The #StopEACOP campaign, an alliance of activists opposed to the East African Crude Oil Pipeline (EACOP), has called on Standard Bank to publicly disclose whether it will be funding the controversial project.
The call by #StopEACOP comes shortly after it emerged earlier this month that Standard Bank has parted ways with Edelman, the US-headquartered PR firm, after the firm reportedly refused to provide reputation management advice on the pipeline. Standard Bank is an adviser on the 1,443km pipeline, which involves oil groups CNOOC, TotalEnergies and Tullow and will see Uganda’s crude oil transported to a port in Tanzania for export.
“#StopEACOP commends Edelman for distancing itself from the bank over its role in the project,” the activist group said in a statement on Monday. “Edelman’s withdrawal illustrates that these include significant reputational risks. #StopEACOP urges all Standard Bank customers, service providers, employees and shareholders to speak up against the project and the bank’s involvement in it.”
Standard Bank has so far refused to rule out funding the EACOP project, which critics say will displace local communities, endanger the region’s sensitive ecosystem and wildlife as well as undermine efforts to transition the global economy to a more sustainable energy system. So far at least 20 international banks have said they will not fund the pipeline while a growing number of insurers, reinsurers, development finance institutions (DFI) and export credit agencies have also ruled out participating in the project.
“Fossil fuel projects like EACOP are a threat to the reputation of any company that promotes or funds them,” said Duncan Meisel, director of Clean Creatives, a US-based organisation that lobbies the PR and advertising industry to become “fossil free”.
“Edelman's decision not to work on this project is the right one, because it separates them from the countless local disasters caused by pipeline construction and operation — not to mention the carbon pollution EACOP will produce. During a climate emergency, ending support for life-threatening projects such as EACOP, and the fossil fuel companies behind them, is the cornerstone of responsible business practice.”
#StopEACOP has accused Standard Bank of being evasive in clarifying whether it will fund the EACOP project. As it stands the bank is acting as a financial adviser with Japan’s Sumitomo Mitsui Banking Corporation (SMBC) and the Industrial and Commercial Bank of China (ICBC), which holds a 20.1% stake in Standard Bank. The campaign also accuses the bank of not honouring commitments made by CEO Sim Tshabalala at its May AGM to make public an environmental report by Golder Associates, which Standard Bank has previously said will guide its decision on whether it will participate in EACOP.
Being reviewed
“The bank has so far failed to meet this commitment and the bank has not responded to recent requests from organisations within the #StopEACOP campaign for an update on the status of this report,” the campaign said in its statement.
Standard Bank told Business Day that the findings of the report are being reviewed by “internal experts” and that its final assessment and subsequent decision will follow the project time frames.
“Project finance deals are subject to a full suite of due diligence assessments to inform decision-making processes, covering legal, technical, security, market, reserves, environmental & social (E&S) and other considerations and concerns,” the bank said. “Standard Bank’s participation in the funding of the EACOP project remains subject to its credit approval process which includes consideration of the findings of the E&S due diligence assessments and meeting the Equator Principles requirements. It is also subject to a full assessment of the EACOP sponsors’ climate change strategies and targets.”
#StopEACOP argues that banks opting to participate in the pipeline project would be violating their commitments under the Equator Principles, a risk management framework for financial institutions to identify, assess and manage environmental and social risks.
“The EACOP project and its associated facilities, the Tilenga and Kingfisher oilfields, fail to comply with the Equator Principles and IFC Performance Standards in a variety of ways,” reads a June report by the Africa Institute for Energy Governance (Afiego), Inclusive Development International (IDI) and BankTrack.
The report also reads that “severe environmental and social risks” are inherent to the EACOP project, which will be impossible to adequately mitigate. It thus described the project as “fundamentally incompatible” with the aim and spirit of the Equator Principles.
“#StopEACOP calls on Standard Bank to publicly confirm — and explain — its position, and to end the prevarication and evasiveness, which has characterised its responses to civil society for a number of years,” the campaign said.
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