Greens Senator Lee Rhiannon will be moving a motion in parliament condemning the bank.
The party says Westpac should not be involved in the project on Vella Lavella island, which involves cutting down trees in an area of rare swamp forest.
Senator Rhiannon tells Bruce Hill the bank should return environmental prizes it's won in Australia and commit to helping with reforestation projects in Solomon Islands.
Speaker:Australian Greens party Senator Lee Rhiannon
RHIANNON: The Greens will be moving a motion in coming days in Federal parliament. The issue of logging in the Solomon Islands is extremely serious. Westpac should have no involvement with this. The World Bank has identified that the rate of logging in the Solomons is the highest anywhere in the Pacific and we need to have sustainable, ecological practices and preserving the forests for the local peoples to be a top priority.
HILL: What are you specifically saying that Westpac is doing that's not right?
RHIANNON: Westpac has loaned to logging companies that are engaged in illegal activities. Westpac has also refused to investigate loans which facilitate this logging and that's quite disappointing. The bank really should immediately announce its' plans to end links with destructive forestry and commit to contributing to forest restoration in the Solomon Islands.
HILL: Is it, or should it be, the role of banks to look at these aspects of things before lending money to operations?
RHIANNON: Westpac represents itself as a responsible corporate citizen. It has received environmental prizes in Australia and right at the moment I have called for Westpac to hand back those prizes, which are called the Banksia Awards, because they don't match their activities in the Solomon Islands. If they don't remove themselves from loaning to the loggers and investigate how this has come about, and what restoration needs to be done, they clearly shouldn't receive those awards, which do assist corporate standing and their business models.
HILL: If banks like Westpac from Australia which operate in a fairly highly regulated environment, as you are suggesting, don't fund these sort of projects doesn't this mean shonkier banks with fewer regulatory requirements will simply come in and fund them themselves and the situation for the environment could actually wind up being worse in the long run?
RHIANNON: Other banks could certainly step in when, if Westpac did the right thing and removed themselves from funding these operations but at the moment the regulations are very minimal and the Solomon Islands government do not have the resources to ensure that the standards are in force. So what we need is the combined activities at all levels of government, non-government and any corporations from Australia of doing the right thing in these countries and not just saying 'other banks will come in and we'll just keep going.'
HILL: You're saying that Westpac should do the right thing. You're not really suggesting here that Westpac are doing anything illegal, I take it?
RHIANNON: No, we haven't identified that Westpac themselves have done anything illegal but to be associated with illegal logging practices through loans to certain companies is of great concern and disappointing that an Australian bank would be associated with such practices.
HILL: If this motion in Parliament goes through, what will its' effect be on Westpac? Will it have any sort of regulatory impact or is it just indicative of a mood in Parliament if it passes?
RHIANNON: The motion in Parliament will not have a direct impact in terms of the day to day operations of Westpac, but it would certainly be a public reminder to Westpac that they're going down a dangerous path that does not fit well with the image that they're attempting to project: that they are an ecologically responsible company. And that's why the Greens will continue to put pressure on the company to clean up their act.
HILL: Well you're sponsoring this, you're a Greens senator, do you have any support from other parties in Parliament at all? Do you think this will actually pass?
RHIANNON: I'm negotiating with my colleagues in the other parties this week to come onboard. They would be wise to put the pressure on Westpac to ensure that they're presenting a good face of that company's activities.