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<strong>Cash<strong>in</strong>g</strong> <strong>in</strong> onTAR SANDS

<strong>Cash<strong>in</strong>g</strong> <strong>in</strong> on Tar Sands:RBS, UK banks and Canada’s “blood oil”Contents5 Part 1 - Executive Summary11 Part 2 - The impact of tar sands extraction18 Testimony 1 - Billy Joe Laboucan, Peace River Region – Trap l<strong>in</strong>es and tar sands21 Part 3 - UK banks f<strong>in</strong>anc<strong>in</strong>g Canadian tar sands extraction24 Testimony 2 - Mike Mercredi, Fort Chipewyan - Do<strong>in</strong>g time <strong>in</strong> tar sands27 Part 4 - Case studies of tar sands-related companies33 Testimony 3 - Clayton Thomas-Muller – Tar sands and treaty rights37 Part 5 - The Royal Bank of Scotland, public money and tar sands42 Campaign case study: Pension funds and shareholder revolts47 Part 6 - Conclusions and recommendationsTar sands <strong>in</strong> other parts of the world16 The Republic of Congo (Congo Brazzaville)32 Jordan45 Madagascar50 Appendix 1: Table of Figures53 Appendix 2: RBS and its history of fossil fuel f<strong>in</strong>ance55 Appendix 3: Equator Pr<strong>in</strong>ciples and Climate Pr<strong>in</strong>ciples - The bank<strong>in</strong>g sector’s response to climate change58 Endnotes4

executivesummary5

executivesummaryPetrol companies have been aware for a century of thevast quantities of oil rich bitumen ly<strong>in</strong>g beneath the borealforests of Alberta. But these ‘tar sands’ 1 lay relativelyuntouched dur<strong>in</strong>g the second half of the twentieth centurywhen oil was plentifully and readily available from moreaccessible sources. In those years, it was simply tooexpensive and uncompetitive to extract oil from the tarsands. However as the oil sources available to Westernoil majors became scarcer, the relative commercialattractiveness of tar sands improved and significant<strong>in</strong>vestments <strong>in</strong> their extraction began.Over the past decade there has been grow<strong>in</strong>g <strong>in</strong>ternationalopposition to the development of the tar sands of Alberta.These extraction ventures – dubbed ‘the most destructiveproject on earth’ 2 – have become recognised as threaten<strong>in</strong>gto have a devastat<strong>in</strong>g impact on the global climate. Theunprecedented scale of the projects and the <strong>in</strong>tensity oftheir energy usage means that they constitute an <strong>in</strong>dustrialtipp<strong>in</strong>g po<strong>in</strong>t, a step change from one form of hydrocarbon– conventional oil – <strong>in</strong>to a far more carbon <strong>in</strong>tense form –unconventional oil. 3Canada is the <strong>in</strong>ternational oil <strong>in</strong>dustry’s test site – if itbecomes acceptable to f<strong>in</strong>ance the tar sands of Alberta, thenthe global f<strong>in</strong>ance sector will have normalised a disastrouslyhigh-carbon development path. It is for this reason that theCanadian tar sands have become a frontl<strong>in</strong>e <strong>in</strong> the struggle6

aga<strong>in</strong>st the destruction of the climate though the extractionof hydrocarbons.All new fossil fuel <strong>in</strong>frastructure is extremely capital<strong>in</strong>tensiveto construct and tar sands are even more costlydue to the extra process<strong>in</strong>g required to produce the oil,the pipel<strong>in</strong>es to br<strong>in</strong>g <strong>in</strong> gas to heat the tar sands andso on. Estimates from <strong>in</strong>dustry analysts for the capital<strong>in</strong>vestment needed over the next 20 years to expand tarsands production <strong>in</strong> the Alberta region range from $120-220billion. 4 Outside of North America, London is home to thehighest concentration of f<strong>in</strong>ancial <strong>in</strong>stitutions <strong>in</strong>vest<strong>in</strong>g <strong>in</strong> tarsands extraction. 5This report summarises some of the ma<strong>in</strong> problemswitnessed with tar sands extraction <strong>in</strong> Canada. It presentsevidence about the impacts of tar sands extraction on localpeoples’ health, land rights and livelihoods, as well as onthe environment. It documents which UK banks are <strong>in</strong>volved<strong>in</strong> provid<strong>in</strong>g f<strong>in</strong>ancial back<strong>in</strong>g for tar sands, how muchmoney they are provid<strong>in</strong>g, and to which oil companies. Itf<strong>in</strong>ds that:• The three ma<strong>in</strong> high street banks <strong>in</strong> the UK(Barclays, HSBC and the Royal Bank of Scotland)are all <strong>in</strong>volved <strong>in</strong> provid<strong>in</strong>g significant sums ofproject or corporate f<strong>in</strong>ance for oil extraction fromCanadian tar sands.• In the three year time frame exam<strong>in</strong>ed between2007-2009, the Royal Bank of Scotland (RBS) hasled underwrit<strong>in</strong>g for the largest amount <strong>in</strong> loans tocompanies operat<strong>in</strong>g <strong>in</strong> tar sands <strong>in</strong> Canada, to atotal of more than $7.5 billion.• S<strong>in</strong>ce the <strong>in</strong>itial recapitalisation of UK banks tookplace <strong>in</strong> October 2008, RBS has underwrittencorporate debt and equity worth nearly $2.5 billionwith tar sands related companies.• In the same period Barclays Bank has led the mostcorporate debt and equity to tar sands-relatedcompanies, more than $14 billion.Out of the many tar sands related companies that havereceived f<strong>in</strong>ance from these banks, three are exam<strong>in</strong>edas case studies to give a snapshot as to the nature of thecompanies, how they conduct their bus<strong>in</strong>ess <strong>in</strong> obta<strong>in</strong><strong>in</strong>g tarsands and the public controversies they have been <strong>in</strong>volved<strong>in</strong>.The particular role of RBS <strong>in</strong> f<strong>in</strong>anc<strong>in</strong>g tar sands is furtherexam<strong>in</strong>ed <strong>in</strong> the context of its well known position as the UKbank most heavily associated with f<strong>in</strong>anc<strong>in</strong>g all fossil fuelsectors, and that with 84% of RBS now owned by the UKtaxpayer there is an extra dimension of public accountability<strong>in</strong> how the bank <strong>in</strong>vests.All of the major banks <strong>in</strong> the UK have responded to public7

concern about climate change to some extent, throughpublic statements or through the <strong>in</strong>volvement <strong>in</strong> varioussets of voluntary pr<strong>in</strong>ciples. An exam<strong>in</strong>ation of several ofthese <strong>in</strong>dustry-led efforts like the Equator Pr<strong>in</strong>ciples, showsthat the reality of the <strong>in</strong>vestment decisions stand <strong>in</strong> starkcontrast to the rhetoric of the various <strong>in</strong>itiatives.While tar sands extraction has become synonymouswith Canada <strong>in</strong> the m<strong>in</strong>ds of most people, geologists andeng<strong>in</strong>eers have been able to identify and evaluate majordeposits of ‘unconventional’ oil <strong>in</strong> many other parts ofthe world. Although many of these deposits have beenpreviously identified, the cost of extract<strong>in</strong>g them has beenconsidered prohibitive. But as <strong>in</strong>vestment <strong>in</strong> technology <strong>in</strong>Alberta br<strong>in</strong>gs down the price of produc<strong>in</strong>g synthetic crudeand as oil prices fluctuate <strong>in</strong> higher ranges, companies arere-assess<strong>in</strong>g the potential of operations <strong>in</strong> other countries.If extraction can be undertaken on the scale envisaged <strong>in</strong>Alberta then it opens the floodgates for ‘unconventional’oil extraction around the world. Throughout the report,three of these countries – Jordan, the Republic of Congo andMadagascar – are exam<strong>in</strong>ed <strong>in</strong> greater detail.Tar sands developments <strong>in</strong> Canada have resulted <strong>in</strong> veryserious consequences for the local ecosystems andcommunities, despite the fact that Canada is a county thathas a regulatory framework that is relatively robust withregards to human rights and the environment. There is realconcern that extraction <strong>in</strong> many of those countries thatare not as regulated as Canada could result <strong>in</strong> even worseimpacts.Indigenous communities <strong>in</strong> Alberta have been the most heavilyimpacted by the tar sands boom. Three people from some ofthose communities have written first-hand accounts of howthey have seen the projects develop and how their communitieshave been affected, and these testimonies have been <strong>in</strong>cludedthroughout the report. In addition, an account has been<strong>in</strong>cluded of a UK-based campaign to support shareholderresolutions that have been tabled for the upcom<strong>in</strong>g BP andShell Annual General Meet<strong>in</strong>gs, rais<strong>in</strong>g concerns about the<strong>in</strong>volvement of the companies <strong>in</strong> tar sands.F<strong>in</strong>ally, the report makes a number of recommendationsto UK banks, the <strong>in</strong>ternational banks that are signatoriesto the Equator Pr<strong>in</strong>ciples and to the UK Treasury, the<strong>in</strong>stitution that has the power to provide strategic directionto RBS through its majority sharehold<strong>in</strong>g <strong>in</strong> the bank. Theserecommendations are:To the UK bank<strong>in</strong>g sector• Create a moratorium on provid<strong>in</strong>g f<strong>in</strong>ance of anyk<strong>in</strong>d to companies that are actively engaged<strong>in</strong> extract<strong>in</strong>g tar sands or any other forms of‘unconventional’ oil.8

• Develop revised <strong>in</strong>vestment mandates draw<strong>in</strong>g onexpertise and guidance from <strong>in</strong>dependent sourcesand best practices <strong>in</strong> the f<strong>in</strong>ancial sector to identifywhich activities, such as tar sands extraction,should not be funded <strong>in</strong> future.• Make Free, Prior and Informed Consent ofIndigenous and/or local communities a condition ofall forms of project f<strong>in</strong>ance.To the UK Treasury, the Chancellor of the Exchequer,Treasury Select Committee and M<strong>in</strong>ister for Bus<strong>in</strong>ess,Innovation and Skills• Use the majority public ownership of RBS toimmediately impose lend<strong>in</strong>g standards on the bankto prevent the f<strong>in</strong>anc<strong>in</strong>g of companies that:o are engag<strong>in</strong>g <strong>in</strong> the extraction of tar sands orother forms of ‘unconventional’ oil exploration,odevelopment or transport; anddo not ask for the Free, Prior and InformedConsent of Indigenous and/or localcommunities.• Include enhanced standards for environmentaland human rights protection <strong>in</strong> the currentparliamentary discussion of the re-regulation of thebank<strong>in</strong>g sector <strong>in</strong> the wake of the f<strong>in</strong>ancial crisis.• Provide <strong>in</strong>centives for long-term, susta<strong>in</strong>ablebehaviour by l<strong>in</strong>k<strong>in</strong>g executive pay to thecompanies’ long-term performance and to thebank’s environmental and social performance.To banks that are signatories to the Equator Pr<strong>in</strong>ciples• Include <strong>in</strong> the Pr<strong>in</strong>ciples the climate impact ofproposed projects as an <strong>in</strong>tegral part of all riskassessments. Commit to a process of cont<strong>in</strong>uouslytighten<strong>in</strong>g the conditions for f<strong>in</strong>anc<strong>in</strong>g under thePr<strong>in</strong>ciples, if required, to meet the challenges posedby an unfold<strong>in</strong>g climate crisis.• Include additional pr<strong>in</strong>ciples that categoricallyexclude the f<strong>in</strong>anc<strong>in</strong>g of all new projects <strong>in</strong>volv<strong>in</strong>gthe exploitation of tar sands and other forms of‘unconventional’ oil.• Commit to work<strong>in</strong>g with groups such as CarbonDisclosure Project and BankTrack to developworkable <strong>in</strong>struments for measur<strong>in</strong>g f<strong>in</strong>anced (or‘embedded’) emissions, and adopt reduction targetsfor each bank. Provide a str<strong>in</strong>gent timel<strong>in</strong>e for this.9

IMPACTSOfEXTRACTION11

THEIThe impacts of tar sands extraction have been welldocumented <strong>in</strong> publications like Unconventional Oil –Scrap<strong>in</strong>g the bottom of the barrel? 6 by WWF and the CooperativeBank, and Dirty Oil – How the tar sands are fuell<strong>in</strong>gthe global climate crisis by Greenpeace Canada. 7 Suchdetailed analysis of the various impacts of m<strong>in</strong><strong>in</strong>g operationsis beyond the scope of this report, which does no more thanprovide a brief overview of the pr<strong>in</strong>cipal impacts.MPACTSOFExtractionClimate impactsThere is no dispute that the process of tar sands extractionis more emissions <strong>in</strong>tensive than that of conventional oilsources, due to the extra energy <strong>in</strong>volved <strong>in</strong> m<strong>in</strong><strong>in</strong>g the tarsands, or <strong>in</strong> the use of large amounts of natural gas <strong>in</strong> orderto super-heat the bitum<strong>in</strong>ous mass <strong>in</strong> the <strong>in</strong> situ process.There is however disagreement as to the magnitude ofthe <strong>in</strong>creased emissions <strong>in</strong>tensity. The lower end of thespectrum of calculations (10-15% more emissions <strong>in</strong>tensivethan conventional fuels) made by the oil <strong>in</strong>dustry itself andthe Albertan government have been challenged by Canadianclimate change academics. 8 In contrast, the Pemb<strong>in</strong>aInstitute has calculated that 28.6 kg of CO 2is emitted <strong>in</strong> theproduction of a conventional barrel of oil, while the averagebarrel of oil produced from tar sands is responsible forpump<strong>in</strong>g 85.5 kg of CO 2<strong>in</strong>to the atmosphere, an <strong>in</strong>crease ofjust under 300%. 9 These calculations do not <strong>in</strong>clude factors12

such as carbon released <strong>in</strong>to the atmosphere throughdeforestation as a result of the m<strong>in</strong><strong>in</strong>g process, or carbonleaked from tail<strong>in</strong>gs ponds, so the reality is that the figurewould be substantially higher.Regardless of the magnitude of the <strong>in</strong>crease <strong>in</strong> emissions<strong>in</strong>tensity, there still rema<strong>in</strong>s the sheer scale of the carbonemissions locked <strong>in</strong>to the amount of tar sands <strong>in</strong> Canadathat could be extracted and burned. The prov<strong>in</strong>ce of Albertahas proven reserves of 174 billion barrels of oil, 10 whichmakes it second only to Saudi Arabia <strong>in</strong> terms of provenreserves. 11 Scientists and many civil society organisationsaround the world have called for atmospheric carbon to bestabilised at below 350ppm 12 <strong>in</strong> order to avoid the worstimpacts of runaway climate change. 13 Current levels ofatmospheric carbon are already at 387ppm and ris<strong>in</strong>g atabout 2ppm annually. It is estimated that the exploitationof Canadian tar sands and US tar shale reserves wouldresult <strong>in</strong> ‘well to wheel’ 14 emissions that would <strong>in</strong>creaseatmospheric carbon <strong>in</strong> the region of 49 and 65ppm. 15 Tarsands exploitation moves us even further away from thepossibility of stabilis<strong>in</strong>g at below 350ppm.Other environmental impactsThe exacerbation of climate change is one the most seriousconsequences of tar sands extraction, but a number ofother, more localised, environmental impacts have also beenHow are tar sands extracted?Tar sands are found <strong>in</strong> the ground <strong>in</strong> the form ofbitumen, which is solid at normal temperatures andmixed <strong>in</strong> with sand, clay and water. The bitumen isfound <strong>in</strong> two locations: when it’s closer to the surfaceit is extracted us<strong>in</strong>g giant open pit m<strong>in</strong><strong>in</strong>g techniques,and when it’s further down, high pressure steam<strong>in</strong>jection (<strong>in</strong> situ) technology is required to remove it.Open pit m<strong>in</strong><strong>in</strong>g strips away the trees from the toplayers of the earth to expose the bitumen beneathit. This process destroys the local environment andecosystems, leav<strong>in</strong>g gap<strong>in</strong>g open pit m<strong>in</strong>es up to 75meters deep as scars on the landscape.In situ m<strong>in</strong><strong>in</strong>g, the technique needed to reach 80% ofthe bitumen, requires <strong>in</strong>ject<strong>in</strong>g the bitumen with highpressuresteam to separate the oil from the sand so that itcan be piped to the surface. Heat<strong>in</strong>g the water to producethe steam requires large quantities of natural gas.documented. The extraction of bitumen and the production ofsyncrude are very water <strong>in</strong>tensive, with each barrel requir<strong>in</strong>gan estimated two to four barrels of water. The Athabasca River<strong>in</strong> Alberta is the primary source of water for the 539 million13

guaranteed Indigenous Peoples the “right to pursue theirusual vocations of hunt<strong>in</strong>g, trapp<strong>in</strong>g and fish<strong>in</strong>g throughoutthe tract”, many First Nation citizens have felt obliged tostop or reduce such activities for fear of toxic contam<strong>in</strong>ationthrough tar sands extraction. There is <strong>in</strong>creas<strong>in</strong>g anecdotalevidence of fisherfolk f<strong>in</strong>d<strong>in</strong>g boils and lesions <strong>in</strong> fish, andhunters f<strong>in</strong>d<strong>in</strong>g tumours <strong>in</strong> game.Fort Chipewyan, which is located on the shore of LakeAthabasca and downstream from numerous tar sands m<strong>in</strong>es,has been described as ‘ground zero’ for the devastationcaused by Alberta’s oil boom. A local doctor has raisedconcerns over alarm<strong>in</strong>gly high rates of what should bevery rare bile duct cancers <strong>in</strong> the town, as well as reportedabnormal rates of immune-system related conditions. 25A study commissioned by the Alberta Health Servicesconfirmed <strong>in</strong> 2009 that there were <strong>in</strong>deed elevated cancerrates <strong>in</strong> the community. 26High levels of dangerous tox<strong>in</strong>s <strong>in</strong> the Athabasca Riverhave been found <strong>in</strong> areas downstream from tar sandsdevelopments. A study <strong>in</strong> 2007 commissioned by the localhealth authority of Fort Chipewyan revealed high levelsof arsenic, alum<strong>in</strong>ium, chromium, cobalt, copper, iron,led, phosphorous, selenium, titanium, and phenols <strong>in</strong> thewater. 28 It found high levels of arsenic, cadmium, polycyclicaromatic hydrocarbons (PAHs) and res<strong>in</strong> acids <strong>in</strong> thesediment, as well as high levels of mercury <strong>in</strong> tested fish.Of these substances, the three contam<strong>in</strong>ants of mostconcern for human health are arsenic, PAHs and mercury.While PAHs and their carc<strong>in</strong>ogenic levels vary, they are allconsidered toxic and l<strong>in</strong>ked to cancer, vascular damage,kidney damage, liver and sk<strong>in</strong> damage. Arsenic is a potentcarc<strong>in</strong>ogen that is also known to have a synergistic effect <strong>in</strong>contribut<strong>in</strong>g to cancer when comb<strong>in</strong>ed with other elements— for example, comb<strong>in</strong><strong>in</strong>g exposure to both arsenic andPAHs can <strong>in</strong>crease the risk of cancer by 8 to 18 fold. Threatsfrom high levels of mercury <strong>in</strong>clude nerve damage, cognitiveimpairment, kidney failure, respiratory failure and death.Although establish<strong>in</strong>g a direct causal relation between<strong>in</strong>creases <strong>in</strong> medical compla<strong>in</strong>ts and specific pollutantsis notoriously tricky, people from the local communitiesare adamant that tar sands are the source of their healthproblems.The right of Indigenous Peoples to Free Prior and InformedConsent to developments that take place on their lands isone that has been recognized by the United Nations. Despitethe fact that some contracts have been signed betweentribal leaders and oil companies, many communities feelthat this has often taken place <strong>in</strong> a way that encourages a‘divide and conquer’ strategy that offers benefits to relativelyfew but disregards the <strong>in</strong>terests and wishes of <strong>in</strong>digenouscommunities generally. In 2008, the International IndianTreaty Council 29 made a submission to the United Nations15

