As protestors demonstrated in London another insurance group has announced it is to refuse to participate in the cover for a controversial oil pipeline scheme.
Britam Holdings, a leading East African insurance group and client of the World Bank’s International Finance Corporation (IFC), has announced it will not participate in underwriting the planned East African Crude Oil Pipeline (EACOP) after conducting a review of the environmental and social risks involved.
The news came as insurers attending an energy conference in the City of London were met by protestors who blocked the entrances and heckled delegates as they arrived.
Britam’s decision puts further pressure in the pipeline’s developers, TotalEnergies and China National Offshore Oil Corporation (CNOOC), who have publicly asserted that the EACOP meets IFC’s environmental and social standards to secure financing and insurance coverage for the project.
The EACOP would be the world’s biggest heated oil pipeline, stretching nearly 900 miles (1,443 kilometres) through the heart of East Africa.
Campaigners against the plan said it has already caused large-scale displacement of local communities and poses grave risks to protected environments, water sources and wetlands in both Uganda and Tanzania, including the Lake Victoria basin, which millions of people rely upon for drinking water and food production.
They claim if completed, it would also enable the extraction and transport of enough oil to generate over 34 million tons of CO2 emissions per year at peak production, exacerbating the ongoing climate emergency.
Britam’s decision was confirmed in official correspondence from the Compliance Advisor Ombudsman (CAO), IFC’s independent accountability mechanism, in response to a complaint submitted by affected communities in Uganda, represented by Inclusive Development International. The accountability office confirmed that Britam decided not to participate in underwriting the risk associated with the oil pipeline and connected oil fields and refinery, after conducting an environmental and social risk evaluation of the projects. As an IFC client, Britam is required to ensure that any high-risk project it insures meets IFC’s Environmental and Social Performance Standards.
“Britam’s decision validates our assessment and confirms what we already knew: the EACOP fails to comply with international standards,” said Coleen Scott, a legal and policy associate at Inclusive Development International. “This is a major wakeup call to any insurance company or Equator Bank still providing or considering support for EACOP. Britam should release its evaluation in full, so that other insurers and banks can consider the findings when making their own decisions regarding this project.”
“The tide is turning on EACOP,” said David Pred, Inclusive Development International’s executive director. “Building a massive fossil fuel project when the world is urgently transitioning to renewable sources of energy is infuriatingly short-sighted and it’s the last thing communities along EACOP’s route need to create lasting economic opportunity.”
Protestors in London were in Bishopsgate to picket an energy insurance conference in an effort to put pressure in energy underwriters not to participate in the EACOP insurance and reinsurance program.
A spokesperson for ‘Stop EACOP’. Which organised the demonstration told Emerging Risks: “We are here to confront the insurers which are backing this project and to highlight the environmental catastrophe it will create.
“Our message is clear and we are delivering that to the energy insurance industry. They need to stop insuring EACOP now!”