Today we delivered Coedie's message and thousands others from around the world in the form of 6ft tall talking valentines cards, to all three of Probitas 1492's UK offices: Lloyds of London, Lime Street (London), and Manchester.
We want to make sure they can't ignore indigenous communities, and people all over the planet who will be impacted by this climate bomb. Check out some pictures from our action, your messages, and how to get involved in keeping the pressure on Probitas.
Printed inside the card: a lot of love for the planet and for the community resistance - not a lot of love for Probitas.
We need to show Probitas that the global movement against Adani won’t let them get away with their involvement. Will you join us and ramp up the pressure we’re placing on them?
We're asking our supporters to sign up to take regular action, emailing staff at Probitas over their companies role in enabling this carbon bomb. We'll be sending you new contact details at every few days – no two people will be receiving the same staff to contact. This tactic means that together we can contact more staff, and be as effective as possible in turning up the heat. Let's convince them to stop insuring climate breakdown.
As always, we'll be providing you with example emails to use & help along the way.
When we’ve taken action together, the #StopAdani movement has won against insurers and brokers again and again - now the industry knows it's one of the most controversial projects in the world. We need to make sure this climate-wrecking project has nowhere left to go.
Let’s make sure Probitas knows what it’s getting into: send your message today.
Four insurers ruled out EACOP in the past two weeks due to pressure from activists and engagement with campaigners, with Canopius the latest to distance itself from the mega-pipeline
A statement from Canopius followed the hand delivery of a letter from Money Rebellion, urging them to rule out the controversial project. Lee Jones, Head of Marketing and Communications at Canopius said: “Canopius can confirm that we have no involvement, or plans to be involved with the insurance of the East African Crude Oil Pipeline.”
The East Africa Crude Oil pipeline, or EACOP is a 1,443 kilometre pipeline planned for Uganda and Tanzania. It threatens to displace thousands of families and farmers from their land, severely degrade critical water resources and wetlands in both Uganda and Tanzania, and rip through numerous sensitive biodiversity hotspots. The oil transported via the pipeline would generate 34 million tons of carbon emissions each year. Local resistance against the project has been ongoing since 2017 as an international Stop EACOP campaign has led advocacy since 2020.
Activists pointed to insurers who have been contacted but are yet to rule out the project, including Brit, Chaucer and Tokio Marine Kiln, Chubb, Liberty Mutual and AIG, as the next targets. All have syndicates within the Lloyd’s of London marketplace which has been criticised over its lack of robust exclusions on fossil fuels.
Further companies with syndicates in the Lloyds marketplace yet to respond to the request for information about their involvement in EACOP include Cincinnati Global and Lancashire Syndicates.
This week, the Extinction Rebellion group, Money Rebellion, will hand-deliver letters to Brit, Chaucer, Tokio Marine Kiln and Chubb, encouraging them to rule out the controversial scheme.
Hundreds of activists from around the world have joined an online platform supporting them to contact insurers and make a case for staying away from EACOP by exposing the numerous climate, environmental, social risks and human rights violations associated with the project. Coal Action Network estimates that by Tuesday morning around two thousand emails will have been received by staff at Brit and Chaucer.
Last week the East African regional insurer Britam ruled out the project in response to a complaint that it did not meet the IFC (International Finance Consortium) Performance Standards. Arch and AEGIS, both Lloyds of London syndicates also ruled out involvement.
Samuel Okulony, of Ugandan organisation and #StopEACOP partner Environment Governance Institute (EGI), said, "Supporting projects that are marred by human rights violations, environmental degradation, and the destruction of our country's natural heritage is unacceptable. While some reinsurers and banks have abandoned the EACOP project due to its disastrous nature, we continue to urge those who are still considering it to refrain from being complicit and to withdraw financial support."
Isobel Tarr of Coal Action Network added, “Because the project can’t be fully insured in-country, global insurance broker Marsh is seeking insurance for EACOP on the international market. Lloyds of London is top of the list, and all the companies the #StopEACOP campaign is targeting syndicates there. If Lloyd’s brought in robust exclusions on fossil fuels then their syndicates wouldn’t be subject to such pressure from campaigners on projects like EACOP.”
EACOP has been condemned by the European parliament for its associated human rights abuses in Uganda and Tanzania with arrests and indefinite detention of peaceful protestors taking place in October, forcing other insurers to distance themselves. The pipeline and associated Tilenga oil field are expected to displace almost 118,000 people in Uganda and Tanzania. And nearly a third of the pipeline would be built in the Lake Victoria Basin, on which more than 40 million people depend for their water and food production and where an oil spill would be disastrous.
The East Africa Crude Oil Pipeline is a heated oil pipeline currently under construction. Once completed, it will stretch for almost 1,445 kilometres across Tanzania and Uganda – making it the longest heated crude oil pipeline in the world.
The pipeline will disturb sensitive ecosystems, and a vital water supply supporting 40 million people. Its ongoing construction has already displaced thousands of people in villages in Uganda, with 100,000 people expected to be displaced.
