Funding Deforestation


Earth Island Journal  is a recent find in the world of periodicals.  It provides “News of the World Environment” and reports on a variety of assaults on the environment, from human intervention to natural disasters.  (

The Summer, 2017 issue’s cover story is about the “Toxic Footprint of America’s Prisons,” but the article that grabbed my interest, and my $5.00, was “Crisis Among the Palms,” by Jeff Conant.  The subtitle, “How Your Retirement Fund May be Fueling Rainforest Destruction,” supports my longstanding belief that people who have retirement accounts—especially accounts managed by large fund managers—often don’t know where their money is invested or how they are contributing to eco-rape and human rights abuses.

It stands to reason that fund managers, who control large pots of money, look for the most profitable investments.  They may not know or care how the individual companies or governments generate those profits, but even a superficial overview suggests that maximum profits come from squeezing labor and compromising the environment where the companies operate.  Compound this with the fiercely competitive market for the almighty dollar, and the fact that multi-national corporations have many levels of protective shells, as well as local government collusion, and it’s a set-up for disaster.  Foreign investment is notorious for bankrupting and/or corrupting third-world governments and devastating local environments.  (Rosaliene Bacchus’ most recent blog post,   “Guyana ties the knot with ExxonMobil” ( reports on such a possibility with the June, 2017 deal between ExxonMobil and the government of Guyana.)

“Crisis Among the Palms” shows how this strategy works in the palm oil industry, but the same strategy is used in every commodity industry I’ve encountered.  The article gives specific examples in Liberia, Guatemala, and Indonesia, three tropical countries where the palm oil industry has grown up and thrived, consuming millions of acres a year over the past several decades.  Palm oil is now the most widely traded vegetable oil on the planet.

In May, 2015, in Butaw, Liberia, villagers who complained to the CEO of Golden Veroleum (subsidiary of Malaysian multinational Golden Agri Resources) about theft of family lands, grinding poverty, and bare subsistence level wages were brutally beaten and arrested by local police.  Homes were ransacked and looted.

A month later, in northern Guatemala, effluent from ponds on the property of a local palm oil company, REPSA, overflowed into the Pasion River, spilling enough malathion—an organophosphate pesticide–to kill hundreds of thousands of fish, an incident local courts would later call an “ecocide.”  The river has provided the lifeblood of the region that was until recently one of the world’s largest rainforests, now given over to plantations and cattle pasture.

Later that summer, Indonesia’s forests and peatlands burned out of control, forcing hundreds of thousands of people to evacuate to medical centers.  The fires were linked to the country’s expanding palm oil and pulpwood plantations.

Author Conant says “. . .the palm oil industry is a leading cause of rainforest destruction—and a source of both economic dispossession and wage labor for countless people—from the Congo basin to Malaysia to Peru . . .the industry has quickly grown to rely on global financing to fuel its expansion.”  Thus the companies that profit from the exploitation appear more and more on the world’s stock exchanges.

The financing of some of the world’s largest and most notorious palm oil companies comes from well known financial management companies, like Vanguard, Teachers Insurance and Annuity Associate (TIAA), BlackRock, CitiGroup, and California Public Employees’ Retirement System (CalPERS).  “What this means is that IRAs, pension funds, and 401Ks . . . are increasingly investing in an industry that is destroying the world’s last rain forests and impoverishing the people who live there.”

With the exception of Cargill, Archer Daniels Midland, and Unilever, the large palm oil juggernauts are mostly southeast Asian, says Conant.  He notes that the industry—almost unknown in the West ten years ago, is projected to be worth $88 billion by the year 2022.  Its growth was spurred in part by the US FDA ban on trans-fats, with 71 percent of production now going to the food industry, everything from Krispy Kreme donuts to Nestle’s chocolate to PepsiCo’s Frito-Lay snacks.  Sixteen percent of palm oil production goes to biofuels, and 12 percent to the chemicals industry.

Conant says the industry’s growth has coincided with two global trends in finance.  First is the massively increased investment in “emerging economies,” which grew by 30 percent just between 2011 and 2015.  Concurrently, there was a huge increase in “index funds” in which multiple companies are bundled into a fund that spreads risk and follows the fluctuations of the market as a whole. They are sold as low-risk funds. Between 2000 and 2014, money invested in index funds more than quintupled.

The article points out that deforestation causes up to 18 percent of global greenhouse gas emissions, and industrial agriculture drives an additional 13 percent.  A rather typical scenario is that “landowners who sold or otherwise gave up their land to agribusiness companies could be driven deeply into poverty.  In this sense, the palm oil boom has come to replace less environmentally damaging, subsistence livelihoods.  It has brought debt, wealth inequality, and, of course, ecological destruction on a vast scale.  In Indonesia, villagers frequently concede to relinquishing land to corporations because the plantation companies promise them roads, schools, and clinics.  But companies have by and large failed to fulfill the terms of community agreements  . . . .  Farmers often don’t know what they are getting into.  Lack of information and transparency are big problems.  ‘A company often collects the farmers’ land certificates, after which they become laborers on their own land.’”



