Risk of harmful investments with Citibank

The risk of a harmful investment with Citibank is very high. Hopefully the risk of harmful investments will be reduced drastically by Citibank in the near future.

Explanation of the Citibank ranking

Citibank has no well developed policy regarding labour rights, environment, and freedom & democracy. On certain issues, eg. sustainable forestry and CO2 emissions, Citibank developed a policy. Furthermore Citibank has an internal risk management policy. This policy ensures that human rights topics are taken into account regarding investment decisions. The risk management policy applies to all activities of Citibank. Finally, as an American company Citibank has to respect legal restrictions regarding investments in Sudan.

These policies has been evaluated as unsatisfactory for three reasons:

• Unclear criteria: Citibank has never made clear which investments can or cannot be accepted.
• Limited applicability: this policy does not apply to all investments of Citibank.
• Unclear application: Citibank does not show how the policy has affected the practice of the bank. It is never stated which investments are allowed and which are refused.

Citibank has no policy regarding the arms industry. It goes without saying that this is unsatisfactory.

The risk of a harmful investment with Citibank is very high. Hopefully the risk of damaging investments by Citibank will be reduced drastically in the near future.

Examples of harmful investments by Citibank

In Februari 2007, Citibank arranged a five year loan to Dongfeng Motor and participated in it for the sum of € 30 million. One of Dongfeng’s subsidiaries “DFL” strenghthens the brutal dictatorship in Burma by supplying military
trucks.

In April 2007 Citibank participated for a value of € 56 million in a bridge loan of € 815 million to Vedanta Resources. In August 2008 Citibank participated for a value of € 42.9 million in a five year loan of € 642 million to refinance the bridge loan. The Indian mining company has illegally driven indigenous people from their land in India. The company has dumped toxic waste in India and Zambia.

In September 2005, Citibank participated for a value of € 1.7 billion in a bridge loan of € 3.4 billion to CNPC, the controlling shareholder of PetroChina. Proceeds were to be used for CNPC’s acquisition of the Canadian oil company PetroKazakhstan. Later in 2005, the acquisition had to be postponed, but was done in August 2006. 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.

June 2009: Citibank owns or manages shares in:

• Freeport McMoRan – US$ 60.81 million: Freeport McMoRan, that operates the Grasberg mine in Papua. 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 hired by the company.
• Total – US$ 19.42 million: 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.
• Wal-Mart – US$ 387.9 million: The US supermarket chain Wal-Mart breaches the most basic labour rights both in its stores and in its suppliers.

More harmful investments by Citibank and other banks check www.banksecrets.eu