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Barclays and Standard Chartered picketed in London over Bidco business (23.08.2016)

Bidco Protest

Members of Prince Charles’ Banking Environment Initiative fail to cut ties with companies that deforest in Africa.

KAMPALA, Uganda, August 23, 2016 – East African protesters have taken to the streets of London to demonstrate against banks that do business with Bidco Africa, highlighting the connection between global financial institutions, The Prince of Wales and widespread deforestation in Africa.

Barclays and Standard Chartered saw their London headquarters picketed due to their funding of Nairobi-based Bidco, a company that cuts down thousands of acres of pristine rainforest in Uganda, and engages in human rights and tax violations in Kenya and Tanzania.

The Bidco Truth Coalition (No2Bidco.org), an activist alliance, has revealed that the Banking Environment Initiative (BEI), based at Cambridge University’s Institute for Sustainability Leadership under the patronage of The Prince of Wales, is failing in its mission to lead the banking industry in collectively directing capital towards environmentally and socially sustainable economic development.

The BEI’s nine member banks are Barclays, Standard Chartered, Deutsche Bank, Goldman Sachs, Lloyds, Northern Trust, RBS, Santander and Westpac.

By signing up to BEI’s ‘Soft Commodities’ Compact, the nine banks have committed to only direct capital towards sustainable business models and achieve zero net deforestation among their client Companies.

Under BEI guidelines, member banks must drop clients that don’t measure up to socially and environmentally responsible policies.

Bidco Africa, which has engaged in multiple human rights, labour, tax and environmental violations, has publically stated that it does business with Barclays, Standard Chartered, Citibank, Equity Bank and Kenya Commercial Bank.

Bidco owns an oil palm plantation that has deforested 18,000 acres of rainforest in Uganda. Bidco has also grabbed land from over 100 smallholder farmers.

The environmental impact of the palm oil project has led activists to call on the UN Global Compact to eject Bidco from its roster of members.

In 2004, the World Bank pulled out of Bidco’s Uganda project, citing violations of the World Bank’s anti-deforestation policies.

But BEI has remained silent, and Barclays, Standard Chartered and other banks continue to do business with Bidco Africa.

The Bidco Truth Coalition calls on BEI, its patron, The Prince of Wales, and BEI’s nine member banks to publically state that they will no longer do business with Bidco and other companies that destroy the environment.

Barclays Bank Uganda Limited’s Operations Not Affected By Impending Shareholding Decisions (01.03.2016)

Barclays Uganda

There have been some local, regional, and international media reports regarding a decision by Barclays Bank Plc to reduce its shareholding in Barclays Africa Group Ltd which involves twelve (12) African countries including Uganda. Barclays Bank Uganda Ltd. has since held two press conferences to clarify the details of these new developments.

Further to the clarifications offered by Barclays Bank, I wish to reassure the Ugandan public that the Barclays Bank Plc announcement does not affect the operations of Barclays Bank Uganda in any way and there will be no interruption to the services Barclays Bank Uganda Ltd extends to its customers.

The regulatory framework in Uganda ensures that any transitions of this nature are orderly and do not affect the soundness and stability of the financial sector as well as provision of financial services to customers.

Please note the following salient points

1. Commercial Banks in Uganda are incorporated locally and function as independent subsidiaries and not as branches. As such, Barclays Bank Uganda Limited is an independent subsidiary of the Barclays Bank Africa Group (in which Barclays Bank Plc owns 62.3% ) and is fully incorporated and registered in Uganda. Being a subsidiary, Barclays Bank Uganda has its own capital base, Management and an autonomous Board of Directors. This insulates the subsidiary from issues affecting the parent entity.

2. The Financial Institutions Act 2004 as amended by the Financial Institutions Amendment Act 2015 and associated regulations provides for a clear procedure for the disposal of Bank of Uganda supervised financial institutions’ shares. If the shareholders of any bank choose to dispose off their shares, the Bank of Uganda will undertake the necessary process of vetting new shareholders to ensure they are fit and proper to run a financial institution in Uganda.

3. Barclays Bank Uganda Limited remains solvent and liquid. It is well capitalised with a capital adequacy ratio well above the statutory minimum of 8.0 percent. The banking sector in Uganda as a whole has a strong asset and capital base with a capital adequacy ratio of 18.8 percent, as well as a relatively low level of nonperforming loans of about 5.3 percent as at December 2015.

I therefore wish to assure the Ugandan public and customers of Barclays Bank Uganda Ltd. in particular that there is no cause for concern arising from the media announcements by Barclays Bank Plc. Customers should therefore continue with their normal banking transactions without any anxiety. The Bank of Uganda is committed to prudent supervision and regulation of financial institutions in order to ensure the stability and soundness of the financial sector, as well as the safety of customers’ deposits.

Please direct any further enquiries to the Director Communications on calupo@bou.or.ug
Justine Bagyenda
EXECUTIVE DIRECTOR SUPERVISION
BANK OF UGANDA

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