Human Rights Council that asserted that, “the expand<strong>in</strong>g tarsands development has taken place without Right to FreePrior Informed Consent of many of the Indigenous Peopleswhose health, ecosystems, subsistence and way of life arebe<strong>in</strong>g impacted.” 30A number of First Nation communities are organis<strong>in</strong>g toresist the expansion of tar sands on their lands, rang<strong>in</strong>gfrom grassroots activities, to legal challenges such as theone that the Beaver Lake Cree Nation is mount<strong>in</strong>g aga<strong>in</strong>stthe Albertan and Canadian governments. The First Nationcommunities are ask<strong>in</strong>g for an <strong>in</strong>junction aga<strong>in</strong>st any new tarsands developments on their land, cit<strong>in</strong>g more than 17,000<strong>in</strong>fr<strong>in</strong>gements on their treaty rights, by every major oilcompany <strong>in</strong> the world. 31Tar Sands <strong>in</strong> other parts of the world: The Republic ofthe Congo (Congo-Brazzaville)In July 2009, a coalition of groups, <strong>in</strong>clud<strong>in</strong>g Congolesehuman rights organisations and Campagna per laRiforma della Banca Mondiale, published a report,Energy Futures that exam<strong>in</strong>ed Italian oil company Eni’s<strong>in</strong>vestment <strong>in</strong> develop<strong>in</strong>g tar sands (as well as palm oiland reduc<strong>in</strong>g gas flar<strong>in</strong>g as a carbon offset project) <strong>in</strong>the Congo bas<strong>in</strong>. 33 Despite the fact that Congo is Africa’sfifth largest oil producer, 34 70% of the population livesbelow the poverty l<strong>in</strong>e. 35 Congo is a classic example of anAfrican country where oil deposits have resulted <strong>in</strong> the‘resource curse’ – the paradox <strong>in</strong> which countries with anabundance of resources (often fossil fuel resources) havea tendency to have lower levels of economic growth and16

worse development outcomes than countries with lessnatural resources.In May 2008, Paolo Scaroni, the CEO of Eni signed a dealwith Bruno Itoua, the Energy M<strong>in</strong>ister for the Republicof Congo, for a projected €3 billion <strong>in</strong>vestment overseveral years. This deal <strong>in</strong>cluded permits for tar sandsexploration <strong>in</strong> two areas cover<strong>in</strong>g a total of 1,790 squarekilometres. The size of the Congo tar sands reservesare as yet unknown, but Eni estimates that at least 500million barrels are recoverable, with up to a further2.5 billion barrels that may evade discovery, or not beeconomically or technologically feasible to extract. 36The forests of the Congo Bas<strong>in</strong> provide vital regionaland global ‘ecological services’ as a carbon s<strong>in</strong>k andwater catchment bas<strong>in</strong>, as well as play<strong>in</strong>g a critical rolefor global biodiversity conservation. 37 Questions havebeen raised on the impact that tar sands extractionwill have on forests <strong>in</strong> Congo given that large-scalearboreal devastation has been one of the moredocumented impacts of m<strong>in</strong><strong>in</strong>g operations <strong>in</strong> Canada.There have been contradictory statements from Enias to how much forested land will be affected. In July2009, CEO Scaroni said that, “our tar sands are not <strong>in</strong>a tropical forest area otherwise we wouldn’t do it.” 38 Incontrast, a report <strong>in</strong> March 2009 from the company’sExploration and Production division said that, “theresults [of remote sens<strong>in</strong>g and mapp<strong>in</strong>g] show thattropical forest and other very sensitive environmentsof biosphere (e.g. marshlands) represent about 50% to70% of the [tar sands] permits.” 39Congo has been categorised <strong>in</strong> the Index of AfricanGovernance as one of the ten worst perform<strong>in</strong>gcountries. 40 There is real concern that the lack ofenvironmental and human rights regulation <strong>in</strong>Congo could result <strong>in</strong> even more serious impactson communities and ecosystems than have beenwitnessed <strong>in</strong> Canada.While Eni is still at the exploratory stage of tar sandsextraction <strong>in</strong> Congo, evidence has already surfaced ofcommunities be<strong>in</strong>g adversely impacted by bulldozersdestroy<strong>in</strong>g land and crops while clear<strong>in</strong>g access routesto sampl<strong>in</strong>g sites. Accord<strong>in</strong>g to field research carriedout by tar sands researchers <strong>in</strong> Congo <strong>in</strong> 2009, “fourfarmers <strong>in</strong>terviewed stated that they (and others) werenot consulted prior to the destruction of their land andcrops, and that no compensation has been paid.” 41 Asof July 2009, Eni admitted that it had not carried outany public consultation with local communities abouttheir plans for tar sands extraction <strong>in</strong> the region. 4217

Billy Joe Laboucan, Peace River Region“This year 2010, I will be 56 years old, so it’s about ahalf century s<strong>in</strong>ce I was small boy liv<strong>in</strong>g with my parents,brothers, sisters, grandparents and all of the aunts, unclesand cous<strong>in</strong>s <strong>in</strong> the trapp<strong>in</strong>g community of Bison Lake,Alberta, approximately 800 km north of Edmonton. It waspopulated by <strong>in</strong>dustrious and successful trappers and furbuyers who plied the trappers with whiskey <strong>in</strong> order toget the best trades. It was accessible only to horse anddog teams and some White trappers <strong>in</strong> small tractors andbush planes, but we lived well. Our lifestyle and livelihooddepended on fur-bear<strong>in</strong>g animals who depended on a cleanenvironment with fresh water, and it seemed like there wasno end <strong>in</strong> sight. We took this bounty for granted and wemade a good liv<strong>in</strong>g. Often the yearly trapp<strong>in</strong>g <strong>in</strong>come wouldsurpass wage earners and the salaried folk alike. For us <strong>in</strong>this region, this trend would cont<strong>in</strong>ue <strong>in</strong>to the late 1970s.Then, the fur economy fell through, dealt a crippl<strong>in</strong>g blowby the European fur embargo led by actors such as BridgetBardot. For the first time, the Cree/Metis people liv<strong>in</strong>gamong the communities of Bison Lake, Haig Lake, MartenRiver, Cadotte Lake, Little Buffalo, and Lubicon Lake had torely on the prov<strong>in</strong>cial and federal government programs tosurvive. It was the beg<strong>in</strong>n<strong>in</strong>g of hard times. But first let’sstep back fifty years and work towards the present. For thenext economic eng<strong>in</strong>e would be driven by the extraction ofcrude oil, natural gas, and later bitumen, or what’s known astar sands.Life <strong>in</strong> Bison Lake dur<strong>in</strong>g the w<strong>in</strong>ter and spr<strong>in</strong>g was hardbut reward<strong>in</strong>g, and it was the only time people stayedthere. After the spr<strong>in</strong>g trapp<strong>in</strong>g was over <strong>in</strong> mid-April, thecommunity would vacate to homes to the other communitiessouth or to cont<strong>in</strong>ue liv<strong>in</strong>g off the land elsewhere. My fatherand the whole family would travel there by horses andwagon.We would spend wonderful days at our summer home atPrairie Lake (now known as Lubicon Lake). This is where weprepared for the trapp<strong>in</strong>g season; and sometimes we cameback to spend the Christmas holidays there. Our garden wasthere too. By wagon trails, the distance from our summerhome to the w<strong>in</strong>ter place <strong>in</strong> Bison Lake was about 160kilometres. We travelled year round. In the w<strong>in</strong>ter, travelwas with a horse-drawn caboose heated with a small woodheater.Then, <strong>in</strong> the fall, after families helped immigrant farmersclear land for agriculture, we would all move back northto our trapp<strong>in</strong>g homes. It was also about that same time,that the oil companies started explor<strong>in</strong>g for oil and gas.Soon there were a myriad of seismic l<strong>in</strong>es carved out <strong>in</strong>the forests. Then, the oil boom struck. In Canada, the oiland gas, and now, tar sands extraction leaves beh<strong>in</strong>d a18

disastrous legacy especially for Aborig<strong>in</strong>al communities.The moose, fur-bear<strong>in</strong>g animals, the fish and birds aredecreas<strong>in</strong>g <strong>in</strong> population. The water is contam<strong>in</strong>ated and theair is polluted with people becom<strong>in</strong>g sick with respiratoryillnesses and diseases such as cancer. However, now <strong>in</strong>order to survive and earn a liv<strong>in</strong>g to raise families someparticipate. There are presently almost no alternatives.I’ve tried to illustrate that Indigenous people <strong>in</strong> NorthAmerica, and <strong>in</strong>deed globally, often participate <strong>in</strong> thedepletion and pollution of the natural environment by be<strong>in</strong>gworkers on these extraction projects but far too often, weare the ones who are left with the consequences. Otherthan local workers receiv<strong>in</strong>g wages, the local communitiesreceive little benefit from the extraction of natural resources<strong>in</strong> their territories with the majority of the revenue flow<strong>in</strong>gsouth or <strong>in</strong>ternationally. For example, the Aborig<strong>in</strong>alpeople of the Athabasca Delta suffer the toxic results ofthe tar sands upon which their trap-l<strong>in</strong>es are located. Forus <strong>in</strong> the Bison Lake area, much of the virg<strong>in</strong> forests havebeen clearcut, forc<strong>in</strong>g moose and their predators to moveonto neighbour<strong>in</strong>g lowlands and w<strong>in</strong>dbreaks with<strong>in</strong> theagricultural areas. On top of that, pump jacks (or ‘nodd<strong>in</strong>gdonkeys’) that pump oil and gas are poison<strong>in</strong>g animals suchas moose, water fowl and fish.Hav<strong>in</strong>g been raised there, I still f<strong>in</strong>d solace <strong>in</strong> the bushand often take my youngest son, twelve, hunt<strong>in</strong>g moose,rabbits or grouse. It is disturb<strong>in</strong>g to f<strong>in</strong>d more and moremoose <strong>in</strong> this region <strong>in</strong> poor health bear<strong>in</strong>g the brunt of acontam<strong>in</strong>ated habitat. Just last year, I hunted a moose, onlyto f<strong>in</strong>d that it was befouled by tumors <strong>in</strong> its carcass. Likewisefisherman on the Athabasca River f<strong>in</strong>d deformed fish andhave to limit their weekly consumption due to mercurylevels.All along we as Indigenous people here on earth have tosome extent participated <strong>in</strong> the destruction of home andMother Earth, I th<strong>in</strong>k now is the time to seek environmentaljustice; and help <strong>in</strong> clean<strong>in</strong>g up our aquifers, air and soil.We need to resort to our stewardship ideologies that werepracticed before immigrants settled here <strong>in</strong> North America.Billy Joe Laboucan isa Cree l<strong>in</strong>guist andspecializes <strong>in</strong> Creelanguage and cultural<strong>in</strong>struction, curriculumdevelopment,Indigenousstorytell<strong>in</strong>g, andfilmmak<strong>in</strong>g workshopsto protect, preserveand promoteIndigenous languagesand culture.19

UKBANKFINANCING21

UKBANKFINANCINGF<strong>in</strong>ancial data presented here are based on underwrit<strong>in</strong>gleague tables compiled by Bloomberg for January 1, 2007 toDecember 31, 2009. Totals are derived from loans, corporatedebt and equity issuances <strong>in</strong>volv<strong>in</strong>g companies withsignificant operations <strong>in</strong> the tar sands listed <strong>in</strong> Appendix I.Figures are based on report<strong>in</strong>g by banks to Bloomberg, butmay be <strong>in</strong>complete due to undisclosed proprietary bank<strong>in</strong>grelationships.Table 1 looks at the f<strong>in</strong>ance that RBS, Barclays and HSBChave made to companies that are engaged <strong>in</strong> tar sands overa three year period from January 2007 through to December2009 and has been collated us<strong>in</strong>g a Bloomberg term<strong>in</strong>al. 43The data has been broken down <strong>in</strong>to loans, corporate debtunderwrit<strong>in</strong>g 44 and equity underwrit<strong>in</strong>g.The totals represent underwrit<strong>in</strong>g to companies that (a) havean ownership stake <strong>in</strong> exist<strong>in</strong>g tar sands projects and projectsunder development; or (b) own, operate or are develop<strong>in</strong>gpipel<strong>in</strong>es primarily be<strong>in</strong>g used to transport tar sands products.All the figures <strong>in</strong> the table are <strong>in</strong> millions of US dollars andthe full list<strong>in</strong>g of all the <strong>in</strong>dividual loans and underwrit<strong>in</strong>gscan be found <strong>in</strong> Appendix I. Totals may not reflect actuallend<strong>in</strong>g, rather they represent the full value of loans wherethe bank acted as lead book-runner (also called manag<strong>in</strong>gunderwriter, lead manager, etc). Where the bank was one of22

multiple lead book-runners, value is awarded pro-rata.The data shows that RBS led underwrit<strong>in</strong>g for over $7.5 billion<strong>in</strong> loans to tar sands related companies, over five times morethan Barclays and over eleven times more than HSBC. Thisfigure for RBS represented 11.5 per cent of the total globalfigure of the 26 banks that were surveyed <strong>in</strong> this period, andis the highest figure for any bank outside of North America. 45Barclays topped other banks <strong>in</strong> lead underwrit<strong>in</strong>g ofcorporate debt and equity, with a total of $12.4 billion.The comb<strong>in</strong>ed total of underwrit<strong>in</strong>g loans, equity andcorporate debt for all 26 banks that were exam<strong>in</strong>ed us<strong>in</strong>gBloomberg was $205.92 billion. The comb<strong>in</strong>ed UK total of$35.92 billion means that the UK banks were responsiblefor 17.4 percent of the global total – the highest share of anycountry outside of North America.Table 1 – all figures <strong>in</strong> US$ millionBank Loans Corporate DebtUnderwrit<strong>in</strong>gEquityUnderwrit<strong>in</strong>gRBS 7,543.91 5,170.62 0Barclays 1,450 12,083.34 310.18HSBC 666.67 8,156.64 023

Mike Mercredi, Fort Chipewyan – Do<strong>in</strong>g time <strong>in</strong> the tar sandsFort McMurray is under siege by oil companies. The Prov<strong>in</strong>ceof Alberta is run by the corporations stationed <strong>in</strong> downtown Calgary and not <strong>in</strong> the Prov<strong>in</strong>ce’s capital of Edmontonwhere the legislation build<strong>in</strong>g sits. Alberta is not run by theLiberals, Conservatives/Tory, Green party or NDP, it is run byImperial oil, Suncor, Shell/Albian, CNRL, Syncrude and soon – the global oil commanders of the world market. The byproductsof oil/tar sands are everywhere, <strong>in</strong> everyth<strong>in</strong>g weuse everyday.I started work<strong>in</strong>g <strong>in</strong> the oil m<strong>in</strong>es <strong>in</strong> the 1990s and witnessedthe tar sands boom, the <strong>in</strong>flux of people from all over theplanet and the devastat<strong>in</strong>g dismantl<strong>in</strong>g of Northern Alberta,400 tons at a time. I used to drive the biggest trucks <strong>in</strong>the world, around the biggest earth mov<strong>in</strong>g equipmenton the planet, on the biggest construction projects knownto mank<strong>in</strong>d. I was on top of the world with my royal bankaccount and gas tank always full <strong>in</strong> my new Chevy truck.At the job site I was surrounded by the latest technologywith eng<strong>in</strong>eers and scientists from everywhere. Everyoneand everyth<strong>in</strong>g was there to do one th<strong>in</strong>g: extract thebitumen from the sand under the boreal forest, us<strong>in</strong>g waterfrom any and every source available. The boreal forest isa traditionally sacred area to First Nations <strong>in</strong> the regionbecause it holds acres of traditional medic<strong>in</strong>al plants usedfor heal<strong>in</strong>g and prayer. It also a scientifically crucial region<strong>in</strong> Canada with an ecology that took tens of thousands ofyears to form. It cannot be recreated or reclaimed. Right nowthe oil companies have laws allow<strong>in</strong>g them to cut down thetrees, remove the top soil, dra<strong>in</strong> the water and dig out everyton of tar sands.When I was work<strong>in</strong>g <strong>in</strong> the m<strong>in</strong>es I started receiv<strong>in</strong>g phonecalls from friends and relatives about people gett<strong>in</strong>g sickand dy<strong>in</strong>g from back home <strong>in</strong> Fort Chipewyan. In one year itwas scary to pick the phone because I knew who was call<strong>in</strong>gand that they were go<strong>in</strong>g to tell me that another person wasdiagnosed or sick, or had passed on. Then I hear it’s com<strong>in</strong>gfrom the water. I didn’t th<strong>in</strong>k about my job as be<strong>in</strong>g a part ofhealth problems happen<strong>in</strong>g <strong>in</strong> Fort Chipewyan. But, I had <strong>in</strong>the back of my m<strong>in</strong>d, like most First Nations people work<strong>in</strong>gthere, wonder<strong>in</strong>g what was actually happen<strong>in</strong>g.When you’re raised <strong>in</strong> the region you never get taught thatwhat you are do<strong>in</strong>g is destroy<strong>in</strong>g a way of life and kill<strong>in</strong>g<strong>in</strong>nocent people. It took some time and questions frompeople I worked with to make me th<strong>in</strong>k about this more,after witness<strong>in</strong>g, th<strong>in</strong>k<strong>in</strong>g and do<strong>in</strong>g the actual destructionI decided to leave the tar sands <strong>in</strong>dustry. I had no plans ofbecom<strong>in</strong>g one of the voices from Fort Chipewyan speak<strong>in</strong>gout aga<strong>in</strong>st the tar sands development. I went back home toFort Chipewyan better known as ground zero and thus beganmy fight aga<strong>in</strong>st the <strong>in</strong>dustry. I lost family to this atrocity– this destruction of a community and cont<strong>in</strong>ued genocide24

