West Virginia Gov. Jim Justice is reportedly on the hook for $700 million in loans from collapsed lender Greensill

WV Gov Jim Justice
Jim Justice has been governor of West Virginia since 2017.

  • West Virginia Gov. Jim Justice is reportedly on the hook for $700 million in loans from Greensill, the collapsed financial firm.
  • Justice personally guaranteed loans Greensill made to his coal companies, The Wall Street Journal reported.
  • Credit Suisse is trying to claw back cash for people who invested in its Greensill-linked funds.
  • See more stories on Insider’s business page.

West Virginia Gov. Jim Justice is personally liable for around $700 million in loans that the collapsed financial firm Greensill Capital made to his coal companies, according to a report.

Justice and his wife guaranteed the loans from Greensill to his coal businesses, the Wall Street Journal reported, citing people familiar with the issue and documents.

Greensill, which collapsed into bankruptcy in March, had packaged the loans and sold them to Credit Suisse, The Journal reported. Now, Credit Suisse is in talks with Justice’s Bluestone Resources and other major borrowers from Greensill to recoup the money and repay investors, per The Journal.

The Swiss bank told investors in a recent notice that Bluestone owes nearly $700 million, the WSJ reported.

Bluestone said in a lawsuit brought in March that it had not expected to start repaying the loans until at least 2023.

The personal liability of Justice, who has been governor of West Virginia since 2017 and is a Republican, adds to his financial pressures. Forbes knocked the politician and businessman off its billionaires list earlier this year, due in large part to Greensill’s collapse.

Justice’s companies are also in legal disputes with other companies over payment contracts and coal deliveries, The Journal reported said. They have settled a number of disputes in recent years over alleged non-payment of bills, according to news outlet ProPublica.

Bluestone, Credit Suisse, and a representative for Justice did not immediately respond to requests for comment. Bluestone and Justice’s representatives declined to comment to The Journal.

As well as the guarantees from the governor and his wife, Justice’s son James C. Justice III guaranteed loans up to a certain limit, The Journal reported.

The collapse of Greensill has heaped pressure on Credit Suisse, which is frantically trying to recoup its losses. It said in April that it was focused on three main borrowers: Bluestone, British-Indian steel magnate Sanjeev Gupta’s GFG Alliance, and SoftBank-backed construction company Katerra.

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Big banks are propping up the coal industry as it keeps on pumping out toxic emissions in some parts of the world

People protest Standard Charter Bank's ties to global warming.
People protest Standard Charter Bank’s ties to global warming.

  • Standard Chartered just helped fund the giant Indonesian coal company Adaro with US$ 400 million.
  • Adaro’s business models are in line with 5-6ºC of global warming, far above the 1.5ºC Paris Agreement limit that Standard Chartered claims to support.
  • Standard Chartered’s climate policy allows them to continue funding destructive coal companies whose business plans are consistent with the Paris Agreement failing.
  • Binbin Mariana is an environmental campaigner from Indonesia.
  • This is an opinion column. The thoughts expressed are those of the author.
  • See more stories on Insider’s business page.

It’s been six years since the world’s governments adopted the Paris Agreement. But in many parts of the world, including my country of Indonesia, the coal industry rampages on, aided and abetted by banks from around the world.

Coal is the single most significant source of global temperature increases to date. Scientists say if we want to meet the Paris Agreement’s 1.5°C target, coal needs to be phased out globally by 2040.

As important as political action is on climate change, banks must end their financing of coal too. Through their lending and investing activities, many banks are funding companies opening new coal mines and building new coal power plants, despite the UN saying that all new coal projects should be cancelled immediately to meet climate goals. If financial institutions phased out funding for coal-dependent companies, the transition from polluting power to clean would be vastly accelerated.

Dirty money

In the UK, public and investor outcry on coal is mounting. Barclays has been targeted for the second year in a row by shareholder resolutions calling on the bank to phase out financing for fossil fuels. HSBC was recently forced into committing to a global coal phase-out by 2040. Polling shows a majority of customers in both banks don’t want them to fund fossil fuels.

But one major UK bank has escaped scrutiny for its poor coal policies: Standard Chartered.

Best known for sponsoring Liverpool FC, Standard Chartered is a major bank in Asia. It’s climate policy allows them to continue pumping billions into destructive coal companies, including in Indonesia.

Standard Chartered is funding one of Indonesia’s giant coal companies, Adaro. Since 2006, the bank has funded over US $400 million to Adaro and its subsidiaries. Last month, Standard Chartered helped provide another US $400 million for Adaro’s coal mining, as part of a syndicate of banks. This new loan underlines how weak Standard Chartered’s coal policies are.

Despite the bank’s internal analysis showing that Adaro’s business plans are in line with 5-6°C of global warming, it has decided to support Adaro anyway. Adaro is a major supplier of coal to Europe, Asia and America. It controls at least 31,380 hectares of land, an area bigger than Birmingham, producing 54 million tonnes of coal in 2020 alone.

Adaro estimates its coal reserves at 1.1 billion tonnes. Burning all of these reserves – as Adaro intends to do – would release 2.2 billion tonnes of CO2-e, almost the equivalent of the annual emissions of India. The company has no plans to produce any less coal. And yet, Standard Chartered continues to fund Adaro, whose business plan is consistent with the Paris Agreement failing.

Like the fallout of climate change in general, Adaro causes much suffering in my country. The company has deprived villagers of their livelihoods for the sake of the coal that lies beneath their homes. When all the coal has been extracted from a mine, it leaves behind desolate open-mining pits, which coal companies are obliged by law to restore and rehabilitate to the previous ecosystem. To date, only 18% of Adaro’s post-mining pits have been rehabilitated.

Adaro coal mining operations tear down forests, degrading the land. Early this year, at least 24 people were killed, and more than 113,000 people were displaced due to a massive flood in South Kalimantan, on the island of Borneo. The immense suffering from the floods has been linked to degraded land in the water catchment area. Adaro is one of the mining companies that operate its coal mines near the river catchment area.

We have been paying the price for pollution from coal combustion with our health. In 2015, research estimated existing coal-fired power plants in Indonesia cause 7,100 premature deaths every year. Adaro is a part-owner of the controversial 2,000 MW Batang coal-fired power plant, which will add to the horrible degradation of air quality for our communities and could cause additional 30,000 premature deaths over an operating life of 40 years.

So Standard Chartered isn’t just funding a perennial coal mining company. It’s funding a company building new dirty coal power plants. And yes, we’re talking about a UK bank in the year 2021.

Standard Chartered’s slogan, “Here For Good”, means nothing if it means continuing to provide hundreds of millions to a company ripping the heart out of communities in my country and making global climate change worse.

Binbin Mariana is an energy finance campaigner living in Indonesia, campaigning with environmental group Market Forces. A former banker, she believes that financial institutions must stop contributing to the climate crisis.

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