The world’s longest heated oil pipeline right through the heart of Africa, an initiative of French oil major, Total and majority state-owned China National Offshore Oil Corporation (CNOOC), is currently suffering a major blow.
In response to an NGO letter sent to the world’s biggest global insurers and brokers to ask them to steer clear from Total’s highly destructive and controversial East Africa Crude Oil Pipeline project, AXA has confirmed that it will not be involved.
It says the “project is not compatible with [their] risk appetite and, more broadly, with [their] climate commitments.” Seven banks have already committed not to finance the deal.
NGOs are welcoming AXA’s position and call on other insurers to follow.
AXA’s commitment comes after members of the StopEACOP Alliance sent letters to five brokers and six re/insurers asking them to publicly commit to steer clear of the oil pipeline project. Several weeks ago, Total East Africa Midstream B.V., a subsidiary of French oil giant Total Energies, published a tender for re/insurance brokerage services for the East African Crude Oil Pipeline (EACOP).
Founder and Director at Reclaim Finance, Lucie Pinson, said: “We warmly welcome this decision, which comes as a fresh blow for TotalEnergies and its polluting oil pipeline project. If the oil and gas major needed new evidence that the EACOP project is toxic, this is it: none of the top French financial institutions want to put a stamp on it.
‘’It’s also particularly encouraging that AXA says the project is not aligned with their climate commitment. We hope that EACOP is only the first of a long list of new oil and gas projects that AXA says no to. That would mean they take their net zero pledge seriously and are committed to go beyond climate rhetoric to truly align their oil and gas policy with the Paris climate agreement.”
The top three French banks BNP Paribas, Crédit Agricole and Société Générale, along with Barclays, Credit Suisse, UniCredit and ANZ have now committed not to finance the EACOP project .
The construction of the pipeline, which will stretch 1,445 kilometres from Uganda to Tanzania, is essential for the exploitation of newly discovered oil reserves in the Great Lakes region.
In addition to accelerating the climate crisis, the project threatens many protected environments, forests, wetlands and mangroves, as well as the livelihoods of local communities.
Over 100,000 people across Uganda and Tanzania will lose the land they rely on for farming and animal raising, and many will be forcibly removed from their homes. Communities along the pipeline route are already suffering from restricted access to their land to grow crops.
Prince Papa, Africa programmes Coordinator at the Global Catholic Climate Movement, Prince Papa, said: “This welcome signal from the giant insurer means that TotalEnergies could have difficulties insuring this extremely risky and damaging project.
‘’No responsible insurer should support the building of a massive crude oil pipeline in the midst of a climate crisis, particularly one with impacts of this magnitude on nature and human rights. It’s high time for insurers that are committed to climate action to take these concerns seriously and withdraw their support.”
AXA is the chair of the net zero insurance alliance which brings together insurers committed to achieve carbon neutrality by 2050.
The recent International Energy Agency net zero scenario and the recent statements made by UN Secretary-General, António Guterres, at the Insurance Development Forum Summit, make clear the urgent need for the global insurance industry to end underwriting of new fossil fuel projects.
EACOP is irreconcilable with the net zero target, and with the goals of the Paris Agreement.
Executive Director of Inclusive Development International, David Pred, said: “We applaud AXA for demonstrating climate leadership. At the same time we appeal to Allianz, SCOR, Munich Re, Swiss Re, and Zurich to follow AXA’s lead and do the right thing.
‘’As members of the Net-Zero Insurance Alliance and purported climate leaders, these companies have no excuse for staying silent. It is time for each of them to publicly commit that they will not support EACOP or its associated oil extraction projects, and instead support the transition to an inclusive, sustainable and decarbonised economy.”
For activists pressing against the 1,445 kilometers EACOP, it will have disastrous consequences for local communities, for wildlife and for the entire planet – ‘’we have to stop it.’’
The project threatens to displace thousands of families and farmers from their land. It poses significant risks to water resources and wetlands in both Uganda and Tanzania – including the Lake Victoria basin, which over 40 million people rely upon for drinking water and food production.
The pipeline will rip through numerous sensitive biodiversity hotspots, and risk significantly degrading several nature reserves crucial to the preservation of threatened elephant, lion and chimpanzee species.
And of course, burning more crude oil is the last thing our planet needs!
EACOP will increase the severity of the global climate emergency by transporting oil that will generate over 34 million tons of carbon emissions each year. The pipeline will open up critical ecosystems in the landlocked regions of Central and Eastern Africa to commercial oil exploitation.
Building a massive crude oil pipeline in 2021 when the whole world is trying to urgently shift away from fossil fuels makes no sense – environmentally or economically.
The people of Uganda and other neighbouring countries in East and Central Africa shouldn’t be burdened with the money-losing and polluting industries of yesterday – they should have the same opportunities to embrace the clean renewable energy of the future and all the benefits that come with it.
Economic strength will come from celebrating the area’s rich diversity, heritage and nature. Investing in sustainable industries like tourism and in reforestation programs will provide more jobs and better long-term security to local communities than the dying oil industry would.
The future hangs in the balance, but as we’ve seen in so many cases around the world, when we unite to support local communities taking a stand for their rights and a better future, we can be a powerful match for any corporate giant.