Unionbancal Corp. is facing an unlikely image problem.
A group of environmentalists has attacked the $28 billion-asset bank to protest the destruction of rain forests in South America, Canada, and Asia.
Trouble is, Unionbancal doesn't do any business in the rain forests.
But that hasn't stopped the Rainforest Action Network, a San Francisco- based environmental organization, from launching a boycott of the bank company. It just so happens that Unionbancal has indirect ties through its Japanese parent - Bank of Tokyo-Mitsubishi Ltd. - to a trading company that owns mills which process rain forest timber.
"We're looking for a deep, systemic solution - not just halting deforestation but change in the economy," said Randall Hayes, executive director of the rain forest network.
The group said a boycott of Unionbancal is warranted because it is 80% owned by Bank of Tokyo-Mitsubishi, the world's largest banking company, with $820 billion of assets.
Bank of Tokyo-Mitsubishi is believed to be an important player in what observers say is an informal system of minority ownership, joint contracts, and mutual assistance among companies that were once part of the same conglomerate.
These collectives, called keiretsu, resulted from the breakup of industrial conglomerates that was a condition of the Japanese surrender in World War II. The Mitsubishi conglomerate was never reassembled formally, but the Mitsubishi companies have historically had close ties, and Rainforest Action Network maintains they still do. The companies, however, dispute this.
Among the most important companies in the current Mitsubishi keiretsu are a multibillion-dollar trading company called Mitsubishi Corp.; the bank, formed in an April 1 merger of Bank of Tokyo and Mitsubishi Bank Ltd.; the television maker Mitsubishi Electric; and automaker Mitsubishi Motors.
The trading company has become a bane of global environmentalists in this decade for what they say is rampant rain forest destruction through a network of fully and partly owned mills, timber stands, and trading subsidiaries.
In 1993, Rainforest Action Network became global spokesman for a group of environmental organizations protesting the trading company's activities. The group called Mitsubishi the "world's worst corporate destroyer of rain forests" and clamored for changes.
Despite its 30,000 members and a $2 million annual budget, Rainforest Action quickly concluded it had little leverage. As a result, it decided to go after members of the keiretsu that sold consumer products.
Protesters affiliated with the group handcuffed themselves to Mitsubishi cars at auto shows and protested at electronics stores that sold Mitsubishi TV sets. Although these companies were said not to be hurting rain forests directly, Rainforest Action wanted them to pressure the trading company to change its ways.
Mitsubishi Motors and Mitsubishi Electric objected to the protests, saying the days of close cooperation among keiretsu members are over and their influence with the trading company is minimal. But eventually, the two companies helped Rainforest Action open lines of communication with the trading company and also put seed money into a study of sustainable forestry management.
The upshot was that Rainforest Action stopped protesting against the auto and television companies and has now focused on the bank, especially its Unionbancal affiliate, which was formed by the April 1 merger of the parent Japanese banks' California subsidiaries.
For instance, during a street protest last October, two employees of the rain forest group climbed down the side of a 22-story bank office building in San Francisco.
They displayed a banner proclaiming "Stop Mitsubishi's Rape of Mother Earth - Boycott Mitsubishi's Bank of California." Bank of California was the Mitsubishi subsidiary merged into Union Bank April 1 to form Unionbancal.
To coincide with the mergers, Rainforest activists unfurled more banners at bank offices in Los Angeles and Portland, Ore., and they also blocked most doors leading into Unionbancal's San Francisco headquarters. They accomplished this by chaining volunteers to half-ton, concrete-filled barrels placed in front of doorways. More than a dozen arrests followed these demonstrations.
On Earth Day 1995, a Rainforest activist made a symbolic deposit into a bank office of what was supposed to resemble blood-stained money.
The group's demands on Unionbancal are similar to those made to the auto and television makers - pressure the trading company to change its ways.
But the environmentalists have added a twist, demanding that the parent bank in Japan also stop financing projects Rainforest Action finds objectionable.
Again, no specific fault was found with the California bank. Steve Johnson, a spokesman for the bank, said it has been wronged.
"We'd like to talk about environmental concerns we can do something about directly," he said, "but we don't have the direct connection that they're looking for."
Mr. Johnson said the boycott has not had any measurable impact on the bank's business. But he said the company is concerned about possible damage to its reputation and employee morale.
For their part, Rainforest Action and the Mitsubishi trading company appear at loggerheads.
The environmental group has compiled thick documents alleging instances around the world in which it says Mitsubishi harms rain forests. Mitsubishi says the operations in question are either environmentally sound or not controlled by it. Mitsubishi also accuses Rainforest Action of being sloppy with facts.
Mr. Hayes, the Rainforest Action executive director, and his key associates had a private meeting this year in San Francisco with Minoru Makihara, president of the trading company. But Mr. Hayes said he and Mr. Makihara disagreed on the extent of Mitsubishi's damage to the environment.
Mr. Hayes added that Rainforest Action would keep up the pressure until it gets Mitsubishi to become what it considers a model citizen.
"We're looking for Mitsubishi to not only get out of logging but to get into other, sustainable activities," Mr. Hayes said.
