Morgan Stanley exposed over controversial Asian projects

Tuesday, 19 March 2002

Friends of the Earth International Rivers Network
Free Tibet Campaign Students for a Free Tibet
Morgan Stanley Exposed Over Controversial Asian Projects

Share Value Threat From Growing Consumer Concerns
Morgan Stanley AGM, 11:30am Tuesday 19 March, at 25 Cabot Square, Canary Wharf, London.
Human rights and environmental campaigners will highlight the growing threat to investment bank Morgan Stanley's shareholder value at the company's annual general meeting in London today (19th March). Efforts to pressure Morgan Stanley are being led by Friends of the Earth (FOE), the International Rivers Network (IRN), Students for a Free Tibet (SFT) and Free Tibet Campaign (FTC). The groups are all engaged in campaigns targeting Morgan Stanley for its lack of environmental and social risk management policies, which have led the company to underwrite some of the most controversial projects in Asia. These include the Three Gorges Dam in China, resource extraction projects in Tibet and rainforest destruction in Indonesia.

Morgan Stanley has underwritten bonds for the China Development Bank and the government of the People's Republic of China, as well as the initial public offerings (IPOs) of Chinese and Indonesian companies including PetroChina, Chalco and Asia Pulp and Paper (see notes). By underwriting these bonds and IPOs, Morgan Stanley is a key component to the financing of controversial projects that have huge environmental and social impacts, and have been carried out without proper consultation with affected people.

These projects include the hugely controversial Three Gorges Dam in China and the Golmud-Lhasa Railway in Tibet. Many of these projects are avoided by organizations such as the World Bank because of failure to incorporate environmental and social safeguards.

Doris Shen, of the Three Gorges Campaign (IRN), said "Is Morgan Stanley planning to carve a niche in financing risks that others companies won't touch because of environmental and social concerns? Is the company prepared for the growing consumer backlash?

Alison Reynolds, Director of Free Tibet Campaign said, "The Chinese government's Western Development Plan threatens to devastate large areas of Tibet through mining and habitat destruction because of its focus on large scale natural resource extraction. Tibetans have no say in these plans. By underwriting these projects Morgan Stanley is helping to finance destruction and oppression in Tibet. It's incredible that Morgan Stanley has not yet adopted guidelines to screen its investments for social and environmental impact. It's time the company seriously addressed these issues or it will risk adding consumer backlashes to its growing list of problems this year."

Ed Matthew of Friends of the Earth said "Morgan Stanley has helped finance Asia Pulp & Paper to the tune of $2 billion. This finance has contributed towards the destruction of one of the richest and most diverse rainforest habitats on Earth. As a result Morgan Stanley has taken on an inordinate level of risk. This company should implement a Forests Policy to ensure that it doesn't continue to finance massive forest destruction."

Members of the groups demonstrating at the AGM plan to hand out a report called Rogue Traders to shareholders (the report can be downloaded from or by clicking on the link below). The report details the grave consequences for millions of people in China, Tibet and Indonesia of Morgan Stanley's activities and encourages them to put pressure the company to take steps to ameliorate this problem, including formulating social and environmental screening policies. The organizations all vow to continue their campaigns to draw public attention to Morgan Stanley's financial involvement in environmentally devastating and politically reprehensible projects.

Notes: Projects and companies that Morgan Stanley are directly linked to include:

The Three Gorges Dam Project, the largest dam project in the world, the project will displace close to two million people. Project critics and dam-affected people have been harassed and had their human rights violated. Both the World Bank and British Export Credit Guarantee Department have refrained from extending support to the dam. Morgan Stanley plan's to underwrite the Initial Public Offering for Three Gorges Power on the London Stock Exchange as early as next year.

Asia Pulp & Paper (APP): An investigation by FOE has found that APP has destroyed over 300,000 hectares of bio-diverse rainforest in Indonesia. They have plans to destroy another 300,000 hectares of rainforest. They have also been involved in conflict with local communities. In Sarawak an APP plantation is forcing 20,000 indigenous Iban people off their land. For more information see:

Chalco: China's largest aluminum company runs its largest smelter in the Amdo province of Tibet poisoning livestock herds and local rivers.

The Golmud-Lhasa Railway threatens to open large areas of Tibet to mining and population transfer and consolidate the Chinese government's grip on the formerly independent region.

PetroChina: China's first publicly floated oil company, PetroChina is building oil & gas pipelines across Tibet and East Turkestan, both areas that suffer from severe oppression at the hands of the Chinese government.

For further information:
Ed Matthew at FOE or Doris Shen at IRN- Tel: 020 7566 1720 / Mob: 07810 558 249
Lorne Stockman at Free Tibet Campaign - Mob: 07989 599 787
In New York contact Students for a Free Tibet, Alma David, 1 212 358 0071

For further information see the following websites:
International Rivers Network:
Free Tibet Campaign:
Friends of the Earth:
Students for a Free Tibet:

To download the report Rogue Traders - Click here.

For a text-only version of Rogue Traders - Click here.