Campaigners have hit back at claims that a controversial pipeline has obtained its insurance coverage as one leading reinsurer stated it would not support the project.
Media reports in Africa said the East African Crude Oil Pipeline (EACOP) has been fully insured and reinsured with local firms through the Insurance Consortium for Oil and Gas in Uganda (ICOG).
However, the StopEACOP campaign said it believed the reports are misleading, claiming numerous official documents indicate that a significant portion of (re)insurance coverage for the EACOP project will have to come from foreign sources and there is no reason to believe that coverage has been secured.
It came as Talanx, Germany’s third largest insurer, became the latest (re)insurance company to confirm to the StopEACOP Coalition that it will not (re)insure the East African Crude Oil Pipeline (EACOP).
The Talanx decision follows those of Argo Group, Axis Capital and RSA Group, who last week also confirmed they would not be involved in underwriting EACOP.
In an email to a member of the StopEACOP campaign, Talanx’s Group Strategy and Sustainability Manager, Dr. Jan-Philippe Lüdtke, stated: “I can now confirm that there is and will be no involvement in EACOP by Talanx or any of its subsidiaries.”
The campaign group said the decision brings the total number of (re)insurers who have confirmed they will not participate on the EACOP program to thirteen.
StopEACOP said: “It is our understanding that the EACOP project still requires significant foreign insurance and reinsurance support. In accordance with the EACOP Act, a substantial portion of reinsurance should come from international reinsurance companies, which have the appropriate credit ratings and financial capacity to absorb the losses if and when accidents occur.
“This is further evidenced in the June 2021 tender for an EACOP insurance broker, which specified that the broker would be responsible for ‘the reinsurance placement in the international reinsurance markets and local markets as required by the laws and various agreements’. There is no indication that international reinsurance has been sourced, and this does not appear to be disputed by recent statements from Uganda’s Insurance Regulatory Authority or members of the ICOG.”
Samuel Okulony, Chief Executive Officer, of Ugandan-based Environment Governance Institute (EGI) added: “More and more (re)insurers are learning about the many problems that EACOP is bringing to the people of Uganda and Tanzania and the health, social, and climate impacts that the pipeline will leave in its wake, and they are wisely distancing themselves from the project. It is time for other (re)insurance companies to follow suit and refuse to be accomplices to such dreadful projects that are premised to only benefit the oil companies Total and China National Offshore Oil Company (CNOOC) at the expense of everyone else.”
Isobel Tarr, insurance campaigner at Coal Action Network in the UK, said: “We welcome Talanx’s commitment not to insure EACOP. However, we also call on Talanx CEO Torsten Leue to adopt a more comprehensive policy that excludes not just EACOP but all other new oil and gas projects. Talanx currently lags behind not just its major rival Allianz but also its own subsidiary Hannover Re, both of which adopted more comprehensive policies earlier this year.”