Benchmarking credit policies of international banks Track p. ii - Mind the Gap BankTrack Boothstraat 1c 3512 BT Utrecht Netherlands T: +31-30-2334343 E: [email protected] Track W: www.banktrack.org BANK Mind the Gap – p. iii Benchmarking credit policies of international banks December 2007 p. iv - Mind the Gap Content Acknowledgements ............................................................................... vii Summary ........................................................................................ ix 1. Introduction.................................................................... 14 2. Objectives and methodology ........................................... 16 2.1 Objectives...................................................................................16 2.2 General description of methodology................................................16 2.3 Selection of banks........................................................................17 2.4 Scope of the study .......................................................................19 2.5 Benchmarking the content of credit policies.....................................20 2.6 Benchmarking transparency & accountability ...................................22 2.7 Implementation cases...................................................................22 2.8 Bank profiles and comments by banks ............................................23 2.9 Conclusion ..................................................................................23 3. Sector Policies................................................................. 24 3.1 Agriculture ..................................................................................24 3.2 Dams .........................................................................................32 3.3 Fisheries .....................................................................................36 3.4 Forestry ......................................................................................41 3.5 Military industry and arms trade ....................................................49 3.6 Mining ........................................................................................55 3.7 Oil and Gas .................................................................................62 4. Issue policies .................................................................. 68 4.1 Biodiversity .................................................................................68 4.2 Climate change............................................................................73 4.3 Human Rights..............................................................................80 4.4 Indigenous Peoples ......................................................................85 4.5 Labour........................................................................................90 4.6 Taxation .....................................................................................95 4.7 Toxics ...................................................................................... 100 5. Transparency and accountability................................... 105 5.1 Why transparency and accountability are important........................ 105 5.2 Application to the banking sector ................................................. 106 5.3 Institutional transparency ........................................................... 107 5.4 Deal transparency ...................................................................... 109 5.5 Institutional accountability .......................................................... 111 5.6 Deal accountability ..................................................................... 113 Mind the Gap – p. v 6. Dodgy deals .................................................................. 116 6.1 Introduction .............................................................................. 116 6.2 Aracruz..................................................................................... 116 6.3 Asia Pulp & Paper....................................................................... 117 6.4 Baku-Tbilisi-Ceyhan pipeline........................................................ 117 6.5 Belene ...................................................................................... 118 6.6 Botnia....................................................................................... 118 6.7 Camisea natural gas project ........................................................ 119 6.8 China Datang ............................................................................ 119 6.9 Cluster munitions producers ........................................................ 120 6.10 CNPC in Sudan .......................................................................... 121 6.11 Dynegy..................................................................................... 122 6.12 Freeport McMoran ...................................................................... 122 6.13 Gunns....................................................................................... 123 6.14 Ilisu dam .................................................................................. 124 6.15 Kashagan.................................................................................. 124 6.16 Kayelekera ................................................................................ 125 6.17 Lafayette Mining ........................................................................ 125 6.18 Mountain top removal mining ...................................................... 126 6.19 Mud volcano in Sidoarjo.............................................................. 127 6.20 Nam Theun 2............................................................................. 128 6.21 National Hydroelectric Power Corporation- NHPC............................ 129 6.22 Rio Madeira dams ...................................................................... 130 6.23 Rosia Montana ........................................................................... 130 6.24 Sakhalin 2................................................................................. 131 6.25 Samling .................................................................................... 132 6.26 Sinopec in Burma....................................................................... 132 6.27 Turkmen Central Bank accounts................................................... 133 6.28 Uranium weapon producers ......................................................... 133 6.29 Vedanta Resources..................................................................... 134 6.30 Wal-Mart Stores......................................................................... 135 6.31 Wilmar International................................................................... 136 7. Bank Profiles................................................................. 138 7.1 Introduction .............................................................................. 138 7.2 ABN AMRO ................................................................................ 141 7.3 ANZ.......................................................................................... 144 7.4 Banco Bradesco ......................................................................... 146 7.5 Banco do Brasil.......................................................................... 148 7.6 Banco Itaú ................................................................................ 150 7.7 Bank Mandiri ............................................................................. 152 7.8 Bank of America......................................................................... 153 7.9 Bank of China ............................................................................ 155 7.10 Barclays.................................................................................... 156 7.11 BBVA........................................................................................ 159 7.12 BNP Paribas............................................................................... 161 7.13 China Construction Bank ............................................................. 163 7.14 Citi........................................................................................... 164 7.15 Crédit Agricole / Calyon .............................................................. 166 p. vi - Mind the Gap 7.16 Credit Suisse ............................................................................. 168 7.17 Deutsche Bank .......................................................................... 170 7.18 Dexia........................................................................................ 172 7.19 Fortis........................................................................................ 174 7.20 Goldman Sachs.......................................................................... 176 7.21 HSBC........................................................................................ 178 7.22 Industrial and Commercial Bank of China ...................................... 180 7.23 ING .......................................................................................... 181 7.24 Intesa Sanpaolo......................................................................... 184 7.25 JPMorgan Chase......................................................................... 186 7.26 KBC.......................................................................................... 188 7.27 Merrill Lynch.............................................................................