The Sustainable Financial Roadmap Could be Fail – The Banks Still Fund the Companies making the Fire

The Sustainable Financial Roadmap Could be Fail – The Banks Still Fund the Companies making the Fire

InfoSAWIT, JAKARTA – The same report published by Rainforest Action Network (RAN), TuK INDONESIA, Jikalahari, WALHI, and Profundo noted the important roles of the financial sectors to smooth the fire (in the forests and areas) crisis in Indonesia.

The report was released to study five year – sustainable financial roadmap which was released by Otoritas Jasa Keuangan (OJK) Indonesia in 2014 by focusing the big influence in the financial sectors to change the behaviors of the companies when the government of Indonesia was struggling for preventing the fire by the law enforcement and giving criminal and civil sanctions.

Executive Director of TuK Indonesia, Edi Sutrisno said that the financial institutions now ignore their obligations. The financial regulators, such as, OJK should actually monitor the activity (financial distribution) firmly and oblige the banks to do financial reviews.

“The companies having the bad environmental, social, and governance (ESG), and that could not improve (their works) needs to be left while the financial to the companies having positive ESG needs to increase,” he said as in the official statement to InfoSAWIT, Thursday (12/12/2019).

Edi thought, if there is a will to do law enforcement, the regulation should be supported by financial punishment for the banks that keep funding the companies making the fire and other operational which endangers the healthy and wealthy of the people.

The government identifies 17 groups of companies which involved in the fire in 2019 but they got, at least, US$ 19 billion in the name of loan to corporates and facility since 2015.

The report also described how the banks from China, Indonesia, Malaysia, Taiwan, Singapore, and Japan also funded the illegal activities. The additional analysis of RAN also revealed that the finance to the company which is responsible to the smoke crisis could be the border limit issue because most of the finance derived from the banks in ASEAN and financial institutions in East Asia.

The five year – ambitious roadmap is made by OJK to separate financial sectors from the high risk finance to the sustainable one. It makes Indonesia as the first one among the neighborhood countries for starting to make series of policy initiatives including the regulation which obliges the banks to identify and solve the ESG risk in their fund.

But the fire and smoke crisis which keeps happening in Indonesia is the dramatic description on the failure to implement the regulation and the missing chance from the roadmap which made the bank find spaces that could be exploited to postpone and ignore the social and environmental consequences because of their financial decisions. (T2)


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