10 thoughts on “Funding Deforestation

  1. Rosaliene Bacchus

    Thanks for raising this issue, Katharine. Thanks, too, for the referral to my latest blog post.

    Divesting from industries that are harming our ecosystems and wrecking lives is an important step. Avoiding the use of such an ubiquitous product as palm oil would mean cutting processed foods from our diet.

    I believe that real change will only come when we change the way we grow our food.

    1. katharineotto Post author

      I’m all for growing food, and I admire all those people who have left cities to run their own farms. Mono-agriculture is a blight on the planet, but this is a one-step-at-a-time issue. People are waking up, albeit more slowly than I would like.

      I’ve avoided processed food for years. It’s not that hard. Still, I’m shocked at what other people buy in the grocery stores. No wonder Americans are fat, sickly, and broke.

      1. katharineotto Post author

        After my last reply, I realized I still buy pasta, but very little else in boxes, And certainly no pre-washed and pre-cut vegetables and fruits in heavy plastic and clam-shell packages.

  2. Jean-Jacques @ Gypsy Café

    Thank you for sharing this information Katharine. I think the nature of the system makes it very difficult for most city-dwellers to live more ethically. It would take a lot of effort for them and be much more expensive and time-consuming to only buy organic foods – and being city dwellers, it’s not really something they think about constantly. I experienced that when I lived in Dublin. The cost of groceries was so high that I often (perhaps usually) had no choice but to buy some processed foods (I still do today too). The other option was farmer’s markets, but it depended on where you lived in the city to get access to them. I made a point to try and go on Saturdays and get as much as possible organic foodstuffs.

    Here where I am now it’s much easier to buy organic, due to the amount of farmers’ markets across the city – it’s an agricultural country (so you could say that almost the entire country is “one big farm” with a capital city and a few coastal resorts – so people have a different attitude here – it’s still very old-school in many ways, but starting to change fast), so there’s good access to unprocessed foods. All in all when reading about what is happening behind the scenes (with the big corps, gov’s and h-funds) it seems like a losing battle – on an individual level it feels like all we can do is to stay as ethical as possible in our day to day living. In the meantime it seems like a runaway juggernaut.

    I think all of this will only start winding down when the energy crisis starts up:

    A good article here:

    1. katharineotto Post author

      JJ, I know how hard it is to avoid monopolist corporations, because part of their game is to eliminate competition, usually from the little guy. What intrigues me about this article, though, is that it links the exploiters to people’s retirement accounts. Even if they can’t avoid the foods, individuals can avoid investing in the corporations themselves.

      Thanks for your comment. I’ve missed you and wondered where you went.

      1. Jean-Jacques @ Gypsy Café

        Katharine, in fact I’m somewhat burnt out I think – it’s been a hectic month with a lot of things happening. I have been in touch with Autumn and told her I may not be able to comment as often as her rules require. I have some assignment (studying sociology & anthropology) deadlines and also web dev project deadlines, so juggling loads of stuff. Also I was caught up following some political development in S. Africa. Things are going on there which should be headline world news, but its not… (scandal of epic proportions and lost of international involvement, hence the news blackout most probably – there are hundreds of thousand of South Africans living world-wide, so these events won’t stay under wraps indefinitely).

        To come back to you article – yes, I fully agree with you that individuals should take an ethical stand in terms of the corporations they support. I have noticed though that generally speaking few people are prepared to do that anymore and that is not only a shame, but also shameful. And I think in terms of pension funds it must be quite hard to change your fund once you have been contributing for decades (for example) and perhaps most of these funds are investing in dubious places. I don’t have a pension fund, but it would have been a major ethical concern for me. I would have chosen to rather invest elsewhere to have a nest egg one day.

        I think I have become a bit cynical due to the realisation that society at large simply don’t care enough about these issues – but hopefully I’l recover soon and get my MOJO back! 🙂

      2. katharineotto Post author

        JJ, Remember your Mayan prophecies, that we are in an unsettling time, as the fifth world comes into being. I’m tempted to get cynical, too, but people like us need to support each other, with all this darkness around. So many people have lost their way and need people to reassure them that the sun does rise when it’s good and ready to do so.

    1. katharineotto Post author

      Erica, I just read your article and posted a comment. Will be following. It is well researched, with some beautiful animal photos, and some frightening statistics. I would encourage anyone interested in advocating for other life forms on the planet to check it out.


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