Risc of harmful investments with KBC

Despite a thorough policy regarding the arms industry, and the attempts that have been made regarding human rights themes, the risk of a harmful investment with KBC is high.

Hopefully the risk of harmful investments will be reduced further by KBC in the near future.

Explanation of the KBC ranking

There is no thorough policy regarding labour rights, environment or freedom & democracy. However, KBC does not give credit to companies that are known to abuse human rights, or where the environmental risk is high. KBC claims to have developed a general policy for investments that takes account of ecological, social and ethical criteria.

This policy is evaluated as unsatisfactory for two reasons.

• Limited and weak criteria: does not make clear which investments can or cannot be accepted;
• Unclear application: KBC 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.

KBC has a policy regarding the exclusion of certain controversial weapons, namely: anti-personnel mines, cluster munitions and uranium weapons. Regarding loans, KBC states that it is conservative in all dealings with the defence industry. This policy has been evaluated as satisfactory for the following reasons:

• Clear criteria: The policy of KBC sets limits for investments in the arms industry. The credit policy goes a step further.
• Widely applicable: The policy regarding controversial weapons is valid for all financing and investments of KBC.
• Clear application: KBC shows how the policy has been applied in practice by publishing a list of companies that are no longer eligible for investment. KBC has also revealed the amount that it still invests in the arms industry.

Examples of harmful investments by KBC

In June 2008, Total issued 7.5% five-year bonds for an amount of US$ 92 million. TD Bank (Canada) acted as book runner. KBC underwrote this issue. Total works with the Burmese military dictatorship to extract gas from the Yadana gas field. The project is the largest source of income for the military dictators. The laying of the pipeline in Burma has been achieved as a result of forced labour, murder and torture.

Begin 2009: KBC owns or manages shares in

• Total – US$ 179.1 million: Total works with the Burmese military dictatorship to extract gas from the Yadana gas field. The project is the largest source of income for the military dictators. The laying of the pipeline in Burma has been achieved as a result of forced labour, murder and torture.
• Wal-Mart – US$ 66,2 million: The US supermarket chain Wal-Mart breaches the most basic labour rights both in its stores and in its suppliers.
• Freeport McMoRan - US$ 12,3 million: Freeport McMoRan 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.

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

Profile KBC (update February 2010)