Kampala, Uganda
Environment, human rights defenders and communities affected by the East African Crude Oil Pipeline (EACOP) are deeply outraged by Standard Bank’s decision to finance the controversial project.
Through the StopEACOP Campaign, the activists are condemning the bank’s move highlighting the detrimental impact the project will have on the environment and the local populations.
This decision comes after a years-long review process during which stakeholders raised various environmental and social concerns. Critics, however, argue that these issues are largely ignored.
The $5 billion EACOP project, led by TotalEnergies, plans to transport crude oil from Uganda’s oil fields to a terminal in Tanga, Tanzania.
Despite significant opposition from affected communities and environmental and human rights groups, Standard Bank, Africa’s largest lender, has supported the destructive venture.
According to Nonkululeko Nyembezi, Standard Bank chair, they had conducted comprehensive environmental and social due diligence before making the decision.
However, the protesters say Nyembezi’s claim contradicts the project’s alleged climate, environmental and human rights risks. The Bank’s decision is also at odds with the assessment of its peers, who have pulled out their support for the EACOP over similar concerns.
Human Rights Abuses
In May alone, 11 oil pipeline critics have been arrested in Uganda and Tanzania for voicing their concerns about the project.
In addition, Steven Kwikiriza, one of the community leaders from the Kingfisher region in Uganda was recently abducted by the Uganda Peoples’ Defense Forces (UPDF), bringing condemnation from the UN Special Rapporteur on Human Rights Defenders across the world.
Standard Bank’s untimely announcement of their decision to finance EACOP, illustrates their detachment from the realities and experiences of communities on the ground and calls into question their claim to have done thorough due diligence.
The activists have persistently highlighted the potential hazards of the controversial oil project, including severe impacts on wildlife habitats, the displacement of communities, and the exacerbation of climate change through increased greenhouse gas emissions.
Many field investigation reports, including the most recent one by Human Rights Watch, have documented and denounced the inadequate compensation and significant disruption experienced by residents displaced by the pipeline’s construction.
Regarding the continued suffering, Standard Bank’s decision to finance EACOP shows a disregard for the voices and rights of the communities in Uganda and Tanzania who will bear the brunt of the environmental and social devastation caused by the project.
Protests
Recently, climate and social justice organisations and groups in South Africa staged various protests outside Standard Bank’s offices in Rosebank, Johannesburg condemning their decision.
These demonstrations, including a large protest with hundreds of participants on the day of the bank’s AGM in 2023, a three-day-long occupation of the bank’s entrance in September of the same year, and weekly pickets held outside the bank’s parking lot by Extinction Rebellion, sought to bring the demands and experiences of EACOP- affected communities to their attention.
Despite all this effort, Standard Bank has refused to engage in meaningful and constructive dialogue and, instead, its response has been characterised by repression and increased militarisation.
The South African Police Service has also intervened to protect the interests of the bank and has arrested peaceful demonstrators on two occasions.
It’s enough indication that Standard Bank’s prioritisation of profit over people and the planet and its lip-service commitment to constructive dialogue and meaningful engagement with front-line communities and other key stakeholders.
Standard Bank, And The Business Risk
The decision to bankroll the project also casts doubt on Standard Bank’s assessment of the business and reputational risks stemming from the risks to local communities, environment and climate posed by the project.
Major financiers and insurers from North America, Europe, and Japan have publicly ruled out support for EACOP due to global outcry over the harmful project.
The expected finance from China has also been delayed, while the Chinese state-owned insurers and banks have taken a prolonged time to assess the outstanding risks.
As a result, the EACOP project is facing significant challenges and project sponsors are reportedly in a cash crisis to fill the funding gap, which threatens to stall the construction.
These delays come as a result of the immense pressure that potential financiers have come under from communities, civil society, the international community and even shareholders and investor groups who express grave concern over the catastrophic socio-economic, biodiversity and climate change risks of the project.
Standard Bank’s decision to finance the EACOP project starkly contradicts industry trends, as leading banks and insurers have distanced themselves from this controversial initiative.
This decision exposes Standard Bank to significant risks, including the potential for stranded assets, especially as the global economy transitions towards clean energy solutions.
Furthermore, with Uganda already facing a severe debt crisis, worsened by the country’s oil-induced borrowing spree, the environmental and social costs associated with EACOP could precipitate an economic disaster for the people of Uganda as well as financiers and their shareholders who opt to engage with this project.
