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Report: East Africa Pipeline ‘Breaches Banking Principles’ | World News

ED DAVEY, by the Associated Press

A controversial oil project that will link Uganda’s national oil fields to a port in Tanzania violates global environmental guidelines for banks, according to a new nonprofit report on Tuesday.

The 897-mile (1443-kilometer) East Africa crude oil pipeline (EACOP), is embroiled in allegations of human rights violations and environmental hazards planned by French oil giant TotalEnergies and China National Offshore Oil Corporation. According to Uganda’s non-profit organization Africa Institute for Energy Governance, 230,000 barrels of oil produced daily will emit 34 million tons of carbon dioxide a year. Once the final decision is made, construction will take three years.

At least 20 banks and eight insurers have dropped out of the project, under pressure from many environmental groups. Standard Bank of South Africa and Sumitomo Mitsui Banking Corporation of Japan (SMBC) are financial advisors and chief loan managers. Standard Chartered Bank of the United Kingdom is also considering financing it.

All three have signed up to the benchmark Equatorial Policy, Voluntary Environmental and Human Rights Guidelines for financing infrastructure projects. A report by the non-governmental organization Inclusive Development International, which is exclusively shared with the Associated Press, says the project repeatedly violates these policies and that banks will violate them if they go ahead. Banks have been banned from financing non-compliant projects. But the scheme is powerless to expel such members.

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Oil wells will be drilled in the Morchison Falls National Park in western Uganda. Here the Nile River is only 20 feet (6 m) wide with a gap of about 130 feet (40 m), home to hippos, egrets, giraffes and antelopes in the surrounding wilderness. The pipeline will then run through seven forest reserves and two game parks, running along Lake Victoria, which is a source of fresh water for 40 million people.

“Oil spills could prove catastrophic for millions of people who depend on lakes for drinking water and food production,” the environmental campaign group warned.

The report states that the risk of oil spills violates an equatorial policy that requires minimal environmental impact. A review of the nonprofit e-Tech International’s plan, which advises communities affected by infrastructure projects, found that best practices were not followed.

“The EACOP oil spill will occur in the lifetime of the project,” the review concludes

The environmental assessment of the pipeline does not plan for a strong oil spill, the authors of the report claim, further violations of the policies. The pipeline will cross an earthquake zone – the Great Rift Valley – warns the International Report on Inclusive Development.

TotalEnergy says the state-of-the-art design of the pipeline will ensure safety for decades to come.

The oil has a high wax content, which hardens at temperatures below 91.4 degrees Fahrenheit (33 degrees Celsius) which will stop the oil from spreading as a liquid, the company said. Emergency plans are being prepared, the agency insisted. Summer temperatures in Uganda could be 104 Fahrenheit (40 degrees Celsius).

According to the report, human rights standards have also been violated. At least four letters from UN special rapporteurs on human rights sent to Ugandan President and TotalEnergy CEO Patrick Poanne in two years, detailing “various forms of harassment and intimidation” against Ugandan protesters. Numerous activists and a journalist have been accused of intimidation, forced into hiding, arrested and interrogated.

Equatorial policies are “not being met in terms of the risks faced by community members who express criticism,” the report found.

TotalEnergy said it was unaware of the threat posed by its own staff. The agency said it was “vocal about the need” for Ugandan security forces to respect human rights and wrote to the Ugandan president to share his concerns.

“Total Energy does not tolerate any threats or attacks against those who peacefully defend and promote human rights,” the statement said.

According to the analysis, the policies have also been violated due to the lack of involvement of the “free from fraud, interference, or coercion or intimidation” community.

More than 120,000 people will lose land to pave the way for the project, an assessment found by environmental campaign group Friends of the Earth. The policy requires “free, prior and informed” counseling with those whose lives may change.

But the report found that these requirements were not “adequately met.”

The project has “systematically failed” to consult and disclose accessible information, it said.

TotalEnergy says only 13,300 people will be economically affected across Uganda and Tanzania. Since 2017, meetings have reached more than 200,000 affected people along the route, Oil Major said.

Finally, the project violated the standards of land acquisition and rehabilitation, the report found. Compensation processes “exacerbate rather than alleviate” the negative effects, with poor villagers who have lost access to agricultural land and long delays awaiting compensation.

TotalEnergy says it has already begun to pay compensation. The process complied with local laws and was consistent with the policy, the company insisted.

Amit Puri, chairman of Equator Principles, said each member was “individually responsible for his or her own internal procedures” for compliance. He added that Equatorial Principles does not have the capacity to respond to concerns about violations.

Mr Puri, the global head of environmental risks at Standard Chartered, said in a report that the pipeline would be financed in violation of the guidelines.

Standard Chartered itself and SMBC declined to comment. China National Offshore Oil Corporation did not respond to numerous requests for comment.

Standard Bank said it was evaluating its due diligence in financing the project, but no final decision had been made. The decision is subject to a full evaluation of climate change strategies, the bank said, when financing the project required “full compliance” with equatorial policies.

Despite environmental and human rights concerns, the campaign to shut down the pipeline is “unrealistic,” said Angelo Izama of the Ugandan think tank Fanaka Kwa Vote.

“Uganda is being pushed into this role as a poster child for climate damage, and it’s really unfair,” he said.

This amounts to a “dismissal of Uganda’s national interest”.

Ugandan oil officials declined to comment.

But while President Euveri Museveni said oil resources could lift millions out of poverty, other government officials hoped Uganda could become a middle-income country.

Efforts to shut down the pipeline have disappointed some by seeing the project as a concerted effort to sabotage.

“Total Energy and CNOOC … have the financial muscle and technical knowledge to deliver a world-class project,” Ellison Karuhanga, a prominent oil lawyer, wrote in the Ugandan Daily Monitor newspaper.

Additional report by Rodney Muhumuza in Kampala, Uganda.

The Associated Press receives support from a variety of individual foundations for climate and environmental coverage. See more about AP’s climate initiatives here. AP is solely responsible for all content.

Copyright 2022 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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