) is a Netherlands based international financial services company and one of the world's largest savings banks. ING…
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