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Canadian protest over RBS oil sands role

By Ed Crooks, Energy Editor Financial Times
Main
Banks
Dodgy deals
London, Nov 16 2009

Royal Bank of Scotland and the government, which holds 70 per cent of  the bank's shares, will be targeted by protests this week from Canadian  aboriginal groups aiming to stop RBS lending to companies that invest  in oil sands extraction in western Canada.

A meeting in Parliament on Tuesday with representatives of the First  Nations, as the native Canadians are known, will highlight calculations  by campaigners that since the start of 2007, RBS has extended $13.9bn  (£8.3bn) in loan guarantees or debt and equity underwriting to  companies linked to oil sands.

That includes companies active in the region, such as Royal Dutch Shell  , and those that are considering investments, such as BP.

The move follows the failure last month of court action to force a  judicial review of the environmental standards used by the Treasury in  its management of RBS.

The campaign groups that brought the action - the World Development  Movement, Platform and People & Planet - plan to appeal, but are also  trying to raise the political pressure on the government.

The campaigners say RBS and other banks lending to the oil sands  industry are in breach of the Equator Principles, the standards for  socially and environmentally responsible lending agreed in 2003.

RBS was one of the ten founder signatories of the principles, which  include a requirement to take into account the rights of indigenous  people in oil developments and other large projects.

The First Nations argue that their rights to hunt and fish in the oil  sands region of Alberta, supposedly guaranteed under treaties with the  Canadian government, have been breached by the pollution created by the  oil projects.

Simon Hughes, the Liberal Democrats' spokesman for energy and climate  change, will host a meeting in Parliament on Tuesday with the  campaigners.

Opponents of oil sands development argue that, because the carbon  dioxide emissions from oil extraction are typically much higher than  for conventional oil, they are a particularly serious contribution to  the problem of climate change.

Melina Laboucan-Massimo, a campaigner, said: "It is really embarrassing  for the UK that a state-owned bank is trampling on indigenous people's  rights, and supporting a climate change time bomb."

RBS responded that it "recognises the reality of climate change and  fully supports the transition towards a low carbon economy", adding  that it had been a leading arranger of finance to the renewable energy  sector.

Last week, it was announced that RBS had been part of a consortium  raising £1.4bn ($2.3bn) in finance for Britain's onshore wind industry.    

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