The Norwegian Government Pension Fund Global has sold its stakes in WTK Holdings Bhd and Ta Ann Holdings Bhd due to the severe environmental damage contributed by their logging operations in Borneo. Sources: Free Malaysia Today, Mongabay.com
The Norwegian Government Pension Fund Global (GPFG), Norway’s US$760 billion pension fund and the world’s largest sovereign wealth fund, has divested interests from WTK Holdings Berhad and Ta Ann Holdings Berhad, two Malaysian companies with extensive logging operations and timber plantations.
According to the environmental science and conservation news site – Mongabay.com the decision was based on recommendations from the fund’s Ethics Council.
Investigations into the operations of these two companies found unacceptable risk of large-scale forest destruction, non-compliance with environmental laws and poor forest management practices.
In the case of WTK, the Council found evidence of logging in breach of regulations outside concession boundaries, in buffer zones along river banks and roads, and on steep slopes.
The Council added that destructive WTK logging operations inside primary forests in the ‘Heart of Borneo’ may have contributed to the log-jam disaster that made international headlines in 2010, when a 50 kilometre stretch of the Rajang river was blocked by logs.
“We find that WTK does little to reduce the environmental damage associated with its forest operations,” the Council stated in its report.
Instances of shocking forest destruction in the ‘Heart of Borneo’ including re-entry logging without required Environmental Impact Assessments, was documented by the Council for Ta Ann’s operations.
It said that Ta Ann’s measures to limit environmental damage, which include a partnership with WWF, are falling short.
“Given that the conversion of tropical forests involves the complete, irreversible alteration of affected ecosystems, the Council has concluded that measures implemented by Ta Ann to mitigate the adverse effects are insufficient to secure a material reduction in the risk of severe environmental damage now and in the future,” said the report.
Ta Ann, linked to Sarawak Chief Minister Taib Mahmud, was previously embroiled in controversy in its involvement with the Tasmanian timber industry.
Mongabay.com said that this move comes seven months after GPFG disclosed selling off and reducing its stakes in palm oil companies in Indonesia and Malaysia, including Astra International, Golden Agri-Resorces, Indofood Agri Resources, Kuala Lumpur Kepong, Ta Ann Holdings, United Plantations and Wilmar International.
