How European banks are financing the trade of controversial Amazon oil to the U.S.

Banks in Switzerland, France, Netherlands facilitate trade from Amazon Sacred Headwaters region in Ecuador, where oil extraction contributes to spills, human rights abuses, and climate destruction

In August 2020, a new report revealed European banks are financing the trade of controversial oil from the Amazon Sacred Headwaters in Ecuador to the U.S. Here, Oil waste is seen from operations in the northern Ecuadorian Amazon. Photo credit: Amazon Watch
Ruptured pipelines are seen dangling into ravine in June 2020 about 25 km from the city of Tena, at the site of an April 7, 2020 oil spill in the Ecuadorian Amazon. Photo credit: Ivan Castaneira / Agencia Tegantai

The financing from these banks perpetuates human rights abuses, worsens the climate crisis, and further tethers Ecuador’s economy to the boom-and-bust cycles of natural resource extraction. Given the recent oil spill and calls from Indigenous federations in Ecuador for a moratorium on oil extraction, any bank committed to protecting Indigenous rights and the climate should end financing the oil trade from the Amazon Sacred Headwaters until new safeguards and commitments for no expansion are put in place. It’s time for European banks to play a responsible and constructive role in advancing life over profits.

MAJOR EUROPEAN BANKS CALLED OUT

The top banks detailed in the report are ING Belgium, Credit Suisse, UBS, and BNP Paribas (Suisse) SA in Geneva, Switzerland; Natixis in Paris, France; and Rabobank in Utrecht, Netherlands. A total of 19 banks were assessed.

The oil industry has a toxic legacy in the Amazon, further exacerbated by recent spills that have contaminated rivers and disrupted the health and food security of Indigenous communities. Even during the COVID-19 pandemic, oil companies continue to pursue expansion, putting Indigenous peoples at even greater risk. These banks cannot claim to uphold their own pledges on climate and human rights while they continue to finance the trade of Amazon oil.

Several banks named in the report responded to Stand and Amazon Watch and expressed interest in addressing the issues raised in the report. To date, no banks have updated their policies.

Lourdes Jipa, vice president of the Confederation of Indigenous Nationalities of the Ecuadorian Amazon, speaks at an International Women’s Day rally in Quito, Ecuador in March 2018. Photo credit: Amazon Watch

AMAZON SACRED HEADWATERS UNDER THREAT

The Amazon Sacred Headwaters is one of the most biodiverse ecosystems on the planet and helps regulate essential planetary ecosystem services such as the hydrologic and carbon cycles. The region is home to more than 500,000 Indigenous peoples from over 20 nationalities, including peoples living in voluntary isolation on their ancestral lands. New and ongoing oil extraction in the region is a gateway to deforestation and contributes to violations of Indigenous peoples’ rights. Indigenous leaders in the region have repeatedly voiced their opposition to the expansion of the oil industry and other industrial activities in their territories.

Representatives of the Shiwiar, Sapara and Kichwa indigenous communities gather in April 2019 in Quito, Ecuador to deliver a statement opposing the government’s auction of oil blocks without the free, prior and informed consent of affected communities. Photo credit: Alianza de Organizaciones por los Derechos Humanos

INDIGENOUS LEADERS SPEAK OUT

“I wonder if the executives of banks in Europe know the real cost of their financing. How can they possibly sleep peacefully knowing their money leaves thousands of Indigenous peoples and communities without water, without food, and in devastating health conditions due to the pollution of the Coca and Napo rivers? It’s time for the banks, companies, and consumers of the oil extracted in the Ecuadorian Amazon to acknowledge how their businesses affect our territories and way of life,” said Marlon Vargas, President of the Confederation of Indigenous Nationalities of the Ecuadorian Amazon (CONFENIAE).

HOW BANKS CAN STOP FINANCING CLIMATE DISASTER AND HUMAN RIGHTS AUBSES

The report outlines the following steps investment banks must take to assure consistency with the environmental and social commitments they have made:

  • Ensure respect for Indigenous rights and compliance with free, prior and informed consent (FPIC) related to any project or trade financing as enshrined in the United Nations Declaration on the Rights of Indigenous Peoples and International Labor Organization Convention 169;
  • Stop financing Amazon oil-related activities, including trade, unless adequate remediation of contamination occurs, rights to health of local communities is guaranteed, safeguards are in place to prevent future spills, and governments in the region commit to no new expansion of oil development and a wind-down of existing wells in line with global climate goals and collective Indigenous visions for the region;
  • Focus investments on opportunities in Ecuador and other countries in the Amazon and world that truly meet responsible banking commitments and respect Indigenous rights; and
  • As debt for nature/climate funds develop, expand policies to exclude all Amazon-derived oil from project and trade financing until all Amazon basin countries commit to no new expansion of oil development and a wind down of existing wells in line with collective Indigenous visions for the region and global climate goals.

We challenge corporations and governments to treat people and the environment with respect, because our lives depend on it. www.stand.earth