Harmful investments by Royal Bank of Scotland June 2009
Loans In February 2007, Royal Bank of Scotland participated for the amount of € 16 million in a € 767 million loan to CNPC, the controlling shareholder of PetroChina. The loan funded CNPC’s further investments in PetroKazakhstan. The Chinese oil company Petrochina operates the majority of Sudan’s oil industry and is also active in Burma. Sudan and Burma are highly reliant on foreign direct investment to fund its military and finance internal repression. In July 2005, Royal Bank of Scotland, incl. ABN Amro Bank, participated for the sum of € 290 million in a € 3 billion revolving credit to EADS. In November 2005, Royal Bank of Scotland participated in a € 175.5 million 14 ¾ years project financing for Eurocopter, a fully-owned subsidiary of EADS for the NH90 project, for the amount of est. € 15 million. EADS, the second largest European arms producer, is involved in the production of nuclear weapons. In March 2007, Royal Bank of Scotland participated for € 34 million in a € 1.1 billion revolving credit and for € 227 million in a € 7.5 billion loan to Freeport McMoran. Freeport releases 230,000 tonnes of polluted rubble into the local river system each day. Opponents of the mine are treated harshly by the military forces bribed by the company. The HidroAysén hydropower project is a joint venture between the Chilean companies Colbún and Endesa Chila. In May 2006, ABN Amro, part of Royal Bank of Scotland, participated in a US$ 320 million loan to Colbún. In December 2006, ABN Amro, part of Royal Bank of Scotland, participated for a sum of € 38 million in a € 152 million loan to Endesa Chile, to be used for general company purposes. In August 2008, ABN Amro Bank, part of Royal Bank of Scotland, participated in a € 267 million loan to Colbún for an amount of € 30 million. At the end of 2008, Endesa Chile had long-term debt of € 15 million outstanding with Royal Bank of Scotland (incl. ABN Amro Bank). The HydroAysén project plans to construct 5 hydroelectric centers with dams which will displace families, threaten critically endangered species and disrupt sustainable income to Patagonia’s local communities. In December 2007, Royal Bank of Scotland participated for an amount of € 128 million in a € 687 million loan to Lundin Petroleum, to be used for further exploration and potential acquisitions. Lundin is classified by the Sudan Divestment Task Force (SDTF) as “Highest Offender”, for its direct support to the Sudanese government. The Sudanese government is accused of continued ethnic cleansing in Darfur.
In April 2007, ABN Amro Bank, now part of Royal Bank of Scotland, arranged a € 1.47 billion loan facility to Gazprom, to partly fund it’s acquisition of a 50%plus-1 stake in the Sakhalin II project. The Sakhalin II project damaged salmon spawning rivers with its 800 kms of onshore pipelines and threatens the last 120 critically endangered Western Gray Whales in the world with extinction. In August 2005, ABN Amro, part of Royal Bank of Scotland, participated for an amount of € 10.2 million in a € 102 million loan to Hindustan Zinc, part of the Vedanta Resources Group. In August 2007, ABN Amro, part of Royal Bank of Scotland, participated in € 815 million loan to Vedanta Resources for the sum of € 56 million. In August 2008, this loan was refinanced by another € 642 million loan, in which ABN Amro participated for € 42.9 million. In March 2009, ABN Amro, part of Royal Bank of Scotland, backed two letter of credit for the acquisition for the total amount of € 1.3 billion of the copper producer Asarco by Vedanta Resources, for a sum of € 77 million. The Indian mining company Vedanta has illegally driven indigenous people from their land in India. The company has dumped toxic waste in India and Zambia. Issues of shares /
Issues of bonds In September 2005, EADS launched a € 3 billion Euro Medium Term Note (EMTN) Programme, replacing the € 3 billion EMTN from February 2003. The programme enables the company to issue bonds on the European capital market on a regular basis and without too many regulatory requirements. ABN Amro, part of Royal Bank of Scotland, is one of the selected dealers for this programme. In March 2007, Freeport McMoran issued notes worth € 4.5 billion. Greenwich Capital Markets, part of Royal Bank of Scotland, participated in the issuing for € 49 million. Royal Bank of Scotland is selected as a dealer for Total’s European mediumterm programme. Thanks to this programme, the company can regularly and easily issue bonds on the European market. Total is involved in gas extraction which supports the Burmese junta. The laying of the pipeline and the surrounding infrastructure led to serious human rights abuses. Between June 2005 and May 2009, ABN Amro, part of Royal Bank of Scotland, arranged ten bonds issuings of Total Capital (the financing subsidiary of Total), worth € 129 million, € 323 million, € 126 million, € 300 million, € 251 million, € 64 million, € 59 million and € 99 million. ABN Amro underwrote these issues for € 42 million, € 162 million, € 63 million, € 150 million, € 125 million, € 32 million and € 99 million respectively. In June 2008, ABN Amro underwrote another issue of bonds of Total Capital worth € 59 million for a sum of € 6 million.
In May 2007 and June 2008, ABN Amro and Royal Bank of Scotland both arranged two issues of bonds of Total, worth € 300 million and € 95 million, and underwrote them for € 75 million and € 24 million respectively each. In April 2008 and March 2009, Royal Bank of Scotland arranged the issuing of bonds for Wal-Mart, worth € 1.6 billion and € 1.06 billion. RBS underwrote these issues for € 284.9 million and € 148.4 million respectively. In December 2006 and January 2009, Royal Bank of Scotland underwrote another two issues of Wall-Mart, worth € 1.5 billion and € 770 million, for a sum of € 119.1 million and € 7.7 million. The US supermarket chain Wal-Mart censors trade union information, sacks members of trade unions, and even closes entire stores to block the unionisation of the workforce. Shareholdings Royal Bank of Scotland owns or manages shares in one of the researched companies, for a value of US$ 0,94 million.
Vedanta Resources
US$
0,94 million
Sources: European banks financing controversial companies, Profundo (research paper for Netwerk Vlaanderen), June 2009 ; Shareholdings of some European Banks in controversial companies, Profundo (research paper for Netwerk Vlaanderen), June 2009.