Bank Blather Buoys Voluntary Climate Guildelines, As Oil/Gas Pipeline Financing Marches Right Along
Activists have accused an association of banks claiming to adhere to principles safeguarding people and the environment of “greenwashing.” Two signatories of the Equator Principles are currently advising East African governments and their oil major partners on securing finance for the EACOP pipeline. Banks signing up to the Equator Principles commit to respecting a set of voluntary guidelines through which the environment and social impacts of large industry projects are considered. South Africa’s Standard Bank and Japan’s Sumitomo Mitsui Banking Corporation (SMBC) are card-carrying members, along with more than 130 other financial institutions globally.
Yet Standard Bank and SMBC continue to facilitate the financing of the East African Crude Oil Pipeline project (EACOP). “Banks are making a lot of promises, but not committing to any action. They are preaching water but drinking wine,” says Omar Elmawi, coordinator of the StopEACOP campaign. Construction of the EACOP pipeline began last year. When completed, it will be the longest heated pipeline in the world, cutting a path from Lake Albert in Uganda to the port of Tanga in Tanzania. France’s TotalEnergies and the China National Offshore Oil Corporation are major stakeholders.
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In September, the European Parliament passed an emergency resolution condemning the EACOP project for human rights violations and environmental risks. “To say that there are no red flags raised is extraordinary,” says Brightwell, who called for a grievance mechanism that allows affected communities to hold banks directly to account when they fail to meet their Equator Principle commitments. Following the Equator Principles annual general meeting in October, the organization announced new “due diligence tools” to improve access to grievance mechanisms.
Brightwell welcomes this but notes that these tools don’t address the question of accountability at the bank level. “It’s not fit for purpose. We can’t rely on banks to do as they promise. But we don’t want to throw the baby out with the bathwater here. We do see the potential of the Equator Principles to ensure that risks are better managed in project finance.” Elmawi, meanwhile, says the system needs to be overhauled to ensure that banks that contravene the principles pay substantial fines. “We have to be serious. These principles have to deter people from doing harms,” he tells Mongabay.
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https://news.mongabay.com/2022/11/as-banks-fund-oil-pipeline-campaigners-question-their-environmental-pledges/