DENVER, COLORADO – Climate change organization 350.org and BankTrack are reacting to yesterday’s disclosure in the Financial Times that U.S. insurance broker Marsh McLennan is continuing plans to back a major African pipeline, although major U.S. banks JP Morgan, CitiGroup and Wells Fargo have ruled out financing of the project. EACOP (East African Crude Oil Pipeline) is planned by French oil giant TotalEnergies to be the world’s longest heated crude oil pipeline, going through Uganda, Tanzania and Africa’s largest lake, Lake Victoria. Because more than 40 million people depend on Victoria for water and food production, oil spills would be catastrophic for many of Africa’s most vulnerable people. The pipeline would displace 100,000 people whose land is being expropriated.
One of the most powerful U.S. insurance brokers, Marsh McLennan, is trying to help get EACOP over the finish line by finding insurance for the project. Cutting off funding for this pipeline is hugely important, but insurance is crucial. TotalEnergies is currently $3 billion short of money for building EACOP, and may try to find alternative funding, but without insurance, this pipeline cannot operate. This week’s commitment by Deutsche Bank not to fund EACOP shows that Marsh McLennan is taking a risky step in a volatile oil market to back the African pipeline.
Brett Fleishman, Head of Finance Campaigning at 350.org, stated:
“In 2021, The International Energy Agency stated clearly that we must stop all new fossil fuel development to avoid the worst impacts of climate change. And just last year, Marsh McLennan the international insurance broker published this, “Without stronger action, global capacity to mitigate and adapt will be diminished, eventually leading to a “too little, too late” situation and ultimately a “hot house world scenario” with runaway climate change that makes the world all but uninhabitable.” Well, now Marsh McLennan is working with Total to find the necessary insurance for the East African Crude Oil Pipeline. This new fossil pipeline is morally bankrupt and financially dubious and we’ll be doing everything we can to stop it.”
Ryan Brightwell, Human Rights Campaign Lead at BankTrack, said,
“The global banking sector’s wholesale rejection of Total’s dangerous plans for the East African Crude Oil Pipeline is becoming clearer by the day. The news from the FT that Citi and JPMorgan Chase won’t join the project loan for this pipeline is particularly significant, as they number among Total’s five biggest lenders. Now all five have declared themselves out of the running, and the total number of banks to have made clear they won’t support EACOP stands at 20. The problem now is that many of the same banks that have said “no” to supporting EACOP directly are keeping on providing general-purpose loans to Total, which leaves them linked to the damages and exposed to the risks in any case. It’s time for banks to say “no” to all further finance for Total unless and until it shelves plans for the EACOP and all other new fossil fuel projects and gets serious about 1.5 degrees.”
- The East Africa Crude Oil Pipeline (EACOP) will be more than 1,400 km long – the distance between Paris and Rome – and would run alongside Lake Victoria basin, which is the continent’s largest freshwater reserve and the source of the Nile, between Uganda and Tanzania.
- The oil would be heated permanently to 50°C to keep it fluid and transport it to the port of Tanga, in Tanzania, and into international shipping tankers.
- This pipeline would transport 200,000 barrels of oil per day and generate up to 34 million tons of carbon emissions each year – seven times what Uganda emits each year and about 1/16th of France’s emissions.
- More than 100,000 people are being forced off their land and expropriated.
- The project risks poisoning the water resources and wetlands of Uganda and Tanzania, including the Lake Victoria Basin, on which more than 40 million people depend for drinking water, food production and their livelihoods.
- This will violate a multitude of human rights: the right to property, the right to an adequate standard of living, the right to food, the right to education, the right to health, the right to adequate housing, the right to life and safety, the right to freedom of expression, assembly and association, and the right to free, prior and informed consent.
- There are threats, harassment, intimidation, attacks, arrests and imprisonment of environmental, human rights and journalistic defenders.