It is clear that investing in EACOP threatens the stability of vulnerable communities and jeopardises the financial health and reputational integrity of those who support it.
A 2022 report assessing the EACOP and associated oil fields against internationally recognised environmental and human rights standards for financial institutions found numerous violations, putting banks at risk if they sign on to support the project.
NGOs, Activists React
The assessment, undertaken by the Africa Institute for Energy Governance (AFIEGO), Inclusive Development International (IDI) and BankTrack, suggests that the project is not in compliance with many of the criteria outlined in the Equator Principles and the Environmental and Social Performance Standards of the International Finance Corporation (IFC), two internationally recognised standards for responsible finance.
AFIEGO further demands that Standard Bank review and rescind its decision to finance the EACOP project immediately. While it may be too late for Standard Bank to redeem its supposed commitment to people and the planet, there is still time for other potential lenders, particularly Chinese state-owned banks, to demonstrate their dedication to human rights and sustainability by refusing to support EACOP.
The activists want the global community to continue its unwavering support for the StopEACOP campaign and the communities on the frontlines.
It is not too late to halt this disastrous project and prevent the extensive environmental, social, and economic damage it promises to inflict.
Diana Nabiruma, Senior Communications Officer- AFIEGO, said that Standard Bank prides itself on financing Africa’s development. However, the bank’s decision to finance the EACOP, not to mention its financing of other fossil fuel projects across Africa, earns the institution the title of an anti-people and anti-development bank.
“Fossil fuel projects like EACOP that cause livelihood losses, enslave Ugandans by worsening indebtedness and drive all of us deeper into the climate crisis should not be financed by any bank,” she added.
Zaki Mamdoo, StopEACOP Campaign Coordinator, noted that for years, they have campaigned tirelessly against Standard Bank, bringing the grievances and aspirations of impacted communities directly to their doorstep time and time again.
Each time, Mamdoo explained, they are met either with deafening silence or with outright violence from an institution that has shown itself to be truly heartless and utterly indifferent to the well-being of ordinary people.
“Let it be known that this announcement will not deter us. We will continue to stand in solidarity with the communities affected by EACOP and will escalate our actions against Standard Bank in the coming months,” he pledged.
According to Richard Senkondo, Executive Director of Organisation for Community Engagement, Tanzania, Standard Bank is contributing to the devastation of our communities including through the immense loss of land and livelihood.
Sekonde argues that the bank has chosen to ignore the plight of the people and to support the exploitation and suffering at the hands of greedy multinational corporations.
“This is a decision that places them squarely on the wrong side of history and which marks them as an institution with no regard for human rights and justice,” he stated.
COTFONE
The Community Transformation Foundation Network (COTFONE) has been closely tracking the East African Crude Oil Pipeline (EACOP) task from its inception.
Yisito Kayinga Muddu, the National Coordinator of COTFONE, reports numerous environmental and human rights violations related to the task.
“Human beings suffering from the pipeline (PAPs) and human rights defenders have confronted intimidation and assaults. There were times when our houses and places of work were broken into, essential files were stolen, and computers were taken all through staged robberies or direct raids. Yet Many have additionally been arrested, abducted, and tortured for opposing the venture,” he said.
In districts like Sembabule, Lwengo, Kyotera, and Rakai, many PAPs are nevertheless struggling due to inadequate compensation. The compensation they acquired was no longer sufficient to shop for new land equal to what they misplaced, leaving them in a precarious state of affairs. Others have not been compensated at all, exacerbating their financial and social instability.
These ongoing troubles spotlight the excessive shortcomings inside the assignment’s implementation and the destructive effect on nearby communities.
COTFONE’s findings further highlight the pressing want for an intensive assessment of the EACOP venture’s practices and policies. The documented violations and the plight of the affected groups name for fast motion from the government and stakeholders to cope with those grievances.
PAPs
According to Margaret Ssuuna, Richard Birimuye, Ismael Bwowe, Richard Kisaakye, and other people affected by the pipeline project, it will require a collective effort to get these issues addressed.
“Without the right intervention and fair compensation, the project threatens to perpetuate similar human rights abuses and environmental degradation, undermining the well-being of thousands of people in the region,” said Bwowe.
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