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European banks halt funding to company over deforestation concerns

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Two of Europe’s major banks have agreed to stop financing a controversial Indonesian pulp and paper company after a campaign by Greenpeace. Spanish banking group Banco Santander said it had decided not to continue current funding for Asia Pacific Resources Limited (APRIL), and that any future loans will be conditional on APRIL “implementing sustainability measures that address its involvement with deforestation.” The Dutch lender ABN Amro announced a similar move. A third European bank, Credit Suisse, is also under pressure to stop funding APRIL.

Campaigners say the company has cleared tens of thousands of hectares of rainforests and peat lands in Indonesia in recent years, sparking land conflicts with local communities and threatening endangered species including the orang-utan and Sumatran tiger. In 2012, Santander organised a US $600 million syndicated loan for APRIL that raised money from many different banks, according to Greenpeace. The Spanish bank has directly lent APRIL around US $150 million, while ABN Amro is believed to have loaned the Indonesian company in the region of US $100 million, according to data compiled by the NGO BankTrack.

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