Commercial banks in the Solomon Islands have closed down several logging company bank accounts, in a move that will make it almost impossible for those companies to receive export proceeds.

Logging activity in the Marovo lagoon, Solomon Islands.
(Courtesy: Terence Titiulu, SPREP)

‘It is the (commercial) banks’ own decision,’ a spokesman for the Central Bank of Solomon Islands told Business Advantage.

‘A number of logging companies’ accounts have been closed,’ the spokesman said, confirming a local media report.

The accounts were with Westpac Banking Corp, ANZ and Bank of South Pacific.

Timber is the main export earner for the Solomon Islands, but logging has been carried out at unsustainable levels for many years and the resource is rapidly becoming depleted.

‘This will affect the export receipts for the logging industry. That is the concern of the Central Bank, that they will not have valid bank accounts to receive the export proceeds.’

International buyers are increasingly demanding timber from sustainable resources. The closure of the loggers’ bank accounts is believed to be aimed at shutting out unlicensed operators.

The central bank spokesman said he could not comment on the reason behind the account closures, but he said the central bank was concerned about the impact on the logging industry.

‘This will affect the export receipts for the logging industry. That is the concern of the Central Bank, that they will not have valid bank accounts to receive the export proceeds,’ the spokesman said.

In a response last year to a news article about loans to the logging industry, Westpac issued a statement that said it has reduced its exposure to the Solomon Islands’ forestry industry to about 9 per cent of its loan book from 35 per cent in 2009.

“Where a loan relates to forestry, we require that they seek the requisite approvals from the Solomon Islands Department of Forestry which governs this industry,’ Westpac said at the time.