100 ORGANIZATIONS ARE CALLING ON LLOYD’S TO REJECT EACOP
Lloyd’s of London’s role in mobilizing insurance for the East African Crude Oil Pipeline
Dear Mr. Carnegie-Brown and Mr. Neal,
I am writing on behalf of the #StopEACOP campaign in relation to Lloyd's of London's potential support for the East African Crude Oil Pipeline (EACOP), a proposed 1,443-kilometer oil pipeline in Uganda and Tanzania. We believe that Lloyd's members are likely to be approached for (re)insurance coverage for the pipeline.
Campaign members previously reached out to your colleagues Mr. Sansom and Mr. Khilosia in November 2020 and August 2021 to provide a finance risk briefing and updated briefing on the EACOP. Unfortunately, we received no response. We are now following up with a third update to the risk briefing, dated February of this year. You can find the 2022 update attached. We highly recommend reviewing all three documents in order to gain a full understanding of the range of severe risks and controversies surrounding the EACOP project.
Here is a high-level overview of the project's key environmental and social risks:
If built, the EACOP will be the longest electrically heated pipeline in the world. The pipeline and associated oil extraction projects will impact the land of over 100,000 individuals in Uganda and Tanzania, threatening communities that rely on farming for their livelihoods and for survival. Thousands of project-affected families are already facing food insecurity, having been deprived of the use of their land to produce food and cash crops for several years without any compensation.
The project poses extensive threats to one of the world’s most ecologically diverse regions, and the communities who rely on it: the pipeline would disrupt nearly 2,000 square kilometres of protected wildlife habitats critical to the preservation of vulnerable species like the Eastern Chimpanzee and the African Elephant. It threatens Lake Victoria, a critical freshwater source for more than 40 million people, and Lake Albert, the single largest contributor to Uganda's fishing industry. The upstream component entails drilling 130 oil wells within Uganda's largest and oldest protected nature reserve, Murchison Falls National Park, a Ramsar site which hosts numerous endangered species and is relied upon by over one million people for fishing and water supplies. An oil spill or leak would have catastrophic and irreversible effects on these vital resources. Expert technical reviews of the project have found that the TotalEnergies and CNOOC have failed to employ the 'Best Available Technique' to minimize risks to these critical resources, opting instead for high-risk and low-cost designs.
The project poses immense climate risks: the oil transported by EACOP is expected to release an estimated 34.3 million metric tons of CO2 per year, significantly greater than the current annual emissions of Uganda and Tanzania combined.
These risks and impacts are occurring in a high-risk context with an increasingly restricted civic space, in which local communities are not able to safely express their views in relation to the project. Local civil society actors and community leaders have faced intensifying harassment, intimidation, reprisals and arrests for speaking out in defense of their rights – including as recently as this past February – garnering attention from multiple UN Special Rapporteurs.
Many of these human rights, environmental and climate risks are inherent to the project design and purpose, making them impossible to adequately mitigate even if the project sponsors, Total and CNOOC, were to abide by international best practice – which they have failed to do thus far.
As such, the project has faced intense local and transnational resistance, with over one million people having signed a petition against the project. The project faces legal challenges at the national, regional and international levels, including in French courts and at the East African Court of Justice. This includes a case at the East African court of justice as well as the first case under the duty of vigilance law in the French courts.
At the time of writing, five major multinational (re)insurers, Zurich, AXA, Swiss Re, SCOR and Hannover Re have stated that they will not insure the project. Fifteen major commercial banks from Europe, Japan, Australia and South Africa have publicly stated that they will not participate in the $3 billion project loan needed for the pipeline to reach financial close. The UK export credit agency, UKEF, and the African Development Bank have similarly refused support for the project. This reluctance among potential financiers and insurers has reportedly driven up the project's cost by roughly 30%, from $3.5 billion to $5 billion. It has also fostered significant controversy, creating immense reputational risk for any institution that chooses to support the EACOP.
The #StopEACOP Campaign calls upon Lloyd’s to advise its members against participation in (re)insurance coverage for the East African Crude Oil Pipeline and associated oil projects. We urge Lloyd's members to instead support sustainable and rights-respecting alternative development opportunities in the region.
We welcome the opportunity to discuss this further in a virtual meeting and look forward to receiving your response by April 18th, 2022. Please direct any responses to Omar Elmawi at info@stopeacop.net and Coleen Scott at coleen@inclusivedevelopment.net.
Regards,
Omar Elmawi
Coordinator of #StopEACOP
The organizations that have signed on to this letter include:
#StopEACOP Campaign
350 Hawaii
350NYC
AbibiNsroma Foundation ANF
Accelerate Neighborhood Climate Action
ActionAid Denmark
Afri-carbon pay organization
Alliance for Empowering Rural Communities
Amis de la Terre France / Friends of the Earth France
AnsvarligFremtid
Avaaz
BankTrack
Barbara asbl
Be The Future
Both ENDS
Businesses for a Livable Climate
Call to Action Colorado
Capitol Heights Presbyterian
CatholicNetwork US
Centre for Citizens Conserving Environment & Management (CECIC)
Citizen's Network For Community Development Zambia
Climate Aid Initiative
CO Businesses for a Livable Climate
Collapse Total Berlin/DE
Community for Sustainable Energy
Community Transformation Foundation Network (COTFONE)
Croydon Climate Action
deCOALonize
Earth Action, Inc.
Earthlife Africa Jhb
Eco Action Families
Empower Venture Partners
Extinction Rebellion San Francisco Bay Area
Famílias pelo Clima
Families for a Livable Climate
FIDEP Foundation
Fridays for Future Uganda
Friends of the Earth US
Greater New Orleans Housing Alliance
GreenFaith
Heinrich Böll Stiftung
I-70 Citizens Advisory Group
Inclusive Development International (IDI)
Indivisible Ambassadors
Innovation pour le Développement et la Protection de l'Environnement
Jamaa Resource Initiatives
Just Share
Justiça Ambiental JA! - FoE Mozambique
Justice, Peace and Integrity of Creation Franciscans Africa
Laudato Si Movement
Leave it in the Ground Initiative (LINGO)
Les Amis de la Terre-Togo
London FOE Network
Mayfair Park Neighborhood Association Board
Mental Health & Inclusion Ministries
Milieudefensie
Montbello Neighborhood Improvement Association
Mothers Out Front Colorado
Mothers Rise Up
Mothers’ Climate Action Network
Mt. Kenya Network Forum
Music Declares Emergency
Natural Justice
North Range Concerned Citizens
Our Kids Climate
Power Shift Africa
Public Citizen
Rainforest Action Network
Rapid Transition Alliance
RapidShift Network
Re-set: platform for social-ecological transformation
Reclaim Finance
ReCommon
Rettet den Regenwald
Sauti ya Wanjiku
Save EPA (former employees)
Sierra Leone School Green Clubs (SLSGC)
Small Business Alliance
South African Faith Communities Environment Institute, SAFCEI
Southwest Organization for Sustainability
Spirit of the Sun, Inc.
Stand.earth
Stop Cambo
SumofUs
System Change Not Climate Change
Talisman
The Green House Connection Center
The Parents' Climate Community
Tipping Point UK
Unite North Metro Denver
Urgewald
Voice of Justice, Kenya
Wall of Women
Warrior Moms
Western Slope Businesses for a Livable Climate
Wilwerding Consulting, Co-Chair, Littleton Business Alliance
Womxn from the Mountain
Working for Racial Equity
Zero Regional Environment Organization