Insurers are openly ruling out EACOP in quick succession, including 4 of the world’s biggest re(insurance) companies: Munich Re, Swiss Re, Hannover Re, and SCOR.
We can see these tactics are working - we just got Arch and AEGIS to rule out insuring this deadly project. But we need all insurance companies to rule out EACOP, and stop the toxic pipeline at its source. Next, we want Brit, and Chaucer insurance to rule it out, and we know that constant pressure works.
SIGN UP to take action, and you will receive details of new people at Arch to email every couple of days. Let's convince them to stop insuring climate breakdown.
Contact: Andrew Taylor, Coal Action Network, andrew@coalaction.org.uk
Arch Capital Group Ltd and AEGIS London join the 19 (re)insurance companies ruling out the controversial East Africa Crude Oil Pipeline (EACOP) project.
Arch Capital Group Ltd responded to ongoing pressure on their insurance business by ruling out insurance for the East Africa Crude Oil Pipeline (EACOP). A statement issued by the company follows sustained pressure on Lloyd’s of London managing agents to rule out underwriting EACOP, and days after Money Rebellion spilt fake oil outside Arch’s London offices.
Patrick Palmer, Head Of Marketing and Communications at Arch Insurance International, confirmed, in an email to Money Rebellion and Coal Action Network : “Arch Capital Group Ltd. can confirm, on behalf of its underwriting operations, that it has not and will not issue any insurance policies covering the East African Crude Oil Pipeline.”
Arch Capital Group Ltd had been targeted by people across the world, from a range of groups, for over two months exposing the numerous climate, environmental, social risks and human rights violations associated with the project. Thousands of emails had been sent to staff asking them to raise the issue with senior management, hundreds of supporters of the #StopEACOP coalition and Coal Action Network, called Arch to recommend they rule out EACOP, and regular protests have been held at Arch’s offices.
In the same week, AEGIS London also ruled out the controversial project as the project doesn’t meet their ESG policy. The total number of insurers ruling out EACOP now stands at 21. Both companies are members of the Lloyds of London insurance marketplace where it has been suggested that the companies behind EACOP (TotalEnergies and CNOOC) are seeking insurance.
The East Africa Crude Oil pipeline, or EACOP is a 1,443 kilometre pipeline planned for Uganda and Tanzania. It threatens to displace thousands of families and farmers from their land, severely degrade critical water resources and wetlands in both Uganda and Tanzania, and rip through numerous sensitive biodiversity hotspots. The oil transported via the pipeline would generate 34 million tons of carbon emissions each year. Local resistance against the project has been ongoing since 2017 as an international Stop EACOP campaign has led advocacy since 2020.
Omar Elmawi, Coordinator of #StopEACOP Coalition stated, "the number of banks (24) and (re) insurers staying away from EACOP is a clear indication that this pipeline and the associated oil fields will cause huge impacts to people, nature and climate if allowed to proceed. Supporting this project is supporting human rights violations and a carbon bomb that will be impossible to difuse once it goes ahead."
EACOP has been condemned by the European parliament for its associated human rights abuses in Uganda and Tanzania with arrests and indefinite detention of peaceful protestors taking place in October, forcing other insurers to distance themselves. The pipeline and associated Tilenga oil field are expected to displace almost 118,000 people in Uganda and Tanzania. And nearly a third of the pipeline would be built in the Lake Victoria Basin, on which more than 40 million people depend for their water and food production and where an oil spill would be disastrous.
The fake oil spill outside Arch’s offices was organised by Money Rebellion as part of a series of actions targeting ‘fossil fuel enablers’ across London, where different Extinction Rebellion groups targeted different organisations asking them to cut their ties with fossil fuels.
Rafela FitzHugh from Money Rebellion said: “We’re happy with Arch and AEGIS’ announcements, but people shouldn’t still have to push for change. With deadly weather destroying lives across the world, the insurance sector should be turning its back on all new fossil fuel projects now. Citizens resisting the East Africa Crude Oil Pipeline in Uganda and Tanzania, are facing arrest and human rights abuses. We continue to stand with them and have written to Canopius Group, and Chaucer, to tell them to expect us on their door step soon if they don’t rule out insuring EACOP.”
A number of insurance companies contacted by the Stop EACOP campaign have offered no comment on their involvement. These include AIG, Tokio Marine Kiln, Brit, Canopius Group, Chubb, Liberty Mutual and Chaucer.
Isobel Tarr of Coal Action Network said “It’s clear that insurance companies want to avoid being implicated in this disastrous project, and that hundreds of people taking small actions can compel insurance companies to take a stand. If companies want to avoid coming under this kind of pressure then they need to adopt robust exclusion policies on all fossil fuels, and this includes Lloyd’s of London.”
With 24 major banks also ruling out support, the project developers have postponed the project’s financial close and are aiming for a new deadline of early 2023. This is not the first time the financing of the project has been delayed. The EACOP has now been delayed 3 years and counting.