– happen<strong>in</strong>g right now <strong>in</strong> a small town of 1,200 people <strong>in</strong>northern Alberta, Canada.The environmental effects of these projects are soastronomically high that the government and <strong>in</strong>dustry have<strong>in</strong>vested millions <strong>in</strong>to mak<strong>in</strong>g it seem like little is happen<strong>in</strong>g,when <strong>in</strong> fact, they are actually allow<strong>in</strong>g the people of FortChipewyan to die – they knew exactly what the effects of thisproject would do. This is a form of war where a nation allowspeople with<strong>in</strong> their country to die for the sake of profit; it iscont<strong>in</strong>ued genocide of the First Nations people of Canada.From exterm<strong>in</strong>ation programs that wiped out the now ext<strong>in</strong>ctBeothucks First Nations <strong>in</strong> the prov<strong>in</strong>ce of Newfoundland,to forc<strong>in</strong>g and steal<strong>in</strong>g First Nations children to be raised<strong>in</strong> residential schools to demoralize and break the spirit ofthe First Nations people. There is also the biological warfarethat’s started <strong>in</strong> the 1800’s with the <strong>in</strong>troduction of small pox<strong>in</strong>fected blankets and the war cont<strong>in</strong>ues today by yet aga<strong>in</strong>the government allow<strong>in</strong>g rare cancer to kill the people of FortChipewyan.So s<strong>in</strong>ce I moved I have become an advocate, speak<strong>in</strong>g outaga<strong>in</strong>st the <strong>in</strong>dustry at every opportunity I receive. I willcont<strong>in</strong>ue until I can no longer cont<strong>in</strong>ue on, then others willtake my place and ensure the fight cont<strong>in</strong>ues aga<strong>in</strong>st big oiland corporotocracy.Mike Mercredi is a member of the community ofFort Chipewyan, where he was raised. He wasborn <strong>in</strong> Fort McMurray and used to work <strong>in</strong> thetar sands <strong>in</strong>dustry.25

CASESTUDIES27

CASEThis section exam<strong>in</strong>es <strong>in</strong> more detail three companies withwhom f<strong>in</strong>anc<strong>in</strong>g deals have been made with UK banks, allof which <strong>in</strong>volve the Royal Bank of Scotland. The companieshave been chosen to cover a range of projects from oilmajor’s extraction projects to pipel<strong>in</strong>es.ConocoPhillipsSTUDIESRBS has underwritten $8 billion <strong>in</strong> loans and corporatef<strong>in</strong>ance over the past three years, which <strong>in</strong>cludes sixdeals s<strong>in</strong>ce, and two previous to, the recapitalisation.ForBarclays the figure is more than $2.5 billion; HSBC has notf<strong>in</strong>anced the company over this period. 46 In January 2010,ConocoPhillips announced plans to expand their Albertantar sands operations, mov<strong>in</strong>g from produc<strong>in</strong>g 27,000 barrelsof bitumen per day to 110,000. 47 They are position<strong>in</strong>gthemselves to become “a lead<strong>in</strong>g <strong>in</strong> situ producer <strong>in</strong> theAthabasca oil sands region, with more than a million netacres of leasehold<strong>in</strong>gs.” 48Although the company advertises a commitment tosusta<strong>in</strong>able development, ethics, honesty and <strong>in</strong>tegrity ontheir website, 49 they have <strong>in</strong> recent months been work<strong>in</strong>galongside several organisations that have sought tounderm<strong>in</strong>e climate legislation <strong>in</strong> the US. ConocoPhillipsis a member of the American Petroleum Institute, 50 whoseimitation ‘grassroots citizens campaign’ <strong>in</strong> Autumn 2009aga<strong>in</strong>st the US climate bill was labelled “devious and28

dishonest” by The Guardian. 51 The company is also anaffiliate of the Consumer Energy Alliance, 52 which alongsidethe National Petrochemical & Ref<strong>in</strong>ers Association iscurrently try<strong>in</strong>g to sue the state of California over their LowCarbon Fuel Standard <strong>in</strong> part because it excludes tar sandsand tar shale oil from the standard. 53The Beaver Lake Cree Nation is currently tak<strong>in</strong>g legal actionclaim<strong>in</strong>g that the approval of oil and gas developments,<strong>in</strong>clud<strong>in</strong>g ConocoPhillips’ operations, <strong>in</strong>fr<strong>in</strong>ges upon theBeaver Lake’s Treaty rights. 54 The company’s controversieswith regards to Indigenous Peoples is not limited to Canada.It is currently the lead<strong>in</strong>g holder of exploration acreage <strong>in</strong>Peruvian Amazon with over 10.5 million acres. Many tribespeoplelive with<strong>in</strong> this area, <strong>in</strong>clud<strong>in</strong>g some liv<strong>in</strong>g <strong>in</strong> voluntaryisolation. ConocoPhillips has been accused of risk<strong>in</strong>g futureconflict by fail<strong>in</strong>g to guarantee that the Free Prior andInformed Consent of these people will be respected. 55The expansion plans of ConocoPhillips <strong>in</strong>clude <strong>in</strong>creas<strong>in</strong>gtheir ref<strong>in</strong>ery at their facility <strong>in</strong> Ponca, Oklahoma and twoother ref<strong>in</strong>eries <strong>in</strong> the US by the end of 2013 <strong>in</strong> order to beable to process the tar sands-derived crude be<strong>in</strong>g pipeddown from Canada. The Ponca facility has existed forthe last 50 years on the land of the Ponca Nation. CaseyCamp-Hornik, a member of the Ponca Nation who workswith the Coyote Creek Center for Environmental Justice,has expressed concern about the effects of <strong>in</strong>creas<strong>in</strong>g theref<strong>in</strong>ery’s output when her community is already suffer<strong>in</strong>gfrom the pollution of the facility. In an <strong>in</strong>terview she saidthat, “we are saturated, we’re beyond saturation, with thepollution from that already. We have an extraord<strong>in</strong>arily highcancer rate, our groundwater is poisoned, the air from theref<strong>in</strong>ery has toxic qualities to it and the earth itself, we’re notcapable of grow<strong>in</strong>g anyth<strong>in</strong>g on it anymore.” 56ConocoPhilips also part-owns Syncrude, a crude oil producerbased <strong>in</strong> Alberta, Canada. On the 28th April, 2008, a delay<strong>in</strong> the company’s bird-deterr<strong>in</strong>g sound cannons 57 lead tothe death of 1606 ducks as they landed on Syncrude’s toxictail<strong>in</strong>g ponds and sank under the weight of the heavy toxicwaste. 58 It is feared that these expand<strong>in</strong>g tail<strong>in</strong>g ponds areplaced too close to river systems. 59EnbridgeRBS underwrote a loan to Enbridge worth $166.67 million<strong>in</strong> December 2008; Barclays underwrote a loan of $200million <strong>in</strong> April 2009; and HSBC underwrote $467 million ofcorporate f<strong>in</strong>ance <strong>in</strong> March 2008 and May 2007. 60 Enbridgeoperates the world’s longest crude oil and petroleumproducts pipel<strong>in</strong>e system, transport<strong>in</strong>g approximately twothirdsof Canada’s crude oil, much of which is derived fromtar sands. 61 They are expand<strong>in</strong>g rapidly with four expansionprojects, which will result <strong>in</strong> an additional 851,600 barrelsper day of crude oil and <strong>in</strong>creased US access. 6229

Controversially, Enbridge is apply<strong>in</strong>g for permission for itsNorthern Gateway pipel<strong>in</strong>e. This would be laid throughBritish Columbia, across more than 50 First Nation’sterritories and prist<strong>in</strong>e ecosystems, through to Kitimaton the coast, open<strong>in</strong>g the Canadian tar sands to Asianmarkets. 63 If oil from Canadian tar sands is renderedunusable by legislation <strong>in</strong> the USA or selected states <strong>in</strong> theUSA, Asian markets will be an important impetus to cont<strong>in</strong>uedevelopment <strong>in</strong> the area. 64 The planned port from where theoil would be exported is expected to service 225 tankers ayear, <strong>in</strong>clud<strong>in</strong>g some Very Large Crude Carriers (VLCCs) thathave a capacity of 2 million barrels of oil or more – almostdouble the capacity of the Exxon Valdez. 65There are 60 Indigenous communities liv<strong>in</strong>g along the routeand on the coastl<strong>in</strong>e near the planned port – and they areall opposed, <strong>in</strong>clud<strong>in</strong>g the Gitga’at of Hartley Bay, a smallsettlement of just 160 people. Ha’eis Clare Hill, Eagle ClanChief-<strong>in</strong>-wait<strong>in</strong>g of the Gitga’at describes how Enbridge sentits President to consult with the community:“Enbridge came <strong>in</strong> with the argument that it would helpcreate jobs <strong>in</strong> Hartley Bay. We would be on call and tra<strong>in</strong>ed<strong>in</strong> case there’s a disaster. So we would be the garbage cleanuppeople! Of course, the people who cleaned up the ExxonValdez spill are now sick and dy<strong>in</strong>g as a result… We had ourchiefs there, we had elders, and everyone who got up said‘no, we don’t want this.’” 66A major concern is the risk of leakages and spills. Follow<strong>in</strong>ga 3,000 barrel leak <strong>in</strong> January 2010 <strong>in</strong> North Dakota 67concerns have been raised by environmental observersover the impact of spillages on wild salmon habitats 68 alongthe proposed Northern Gateway pipel<strong>in</strong>e. Accord<strong>in</strong>g to aNorthern Gateway spokesman, Enbridge has 50 or 60 leaksa year, well above the <strong>in</strong>dustry average, 69 but vary<strong>in</strong>g fromhalf a barrel to, <strong>in</strong> this case, 3,000. 70A new report from the Pemb<strong>in</strong>a Institute also raises concernover the upstream impacts the pipel<strong>in</strong>e would br<strong>in</strong>g asa result of creat<strong>in</strong>g extra capacity. 71 They assert that thepipel<strong>in</strong>e would br<strong>in</strong>g approximately a 30 per cent <strong>in</strong>crease<strong>in</strong> production, boost<strong>in</strong>g Alberta’s annual greenhouse gasemissions by 6.5 million tonnes 72 as well as the associatedenvironmental and social impacts tar sands <strong>in</strong>duce alreadyraised <strong>in</strong> this report.“”The Wet’suwet’en want to protect our land, we wantto protect it from any type of pollution, any type of<strong>in</strong>dustrial development, because we need to makesure the lands are available for our children and ourunborn children.– Toghestiy (Warner Naziel), hereditary chief of theFireweed Clan for the Wet’suwet’en Nation who arefight<strong>in</strong>g the Enbridge pipel<strong>in</strong>e. 7330

ShellRBS underwrote two amounts of corporate debt worth $192million each to Royal Dutch Shell <strong>in</strong> February and March2007. HSBC also underwrote the March 2007 debt, as wellas underwrit<strong>in</strong>g with Barclays $2.2 billion of corporate debt<strong>in</strong> May 2009. Barclays underwrote a further $1.375 billion ofcorporate debt to Shell <strong>in</strong> December 2008, as well as $1.25billion <strong>in</strong> March 2009. 74Shell owns 60%, a majority share, of the Athabasca OilSands Project. Consist<strong>in</strong>g of the Muskeg River M<strong>in</strong>e locatednorth of Fort McMurray, and the Scotford Updgrader, besideShell’s ref<strong>in</strong>ery <strong>in</strong> Fort Saskatchewan, the Project’s websitedescribes it as, “currently one of the largest constructionprojects on the planet.” 75 The current production capacity ofthis project is 155,000 barrels per day of crude oil, althoughapproval has already been granted for an expansion thatwould <strong>in</strong>crease production by 100,000 barrels per day. 76Although tar sands currently account for 2% of Shell’s totaloil and gas production, analysis of its resources show that30% of their Total Resources are tied up <strong>in</strong> the Canadiantar sands. 77 This significantly high percentage of reserveillum<strong>in</strong>ates the extent to which the tar sands factor <strong>in</strong>toShell’s future. No other oil major has staked its future on tarsands to such an extent. 78In 2009, Shell abandoned written agreements withthe Oil Sands Environmental Coalition, to significantlyreduce greenhouse gas pollution of expansion projects.These agreements had helped <strong>in</strong>form the approval of theexpansion projects <strong>in</strong> 2004 and 2006 and were supposed tohave prevented an estimated 900,000 tonnes of carbon frombe<strong>in</strong>g emitted. 79Shell have a long history of environmental and humanrights controversies <strong>in</strong> their operations <strong>in</strong> the Niger Delta.In June 2009, they made an out of court settlement worth$15.5 million <strong>in</strong> was accused of hav<strong>in</strong>g collaborated <strong>in</strong> theexecution of the writer Ken Saro-Wiwa and eight otheranti-Shell activists. 80 A court case aga<strong>in</strong>st Shell will beresumed <strong>in</strong> Summer 2010 <strong>in</strong> the Netherlands brought byfour Nigerians, <strong>in</strong> conjunction with Friends of the EarthNetherlands, who say they lost their livelihoods when oilfrom leak<strong>in</strong>g Shell pipel<strong>in</strong>es contam<strong>in</strong>ated their farmlandand fish<strong>in</strong>g ponds. 81Shell are currently fac<strong>in</strong>g shareholder questions over its tarsands operations. A number of shareholders, coord<strong>in</strong>ated byFairPensions have filed a motion to Shell’s 2010 AGM, rais<strong>in</strong>gconcerns of the profitability, environmental consequences,and community impact of its activities <strong>in</strong> tar sandsextraction. 8231

Tar Sands <strong>in</strong> other parts of the world: JordanJordan is believed to hold over forty billion tons of tarshale, 83 a form of tar sands dist<strong>in</strong>ct from those found<strong>in</strong> Canada. Known locally as “the rock that burns”, tarshale refers to rocks that will give up synthetic crudewhen heated to extreme temperatures. Shell hascommitted to spend $540 million dollars explor<strong>in</strong>g22,500 square kilometres 84 – an area cover<strong>in</strong>g onequarter of the country and larger than Wales and seesits Jordan venture as a long-term <strong>in</strong>vestment to buildup future reserves. 85 Analysts expect that extractionwould start around 2035, and cont<strong>in</strong>ue until 2080. 86Shell has announced that it will <strong>in</strong>troduce itsproprietary <strong>in</strong> situ conversion process developed <strong>in</strong>Canada 87 , which boils the oil out of the ground by<strong>in</strong>ject<strong>in</strong>g hot steam <strong>in</strong>to deep holes. This means steamgenerat<strong>in</strong>gplants, many oil wells and extensive gasand syncrude pipel<strong>in</strong>es will have to be built.A chronic lack of water resources <strong>in</strong> Jordan poses anobvious challenge to Shell’s plans. Jordan is the fourthpoorest country <strong>in</strong> the world <strong>in</strong> terms of water 88 , withannual per capita supply of 200 cubic metres perperson 89 – compared to a world average of 8,900 cubicmetres. 90 Current use of non-renewable fossilizeddeep-water aquifers comb<strong>in</strong>ed with a burgeon<strong>in</strong>gpopulation means that by 2025, water supply perperson is expected to halve. 91Generat<strong>in</strong>g one barrel of oil from tar sands <strong>in</strong> Canadauses between 1 and 5.7 barrels of water. 92 Shell’s planswill need 50-500 million tonnes of water, every year –water that Jordan just does not have. A possible watersource will be the controversial Red Sea-Dead SeaCanal. Heavily criticised by environmental campaigners<strong>in</strong> Amman, this proposed $10 billion project is <strong>in</strong>tendedto pump seawater 200 kilometres from the Red Seato the Dead Sea, where it will be used to cool nuclearreactors. 93 Local opponents have warned of damage toprotected coral reefs <strong>in</strong> the Red Sea and wider impactson the Jordan Valley. 9432

Clayton Thomas-Muller – Tar sands and treaty rightsThe tar sands is the biggest and most destructive project <strong>in</strong>the history of mank<strong>in</strong>d. Never before have the words “Welive at ground zero” from frontl<strong>in</strong>e Indigenous Peoples liv<strong>in</strong>g<strong>in</strong> Fort Chipewyan rang more true. Globally Canada is be<strong>in</strong>glooked at as a best practice for heavy oil development andthe technology be<strong>in</strong>g ref<strong>in</strong>ed <strong>in</strong> the Athabasca Tar Sandsregion will be used as far as the deserts of Jordan, theRepublic of Congo and Venezuela.The situation play<strong>in</strong>g out <strong>in</strong> downstream communitieslike Fort Chipewyan, Alberta, is one of the worst cases ofenvironmental racism globally. Environmental racism <strong>in</strong>this context, is the failure of colonial government programsto adequately consult with or address environmentalprotection, natural resource conservation, environmentalhealth, and sacred/historical site issues affect<strong>in</strong>g traditionalIndigenous lands and its Indigenous peoples.For many years the leadership <strong>in</strong> Fort Chipewyan have beencall<strong>in</strong>g for a government-funded basel<strong>in</strong>e health study toconfirm or disprove the communities’ concern about tarsands encroachment nearer to their lands and the effect thisdevelopment is hav<strong>in</strong>g on their health.Decades ago, the Alberta government enticed First Nationscouncil leadership to lease their treaty reserve lands to thetar sands <strong>in</strong>dustry as a means for economic developmentand jobs. The tar sands <strong>in</strong>dustry with the bless<strong>in</strong>gs of theprov<strong>in</strong>cial government are expand<strong>in</strong>g even further, and FirstNations leadership and community members are feel<strong>in</strong>gpressured by Alberta, the federal government of Canada,and the <strong>in</strong>dustry to support it. Many of the oil companies<strong>in</strong>volved have well funded public relations campaignscom<strong>in</strong>g <strong>in</strong>to the First Nation communities, schools, andsenior citizen facilities campaign<strong>in</strong>g on how tar sandexpansion would be good for the Dene, Cree and Métispeople.The First Nations and Métis liv<strong>in</strong>g <strong>in</strong> the tar sands regionhave been rais<strong>in</strong>g concerns about the impacts of tarsands development on their treaty and aborig<strong>in</strong>al rightsfor some years. More recently, Canadian, American andEuropean campaigns aga<strong>in</strong>st tar sands development havebeen <strong>in</strong>itiated by both Indigenous and non-Indigenousgroups <strong>in</strong>clud<strong>in</strong>g many environmental non-governmentalorganizations, that have shifted to directly support<strong>in</strong>g theconcerns of First Nations and Métis <strong>in</strong> the region.Many elected tribal leaders <strong>in</strong> the tar sands are faced withthe real woes of try<strong>in</strong>g to provide economic revenue streamsfor their communities while at the same time protect<strong>in</strong>g theirculture and ecological <strong>in</strong>tegrity of their traditional territories.What ends up play<strong>in</strong>g out more often than not is leadershipbe<strong>in</strong>g put <strong>in</strong> position where they have to choose between33

jobs for the people or the destruction of their lands, water,air and way of life.First Nation/Indigenous communities must lead all work thatis challeng<strong>in</strong>g the Alberta tar sands, as well as the broaderfossil fuel regime <strong>in</strong> Canada. The rationale beh<strong>in</strong>d this is thattheir Aborig<strong>in</strong>al title and treaty rights to large areas of landthroughout Canada supercedes the rights of the prov<strong>in</strong>ceof Alberta and the corporations operat<strong>in</strong>g <strong>in</strong> the region. Itis a legal term that recognizes Aborig<strong>in</strong>al <strong>in</strong>terest <strong>in</strong> theland. It is based on Aborig<strong>in</strong>al peoples’ long-stand<strong>in</strong>g useand occupancy of the land as descendants of the orig<strong>in</strong>al<strong>in</strong>habitants of Canada.First Nations and Métis are not mere stakeholders orthe public, but are political and legal entities that haveAborig<strong>in</strong>al and treaty rights with Canada. The governmentof Canada and the courts understand treaties betweenthe Crown and Aborig<strong>in</strong>al peoples. These treaty rights arespecial rights to lands and entitlements that First Nationpeople legally have as a result of these treaties.Dene, Cree and Métis communities and their leadershipmust look beyond a dependence on a fossil fuel regime andbe visionaries and doers on support<strong>in</strong>g the development ofclean production and clean renewable energy with<strong>in</strong> theirlands. There needs to be a clear strategy to motivate FirstNations leadership and their grassroots communities to getactive <strong>in</strong> energy and climate change policy, at the prov<strong>in</strong>cial,federal and <strong>in</strong>ternational levels.There is a need for Indigenous-led advocacy and tra<strong>in</strong><strong>in</strong>gfor First Nations on media strategies to be more visible andlead locally, nationally and <strong>in</strong>ternationally <strong>in</strong> anti tar sandscampaigns.There is a great need for organizations to prioritize bottomuporganiz<strong>in</strong>g and create spaces for First Nations to speakfor themselves on this issue on a local, regional, nationaland <strong>in</strong>ternational level.Accountability is a major issue as we move forward <strong>in</strong> termsof ensur<strong>in</strong>g that messag<strong>in</strong>g <strong>in</strong> the US, Canada, and globallyare <strong>in</strong> sync and accountable to the local First Nations’position so that solutions be<strong>in</strong>g proposed do not furthermagnify social and cultural <strong>in</strong>equities faced by frontl<strong>in</strong>e andfencel<strong>in</strong>e communities.Many First Nations and Métis <strong>in</strong> the regions are demand<strong>in</strong>gthe Alberta government halt tar sands expansion, addressenvironmental damages, <strong>in</strong>itiate remediation, and addresshuman health issues.There are also demands that the Canadian governmentrecognize Aborig<strong>in</strong>al Treaties 8 and 6, legally b<strong>in</strong>d<strong>in</strong>g andconstitutionally protected agreements between the federal34

government and First Nations that def<strong>in</strong>e the unique land,water and cultural rights of First Nations <strong>in</strong>clud<strong>in</strong>g the rightto hunt, fish and trap.There is an emerg<strong>in</strong>g political will of First Nations toexercise their sovereign rights by implement<strong>in</strong>g their ownenvironmental and health <strong>in</strong>frastructure to regulate andenforce their own laws with<strong>in</strong> their land and territory. Thishas been best expressed by the multitude of First Nationslitigations be<strong>in</strong>g brought forward aga<strong>in</strong>st the governmentof Alberta and the Federal government of Canada forfailure to uphold their obligation to consult First Nationsover potential impacts of the tar sands operation. We willcont<strong>in</strong>ue to see First Nations engage networks <strong>in</strong> NorthAmerica and abroad to jo<strong>in</strong> them <strong>in</strong> the fight for Energy andClimate Justice.Photo: Mike RussellClayton Thomas-Muller, of the Mathais ColombCree Nation, also known as Pukatawagan <strong>in</strong>Northern Manitoba, Canada, is an activist forIndigenous rights and environmental justiceand tar sands campaign organizer for theIndigenous Environmental Network. He worksacross Canada, Alaska and the lower 48 stateswith grassroots <strong>in</strong>digenous communities todefend aga<strong>in</strong>st the sprawl<strong>in</strong>g <strong>in</strong>frastructure that<strong>in</strong>cludes pipel<strong>in</strong>es, ref<strong>in</strong>eries and extractionassociated with the tar sands.35

PUBLICMONEY37

PRBS is the UK bank that has received the biggest <strong>in</strong>jectionof public money <strong>in</strong> order to keep it afloat <strong>in</strong> the wake of thebank<strong>in</strong>g crisis <strong>in</strong> late 2008. Follow<strong>in</strong>g two separate roundsof recapitalisations and the launch of the Asset ProtectionScheme <strong>in</strong> November 2009, the UK government owns 84% ofthe bank’s shares. 95UBLICMONEYCivil society groups have argued that the public ownershipof the bank means that there should be accountability forthe way that the public money is be<strong>in</strong>g used by the bank.An <strong>in</strong>vestigation by The Guardian showed that <strong>in</strong> the firstsix months follow<strong>in</strong>g the bank’s <strong>in</strong>itial recapitalisation <strong>in</strong>October 2008, RBS had been <strong>in</strong>volved <strong>in</strong> loans worth nearly£10 billion to oil, coal and gas companies – a quarter of thetotal amount of public funds put <strong>in</strong>to RBS at that po<strong>in</strong>t. 96On the first year anniversary of RBS becom<strong>in</strong>g majorityownedby the public, 30 public figures, <strong>in</strong>clud<strong>in</strong>g MPs, faithleadersand members of the bus<strong>in</strong>ess community, wrotean open letter to the Chancellor, Alastair Darl<strong>in</strong>g, call<strong>in</strong>gon the Treasury to take a more active role <strong>in</strong> manag<strong>in</strong>g thebank. The letter said that, “we believe that the Treasury hasfailed to push RBS and the other bailed-out banks towardssupport<strong>in</strong>g the <strong>in</strong>vestments our country needs. In do<strong>in</strong>gso, the government has effectively written a blank chequefor the rescued banks to f<strong>in</strong>ance anyth<strong>in</strong>g from destructivefossil fuel companies driv<strong>in</strong>g climate change to hostile takeoversthat threaten UK jobs.” 9738

This perspective has also been echoed <strong>in</strong> reports thatcome from Parliament itself. In its pre-budget report of2009, the Parliamentary Environmental Audit Committeerecommended that, “the Treasury exam<strong>in</strong>e and report onhow some form of environmental criteria for the <strong>in</strong>vestmentstrategies pursued by these banks might be imposed,and what impacts this might have on UK susta<strong>in</strong>abledevelopment objectives.” 98 The f<strong>in</strong>ancial services companyPricewaterhouseCoopers echoes this recommendation thatthe government’s majority sharehold<strong>in</strong>g of RBS presentsa good “opportunity for reform” and thus management ofthese shares should take an approach “broader than a narrowf<strong>in</strong>ancial goal. There should be focus on the wider social andeconomic objectives.” 99 Despite this, the Treasury is adamantthat the shares will be managed “on a commercial basis” onbehalf of the HM Treasury and UK taxpayers at “arms-length”by UK F<strong>in</strong>ancial Investments (UKFI), a wholly governmentowned company set up for this purpose. 100In February 2010, UKFI f<strong>in</strong>ally published a susta<strong>in</strong>abilitypolicy. 101 Although acknowledg<strong>in</strong>g the need for such apolicy is a welcome first step, the policy itself falls shortof standard <strong>in</strong>dustry best practice. In particular, it fails todescribe any monitor<strong>in</strong>g processes, does not put <strong>in</strong> placeany positive strategic vision for RBS, and fails to recognisethat the ma<strong>in</strong> shareholders <strong>in</strong> the bank – UK taxpayers –have <strong>in</strong>terests other than their f<strong>in</strong>ancial stake <strong>in</strong> the recoveryof RBS’ share value.“As RBS is an important provider of f<strong>in</strong>ance to fossilfueland carbon-<strong>in</strong>tensive <strong>in</strong>dustries, it, together withthe bus<strong>in</strong>esses <strong>in</strong> which it <strong>in</strong>vests, is attempt<strong>in</strong>g toexternalise the risks of climate change which, sooneror later, will fall on taxpayers. Those are the sametaxpayers who now own RBS, so those external costsare no longer carried by a third party. We can cutthe long-term cost to the taxpayer by act<strong>in</strong>g now onsusta<strong>in</strong>ability. That is the important message.”– Andrew Smith MP, dur<strong>in</strong>g a Parliamentarydebate on bank<strong>in</strong>g reform. 102The Treasury ma<strong>in</strong>ta<strong>in</strong>s that any sort of <strong>in</strong>tervention wouldjeopardize the share price of RBS and would dim<strong>in</strong>ishthe shareholder return of the UK taxpayer. There are twoarguments that expose how this reason<strong>in</strong>g does not standup beyond the most short-termist perspective. The firstis that by cont<strong>in</strong>u<strong>in</strong>g to pour money <strong>in</strong>to new fossil fuel<strong>in</strong>vestments, we are committ<strong>in</strong>g the world, not just theUK, to <strong>in</strong>frastructure that will be responsible for decadesof commensurate carbon emission <strong>in</strong>creases. As The SternReview conv<strong>in</strong>c<strong>in</strong>gly showed, the longer that we delay thenecessary changes we need to make to our societies andour economies <strong>in</strong> the low-carbon transition, the higherthe annual percentage of GDP that will end up be<strong>in</strong>g paid<strong>in</strong> order to adapt to the consequences of a destabilisedclimate. The <strong>in</strong>terests of the taxpayer are better served by39

“In the long term, any oil company that believes itcan cont<strong>in</strong>ue to externalise environmental costs,especially carbon, to society at large will havesignificant difficulty. Carbon caps are go<strong>in</strong>g to be areality and at the moment carbon capture andstorage does not look cost effective or eventechnically feasible at the scale necessary.”– Marc Brammer, the Head of Bus<strong>in</strong>ess Developmentfor Europe at Risk Metrics Group. 103try<strong>in</strong>g to avoid the longer-term consequences of failure tore<strong>in</strong> <strong>in</strong> the worst excesses of runaway climate change ratherthan by simply go<strong>in</strong>g for ‘a quick buck’ by try<strong>in</strong>g to boostthe share price by <strong>in</strong>vest<strong>in</strong>g <strong>in</strong> projects and companies thatmight yield short-term profits.The second argument aga<strong>in</strong>st the Treasury’s non<strong>in</strong>terventionistposition is that while banks like RBS canappear to be <strong>in</strong>stitutionally locked <strong>in</strong>to ma<strong>in</strong>ta<strong>in</strong><strong>in</strong>g an<strong>in</strong>vestment portfolio of ongo<strong>in</strong>g fossil fuel f<strong>in</strong>ance, thereis a grow<strong>in</strong>g body of analysis that ma<strong>in</strong>ta<strong>in</strong>s that thesecarbon-<strong>in</strong>tensive <strong>in</strong>vestments could turn out to be a sourceof f<strong>in</strong>ancial risk rather than return to the taxpayer. S<strong>in</strong>cereceiv<strong>in</strong>g public funds, RBS has entered a new period <strong>in</strong>which the risks and objectives associated with its <strong>in</strong>vestmentdecisions must be calculated differently.In a report published <strong>in</strong> 2009, <strong>in</strong>surance company SwissRe has predicted that we will see a sharp rise <strong>in</strong> <strong>in</strong>stancesof litigation result<strong>in</strong>g from climate change, a phenomenonthat caused many companies <strong>in</strong> the asbestos <strong>in</strong>dustry tofile for bankruptcy when faced with similar legal challenges.The report predicts that, “climate change-related liabilitywill develop more quickly than asbestos-related claims andbelieve the frequency and susta<strong>in</strong>ability of climate changerelatedlitigation could become a significant issue with<strong>in</strong> thenext couple of years.” 104The f<strong>in</strong>ancial risks of tar sands <strong>in</strong>vestments have beens<strong>in</strong>gled out as be<strong>in</strong>g of particular concern. Reports likeShift<strong>in</strong>g sands: How a chang<strong>in</strong>g economy could bury thetar sands <strong>in</strong>dustry have outl<strong>in</strong>ed how: “International OilCompanies face significant challenges to their currentbus<strong>in</strong>ess plans for oil production. While risk is noth<strong>in</strong>gnew to the oil <strong>in</strong>dustry, the k<strong>in</strong>d of structural change be<strong>in</strong>gsignalled today is unprecedented.” 105One of the challenges to tar sands is that there is a trend<strong>in</strong>ternationally to develop low carbon fuel standards (suchas the Fuel Quality Directive <strong>in</strong> the EU and the Low CarbonFuel Standard <strong>in</strong> California 106 ), which would prohibit fuelswith lifecycle CO 2emissions ‘well to wheel’ greater thanthose from conventional fuels. The successful developmentof these standards could have an enormous impact <strong>in</strong>restrict<strong>in</strong>g the access of companies engaged <strong>in</strong> tar sands40

to their primary markets. The potential threat of this is sogreat to the oil companies concerned that the NationalPetrochemical & Ref<strong>in</strong>ers Association are currently su<strong>in</strong>g theState of California over the potential exclusion of tar sandsderived fuels. 107RBS should now be exit<strong>in</strong>g its <strong>in</strong>vestments <strong>in</strong> tar sands and rechannell<strong>in</strong>gthem <strong>in</strong>to projects that are <strong>in</strong> l<strong>in</strong>e with the widerpublic <strong>in</strong>terest, such as renewable energy. There exists aunique opportunity for government to utilise its sharehold<strong>in</strong>gstowards tackl<strong>in</strong>g climate change, an issue firmly <strong>in</strong> the public<strong>in</strong>terest. Invest<strong>in</strong>g public funds <strong>in</strong>to projects such as tar sandsis antithetical to this end. As Andrew Smith MP has argued,“we need to question very seriously whether, at a time whenwe rightly voice the priority that must be given to combat<strong>in</strong>gclimate change, those are the <strong>in</strong>vestment priorities that publicfunds should be underwrit<strong>in</strong>g.” 108S<strong>in</strong>ce the <strong>in</strong>itial recapitalisation took place <strong>in</strong> October2008, RBS has underwritten corporate debt and equityworth nearly $2.5 billion with tar sands related companies.This use of public money is counter to grow<strong>in</strong>g publicexpectations and political demands that RBS operate to adifferent standard than simply the pursuit of a bottom l<strong>in</strong>eagenda.Banks and their response to climate changeWhile all banks have publicly acknowledged theimportance of address<strong>in</strong>g climate change, there is awide disparity <strong>in</strong> the effectiveness of their responses.While The Co-operative Bank has long had a policy notto f<strong>in</strong>ance any fossil fuel project, 110 other banks havelimited their engagement to tak<strong>in</strong>g part <strong>in</strong> sign<strong>in</strong>g up tovoluntary, <strong>in</strong>dustry-led <strong>in</strong>itiatives.Over the past seven years, a number of these <strong>in</strong>itiativeshave been established by groups of banks. Theyostensibly seek to monitor, <strong>in</strong>fluence and lessen theharmful social and environmental impacts of theoperations of companies which the banks f<strong>in</strong>ance.These standards <strong>in</strong>clude the Equator Pr<strong>in</strong>ciples, towhich all three major UK banks with <strong>in</strong>vestments<strong>in</strong> tar sands projects (RBS, HSBC and Barclays) aresignatories, and the Climate Pr<strong>in</strong>ciples, which all threecommented on, and to which HSBC signed up. Thecase of tar sands f<strong>in</strong>anc<strong>in</strong>g offers a lens to consider theeffectiveness of guid<strong>in</strong>g pr<strong>in</strong>ciples which are voluntaryand unenforceable <strong>in</strong> the breach.A more detailed exam<strong>in</strong>ation of the shortcom<strong>in</strong>gs ofboth the Equator Pr<strong>in</strong>ciples and the Climate Pr<strong>in</strong>ciplescan be found <strong>in</strong> Appendix III.41

Case study: Pension funds & shareholder revoltsOil companies with operations <strong>in</strong> the Canadian tar sands forma cornerstone of the portfolios of UK pension funds. In 2009,BP and Shell alone provided pension funds with a quarter of UKcorporate dividends, offer<strong>in</strong>g a vital <strong>in</strong>come-generat<strong>in</strong>g lifel<strong>in</strong>eto these large <strong>in</strong>vestors. 120 Accord<strong>in</strong>g to Paul Taylor, CapitaRegistrar’s head of dividends: “Oil has fuelled the eng<strong>in</strong>e of UKdividends <strong>in</strong> the last two years. The <strong>in</strong>creas<strong>in</strong>g dom<strong>in</strong>ance ofoil companies has left <strong>in</strong>vestors highly dependent on a few bigstocks to provide them with an <strong>in</strong>come.” 121In essence the long-term health of UK pension funds and ofShell and BP are, currently, <strong>in</strong>extricably bound up together.Senior executives at the two oil majors may come and go butthe pension fund members of Brita<strong>in</strong> are <strong>in</strong> for the long haul.This means that failed <strong>in</strong>vestment decisions made by BP andShell will have a big impact on work<strong>in</strong>g people <strong>in</strong> the UK whoare sav<strong>in</strong>g for their retirement through a pension plan. Afterthe hit susta<strong>in</strong>ed by pension funds as a result of the collapseand near collapse <strong>in</strong> 2008 of prom<strong>in</strong>ent banks and f<strong>in</strong>ancialcompanies which, like BP and Shell, were key stocks <strong>in</strong> theirportfolios, pension funds are today <strong>in</strong> far too delicate a positionto be careless about risk management at the oil majors.It was partly with this delicate situation <strong>in</strong> m<strong>in</strong>d that <strong>in</strong>vestorscame together <strong>in</strong> late 2009 to file resolutions at BP and Shellwhich call upon the boards of both companies to present acomprehensive strategic justification of their allocation ofcapital to Canadian tar sands projects. Tar sands not only posean almost unparalleled environmental risk to the world but,an <strong>in</strong>creas<strong>in</strong>g number of <strong>in</strong>stitutional <strong>in</strong>vestors are concernedat the risk they pose to <strong>in</strong>vestor assets. Even with<strong>in</strong> the oil<strong>in</strong>dustry some prom<strong>in</strong>ent figures have doubted the goodsense of tar sands <strong>in</strong>vestment. Lord Browne, CEO of BP from1995 to 2007, was one of those. In 1999 the company soldalmost all its Canadian tar sands <strong>in</strong>terests and as recentlyas 2004 he declared that there were “tons of opportunities”beyond the sector. 122 His successor Tony Hayward reversedthis decision on his appo<strong>in</strong>tment as CEO <strong>in</strong> 2007. 123 Oil <strong>in</strong>2007 was hover<strong>in</strong>g at the $100 dollar per barrel level, aprice that appeared to make tar sands a logical <strong>in</strong>vestment.Nevertheless s<strong>in</strong>ce 2007 the world has moved on aga<strong>in</strong>, and<strong>in</strong> ways which once more cast real doubt on the f<strong>in</strong>ancialprudence of heavy capital expenditure <strong>in</strong> the oil sands.What has changed?“It’s very clear that <strong>in</strong> the mature markets of the West, thepeak for gasol<strong>in</strong>e consumption was <strong>in</strong> 2007. The <strong>in</strong>dustrywill not sell more gasol<strong>in</strong>e <strong>in</strong> either the US or Europe thanit did <strong>in</strong> 2007. Ever. As government regulation and policydrives efficiency <strong>in</strong>to the transport fleet… it’s a challengefor companies like BP. It’s why our ref<strong>in</strong><strong>in</strong>g and market<strong>in</strong>gbus<strong>in</strong>esses are so challenged right now because there’s alot of surplus capacity which is not go<strong>in</strong>g to go away” TonyHayward, Today Programme, 4 th February 2010.42

As Hayward himself put it so clearly <strong>in</strong> early 2010, theextraord<strong>in</strong>ary market conditions which oil companiesenjoyed <strong>in</strong> 2007 when BP decided to move back <strong>in</strong>to theCanadian tar sands, no longer exist and look unlikely everto return. Shell’s new CEO, Peter Voser, appears to havecome to a similar conclusion s<strong>in</strong>ce be<strong>in</strong>g appo<strong>in</strong>ted CEO<strong>in</strong> mid 2009. In an <strong>in</strong>terview with the F<strong>in</strong>ancial Times <strong>in</strong>early 2010, Mr Voser pronounced that Shell, which is <strong>in</strong> thepotentially uncomfortable position of hav<strong>in</strong>g a third of itsglobal oil resources sitt<strong>in</strong>g <strong>in</strong> the tar sands of Alberta, wouldbe slow<strong>in</strong>g down planned expansion <strong>in</strong> Canada. The reasongiven was that other global opportunities now seemedattractive <strong>in</strong> comparison. 124What is becom<strong>in</strong>g <strong>in</strong>creas<strong>in</strong>gly clear is that the oil majorsface a situation of great strategic uncerta<strong>in</strong>ty, reflect<strong>in</strong>gthe disarray and <strong>in</strong>decision of the UN climate negotiations<strong>in</strong> Copenhagen at the end of 2009. The world has nolegally b<strong>in</strong>d<strong>in</strong>g <strong>in</strong>ternational agreement to reduce carbonemissions, and yet ostensibly, the <strong>in</strong>ternational will to movedecisively towards a lower carbon model of global economicactivity rema<strong>in</strong>s strong. This poses an uncomfortabledilemma for oil companies and <strong>in</strong> turn a significant riskfor any pension funds dependent for dividends on BP andShell. Investors <strong>in</strong> both companies have an opportunity atthe Spr<strong>in</strong>g 2010 Annual General Meet<strong>in</strong>gs (AGMs) of BP andShell to demand clearer answers on this risk. FairPensions,work<strong>in</strong>g with a coalition of <strong>in</strong>vestors and NGOs, hassucceeded <strong>in</strong> coord<strong>in</strong>at<strong>in</strong>g shareholder resolutions to bediscussed at BP and Shell’s 2010 shareholder meet<strong>in</strong>gs. 125Members of pension funds, <strong>in</strong>clud<strong>in</strong>g work<strong>in</strong>g people <strong>in</strong>every sector of the UK economy, should be watch<strong>in</strong>g thissituation with <strong>in</strong>terest. Indeed, they can do more than watch;they can now also actively engage by express<strong>in</strong>g supportfor the tar sands resolutions, by contact<strong>in</strong>g their pensionprovider (most easily via www.count<strong>in</strong>gthecost.org.uk) tourge votes <strong>in</strong> favour of the resolutions.In recent years, many people <strong>in</strong> the UK have written lettersto RBS and the Treasury, or taken part <strong>in</strong> actions anddemonstrations at local branches at their headquarters todemand an end to the f<strong>in</strong>ance of projects that exacerbateclimate change or disregard human rights. These actionsrepresent an attempt by civil society to make it possible for‘ord<strong>in</strong>ary’ people to have their voices heard <strong>in</strong> boardroomswhere key decisions are made. The 2010 UK corporate AGMseason represents a similar attempt for citizens who areconcerned about tar sands to engage the f<strong>in</strong>ance sector<strong>in</strong> demand<strong>in</strong>g f<strong>in</strong>ancially and environmentally responsiblevot<strong>in</strong>g decisions at the BP and Shell AGMs. This is a uniqueopportunity for people who care about tar sands to exercise<strong>in</strong>fluence <strong>in</strong> decisions be<strong>in</strong>g made that will impact us all.For further <strong>in</strong>fo about the tar sands resolutions andFairPensions’ plans to mobilise pension fund membersnationwide contact: cather<strong>in</strong>e.howarth@fairpensions.org.uk43

“We are see<strong>in</strong>g a terrify<strong>in</strong>gly high rate of cancer <strong>in</strong>Fort Chipewyan where I live. We are conv<strong>in</strong>ced thatthese cancers are l<strong>in</strong>ked to the tar sandsdevelopment on our doorstep. It is shorten<strong>in</strong>g ourlives. That’s why we no longer call it ‘dirty oil’ but‘bloody oil’. The blood of Fort Chipewyan peopleis on these companies’ hands. 27– George Poitras, a former chief ofMikisew Cree First Nation”44

Tar Sands <strong>in</strong> other parts of the world: MadagascarIn 2004, Madagascar Oil was created specificallyto develop the heavy and ultra-heavy oil resources(<strong>in</strong>clud<strong>in</strong>g tar sands) on the western side of Madagascar.The heavy oil fields are located <strong>in</strong> two fields, Bemolangaand Tsimiroro and are both approximately 70km 2 <strong>in</strong>size. 111It is estimated that the fields possibly conta<strong>in</strong> acomb<strong>in</strong>ed 26,385 million barrels. Madagascar Oilbelieves these two fields could produce more then280,000 barrels a day for over 20 years 112 and at leasta further 180,000 barrels for 10 years after that. 113 InSeptember 2008, Total paid $100 million for the 60%ownership of the Bemolanga field. 114Near the Tsimiroro field is the 1,520km 2 Ts<strong>in</strong>gy deBemaraha nature reserve. This was <strong>in</strong>scribed as aUNESCO World Heritage site <strong>in</strong> 1990, due to its limestonekarst landscapes, undisturbed forests and mangroveswamps. 115The Tsimiroro site is also very close to the source of theimportant Manambolo River. Almost 120,000 peoplelive <strong>in</strong> a large number of villages that make up theMorafenobe commune with<strong>in</strong> the Bemolanga field. OnMarch 17, 2009, democratically elected President MarcRavalomanana transferred power to the High TransitionalAuthority (HTA). The US state Department considered thismove tantamount to a military coup d’état and thereforedoes not recognize the HTA. 116The World Bank placed Madagascar 91 st on its 2008Control of Corruption Indicator, and 134 th on its 2009Do<strong>in</strong>g Bus<strong>in</strong>ess Rank<strong>in</strong>g. 117 Madagascar Oil admit that theoil contracts “conta<strong>in</strong> attractive terms and conditions.” 118Under the current contracts, even after thirty years ofcommercial production, the government of Madagascarwill only be receiv<strong>in</strong>g 4% of the oil revenues. 11945

CONCLUSIONS47

CONCLUSIONSIn light of the climate crisis, as well as the devastat<strong>in</strong>gimpacts that tar sands are hav<strong>in</strong>g on communities andecosystems <strong>in</strong> Canada, and their potential to wreak havoc<strong>in</strong> other parts of the world, this report calls for all parties<strong>in</strong>volved to act responsibly and f<strong>in</strong>d ways to stop f<strong>in</strong>ancial<strong>in</strong>stitutions provid<strong>in</strong>g the f<strong>in</strong>ance to companies to expandsuch operations.Recommendations to the UK bank<strong>in</strong>g sector• Create a moratorium on provid<strong>in</strong>g f<strong>in</strong>ance of any k<strong>in</strong>dto companies that are actively engaged <strong>in</strong> extract<strong>in</strong>gtar sands or any other forms of ‘unconventional’ oil.• Develop revised <strong>in</strong>vestment mandates draw<strong>in</strong>g onexpertise and guidance from <strong>in</strong>dependent sourcesand best practices <strong>in</strong> the f<strong>in</strong>ancial sector to identifywhich activities, such as tar sands extraction,should not be funded <strong>in</strong> future.• Make Free, Prior and Informed Consent ofIndigenous and/or local communities a condition ofall forms of project f<strong>in</strong>ance.Recommendations to the Chancellor of the Exchequer andthe UK Treasury, the Treasury Select Committee, and theM<strong>in</strong>ister for Bus<strong>in</strong>ess, Innovation and Skills• Use the majority public ownership of RBS toimmediately impose lend<strong>in</strong>g standards on the bank48

to prevent the f<strong>in</strong>anc<strong>in</strong>g of companies that:o are engag<strong>in</strong>g <strong>in</strong> the extraction of tar sands orother forms of ‘unconventional’ oil exploration,development or transport;o do not ask for the Free, Prior and InformedConsent of Indigenous and/or local communities.• Include enhanced standards for environmentaland human rights protection <strong>in</strong> the currentparliamentary discussion of the re-regulation of thebank<strong>in</strong>g sector <strong>in</strong> the wake of the f<strong>in</strong>ancial crisis.• Provide <strong>in</strong>centives for long-term, susta<strong>in</strong>ablebehaviour by l<strong>in</strong>k<strong>in</strong>g executive pay to thecompanies’ long-term performance and to thebank’s environmental and social performance.Recommendations to the Equator Pr<strong>in</strong>ciples Steer<strong>in</strong>gCommittee and all Equator Pr<strong>in</strong>ciples signatories• Include <strong>in</strong> the Pr<strong>in</strong>ciples the climate impact ofproposed projects as an <strong>in</strong>tegral part of all riskassessments. Commit to a process of cont<strong>in</strong>uouslytighten<strong>in</strong>g the conditions for f<strong>in</strong>anc<strong>in</strong>g under thePr<strong>in</strong>ciples, if required, to meet the challenges posedby an unfold<strong>in</strong>g climate crisis.• Include additional pr<strong>in</strong>ciples that categoricallyexclude the f<strong>in</strong>anc<strong>in</strong>g of all new projects <strong>in</strong>volv<strong>in</strong>gthe exploitation of tar sands and other forms of‘unconventional’ oil.• Commit to work<strong>in</strong>g with groups such as CarbonDisclosure Project and BankTrack to developworkable <strong>in</strong>struments for measur<strong>in</strong>g f<strong>in</strong>anced (or‘embedded’) emissions, and adopt reduction targetsfor each bank. Provide a str<strong>in</strong>gent timel<strong>in</strong>e for this.Access for Western oil companies to conventional formsof oil production has been <strong>in</strong>creas<strong>in</strong>gly difficult to secure.Meanwhile governments, the bank<strong>in</strong>g sector and oilcompanies have collaborated to cash <strong>in</strong> on tar sands byensur<strong>in</strong>g that this dirty and devastat<strong>in</strong>g form of energy isguided <strong>in</strong>to the global energy market. The grave threat ofclimate change to people’s lives and livelihoods across theglobe rema<strong>in</strong>s unparalleled, yet <strong>in</strong>vestments <strong>in</strong> tar sandsexpansion ensure the energy model responsible for the crisisis further entrenched. We need to seize the opportunity totake steps towards considerable <strong>in</strong>vestment <strong>in</strong> renewablesand energy efficiency whilst reduc<strong>in</strong>g consumption <strong>in</strong> orderto prevent the worst impacts of climate change.The failure by governments and bus<strong>in</strong>esses to trulyrecognise the enormity of the threat means that the rightsand lives of Indigenous Peoples and the most cash-poorpeople <strong>in</strong> the world are be<strong>in</strong>g ignored, ru<strong>in</strong>ed <strong>in</strong> the rushto obta<strong>in</strong> profits from tar sands cloaked <strong>in</strong> the rhetoric ofenergy security. Legal action <strong>in</strong> the UK and Canada, BP andShell shareholder concern, civil society campaigns andgrassroots activism are coalesc<strong>in</strong>g to redress this wrong.49

Appendix I: F<strong>in</strong>ancial DataAll figures <strong>in</strong> US$ millionTotal Tar Sands F<strong>in</strong>anc<strong>in</strong>g = $13,843.52Total fees earned from tar sands issuances = $38.5Issuer Name Date Amount (US$ million) ProductConocoPhillips 5.5.2008 200 CorpShell International F<strong>in</strong>ance BV 8.12.2008 1375 CorpK<strong>in</strong>der Morgan Energy Partners LP 16.12.2008 166.67 CorpConocoPhillips 29.1.2009 250 CorpConocoPhillips 29.1.2009 375 CorpConocoPhillips 29.1.2009 375 CorpChevron Corp 26.2.2009 750 CorpChevron Corp 26.2.2009 750 CorpChevron Corp 26.2.2009 1000 CorpStatoilHydro ASA 4.3.2009 378.52 CorpStatoilHydro ASA 4.3.2009 379.83 CorpStatoilHydro ASA 4.3.2009 411.48 CorpShell International F<strong>in</strong>ance BV 18.3.2009 1250 CorpShell International F<strong>in</strong>ance BV 6.5.2009 1111.21 CorpShell International F<strong>in</strong>ance BV 6.5.2009 1111.21 CorpOccidental Petroleum Corp 12.5.2009 187.5 CorpConocoPhillips 18.5.2009 71.43 CorpConocoPhillips 18.5.2009 214.29 CorpConocoPhillips 18.5.2009 142.86 CorpKorea National Oil Corp 23.7.2009 166.67 CorpK<strong>in</strong>der Morgan Energy Partners LP 11.9.2009 100 CorpK<strong>in</strong>der Morgan Energy Partners LP 11.9.2009 150 CorpCenovus Energy Inc 15.9.2009 266.67 CorpCenovus Energy Inc 15.9.2009 433.33 CorpCenovus Energy Inc 15.9.2009 466.67 CorpK<strong>in</strong>der Morgan Energy Partners LP 27.2.2008 165.89 EquityK<strong>in</strong>der Morgan Energy Partners LP 9.6.2009 85.14 EquityK<strong>in</strong>der Morgan Energy Partners LP 1.12.2009 59.15 EquityConocoPhillips 4.4.2007 1250 LoanEnbridge Energy Partners LP 9.4.2009 200 Loan

Appendix I: F<strong>in</strong>ancial DataAll figures <strong>in</strong> US$ millionTotal Tar Sands F<strong>in</strong>anc<strong>in</strong>g = $8,823.32Total fees earned from tar sands issuances = $31.12Issuer Name Date Amount (US$ million) ProductTotal Capital SA 22.1.2007 197.56 CorpEnCana Corp 7.3.2007 212.07 CorpShell International F<strong>in</strong>ance BV 8.3.2007 192.83 CorpEnbridge Inc 31.5.2007 200 CorpTotal Capital SA 24.7.2007 103.1 CorpHusky Energy Inc 6.9.2007 100 CorpHusky Energy Inc 6.9.2007 150 CorpTransCanada Pipel<strong>in</strong>es Ltd 2.10.2007 500 CorpTotal Capital SA 8.10.2007 101.8 CorpEnbridge Energy Partners LP 31.3.2008 133.33 CorpEnbridge Energy Partners LP 31.3.2008 133.33 CorpPetro-Canada 12.5.2008 200 CorpPetro-Canada 12.5.2008 300 CorpTotal Capital SA 3.7.2008 99.17 CorpTransCanada Pipel<strong>in</strong>es Ltd 6.1.2009 375 CorpTransCanada Pipel<strong>in</strong>es Ltd 6.1.2009 625 CorpTotal Capital SA 13.3.2009 387.5 CorpTotal Capital SA 19.3.2009 239.16 CorpCanadian Oil Sands Ltd 6.5.2009 250 CorpHusky Energy Inc 6.5.2009 250 CorpHusky Energy Inc 6.5.2009 250 CorpShell International F<strong>in</strong>ance BV 6.5.2009 1111.21 CorpShell International F<strong>in</strong>ance BV 6.5.2009 1111.21 CorpTotal Capital SA 7.5.2009 368.22 CorpTotal Capital SA 2.6.2009 165.8 CorpNexen Inc 27.7.2009 75 CorpNexen Inc 27.7.2009 175 CorpTotal Capital SA 17.11.2009 150 CorpHusky Energy Inc 3.7.2007 666.67 Loan

Appendix I: F<strong>in</strong>ancial DataAll figures <strong>in</strong> US$ millionTotal Tar Sands F<strong>in</strong>anc<strong>in</strong>g = $12,714.53Total fees earned from tar sands issuances = $23.23Issuer Name Date Amount (US$ million) ProductTotal Capital SA 11.1.2007 320.1 CorpShell International F<strong>in</strong>ance BV 9.2.2007 195.12 CorpShell International F<strong>in</strong>ance BV 8.3.2007 192.83 CorpTotal Capital SA 23.05.2007 403.78 CorpK<strong>in</strong>der Morgan Energy Partners LP 18.6.2007 183.33 CorpTotal Capital SA 26.9.2007 100.79 CorpK<strong>in</strong>der Morgan Energy Partners LP 5.2.2008 300 CorpK<strong>in</strong>der Morgan Energy Partners LP 5.2.2008 150 CorpTotal Capital SA 19.3.2008 100.18 CorpTotal Capital SA 25.4.2008 96.69 CorpConocoPhillips 5.5.2008 133.33 CorpConocoPhillips 5.5.2008 166.67 CorpConocoPhillips 5.5.2008 200 CorpTotal Capital SA 10.6.2008 154.67 CorpK<strong>in</strong>der Morgan Energy Partners LP 16.12.2008 166.67 CorpEnbridge Energy Partners LP 17.12.2008 166.67 CorpDevon Energy Corp 6.1.2009 83.33 CorpDevon Energy Corp 6.1.2009 116.67 CorpConocoPhillips 29.1.2009 250 CorpConocoPhillips 29.1.2009 375 CorpConocoPhillips 29.1.2009 375 CorpStatoilHydro ASA 4.3.2009 378.52 CorpTotal Capital SA 7.5.2009 132.69 CorpConocoPhillips 18.5.2009 71.43 CorpConocoPhillips 18.5.2009 214.29 CorpConocoPhillips 18.5.2009 142.86 CorpCh<strong>in</strong>a National Petroleum Corp 28.2.2007 43.91 LoanKoch Resources LLC 10.7.2007 1250 LoanConocoPhillips 7.9.2007 3750 LoanConocoPhillips 1.10.2008 2500 Loan

Appendix II: RBS and its history of fossil fuel f<strong>in</strong>anceRBS’ high level of tar sands <strong>in</strong>vestment must be viewed with<strong>in</strong>the context of their <strong>in</strong>volvement <strong>in</strong> f<strong>in</strong>anc<strong>in</strong>g the fossil fuelsector more generally. In the last decade it has been one ofthe most significant funders of the oil and gas sector <strong>in</strong> theUK. Between 2001 and 2006, RBS provided over $10 billion<strong>in</strong> oil and gas loans, and structured the loan agreements andacted as f<strong>in</strong>ancial adviser on over $30 billion of oil and gasprojects, accord<strong>in</strong>g to a report published <strong>in</strong> 2007. 126 The reportalso calculated that the ‘embedded emissions’ 127 with<strong>in</strong> RBSproject f<strong>in</strong>ance to oil and gas projects exceeded 36.9 milliontonnes <strong>in</strong> 2005, equivalent to those of 6.2 million homes (onequarter of UK households).In 2008, the report <strong>Cash<strong>in</strong>g</strong> <strong>in</strong> on Coal, analysed the<strong>in</strong>vestments of HSBC, Barclays and RBS <strong>in</strong> coal-relatedcompanies over the period May 2006 to April 2008. It foundthat whilst HSBC had participated <strong>in</strong> 3 different loans, andBarclays <strong>in</strong> 17, RBS <strong>in</strong>vested <strong>in</strong> 27 different loans to the coal<strong>in</strong>dustry, totall<strong>in</strong>g an estimated $15.93 billion. 128It is not only the climate impacts of projects and companiesthat RBS has f<strong>in</strong>anced that have raised concerns. Like their<strong>in</strong>vestments <strong>in</strong> tar sands, many projects have been criticisedfor be<strong>in</strong>g associated with human rights abuses, other formsof environmental degradation, or for operat<strong>in</strong>g <strong>in</strong> politicallyand/or environmentally sensitive regions. In the last yearthese have <strong>in</strong>cluded:• Provid<strong>in</strong>g two rounds of f<strong>in</strong>ance to Tullow Oil, whichis explor<strong>in</strong>g for oil on the Ugandan – DemocraticRepublic of Congo border, an area which has seen<strong>in</strong>tense conflict <strong>in</strong> recent years, conflict which isnow be<strong>in</strong>g exacerbated by compet<strong>in</strong>g demandsfor control over resources 129 . In March 2009 ithelped provide f<strong>in</strong>anc<strong>in</strong>g worth $100 million andacted as jo<strong>in</strong>t global co-ord<strong>in</strong>ator and bookrunnerwith Bank of America Merrill Lynch <strong>in</strong> a share salerais<strong>in</strong>g £925 million for the company <strong>in</strong> January2010. 130 The Production Shar<strong>in</strong>g Agreements wereanalysed <strong>in</strong> a recent report 131 that makes the casefor changes <strong>in</strong> the contract between Tullow andthe Ugandan government on account of resourcesovereignty and environmental concerns. 132 JacobMay<strong>in</strong>do of the Uganda Wildlife Society said that,“there are significant and justifiable concerns aboutenvironmental safeguards relat<strong>in</strong>g to oil explorationand production <strong>in</strong> Uganda, <strong>in</strong>clud<strong>in</strong>g the lack of astrategic environmental assessment. The negativeimpacts to biodiversity and tourism, and air, waterand land pollution have yet to be adequatelyaddressed. There is currently little evidence of thecompanies’ [Tullow and Heritage] commitmentto create, monitor and enforce environmentalprotections.’’ 13353

• Issu<strong>in</strong>g loans worth $100m to Sterlite, which is60% owned by Vedanta, the m<strong>in</strong><strong>in</strong>g company fac<strong>in</strong>gcontroversy over its plans for an open cast bauxitem<strong>in</strong>e on Niyamgiri mounta<strong>in</strong> <strong>in</strong> Orissa, India.Vedanta’s Niyamgiri m<strong>in</strong>e project has been criticisedby the UK government, and caused the Church ofEngland to sell its £3.8million stake <strong>in</strong> the company,follow<strong>in</strong>g evidence that <strong>in</strong>digenous tribes would bedisplaced and ancient forests severely degraded ifthe m<strong>in</strong>e were to go ahead. 134RBS is not only a lead<strong>in</strong>g arranger of f<strong>in</strong>ance to the fossilfuel sector, it also deploys its expertise to source, f<strong>in</strong>anceand structure loan agreements and provide key advisoryservices to the sector. In September 2009, <strong>in</strong> conjunctionwith Oil and Gas UK, RBS sponsored, and provided a keyspeaker for sem<strong>in</strong>ars on how to revitalise the oil and gas<strong>in</strong>dustry <strong>in</strong> the wake of the f<strong>in</strong>ancial crisis. 135 RBS has builtclose relationships with Cairn Energy, which is currentlyestablish<strong>in</strong>g itself to drill up to four oil wells <strong>in</strong> the Arcticoff the coast of Greenland. RBS acted as jo<strong>in</strong>t arranger withMerrill Lynch, plac<strong>in</strong>g shares worth £116 million <strong>in</strong> March2009. 136 RBS Hoare Govett has made public statementsto create enthusiasm with<strong>in</strong> the market for Cairn’s Arcticexploration, describ<strong>in</strong>g the company’s announcementto br<strong>in</strong>g drill<strong>in</strong>g forward from 2011 to 2010 as an “earlyChristmas present” <strong>in</strong> December 2009. 137RBS’ <strong>in</strong>timate f<strong>in</strong>ancial l<strong>in</strong>ks with the fossil fuel <strong>in</strong>dustryhave not gone unnoticed by an <strong>in</strong>creas<strong>in</strong>gly climateconsciouspublic <strong>in</strong> the UK. In May 2009, RBS came bottom<strong>in</strong> a league table of UK high street banks created byEthical Consumer magaz<strong>in</strong>e, partly as a result of its fossilfuel f<strong>in</strong>ance. 138 Later on <strong>in</strong> the year, RBS was named andshamed as a ‘villa<strong>in</strong>’ <strong>in</strong> the New Statesman’s ‘20 greenheroes and villa<strong>in</strong>s’ feature. 139 The disclosure of the extentof RBS’ <strong>in</strong>volvement <strong>in</strong> tar sands at a time when the issue isbecom<strong>in</strong>g an <strong>in</strong>ternational scandal is likely to contribute tofurther brand damage to RBS.54

Appendix III: Equator Pr<strong>in</strong>ciples and Climate Pr<strong>in</strong>ciples –The bank<strong>in</strong>g sector’s response to climate changeThe case of the Equator BanksThe Equator Pr<strong>in</strong>ciples 140 claim to offer an <strong>in</strong>ternationalstandard for project f<strong>in</strong>ance, the k<strong>in</strong>d of lend<strong>in</strong>g <strong>in</strong> whichbanks directly <strong>in</strong>vest <strong>in</strong> specific projects undertaken by acompany, or ‘sponsor’. Established <strong>in</strong> 2003, there are now69 signatories <strong>in</strong>clud<strong>in</strong>g RBS, HSBC and Barclays. TheEquator banks “adopted these Pr<strong>in</strong>ciples <strong>in</strong> order to ensurethat the projects we f<strong>in</strong>ance are developed <strong>in</strong> a manner thatis socially responsible and reflect sound environmentalmanagement practices.” 141 Thus <strong>in</strong> Equator-compliantprojects, “negative impacts on project-affected ecosystemsand communities should be avoided where possible”.Concerns have been raised over the value of the EquatorPr<strong>in</strong>ciples <strong>in</strong> the wake of numerous harmful projectsbe<strong>in</strong>g f<strong>in</strong>anced by Equator banks, <strong>in</strong>clud<strong>in</strong>g Mounta<strong>in</strong>Top Removal coal m<strong>in</strong><strong>in</strong>g <strong>in</strong> the US, the Rio Madeira dam<strong>in</strong> Brazil, and a gas pipel<strong>in</strong>e <strong>in</strong> Papua New Gu<strong>in</strong>ea. 142 Thewater, ecosystem and community impacts – related both tohealth and <strong>in</strong>digenous land rights – of Canadian tar sands’extraction, conversion to syncrude and transportation areall issues covered by the International F<strong>in</strong>ance Corporation’sPerformance Standards (currently under review 143 ) to whichthe Equator Pr<strong>in</strong>ciples are aligned 144 , but nonetheless 26 145Equator banks have f<strong>in</strong>anced Canadian tar sands projectsand companies operat<strong>in</strong>g <strong>in</strong> the tar sands.In response to climate change, the Equator Pr<strong>in</strong>ciplescommit signatories to “promote the reduction of projectrelatedgreenhouse gas (GHG) emissions <strong>in</strong> a mannerappropriate to the nature and scale of project operationsand impacts”. BankTrack, an <strong>in</strong>ternational networkmonitor<strong>in</strong>g bank<strong>in</strong>g f<strong>in</strong>ance, recently convened close to 100organisations worldwide to call for “major reforms..[of thePr<strong>in</strong>ciples]..on transparency, accountability, implementationand climate change.” 146The call, <strong>in</strong> the form of a letter, also po<strong>in</strong>ted out thenarrowness of the Equator Pr<strong>in</strong>ciples with regards to theclimate change impacts of projects, as they only take <strong>in</strong>toconsideration emissions which result from energy use <strong>in</strong>the production process and not result<strong>in</strong>g from the ultimatecombustion of a product of a specific project (oil, gas, coalfuel). In effect, there is no dis<strong>in</strong>centive to persuade or directbanks not to f<strong>in</strong>ance massive fossil fuel exploration andexploitation projects that will lead to billions of tons ofgreenhouse gases be<strong>in</strong>g released <strong>in</strong>to the atmosphere.” 147The Equator Pr<strong>in</strong>ciples are limited <strong>in</strong> their scope partlybecause they are applicable only to project f<strong>in</strong>ance asopposed to other forms of f<strong>in</strong>ance. Lack of liquidity <strong>in</strong> thewake of the recent f<strong>in</strong>ancial crisis has meant that there55

has been a significant decl<strong>in</strong>e <strong>in</strong> the more capital-<strong>in</strong>tensiveproject f<strong>in</strong>ance market. 148 If banks use corporate loans tof<strong>in</strong>ance companies <strong>in</strong>volved <strong>in</strong> tar sands extraction, theycan effectively evade their commitments under the EquatorPr<strong>in</strong>ciples.Manag<strong>in</strong>g climate changeThe more recently drawn up Climate Pr<strong>in</strong>ciples, 149 whichwere announced <strong>in</strong> December 2008 with six signatories<strong>in</strong>clud<strong>in</strong>g HSBC, look at different types of f<strong>in</strong>anc<strong>in</strong>g tocoalesce guidance on the “risks and opportunities” posedby catastrophic climate change. Much of the content outl<strong>in</strong>esnew markets associated with low carbon transitions, andbypasses the question of f<strong>in</strong>anc<strong>in</strong>g activities that causeclimate change.The Pr<strong>in</strong>ciples assume dis<strong>in</strong>centives for fossil fuelconsumption lie only with governments and consumers,conveniently overlook<strong>in</strong>g the crucial cog <strong>in</strong> the fossil fueleconomy that is f<strong>in</strong>ance. Yet <strong>in</strong> 2006, HSBC acknowledgedthat its “most significant impact [on climate change] is the<strong>in</strong>vestment and lend<strong>in</strong>g decisions we make.” 150In the Climate Pr<strong>in</strong>ciples, only projects emitt<strong>in</strong>g more than100,000 tons of CO 2warrant climate risk consideration,which itself <strong>in</strong>volves no more than an assessment ofemissions and possible reduction options by the sponsor.The recently published Climate Pr<strong>in</strong>ciples ProgressReview by f<strong>in</strong>ancial sector accountant and consultantPricewaterhouseCoopers notes a lack of open discussionaround “guidance for <strong>in</strong>vestment decisions where climatechange considerations are a crucial part of the process.” 151Inappropriate and <strong>in</strong>adequate responses to the scale of theproblemThe Equator Pr<strong>in</strong>ciples and the Climate Pr<strong>in</strong>ciples could bothbe used by banks to limit <strong>in</strong>vestment <strong>in</strong> tar sands relatedprojects if bank participation was conditional on certa<strong>in</strong>policy features. The f<strong>in</strong>anc<strong>in</strong>g of tar sands projects andcompanies operat<strong>in</strong>g <strong>in</strong> tar sands exploitation demonstratesnot only the lack of limitations imposed on lend<strong>in</strong>g and<strong>in</strong>vestments, but crucially that these banks are still will<strong>in</strong>gto put money <strong>in</strong>to highly contested companies and projects.If banks can cont<strong>in</strong>ue to fund companies that are actively<strong>in</strong>volved <strong>in</strong> ‘the most destructive project on earth’ and stillclaim compliance with the Equator or Climate Pr<strong>in</strong>ciples,it is surely compell<strong>in</strong>g evidence that such pr<strong>in</strong>ciples needurgently to be strengthened.Importantly, these Pr<strong>in</strong>ciples and wider discourse with<strong>in</strong>the f<strong>in</strong>ancial sector around climate change, display not afailure to respond to climate change – most acute <strong>in</strong> theClimate Pr<strong>in</strong>ciples’ focus on ‘opportunities’ – but a refusalby many banks to accept responsibility for <strong>in</strong>vestment56

choices that harm communities and ecosystems and driveclimate change, despite public statements to the contrary.HSBC claimed <strong>in</strong> late 2008 that “The [tar sands] policy isunder review.” 152 But <strong>in</strong> the subsequent year it proceededto underwrite loans, debt and equity worth more than $6billion 153 to tar sands related companies.and certa<strong>in</strong> biofuels. The development of these fuels hasthe potential for significant local environmental impactsand will accelerate <strong>in</strong>creases <strong>in</strong> global greenhouse gasemissions.” 158It does not need to be like this. There are examples of goodpractice which RBS and others can follow. Two signatoriesof the Equator Pr<strong>in</strong>ciples have taken bold steps forwardby creat<strong>in</strong>g their own specific policies. German bank WestLB recently published a policy on restrict<strong>in</strong>g f<strong>in</strong>ance forcoal-fired power generators, 154 and French bank Dexia setglobal best practice standards on releas<strong>in</strong>g Energy SectorGuidel<strong>in</strong>es stat<strong>in</strong>g the bank “will not provide f<strong>in</strong>anc<strong>in</strong>g to…projects related to oil sands or oil shales which adverselyimpact, <strong>in</strong> a non-reversible manner, critical natural habitatsor freshwater resources used for supply for dr<strong>in</strong>k<strong>in</strong>gwater.” 155And <strong>in</strong> the UK The Co-operative Bank has long had a policynot to f<strong>in</strong>ance any fossil fuel project, 156 and supportscampaigns to stop tar sands extraction. 157 One year agoit updated policies committ<strong>in</strong>g the bank to “extend itsexclusion beyond the extraction and production of fossilfuels to those bus<strong>in</strong>esses engaged <strong>in</strong> the distributionof fuels with a particularly high global-warm<strong>in</strong>g impact,particularly unconventional oil sources (such as tar sands)57

Endnotes1 Oil companies and their PR firms have <strong>in</strong>sisted on referr<strong>in</strong>gto Canadian tar sands as ‘oil sands’, as ‘tar’ is more readilyidentified as negative than ‘oil’. By plac<strong>in</strong>g these deposits<strong>in</strong> the same category as crude oil it becomes easier for thecompany to ga<strong>in</strong> acceptance and expand its exist<strong>in</strong>g ‘sociallicence to operate’. In a similar way we will refer to ‘oil shale’as ‘tar shale’ <strong>in</strong> this report.2 ‘Canada’s Toxic Tar Sands: The Most Destructive Project onEarth’, Environmental Defence, February 2008. See: http://www.environmentaldefence.ca/reports/tarsands.htm3 Conventional and unconventional oil are terms used <strong>in</strong> thisreport as a matter of convenience, but are problematic <strong>in</strong>that like the <strong>in</strong>dustry adoption of ‘oil sands’ <strong>in</strong>stead of ‘tarsands’, they gloss over the dangerous threats to the climatethat all forms of oil represent and the harmful impacts thatare often borne by local communities and ecosystems.4 ‘Are Canadian tar sands the answer to our oil needs?’,Money Week, November 2007. See: http://www.moneyweek.com/<strong>in</strong>vestments/commodities/are-canadiantar-sands-the-answer-to-our-oil-needs.aspx5 Accord<strong>in</strong>g to unpublished data from the Ra<strong>in</strong>forest ActionNetwork.6 ‘Unconventional Oil – Scrap<strong>in</strong>g the bottom of the barrel?’,WWF, July 2009, see: http://assets.panda.org/downloads/unconventional_oil_f<strong>in</strong>al_lowres.pdf7 ‘Dirty Oil – How the tar sands are fuell<strong>in</strong>g the globalclimate crisis’, Greenpeace Canada, September 2009. See:http://www.greenpeace.org/raw/content/canada/en/documents-and-l<strong>in</strong>ks/publications/tar_sands_report.pdf8 Memorandum to Eddy Isaacs, Alberta Energy ResearchInstitute, from Joule Bergerson, University of Calgary,David Keith, University of Calgary, and Heather L. MacLean,University of Toronto, July 16, 2009. Onl<strong>in</strong>e at:http://eipa.alberta.ca/media/39674/post%20workshop%20stakeholder%20<strong>in</strong>put.pdf9 Pemb<strong>in</strong>a Institute (2005) Oil Sands Fever, available athttp://www.oilsandswatch.org/10 National Energy Board of Canada (2006) Canada’soil sands: Opportunities and challenges to 2015 – anupdate, available at: http://www.neb-one.gc.ca/clf-nsi/rnrgynfmtn/nrgyrprt/lsnd/pprtntsndchllngs20152006/pprtntsndchllngs20152006-eng.pdf11 Saudi Arabia has 260 billion barrels accord<strong>in</strong>g to the USEnergy Information Adm<strong>in</strong>istration website, available athttp://www.eia.doe.gov/emeu/cabs/Saudi_Arabia/Oil.html58

12 ‘Parts per million’ – the means of measur<strong>in</strong>g theconcentration of atmospheric carbon <strong>in</strong> the atmosphere13 ‘A safe operat<strong>in</strong>g space for humanity’, J Rockström et al.,Nature 461, 472-475 (24 September 2009).14 ‘Well to wheel’ refers to a Life Cycle Analysis that takes<strong>in</strong>to account the total environmental impact from theextraction of the fuel to the po<strong>in</strong>t it is used, with the wheelreferr<strong>in</strong>g to the example of use by car.15 Based on calculations made <strong>in</strong> the report ‘UnconventionalOil – Scrap<strong>in</strong>g the bottom of the barrel?’, WWF, July 2009,page 42. See: http://assets.panda.org/downloads/unconventional_oil_f<strong>in</strong>al_lowres.pdf16 Alberta Environment, 2008.Water Diversion by OilsandsM<strong>in</strong><strong>in</strong>g Projects <strong>in</strong> 2007, September 200817 University of Alberta (2007), Runn<strong>in</strong>g out of Steam?available at http://www.ualberta.ca/ERSC/water.pdf18 Not all the extraction sites have tail<strong>in</strong>gs ponds – most ofthe SAGD projects don’t.19 ‘Oil Sands Tail<strong>in</strong>gs and Directive 074,’ The Pemb<strong>in</strong>aInstitute, December 2009. See: http://www.pemb<strong>in</strong>a.org/pub/193320 ‘11 Million Litres a Day: The Tar Sands’ Leak<strong>in</strong>g Legacy’,Environmental Defence, December 2008. See: http://www.environmentaldefence.ca/reports/tarsands_dec_2008.html21 Cumulative Environmental Management Association,Review and Assessment of Environmental EffectsInformation for Wildlife and Fish Indicators <strong>in</strong> the RegionalSusta<strong>in</strong>able Development Strategy (RSDS) Study Area with<strong>in</strong>the Athabasca Oil Sands Region (AOSR). March 2003. p. 42.22 About the Beaver Lake Cree Nation, The Coop BankWebsite. See: http://www.co-operativecampaigns.co.uk/toxicfuels/stopTarSandsExpansion-about.php23 See: http://www.cpaws-edmonton.org/CPAWS-NR-WoodCaribou.htm24 ‘Danger <strong>in</strong> the Nursery: Impact on birds of tar sands oildevelopment <strong>in</strong> Canada’s Boreal forest’, NRDC and Pemb<strong>in</strong>aInstitute, September 2009. See: http://www.borealbirds.org/birdstarsands.shtml25 ‘Cancer rate <strong>in</strong> Fort Chipewyan cause for concern:medical exam<strong>in</strong>er’, CBC News, 10 March 2006. See http://www.cbc.ca/canada/edmonton/story/2006/03/10/edfortchip20060310.html26 ‘High Cancer Rates Among Fort Chipewyan Residents’,59

Canadian Medical Association Journal News, February 2009.See: www.ecmaj.ca/cgi/rapidpdf/cmaj.090248v1.pdf27 ‘“British companies are kill<strong>in</strong>g us”: Indigenouscampaigners jo<strong>in</strong> Climate Camp to launch anti-Tar Sandsaction <strong>in</strong> the UK’, Press Release, 18 August 2009, See:http://www.climatecamp.org.uk/press/2009/08/18/britishcompanies-are-kill<strong>in</strong>g-us-<strong>in</strong>digenous-campaigners-jo<strong>in</strong>climate-camp-to-launch-anti-tar-sands-action-<strong>in</strong>-the-uk28 ‘A study of water and sediment quality as related topublic health issues, Fort Chipewyan, Alberta,’ Treel<strong>in</strong>eEcological Research, 2007. See: http://www.borealbirds.org/resources/timoney-fortchipwater-111107.pdf29 An NGO with ECOSOC Special Consultative Status, andIITC affiliate the Confederacy of Treaty No. 6 First Nationsrepresent<strong>in</strong>g 18 First Nations <strong>in</strong> Alberta Canada30 ‘Jo<strong>in</strong>t Submission to the United Nations HumanRights Council <strong>in</strong> regard to the Universal Periodic ReviewConcern<strong>in</strong>g Canada <strong>in</strong> February 2009’, September 8th 2008.31 ‘Indigenous people <strong>in</strong> legal challenge aga<strong>in</strong>st oil firmsover tar sand project,’ Guardian, 26 February 2009, http://www.guardian.co.uk/environment/2009/feb/26/activismcarbon-emissionsMore <strong>in</strong>formation on the Beaver LakeCree challenge can be found at http://www.raventrust.com/projects/beaverlakecree.html32 The Beaver Lake Cree Nation’s legal challenge, The CoopBank Website. See: http://www.co-operativecampaigns.co.uk/toxicfuels/stopTarSandsExpansion-legalCase.php33 The report ‘Energy Futures? Eni’s <strong>in</strong>vestments <strong>in</strong> tar sandsand palm oil <strong>in</strong> the Congo Bas<strong>in</strong>’ can be downloaded fromhttp://www.boell.de/ecology/climate-energy-7110.html34 CIA World Factbook, 2009. “Country Comparison:Oil Production”. See: https://www.cia.gov/library/publications/the-worldfactbook/rankorder/2173rank.html.Current production is around 240,000 barrels per day. USEnergy Information Agency, September 2009.35 IMF, 2005. Country Report No. 05/39, Republic of Congo:Interim Poverty Reduction Strategy Paper Progress Report,February 2005,36 http://www.eni.it/portal/search/search.do?keyword=risked&x=0&y=5&locale=en_IT&headersite=search37 Congo Bas<strong>in</strong> Forests –State of Forests 2008. Eds : deWasseige C., Devers D., from Marcken P., Eba’a Atyi R.,Nasi R. and Mayaux Ph., Office des publications de l’Unioneuropéenne, 2009. http://www.cbfp.org/Stateoftheforest.html60

38 “Hardtalk”, BBC TV, 21 July 2009. See: http://www.bbc.co.uk/programmes/b00lt51039 Eni S.p.A Exporation and Production Division, 2009.Onshore Congo, Projet sablesbitum<strong>in</strong>eux des permis Tchikatanga et Tchikatanga-Makola,Rapport nº1: Etat d’avancement au 31 mars 2009, Section3:240 Congo is rated 43 out of 53 countries.World PeaceFoundation, 2009. STRENGTHENINGAFRICAN GOVERNANCE:Index of African governance, October 2009, pp. 7-18. See:http://www.worldpeacefoundation.org/africangovernance.html41 ‘Energy Futures: Eni’s <strong>in</strong>vestments <strong>in</strong> tar sands and palmoil <strong>in</strong> the Congo Bas<strong>in</strong>’, He<strong>in</strong>rich Boll Stiftung, 200942 Eni, 2009. Responses to the FONDAZIONE CULTURALERESPONSABILITA’ETICA, July 26 200943 The Bloomberg Term<strong>in</strong>al is a computer system thatenables f<strong>in</strong>ancial professionals to access the BloombergProfessional service through which users can monitor andanalyze real-time f<strong>in</strong>ancial market data movements andplace trades.44 Underwrit<strong>in</strong>g refers to the process by which <strong>in</strong>vestmentbankers raise <strong>in</strong>vestment capital from <strong>in</strong>vestors on behalfof corporations and governments that are issu<strong>in</strong>g securities(both equity and debt). Def<strong>in</strong>ition taken from www.<strong>in</strong>vestopedia.com45 Accord<strong>in</strong>g to RAN’s Bloomberg analysis, the total figurefor loans underwritten by the banks <strong>in</strong> question <strong>in</strong> the threeyear period was $64.82 billion.46 See Appendix I.47 CBC News, ConocoPhillips plans oilsands expansion, CBCNews, Money, 19 January 2010.48 ConocoPhillips Company, Canadian Oil Sands, http://www.conocophillips.com/EN/susdev/ourapproach/oilsands/Pages/<strong>in</strong>dex.aspx49 ConocoPhillips Company, Susta<strong>in</strong>able Development,http://www.conocophillips.com/EN/susdev/Pages/<strong>in</strong>dex.aspx [accessed on 5 February 2009]50 ‘API Members’, http://www.api.org/resources/members/<strong>in</strong>dex.cfm [accessed 18.02.10]51 ‘ConocoPhillips’ opposition to US climate bill is deviousand dishonest’, The Guardian, 24 September 2009. See:http://www.guardian.co.uk/environment/2009/sep/24/61

conoco-phillips-us-climate-bill52 http://consumerenergyalliance.org/affiliates/53 Nick Snow, NPRA, others sue over California low-carbonfuel standard, Oil and Gas Journal, 4 Febuary 2010.54 Beaver Lake Cree Nation, www.beaverlakecreenation.ca55 Anderson et al, ConocoPhillips <strong>in</strong> the Peruvian Amazon,Amazon Watch and Save America’s Forests, 2009, p 3. See:http://www.amazonwatch.org/conoco2009.pdf56 ‘Everybody’s downstream II: Tar sands, USA,’ Vue Weekly,November 2008. See: http://www.vueweekly.com/article.php?id=1027057 Jeffrey Jones, Syncrude duck deaths now triple <strong>in</strong>itial tally,Reuters Canada, Canada, 31 March 2009.58 Tom Kat<strong>in</strong>as, President and CEO Syncrude Canada Ltd.,Waterfowl Management Update, 31 March 2009.59 Jeffrey Jones, Syncrude duck deaths now triple <strong>in</strong>itialtally, Reuters Canada, Canada, 31 March 2009.60 See Appendix I.61 Enbridge Inc, System Profile & Statistics,www.enbridge.com/pipel<strong>in</strong>es/about [accessed on 5 February 2009]62 Enbridge Inc, Enbrigde Expansion www.enbridgeexpansion.com/expansion[accessed on 5 February 2009]63 Lauren Krugel, Enbridge gets ready for ‘very busy year’ <strong>in</strong>oilsands after project announcements, The Canadian Press,3 Febuary 2010.64 Nathan Vanderklippe, Native group calls for pipel<strong>in</strong>eboycott, The Globe and Mail, Report on Bus<strong>in</strong>ess, 16 January2010.65 ‘The Enbridge Northern Gateway Pipel<strong>in</strong>e: Do BritishColumbians stand to ga<strong>in</strong>?’ West Coast EnvironmentalLaw, 2009. See: http://skeenawild.org/uploads/reports/Enbridge_outreach_materials.pdf66 Interviewed by Jess Worth from the forthcom<strong>in</strong>g issue ofthe New Internationalist magaz<strong>in</strong>e focus<strong>in</strong>g on tar sands.67 Thomson Reuters, Enbridge shuts oil pipel<strong>in</strong>e after leak,Reuters, 10 January 201068 David A. Levy, Pipel<strong>in</strong>es and Salmon <strong>in</strong> Northern BritishColumbia:Potential Impacts, The Pemb<strong>in</strong>a Institute, 16October 200962

69 www.processonl<strong>in</strong>e.com.au “A typical 500 km pipel<strong>in</strong>ewill leak on average 0.91 times per year.” Length of northerngateway pipel<strong>in</strong>e: 1170km, www.northerngateway.ca/.../northern-gateway-at-a-glance70 Geroge T. Baker, U.S. oil spill raises concerns aboutNorthern Gateway project from Alta. to B.C., AssociatedPress, 19 January 2010. “Northern Gateway spokesmanSteve Greenaway said Enbridge has 50 or 60 leaks a year –the average for the past two or three years. ‘The majority ofthose are conta<strong>in</strong>ed with<strong>in</strong> our facilities and those <strong>in</strong>cidentswould happen at a facility like a pump<strong>in</strong>g station where wemight have leaks as small as (eight litres),’ Greenaway said.”71 Greg Brown et al. Open<strong>in</strong>g the Door for Oil SandsExpansion: The Hidden Environmental Impacts of theEnbridge Northern Gateway Pipel<strong>in</strong>e, The Pemb<strong>in</strong>a Institue,December 2009, p 772 Factsheet December 2009: Open<strong>in</strong>g the Door for OilSands Expansion, The Pemb<strong>in</strong>a Institute, December 200973 ‘Stand beside us <strong>in</strong> defense of the land: Wet’suwet’en,’Vancouver Media Coop, 12 Feb 2010. See: http://vancouver.mediacoop.ca/story/270874 See Appendix I.75 BP plc, Press releases, BP Enters Canadian Oil Sands withHusky Energy www.bp.com/genericarticle.do?categoryId=2012968&contentId=7038865 [Accessed 15 February 2010]76 ‘BP upsets Greenpeace with return to tar sands’, TheTimes, 6 December 2007. See: http://bus<strong>in</strong>ess.timesonl<strong>in</strong>e.co.uk/tol/bus<strong>in</strong>ess/<strong>in</strong>dustry_sectors/natural_resources/article3007256.ece77 David Ebner, Husky, BP help fuel oil sands resurgence,Globe and Mail Update, 4 February 201078 Julie Crust, BP <strong>in</strong> talks over $1.2 billion Canadian oil sandsdeal: report, Reuters, 14 February 201079 Fair Pension, Resolutions, Resolutions to BP and ShellAGMs on TarSands www.fairpensions.org.uk/resolutions[Accessed 15 February 2010]80 Beaver Lake Cree Nation, www.beaverlakecreenation.ca[assessed on 5 February 2009]81 ‘EPA rejects permit for BP Whit<strong>in</strong>g ref<strong>in</strong>ery,’ November2009, Global Climate Law Blog. See: http://www.globalclimatelaw.com/2009/11/articles/climate-changelitigation/epa-rejects-permit-for-bp-whit<strong>in</strong>g-ref<strong>in</strong>ery/82 ‘Stand beside us <strong>in</strong> defense of the land: Wet’suwet’en,’63

Vancouver Media Coop, 12 Feb 2010. See: http://vancouver.mediacoop.ca/story/270883 “Oil Shale In Jordan: Occurrences And InvestmentOpportunities”, Jordan Natural Resources Authority,http://www.oilshalesymposium.com/fileadm<strong>in</strong>/user_upload/documents/MADANAT.pdf84 “Jordan, Shell sign oil shale agreement”, Oil & GasJounal, March 25 2009 http://www.ogj.com/<strong>in</strong>dex/articledisplay/363124/articles/oil-gas-journal/volume-107/issue-20/regular-features/ogj-newsletter.html85 “Amman unlocks energy potential”, Perry Williams,MEED, 7 August 2009, http://www.meed.com/sectors/oiland-gas/amman-unlocks-energy-potential/2040154.article86 “Amman unlocks energy potential”, Perry Williams,MEED, 7 August 2009, http://www.meed.com/sectors/oiland-gas/amman-unlocks-energy-potential/2040154.article87 “Shell Exploration & Production Unconventional Oil –Jordan Oil Shale Project”, Shell, 07.04.2007, http://www.medemip.eu/Calc/FM/MED-EMIP/OtherDownloads/Docs_Related_to_the_Region/Oil Shale - Jourdan - April 2009/Day1/Shell_Exploration_and_Production-Unconventional_Oil-Joran_Oil_Shale_Project.pdf88 “Jordan: National Water Strategy 2008-2022” http://www.emwis.net/countries/fol749974/country045975/national_program/thematicdirs/news/jordan-jd586b-waterstrategy-f<strong>in</strong>alized89 “Jordan’s Water Shortage”, The Hashemite K<strong>in</strong>gdom ofJordan, http://www.k<strong>in</strong>ghusse<strong>in</strong>.gov.jo/geo_env4.html90 “Water Pressure: Population Growth and the MiddleEastern and North African Water Crisis”, Lamont-DohertyEarth Observatory http://www.ldeo.columbia.edu/edu/dees/V1003/webposter/2007%20powerpo<strong>in</strong>t/Water%20Pressure%20Presentation.ppt91 “Jordan’s Water Shortage”, The Hashemite K<strong>in</strong>gdom ofJordan, http://www.k<strong>in</strong>ghusse<strong>in</strong>.gov.jo/geo_env4.html92 “Fact Sheet: Oil Shale Water Resources”, USADepartment of Energy, http://fossil.energy.gov/programs/reserves/npt/Oil_Shale_Water_Requirements.pdf “Wateron the Rocks: Oil Shale Water Rights <strong>in</strong> Colorado”,Western Resource Advocates, 2009 http://www.westernresourceadvocates.org/land/wotrreport/<strong>in</strong>dex.php93 “Nuclear energy production and water supply arestrongly l<strong>in</strong>ked <strong>in</strong> Jordan”, The Jordan Times, 26 May 2009http://www.animaweb.org/en/actu-detail.php?actu=645764

94 “An Analysis of the Latest Research Commissioned byEcoPeace / FoEME on the Red Sea to Dead Sea Conduitand its Relevance to the World Bank Led Study”, May2007, http://www.foeme.org/<strong>in</strong>dex_images/d<strong>in</strong>amicas/publications/publ75_1.pdf95 http://www.<strong>in</strong>dependent.co.uk/news/bus<strong>in</strong>ess/news/article1841928.ece96 http://www.guardian.co.uk/environment/2009/mar/02/rbs-environmental-regulations97 Observer letters page, 29 November 2009. See: http://www.guardian.co.uk/theobserver/2009/nov/29/lettersmethadone-prison-weather-muslims98 http://www.publications.parliament.uk/pa/cm200809/cmselect/cmenvaud/202/202.pdf99 ‘Governments likely to reta<strong>in</strong> stakes <strong>in</strong>f<strong>in</strong>ancial <strong>in</strong>stitutions for 5-7 years, accord<strong>in</strong>g toPricewaterhouseCoopers LLP’, PricewaterhouseCooperspress release, November 2009. See: http://www.ukmediacentre.pwc.com/Content/Detail.asp?ReleaseID=3432&NewsAreaID=2100 http://www.hm-treasury.gov.uk/press_114_08.htm101 The policy can be viewed at http://www.ukfi.gov.uk/images/dynamicImages/UKFI_Susta<strong>in</strong>ability_policy_010210.pdf102 Andrew Smith, 26th November, http://www.publications.parliament.uk/pa/cm200910/cmhansrd/cm091126/debtext/91126-0012.htm103 ‘Shift<strong>in</strong>g Sands: How a chang<strong>in</strong>g economy could burythe tar sands <strong>in</strong>dustry’, Greenpeace, PLATFORM & OilChange International, July 2009, p14. See: http://www.greenpeace.org.uk/media/reports/shift<strong>in</strong>g-sands-howchang<strong>in</strong>g-economy-could-bury-tar-sands-<strong>in</strong>dustry104 (page 3) http://www.swissre.com/resources/7249eb804e42012db8a8bcb8626ab849-Publ09_FR_Globalisation_en.pdf; http://www.nytimes.com/2010/01/27/bus<strong>in</strong>ess/energy-environment/27lawsuits.html105 ‘Shift<strong>in</strong>g Sands: How a chang<strong>in</strong>g economy could bury thetar sands <strong>in</strong>dustry’, Greenpeace, PLATFORM & Oil ChangeInternational July 2009. See: http://www.greenpeace.org.uk/media/reports/shift<strong>in</strong>g-sands-how-chang<strong>in</strong>g-economycould-bury-tar-sands-<strong>in</strong>dustry106 http://www.energy.ca.gov/low_carbon_fuel_standard/107 ‘NPRA, others sue over California low-carbon fuel65

standard’, Oil and Gas Journal, 4 Feb 2010. See: http://www.ogj.com/<strong>in</strong>dex/article-display/8289160832/articles/oil-gasjournal/general-<strong>in</strong>terest-2/hse/2010/02/npra_-others_sue_over/QP129867/cmpid=EnlDailyFebruary42010.html108 Andrew Smith, 26th November, http://www.publications.parliament.uk/pa/cm200910/cmhansrd/cm091126/debtext/91126-0012.htm109 http://www.iigcc.org/docs/PDF/Public/RevisedIIGCCInvestorStatementonClimateChange.pdf110 http://www.goodwithmoney.co.uk/assets/Uploads/Documents/Ethical-Policy-A4-doc-FINAL2.pdf111 Summary Presentation, p. 10; Madagascar Oil,Madagascar Oil, August 2009, http://www.graftonresources.net/userfiles/file/Madagascar%20Oil%20Executive%20Summary%20August%202009.pdf, pp. 2-3112 Summary Presentation, p. 18; Madagascar Oil, p. 4113 Summary Presentation, p. 39; www.madagascaroil.com,‘Operational Update’; ‘Development Projects’; http://www.total.com/en/press/press-releases/consultation-200524.html&idActu=1553114 Total <strong>in</strong> 2008, http://www.total.com/MEDIAS/MEDIAS_INFOS/866/FR/Total-2008-total-<strong>in</strong>-2008.pdf, p. 17115 http://whc.unesco.org/en/list/494/116 http://www.state.gov/r/pa/ei/bgn/5460.htm117 http://rru.worldbank.org/BESnapshots/Madagascar/default.aspx118 Madagascar Oil, p. 1119 Summary Presentation, p. 7120 http://www.fool.co.uk/news/<strong>in</strong>vest<strong>in</strong>g/<strong>in</strong>vest<strong>in</strong>gstrategy/2010/02/09/dodg<strong>in</strong>g-brita<strong>in</strong>s-dividend-cutters.aspx121 ‘15% fall <strong>in</strong> share dividends leaves pensions exposed’,Guardian, 10 February, 2010. See: http://www.guardian.co.uk/money/2010/feb/08/dividend-fall-exposes-pensions122 ‘Oil <strong>in</strong>dustry faces a stark choice’, F<strong>in</strong>ancial Times, 21September 2004. See: http://www.energybullet<strong>in</strong>.net/node/2211123 ‘The biggest environmental crime <strong>in</strong> history’,Independent, 10 December 2007. See: http://www.<strong>in</strong>dependent.co.uk/environment/the-biggest-environmental-66

crime-<strong>in</strong>-history-764102.html124 http://blogs.ft.com/energy-source/2010/01/26/shellsceo-peter-voser-<strong>in</strong>terview-transcript-on-canadas-oil-sandsjobs-acquisitions-us-gas-iraq-nigeria-copenhagen-andmore/125 ‘BP faces <strong>in</strong>vestor revolt over Canadian oil sandsproject’, Telegraph, 8 Feb 2010. See: http://www.telegraph.co.uk/f<strong>in</strong>ance/newsbysector/energy/7182811/BP-faces<strong>in</strong>vestor-revolt-over-Canadian-oil-sands-project.html126 The Oil & Gas Bank – RBS and the f<strong>in</strong>anc<strong>in</strong>g of climatechange: March 2007, p6. Published by PLATFORM,BankTrack, Friends of the Earth Scotland, new economicsfoundation and People & Planet. Onl<strong>in</strong>e: http://www.carbonweb.org/documents/Oil_&_Gas_Bank.pdf127 Embedded emissions are the emissions that will resultfrom fossil fuels produced or brought to the market fromoperations f<strong>in</strong>anced through project f<strong>in</strong>ance. The bank’sproportion is calculated accord<strong>in</strong>g to the proportion of theproject funded.128 Equivalent estimated total for HSBC was $10.10 billionand for Barclays $5.79 billion. <strong>Cash<strong>in</strong>g</strong> <strong>in</strong> on Coal, PLATFORMet. al p14.129 ‘Secrecy, woes, war over Uganda’s oil’ http://www.<strong>in</strong>dependent.co.ug/<strong>in</strong>dex.php/cover-story/cover-story/82-cover-story/1171-secrecy-woes-war-over-ugandas-oil;‘Uganda oil contracts give little cause for optimism’ http://www.guardian.co.uk/kat<strong>in</strong>e/kat<strong>in</strong>e-chronicles-blog/2010/jan/18/uganda-oil-profits130 ‘Tullow completes $2bn f<strong>in</strong>anc<strong>in</strong>g’ http://www.ft.com/cms/s/0/9a28a7dc-0ce0-11de-a555-0000779fd2ac.html;‘Tullow <strong>in</strong> £925 million share sale’ http://www.reuters.com/article/idUKTRE60Q4P420100127?type=companyNews131 ‘Contracts Curse: Uganda’s oil agreements place profitbefore people’ http://www.carbonweb.org/documents/uganda/Cursed_Contracts_Uganda_PLATFORM_CSCO_Tullow_Heritage_2010_February.pdf132 ‘Tullow Oil given contact to flare Ugandan gas’, http://www.guardian.co.uk/bus<strong>in</strong>ess/2010/feb/16/tullow-oiluganda-agreement133 Jacob May<strong>in</strong>do, <strong>in</strong> correspondence with Taimour Lay,PLATFORM researcher.134 ‘Treasury taken to court for RBS loans to Vedantaresources’ http://www.guardian.co.uk/bus<strong>in</strong>ess/2009/oct/18/rbs-vedanta-loan-court-case; ‘Church of Englandsells Vedanta stake of human rights concerns’ http://www.67

guardian.co.uk/bus<strong>in</strong>ess/2010/feb/05/vedanta-niyamgiriorissa-church-of-england135 p.11, www.oilandgasuk.co.uk/templates/asset-relay.cfm?frmAssetFileID=623136 ‘Cairn’s Greenland project moves forward’, 4.1.10,F<strong>in</strong>ancial Times http://www.ft.com/cms/s/0/9a2a6e78-f902-11de-80dc-00144feab49a.html137 http://www.guardian.co.uk/bus<strong>in</strong>ess/marketforceslive/2009/dec/21/cairnenergy138 ‘Chang<strong>in</strong>g Banks,’ Ethical Consumer, May/June 2009, p7139 ‘20 green heroes and villa<strong>in</strong>s’, New Statesman, 19November 2009. See: http://www.newstatesman.com/environment/2009/11/mitsubishi-rbs-michael-oleary-donal140 http://www.equator-pr<strong>in</strong>ciples.com/pr<strong>in</strong>ciples.shtml141 ibid.142 http://www.banktrack.org/manage/ems_dodgydeals/dealslist143 http://www.ifc.org/policyreview144 Equator Pr<strong>in</strong>ciples, Pr<strong>in</strong>ciple Three and Exhibit IV,http://www.equator-pr<strong>in</strong>ciples.com/documents/Equator_Pr<strong>in</strong>ciples.pdf and http://www.ifc.org/ifcext/susta<strong>in</strong>ability.nsf/Content/PerformanceStandards145 Figures provided by Ra<strong>in</strong>forest Action Network146 http://www.banktrack.org/show/news/civil_society_groups_call_for_bold_steps_forward_with_equator_pr<strong>in</strong>ciples147 ‘Bold Steps Forward - Towards Equator Pr<strong>in</strong>ciples thatdeliver to people and the planet, A civil society call to theEquator Pr<strong>in</strong>ciples F<strong>in</strong>ancial Institutions,’ January 2010. See:http://www.banktrack.org/download/bold_steps_forward_towards_equator_pr<strong>in</strong>ciples_that_deliver_to_people_and_the_planet148 ‘Tighter loan structure puts brakes on ME projectf<strong>in</strong>ance’, Emirate Bus<strong>in</strong>ess, Feb 2010. http://www.bus<strong>in</strong>ess24-7.ae/Articles/2009/5/Pages/27052009/05282009_88305bd02c8347678893ab2b7c8b63e1.aspx149 http://www.theclimategroup.org/programs/theclimate-pr<strong>in</strong>ciples/150 HSBC, Carbon Disclosure Project 3, p.7, search.cdproject.net/file-response.asp?file=CDP3_HSBC_AQ_3213.pdf68

151 Climate Pr<strong>in</strong>ciples Progress Review January 2010, p.4,http://www.theclimategroup.org/_assets/files/Climate-Pr<strong>in</strong>ciples-Progress-Review.pdf152 Francis Sullivan, Head of Group Susta<strong>in</strong>ability, HSBChttp://www.reuters.com/article/idUSTRE4B143620081202153 See Appendix I.154 The policy can be seen at http://appsvr07.westlb.com/isearch/westlb/westlb_de/en/wlb/csr/Susta<strong>in</strong>ability/at/Documents/WestLB_Policy_for_Bus<strong>in</strong>ess_Activities-re_Coal_Fired_Power_Generation.pdf155 Energy Sector Guidel<strong>in</strong>es, Dexia http://www.dexia.com/docs/2009/2009_susta<strong>in</strong>able/20081110_Energy_sector_guidel<strong>in</strong>es_UK.pdf156 http://www.goodwithmoney.co.uk/assets/Uploads/Documents/Ethical-Policy-A4-doc-FINAL2.pdf157 http://www.co-operativecampaigns.co.uk/toxicfuels/158 http://www.bus<strong>in</strong>essgreen.com/bus<strong>in</strong>ess-green/news/2235543/op-calls-carbon-<strong>in</strong>tensive69

L<strong>in</strong>ks & ResourcesPLATFORMhttp://www.platformlondon.orgWorld Development Movementhttp://www.wdm.org.ukPeople & Planethttp://peopleandplanet.orgIndigenous Environmental Networkhttp://www.ienearth.orgRa<strong>in</strong>forest Action Networkhttp://ran.orgFriends of the Earth – Scotlandhttp://www.foe-scotland.org.ukFriends of the Earth – England, Wales and Northern Irelandhttp://www.foe.co.ukFriends of the Earth – Europehttp://www.foeeurope.orgIndigenous People L<strong>in</strong>kshttp://www.pipl<strong>in</strong>ks.orgNew Internationalisthttp://www.new<strong>in</strong>t.orgBankTrackhttp://www.banktrack.orgFor more <strong>in</strong>formation on tar sandsIndigenous Environmental Network Tar Sands Campaignhttp://www.ienearth.org/cits.htmlOil Sands Truth http://oilsandstruth.orgUK Tar Sands Networkhttp://tarsands<strong>in</strong>focus.wordpress.com/tour/Tar Sands Blow http://tarsandsblow.comDirty Oil Sands http://www.dirtyoilsands.orgFor more <strong>in</strong>formation on RBS and fossil fuel f<strong>in</strong>anceThe Oyal Bank of Scotland http://oyalbankofscotland.comBank Secrets http://www.banksecrets.orgPLATFORM – The Carbon Web http://www.carbonweb.orgWDM – Clean The Bankshttp://www.wdm.org.uk/global-f<strong>in</strong>ancial-crisisP&P – Ditch Dirty Developmenthttp://peopleandplanet.org/ditchdirtydevelopmentJo<strong>in</strong> the facebook group ‘Stop RBS Us<strong>in</strong>g Public Money toF<strong>in</strong>ance Climate Change’http://www.facebook.com/group.php?gid=2370015501FairPensions shareholder actionhttp://www.count<strong>in</strong>gthecost.org.uk70

“Investment decisions taken now will have a majorimpact on current and future global greenhousegas emissions and, hence, on the world’s climate.– The Institutional InvestorsGroup on Climate Change 109”71

“We are see<strong>in</strong>g a terrify<strong>in</strong>gly high rate of cancer <strong>in</strong> Fort Chipewyan whereI live. We are conv<strong>in</strong>ced that these cancers are l<strong>in</strong>ked to the Tar Sandsdevelopment on our doorstep. It is shorten<strong>in</strong>g our lives. That’s why weno longer call it ‘dirty oil’ but ‘bloody oil’. The blood of Fort Chipewyanpeople is on these companies’ hands.”– George Poitras, former chief of Mikisew Cree First NationTar sands extraction <strong>in</strong> Canada is devastat<strong>in</strong>g Indigenous communities, wildlife and vastareas of boreal forests, as well as be<strong>in</strong>g many times more carbon-<strong>in</strong>tensive to produce than‘conventional’ oil.The higher oil prices <strong>in</strong> recent years have meant that it’s become a more attractive prospectfor oil companies to expand their operations <strong>in</strong> the costly process of obta<strong>in</strong><strong>in</strong>g and process<strong>in</strong>gthe thick bitumen <strong>in</strong>to a usable form. It’s estimated that the <strong>in</strong>dustry is look<strong>in</strong>g for a capital<strong>in</strong>vestment of $120-$220 billion over the next 20 years to build the new pipel<strong>in</strong>es, m<strong>in</strong>es,ref<strong>in</strong>eries and upgraders that are necessary to susta<strong>in</strong> the boom.This report looks at the role that UK banks are play<strong>in</strong>g <strong>in</strong> provid<strong>in</strong>g the necessary capital, andhow RBS, which is 84% owned by the UK public, has been the bank the most heavily <strong>in</strong>volved<strong>in</strong> underwrit<strong>in</strong>g loans to companies engag<strong>in</strong>g <strong>in</strong> tar sands extraction.www.platformlondon.org72