For more information please contact:
Johan Frijns, director BankTrack, email: Johan@banktrack.org, tel: +31 6 12421667 (m), +31 24 3249220 (p)
Share this page:
312 Civil society organizations from 58 countries have today called upon the financial institutions that make up the Equator Principles Association (EPA) to “act with courage and ambition and not settle for business as usual” when deciding upon a new version of the banking sector’s standards for financing large-scale infrastructure projects at their annual meeting in Singapore, next week from November 18th to 20th.
An “Open letter from Civil Society to all Equator banks” with this message was delivered earlier today by BankTrack, the civil society banking sector watchdog, to all 100 individual Equator banks and to the EPA secretariat and Steering Committee, on behalf of all signatory organizations.
The letter expresses deep concern that the ongoing two-year long Equator Principles revision process may well deliver no hard commitments from banks to stop financing projects that pose a high risk to the world’s climate, such as new coal mines and power plants, oil pipelines and gas terminals, and may not succeed in ensuring projects situated on Indigenous Peoples’ land only proceed with their freely given explicit consent. The signatory organizations signal that they would consider such a ‘business as usual’ outcome unacceptable.
The revision process for the Equator Principles was agreed at the 2017 EPA annual meeting in Brazil following BankTrack and allies calling on the EPA to address the ongoing financing under the Equator Principles of projects with a massive negative impact on the world’s climate and which violate Indigenous Peoples’ rights, citing the Dakota Access Pipeline (DAPL) as the most notorious example of such a ‘fully Equator compliant’ project.
The ‘Equator Banks, Act!’ campaign coalition then called for a complete overhaul of the Equator Principles, including a full rethink of the underlying concept of ‘risk management’ to focus on risks posed by projects to nature and people, and not only on the risks to the project itself. Projects posing massive environmental and human rights risks to people and planet should no longer be eligible for financing under the Equator Principles, the campaign argued.
With one week to go until banks are set to agree the new Equator Principles, the 300+ groups are becoming concerned that no such overhaul of the Principles will be decided upon, and that the new version, ‘EP4’, will allow for the continued financing by Equator banks of precisely the sort of disaster projects that triggered the emergence of the Equator Banks Act coalition in the first place. A draft version of the new Principles was met with deep disappointment by campaigners, and only limited further changes have since been proposed.
Johan Frijns, director of BankTrack, commented: “With this letter, a wide range of organizations big and small, from community centers to global development organizations to local climate campaigners to indigenous organizations to nature conservation groups to international women’s organizations to national consumer groups and human rights advocates, want to send a clear signal to all Equator banks that anno 2019, with the world facing multiple social and environmental crises, we expect a serious commitment from them to thoroughly change the way they do business, by adopting new Principles that will no longer allow the financing of projects that contribute to such crises''.
Osprey Orielle Lake, Founder/Exec.Dir. Women's Earth and Climate Action Network (WECAN) said: “The current version of the Equator Principles was adopted in 2013, two years before the Paris Climate Agreement. The whole world has by now agreed that in order to reach the Paris climate goals unprecedented steps must be taken, starting with bringing an end to the fossil fuel era. Equator banks must do their share and immediately stop financing coal, oil and gas projects that pose a major risk of locking the world into another few decades of fossil fuels addiction”.
Carla Fredericks, Director of First Peoples Worldwide said: "More than ever before, Indigenous Peoples around the world are actively resisting the imposition of finance and investment that does not proceed in line with their rights. When investment does not do so, Indigenous Peoples are the first to experience violence and the negative impacts of imposed development. With this letter, these organizations urge all Equator banks to acknowledge their responsibility to respect the human rights of Indigenous Peoples and guarantee their free, prior and informed consent on all projects that affect their communities. If not further revised, the Equator Principles can no longer be relied upon as a proxy for responsible and sustainable project finance."
Anja Bakken Riise, director of Framtiden i våre hender, said: “The Equator Principles are all about risk management, but the only sensible risk management today is to help ensure that the planetary ecosystem as a whole remains stable. For banks this means an end to financing projects that threaten the climate, lead to forest destruction, pollute our oceans and kill our plants and animal species.”
Ben Cushing, Campaign Representative Beyond Dirty Fuels, Sierra Club said: "The Dakota Access Pipeline should have taught all Equator banks about the risk of supporting fossil fuel projects against the will of the Indigenous peoples, whose land is being threatened by these projects. Unless banks commit to walking away from fossil fuel projects that threaten the rights of Indigenous communities, they will continue to be exposed to severe reputational and financial risk."
Moira Birss, Finance Campaign Director Amazon Watch said: "The brutal murder of forest guardian Paulo Paulino Guajajara in the Brazilian Amazon earlier this month is a tragic reminder of the risks that indigenous peoples face in their efforts to defend their rights, ancestral territories, and our global climate. The Equator Principles revision process purported to address risks to indigenous peoples' rights, yet the current revision does not sufficiently ensure those rights; a lack of adequate indigenous rights protections portends more violence against indigenous peoples, more destruction of essential ecosystems like the Amazon, and more climate chaos."
Ryan Brightwell, Human rights campaigner at BankTrack said: “This revision of the Equator Principles may well be the last chance for Equator banks to get it right for a long time to come. It would be a huge missed opportunity if the EPA again can’t deal decisively with the systemic flaws that have plagued the Equator Principles for too long. So, be courageous. Commit to full transparency on which projects gets financed under the EPs; be accountable to communities by establishing a mechanism that can deal with grievances if they occur; do not allow financing for projects on Indigenous land without permission, anywhere; and recognise the massive risk posed by fossil fuel projects to both our planet and your own future business.”
