Report: East Africa Pipeline ‘Breaches Banking Principles’

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Tourists walk at the top of the waterfalls in Murchison Falls National Park, northwest Uganda, February 22, 2020. The East African Crude Oil Pipeline, a controversial oil project that would link the fields oil farms at a port in Tanzania is in breach of global environmental and human rights guidelines for banks, according to a new report from Inclusive Development International on Tuesday, July 5.  (AP Photo)

Tourists walk at the top of the waterfalls in Murchison Falls National Park, northwest Uganda, February 22, 2020. The East African Crude Oil Pipeline, a controversial oil project that would link the fields oil farms at a port in Tanzania is in breach of global environmental and human rights guidelines for banks, according to a new report from Inclusive Development International on Tuesday, July 5. (AP Photo)

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A controversial oil project that would link oil fields in a Ugandan national park to a port in Tanzania violates global environmental guidelines for banks, according to a new nonprofit report on Tuesday.

The 897-mile (1,443 kilometer) East African Crude Oil Pipeline (EACOP), planned by French oil giant TotalEnergies and China National Offshore Oil Corporation, has been mired in allegations of human rights abuses. man and danger to the environment. The 230,000 barrels of oil produced daily will emit 34 million tonnes of carbon dioxide per year, according to Ugandan nonprofit Africa Institute for Energy Governance. Construction will take three years, once a final decision has been made.

At least 20 banks and eight insurers have opted out of the project, many coming under pressure from environmental groups. Standard Bank of South Africa and Sumitomo Mitsui Banking Corporation (SMBC) of Japan are principal financial advisers and debt arrangers. The British bank Standard Chartered is also considering financing it.

All three have signed up to the Equator Benchmark Principles, voluntary environmental and human rights guidelines for financing infrastructure projects. A report by the non-governmental organization Inclusive Development International, shared exclusively with The Associated Press, says the project repeatedly violates these principles and that the banks would also violate them if they go ahead. Banks are prohibited from financing non-compliant projects. But the regime is powerless to expel members who do.

Oil wells will be drilled in Murchison Falls National Park in western Uganda. Here, the Nile plunges about 40 meters (130 feet) through a gap just 6 meters (20 feet) wide, with the surrounding wilderness home to hippos, egrets, giraffes and antelope. The pipeline would then cross seven forest reserves and two game parks, skirting Lake Victoria, a source of fresh water for 40 million people.

“An oil spill could prove disastrous for the millions of people who depend on the lake’s catchment for drinking water and food production,” warned environmental campaign group 350.org.

The report says the risk of oil spills violates an Equator Principle requiring minimal environmental impact. A review of the plans by the non-profit organization E-Tech International, which advises communities affected by infrastructure projects, found that best practices were not being followed.

“EACOP oil spills will occur throughout the life of the project,” the review concluded.

The environmental assessment of the pipeline lacks a solid plan in the event of an oil spill, say the report’s authors, a further violation of the Principles. The pipeline will also cross a seismic zone – the Great Rift Valley – warns the report by Inclusive Development International.

TotalEnergies said the pipeline’s state-of-the-art design will ensure safety for decades.

The oil has a high wax content, solidifying at temperatures below 91.4 degrees Fahrenheit (33 degrees Celsius), which would prevent the oil from spreading as a liquid, the company said. Contingency plans are being prepared, the company insisted. Summer temperatures can reach 104 degrees Fahrenheit (40 degrees Celsius) in Uganda.

Human rights standards were also allegedly violated, according to the report. At least four letters from UN special rapporteurs on human rights, sent to Ugandan President and CEO of TotalEnergies Patrick Pouyanné for two years, detail ‘various acts of harassment and intimidation’ against protesters Ugandan. Many activists and a journalist were reportedly intimidated, forced into hiding, arrested and interrogated.

The Equator Principles “are not being adhered to with respect to the risks faced by community members who voice criticism,” the report says.

TotalEnergies said it was unaware of threats from its own staff. The company said it “openly expressed the need” for Ugandan security forces to respect human rights and had written to Uganda’s president expressing its concerns.

“TotalEnergies does not tolerate any threats or attacks against those who peacefully defend and promote human rights,” the statement said.

The Principles have also been violated by a lack of community engagement “free from manipulation, interference, coercion or intimidation”, according to the analysis.

More than 120,000 people will lose land to make way for the project, according to an assessment by environmental campaign group Friends of the Earth. There must be “free, prior and informed” consultation with people whose lives may be affected, in accordance with the Principles.

But the report found that these requirements were not “sufficiently met”.

The project “systematically failed” to access and disclose accessible information, he said.

TotalEnergies said only 13,300 people would be economically affected in Uganda and Tanzania. Since 2017, the meetings have reached more than 200,000 concerned people along the route, the oil major said.

Finally, the project violates standards on land acquisition and resettlement, according to the report. Compensation processes ‘exacerbated rather than mitigated’ negative impacts, impoverishing villagers who lost access to farmland and had to wait a long time for compensation.

TotalEnergies said it had already started paying compensation. The process respects local laws and is consistent with the Principles, the company insisted.

Equator Principles chair Amit Puri said each member was “individually responsible for their own internal procedures” to be followed. He added that the Equator Principles do not have the authority to address concerns about their violation.

Mr Puri is the global head of environmental risk at Standard Chartered, one of the banks the report said violated guidelines by funding the pipeline.

Standard Chartered itself and SMBC declined to comment. The China National Offshore Oil Corporation did not respond to numerous requests for a statement.

Standard Bank said its due diligence on funding the project is being assessed, but no final decision has been made. The decision is subject to a full assessment of climate change strategies, the bank said, while “full compliance” with Equator Principles was required to finance the project.

Despite environmental and human rights concerns, the campaign to stop the pipeline is “unrealistic”, said Angelo Izama of Ugandan think tank Fanaka Kwa Wote.

“Uganda is being pushed into this iconic child role of climate damage, and it is truly unfair,” he said.

This amounted to a “rejection of Uganda’s national interests”.

Ugandan oil officials declined to comment.

But President Yoweri Museveni has said oil wealth can lift millions out of poverty, while other government officials hope Uganda can become a middle-income country.

Efforts to shut down the pipeline have left some appalled at what they see as concerted efforts to sabotage the project.

“TotalEnergies and CNOOC … have the financial muscle and technical know-how to deliver a world-class project,” wrote Elison Karuhanga, a prominent oil industry lawyer, in Uganda’s Daily Monitor newspaper.

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Additional reporting by Rodney Muhumuza in Kampala, Uganda.

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The Associated Press’s climate and environmental coverage receives support from several private foundations. Learn more about AP’s climate initiative here. The AP is solely responsible for all content.

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