Publications
Partners
- Standard Bank was grilled by climate and human rights activists on its continued financing oil and gas projects.
- The East Africa Crude Oil Pipeline is of particular concern.
- Standard Bank's chair says here are many positive impacts of the project on Uganda's economy.
- For climate change news and analysis, go to News24 Climate Future.
Despite being criticised by activists for its involvement in the controversial East Africa Crude Oil Pipeline project, Standard Bank is still dead set on financing oil and gas projects in the short and medium term to support economic development across the African continent.
During its annual general meeting (AGM) on Monday, the bank was grilled by a number of climate and human rights activists on its continued financing of fossil fuels. Outside its offices in Johannesburg and Cape Town, environmental activists also held demonstrations, speaking out against projects like the East Africa Crude Oil Pipeline (EACOP).
Videos circulating on Twitter show some activists being physically expelled from Standard Bank's headquarters while the AGM was underway.
Standard Bank said they had been disrupting the "flow of business" and were taken to the designated point on the premises, where other activists were gathered to continue their protest.
Climate activists Malik Dasoo and Kumi Naidoo forcibly removed from Standard Bank HQ after protesting for them to stop funding East African Crude Oil Pipeline (EACOP) project outside the AGM pic.twitter.com/a66zlhdFWv
— Julia Evans (@Julia_J_Evans) June 12, 2023
Standard Bank is acting as a financial advisor to the project but has not ruled out financing it. The bank previously told News24 that it is still considering the details of the project before making a final decision.
The 1 443km pipeline, which runs through Uganda and Tanzania, risks displacing farmers and communities and putting wildlife in danger because it involves the drilling of oil wells in and around nature reserves.
TotalEnergies holds a majority stake (62%) in the $5 billion project. Others include Uganda National Oil Company (15%), Tanzania Petroleum Development Corporation (15%) and the China National Offshore Oil Corporation (8%).
So far, four of South Africa's banks – Absa, Investec, Nedbank and FirstRand – have said they will not finance the pipeline.
Earthlife Africa, in a statement, raised concerns that this would be the world's longest heated crude oil pipeline, negatively impacting the well-being of communities in Uganda and Tanzania.
"We strongly oppose the EACOP, not just from an environmental perspective but also from a social perspective because this pipeline will be uprooting hundreds of communities, all along East Africa," said Ulrich Steenkamp, Earthlife Africa programme officer.
"We are here in solidarity with other comrades in Uganda and Tanzania, who oppose the EACOP. The time has come to move away from fossil fuels and other destructive projects and move steadily towards renewable energy in the African continent," added Thabo Sibeko, Earthlife Africa's coal campaigner.
Standard Bank's chairperson Nonkululeko Nyembezi said that in any large projects of this nature, such as building a road or railway, there would be disruption to people's lives. "It is unavoidable. That is not the test. The test is how does the project sponsor then deal with that," said Nyembezi. In the case of EACOP, TotalEnergies is the project sponsor, which has to deal with the on-the-ground impacts in Uganda. These issues include compensating people who will have to move.
Nyembezi said that there are many positive impacts of the project on Uganda's economy, which would filter through to job creation and livelihoods.
"Projects like this, yes, are disruptive. But you do have to look at both sides of the fence.
"We do not believe this project is going to be endangering people's lives and disrupt[ing] their social norms forever," said Nyembezi.
"There are many, many things to be concerned about projects like this. It is not to say the bank is not mindful of some of the negative impacts that could ensure," said Nyembezi. For this reason, the bank is considering how the project will impact people and their livelihoods through an extensive due diligence process.
"This is an extensive[ly] due diligenced project, so we are continuously on top of the detail coming out from the independent consultant we have hired," said Nyembezi.
"This project has not reach financial close, because that is subject to remaining unclosed matters relating to the due diligence process," Nyembezi added.
Amid the AGM's proceedings, Makoma Lekalakala, director at Earthlife Africa Johannesburg, also took the opportunity to present Nyembezi, with a "token" or certificate on behalf of Ugandan communities who are negatively impacted by the EACOP.
The certificate reads:
"Certificate of Award proudly presented to Standard Bank Group Limited, in recognition of human rights violations as laid out in the bank's own human rights policy, including adherence to the Equator Principles in project financing."
Nyembezi acknowledged the certificate and that it comes from a place of "deep concern and worry".
READ | Fossil fuel divestment would be 'devastating, disastrous', says Standard Bank exec
Lekalakal also asked Nyembezi whether Standard Bank would consider Uganda's new anti-gay legislation in making its decision to finance the pipeline.
Nyembezi said that the laws of the country should not be conflated with the bank's involvement in the project:
She explained that anti-homosexuality laws or severe punishments are "quite prevalent" in the African countries in which Standard Bank operates.
"We continue to do business there, albeit understanding or acknowledging it does not align to our values," said Nyembezi.
She said the bank complies with the laws of the countries in which it operates while upholding its own values.
READ | A R76bn oil pipeline creates a climate dilemma for Africa
On the bank's future backing of oil and gas, Nyembezi said that it is "not realistic" to simply stop funding these projects, especially given that the bank operates in the least developed continent on the planet.
The bank will always consider issues of energy access, availability and affordability, as well as security and sustainability.
"We will not privilege sustainability at the expense of developing a poor country," said Nyembezi.
Nyembezi said that as a bank that is committed to driving Africa's growth or development, it is difficult to do that without considering economic growth and energy.
"So it is a very difficult subject. It is not something the bank does lightly," she stressed.
*The article was updated on 13 June, 2023 at 16:15 to correctly reflect that the activists were escorted to a designated protest area.
