19/06/2013 (AllAfrica.com) - Environmentalists in Uganda have warned international Banks against funding projects in Uganda that are depleting the national forest cover and supporting land grabbing

According to the new study carried out by the Friends of the Earth, an environmental organization advocating for the protection of nature, European banks and pension funds are funding palm oil giant Wilmar International, to grow palm oil crops in Kalangala District in the middle of Lake Victoria

Mr. David Kureeba, Friends of the Earth Uganda representative told the East African Business Week that the Wilmar International palm Oil projects has caused a lot of Environmental degradation on the island district coupled with displacing large local communities thus exposing them to land shortage for Agriculture purposes.

"Communities in Kalangala living and working on land acquired for palm oil plantations have been displaced, often with no compensation or alternative livelihood options. About 3,600 hectares of forest have been destroyed, negatively affecting the environment and livelihoods of local people," Kureeba said.

Kalangala used to be one of the Districts in Uganda with a good forest cover but since the inception of palm oil farming projects in the early 2004 the forest cover has been depleted at a high rate because thousands of forest hectare were cleared to pave way for the cultivation of palm Oil plantations and this has caused a volatile relationship between Government and Environmentalists in the country who are agitating for the protection of nature yet Government wants investors to venture into Palm Oil growing to create employment to the many unemployed Ugandan youth.

He explained that Friends of the Earth are not against the palm project in Kalangala District but the implementers should follow the legal procedures when implementing their investments especially those near sensitive ecological system like lakes and forest in the country. He noted that failure to adhere to the environmental laws will bring total destruction of the country's Ecosystem which plays vital role in the social Economic transformation.

As mentioned in the report, some of the banks that have been funding the Singapore based Giant Wilmar International include the HSBC (€877 million), BNP Paribas (€241 million), Deutsche Bank (€24 million) and Rabobank (€222 million) as well as Dutch pension funds ABP and Pensionfonds Zorg en Welzijn which own shares in Wilmar.

When contacted for comment on the report, Wilmar International Senior manager for Cooperate Social responsibility Mrs Sharon Chong told East African Business Week in an Email that the report findings from Friends of the Earth (FoE) is biased and is aimed at sabotaging economic development in Uganda "In fact, the Kalangala Oil Palm Growers Trust (KOPGT) in Uganda deemed this a baseless report that could potentially hamper Uganda's socio-economic development that it prompted them to respond to FoE directly, as well as to the media to clarify Bidco's position." Reads part of the respond email from Wilmar International

On the 200 meter buffer zone area Chong said that Bidco was granted a permit by the local government to develop100m. The remaining 100m was not planted.

FoE Food Sovereignty coordinator Kirtana Chandrasekaran said that international funders should ensure that their support does not violate both peoples and Environmental rights: