Cashing in on Tar Sands: RBS, UK banks and Canada's ... - Platform

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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
Page 3 and 4: Cashing</s
Page 5 and 6: executivesummary5
Page 7: against the destru
Page 12 and 13: THEIThe impacts of tar sands extrac
Page 15 and 16: guaranteed Indigenous Peoples the
Page 17 and 18: worse development outcomes than cou
Page 19: disastrous legacy especially for Ab
Page 22 and 23: UKBANKFINANCINGFin
Page 24 and 25: Mike Mercredi, Fort Chipewyan - Do<
Page 27 and 28: CASESTUDIES27
Page 29 and 30: dishonest” by The Guardian. 51 Th
Page 31 and 32: ShellRBS underwrote two amounts of
Page 33 and 34: Clayton Thomas-Muller - Tar sands a
Page 35: government and First Nations that d
Page 38 and 39: PRBS is the UK bank that has receiv
Page 40 and 41: “In the long term, any oil compan
Page 42 and 43: Case study: Pension funds & shareho
Page 44 and 45: “We are seeing a
Page 47 and 48: CONCLUSIONS47
Page 49 and 50: to prevent the fin
Page 51 and 52: Appendix I: Financ
Page 53 and 54: Appendix II: RBS and its history of
Page 55 and 56: Appendix III: Equator Prin<
Page 57 and 58: choices that harm communities and e
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12 ‘Parts per million’ - the me
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38 “Hardtalk”, BBC TV, 21 July
Page 63 and 64:
69 www.processonlin</strong
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94 “An Analysis of the Latest Res
Page 67 and 68:
crime-in-history-7
Page 69 and 70:
151 Climate Princi
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“Investment decisions taken now w
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