Bernadette Maheandiran, Research and Legal Analyst at Market Forces said: “What good is a new set of principles if nothing changes? While much-needed revisions to the EPs are being contested, some non-Equator banks are moving ahead on climate. Banks like Singapore's OCBC, which is out of coal power projects, actually use robust risk assessment frameworks to make sure their project finance lending is up to scratch. In contrast, EP financial institutions continue to finance polluting coal power projects without appropriate public consultation, such as Vung Ang 2 in Vietnam. EP banks like Japan's SMFG, MUFG, Mizuho, SMTB and Standard Chartered must be forced to end their financing of all new coal power and stop risking our collective climate future.”
Greig Aitken, climate campaigner at BankTrack said: “This week’s forest fires directly threatening the suburbs of Sydney are just the latest stark warning that in a world where there is ever less ‘life as usual’ because of climate breakdown, there can be no such thing as ‘business as usual’. Every new fossil fuel project being financed by Equator banks leads us further away from a climate stable world, into a future where neither people nor business can thrive.”
Note to editors
For the text of the open letter see www.equatorbanksact.org and below
For the full list of Equator banks see: https://www.equatorbanksact.org/equator_banks
And the recommendations from the stakeholder consultation: https://equator-principles.com/wp-content/uploads/2019/11/2019-09-25_EPA-Stakeholder-Consultation_BSR-Summary-and-Recommendations.pdf
Full text: An open Letter from Civil Society to all Equator Principles Financial Institutions (EPFIs)
This November 18-20, your institutions will meet in Singapore at the annual meeting of the Equator Principles Association (EPA), to decide on your commitments under the proposed new Equator Principles, EP4.
As you will recall, the decision to revise the Equator Principles was taken at your 2017 Annual Meeting in Sao Paulo after 270 organisations and 130,000 individuals signed the Equator Banks Act petition, asking your institutions to ‘Stop financing climate disasters’ and to ‘Respect Indigenous Peoples’ rights and territories’.
The petition reflected our deep concern over the ongoing financing by EPFIs of coal, oil and gas extraction and infrastructure projects the world over, with many of these projects situated on the lands and territories of Indigenous Peoples that did not give permission for these projects to proceed. It was triggered when in 2016 no fewer than 14 EPFIs provided finance for the Dakota Access Pipeline (DAPL) in the United States, a project fiercely opposed by the Standing Rock Sioux Tribe and their allies because of the threat it posed to their water sources - and leading to well-documented human rights violations when these protests were quelled.
If projects such as DAPL can get financed under the Equator Principles, not only will communities and the planet continue to be exposed to major environmental and human rights risks, but also Equator banks themselves will remain exposed to precisely the sort of severe reputational and financial risks that application of the Equator Principles is supposed to prevent.
This month in Singapore, one week before the world meets in Madrid for the 25th Conference of the Parties to the Climate Treaty, your two-year long drafting process for EP4 will come to an end. We do not know what the final proposal will look like, as the final draft of EP4 has not been shared with stakeholders, not even with those that constructively engaged in this two-year discussion.
We do know, however, if the final EP4 closely resembles the draft EP4, it will not put an end to Equator banks’ financing of climate disaster projects; it will not comprehensively ensure the rights of Indigenous Peoples, and it will not deal with other major shortcomings of the Equator Principles that urgently need to be addressed, such as their limited scope and their lack of transparency and accountability. By and large, such an EP4 package would be ‘business as usual’ in the years to come.
Our organisations would consider such an outcome unacceptable.
We strongly believe that at the end of 2019, in a world increasingly prey to an ever- accelerating climate crisis, with forests disappearing at an unprecedented rate, tens of thousands of animal and plant species disappearing with them, with poverty and inequality rising and conflicts over control of land, water and resources deepening, for the Equator Principles to proceed with ‘business as usual’ is not an option.
‘Business as usual’ will see the continued financing by EPFIs of disaster projects that lead to and deepen these many crises. It will not deliver on the central promise of the Equator Principles that ‘negative impacts on project-affected ecosystems, communities, and the climate should be avoided where possible’ (EP3, preamble).
Continuing with ‘business as usual’ will also not help EPFIs operating in our volatile world meet the stated objective of the Principles of adequately managing risk. For this to happen it is necessary that the ‘comprehensive risk management’ concept at the core of the Principles is expanded, so that it no longer only focuses on managing risks posed by external circumstances to a project, but also encompasses all risks that a project will pose to communities, nature and climate, both locally and globally.
In short, financing coal power plants and other new fossil fuel infrastructure – which pose an immense risk to the world’s climate, and therefore to your future business – can no longer be considered an outcome of adequate risk management; it needs to stop. Financing projects on the lands and territories of Indigenous Peoples against their will, triggering sustained conflicts that also impact your future business, is no longer an option; it needs to stop. Financing projects that will destroy immense swathes of forests, and all life within them, leaving a barren infertile landscape where no future business can thrive is no longer an option; it needs to stop. And so on.
This is why, right before your Singapore meeting, our organisations once more call upon your institutions to Act, with courage and ambition.
We call on you to ensure that the EP4 you agree upon in Singapore will not be mere ‘business as usual’, but will contain clear, ambitious and courageous commitments and provisions that no longer allow the financing of projects that pose a direct threat to our world and to your future business, but will steer your investments towards projects that will preserve it and help it thrive for future generations.
Our organisations will carefully monitor the proceedings and outcome of your meeting, and take further action as we deem appropriate.
We wish you a successful meeting!