Date: August 13 2012
WESTPAC has been revealed as the guarantor of a controversial new project to log thousands of acres of pristine rainforest in the Solomon Islands, despite saying it is winding back financial support to the nation's logging industry.
The logging area includes rare swamp rainforest that has previously been the scene of violent clashes involving logging interests and locals that left six women injured.
Westpac's association with the project has infuriated environmentalists and tribal elders who are trying to block the operation that involves logging about 1600 hectares of rainforest on tiny island of Vella Lavella.
The plan was revealed as the Australian Greens have called for the bank to be stripped of a prestigious pro-environment award over long term financing of logging industry in the islands.
Westpac has denied backing illegal logging and said it had reduced loans to loggers from 35 per cent to 9 per cent in the islands since 2009.
The Herald has obtained a harvest plan dated in May listing the bank as guarantor for loggers to log about 1760 hectares of forest.
The plan says the Bolopoe Corporation Community Company Ltd (BCCCL) has signed an agreement with foreign owned logging contractor Middle Island Investment Pty Ltd to harvest 24,000 cubic metres of trees on the island.
BCCCL which holds the timber licence for the area, has a bank guarantee with Westpac for Solomon Islands dollars 250,000 ($33,634) - the amount described as a performance bond, says the harvest plan.
Westpac rejects any problems. A spokesman said Westpac understands the plan complies with forestry licensing requirements, is formally approved by the Forestry Department in consultation with the community, and will be overseen by a district forestry officer.
''Our intention is to continue to reduce our lending to the forestry industry in the Solomon Islands. However, the industry is the largest portion of the country's economy and, as a consequence, we are undertaking this reduction over time and in a socially responsible way,'' he said.
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