NGOs warn financial institutions and investors of human rights risks associated with financing the East African Crude Oil Pipeline
"Crude Risk: Risks to banks and investors from the East African Crude Oil Pipeline"
The much delayed Final Investment Decision (FID) on the controversial East African Crude Oil Pipeline (EACOP) is now expected before the end of this year, with construction due to commence in 2021. Without the successful completion of EACOP, Total and CNOOC Ltd will not be able to begin commercial production at two oil fields in the Albertine Graben in Uganda. Debt financing (amounting to approximately $2.5bn) for the EACOP, to which the Equator Principles will apply, is yet to be finalised. Stanbic Bank Uganda (a subsidiary of South Africa’s Standard Bank) and Japan’s Sumitomo Mitsui Banking Corporation have reportedly been appointed lead arrangers and advisors to the project, with China’s ICBC also on board as an advisor...
This briefing outlines the risks the companies and banks could face from the EACOP, and provides questions to help them and their shareholders to understand those risks and whether a decision to proceed with or finance the EACOP is in their long-term interests. We consider that many of these risks and impacts are unacceptable and incapable of being adequately mitigated, and that financial institutions should avoid financing the pipeline. [Business and Human Rights Resource Centre invited Standard Bank, Sumitomo Mitsui Banking, CNOOC and Industrial and Commercial Bank of China (ICBC) to respond. We have included Standard Bank's response. Sumitomo Mitsui Banking and ICBC did not respond. We shall include CNOOC's response if we receive it]