Stop EACOP campaign advocates that instead of locking Uganda into a fossil fuel trap, financial actors should redirect their investments towards renewable energies. Instead of an economy that relies on multinationals extracting as much profit as possible, Uganda and Tanzania need an economy that is shaped and driven by local people and celebrates the people, biodiversity, heritage and natural landscapes of the region. An economy that provides quality jobs and long-term, sustainable financial security for young people, men and women. An economy that does not require the destruction of the environment, endangering wildlife, or driving families off the farmland on which they depend.
ENDS
Photos from XR Cut the Ties oil spill protest at Arch
https://show.pics.io/xr-global-media-breaking-news/search?tagId=637b658faab7680013dab7de
Notes to Editors
Who’s insuring the East Africa Crude Oil Pipeline checklist
https://www.stopeacop.net/insurers-checklist
Who’s banking the East Africa Crude Oil Pipeline checklist
https://www.stopeacop.net/banks-checklist
EACOP human rights / climate damages report (French)
EACOP in likely breach of IFC Performance Standards on Displacement & Risk to Livelihoods
https://www.banktrack.org/download/crude_risk/cruderisk_eacop_briefing_nov2020_1.pdf
BREAKING: Extinction Rebellion takes action at the offices of fossil fuel enablers across London
Analysing 30 leading primary insurers and reinsurers, assessing their policies on insuring and investing in coal, oil, gas, the 6th Annual Scorecard cuts through the greenwash and sorts the meanest from the greenest. The report highlights progress and loopholes, calls out leaders and laggards, and identifies challenges and opportunities for the year ahead.
The number of coal exit policies has grown from 35 to 41 this past year, with major US insurers known for their role in fossil fuels AIG and Travelers finally getting on board. The market share of insurers with coal exclusions has reached 62% in the reinsurance and 39% in the primary insurance markets.
In terms of new power stations, this is good news: according to the report many of the key laggards that are continuing to underwrite new coal projects lack the capacity and expertise involved in insuring complex large-scale new coal power plants.
There is still a lot of work to do: many companies still have no policies excluding coal, and some of those that do extend only to power stations and thermal coal mines, not coking coal mines. Meanwhile Lloyds of London's coal exclusion guideleines are non-mandatory, and they take on 40% of the global energy market.
Insurance company restrictions on oil and gas are only just starting to catch up with those on coal. The new report shows 13 companies have adopted oil and gas restrictions, compared with 41 on coal.
Be it in the IPCC’s 1.5°C report, the IEA’s Net Zero Roadmap or the One Earth Climate Model, climate scientists are clear that there is no space for any new coal, oil or gas projects in credible pathways to limit global warming to 1.5°C. Yet most insurance companies have not taken this scientific evidence on board and continue to offer support to projects and companies expanding oil and gas production
Some insurers like Liberty Mutual, Chubb and Tokio Marine have adopted some restrictions on coal but actively insure the expansion of the oil and gas industry.
For the second year running, companies were ranked on their policies of Free, Prior and Informed consent: i.e. do they support projects that are in conflict with communities, and respect the right of communities to say no?
In summary, very few of them commit to anything like this.
While Allianz and Swiss Re mention of the right to Free Prior Informed Consent (FPIC) in their policies, AXIS Capital was the first insurer to adopt an explicit policy “to not provide insurance coverage on projects undertaken on indigenous territories without FPIC” in accordance with the United Nations Declaration on the Rights of Indigenous Peoples. The policy marks an important breakthrough for the recognition of Indigenous rights and other insurers should emulate it.
“So far, there hasn’t been real regulatory pressure. And there hasn’t been market pressure … as in the short term, it’s still a profitable business. So we think public pressure has really made an essential difference”
- Lindsay Keenan, Insure Our Future (the Guardian)
As part of the StopEACOP Coalition, we've been mobilizing to persuade insurers at Lloyds of London to drop the contraversial East Africa Crude Oil Pipeline.
Not only does this make the pipeline harder to finance, it also informs insurance companies about the damaging impacts of oil and gas pipelines, and is part of the movement to shift the whole industry away from fossil fuels.Sign up here to commit taking regular action with us - it's easy to do from home!
Along with our partners in the #StopEACOP coalition, Coal Action Network has been targetting insurers to turn the tide on fossil fuel insurance. This month, QBE, Suncorp, Generali, Aspen and Helvetia stated that they will not be providing insurance support to the East Africa Crude Oil Pipeline (EACOP).
They follow five other insurance companies who ruled out the project in recent months, making 18 insurance companies who have ruled it out overall. QBE and Suncorp are two of Australia's biggest insurers. Generali is Italy's biggest insurer.
In addition, Italy’s largest bank Intesa Sanpaolo, Germany’s second largest bank DZ Bank, as well as Natixis from France, have joined the growing list of banks that have ruled out direct finance for the EACOP project, bringing the total to 24. Spanish bank Santander is also understood not to be financing the project, which would be precluded as part of the bank's Environmental, Social and Climate Change Risk Management Policy.
Is the EACOP project looking less and less viable? There are now no French banks backing EACOP (Total Energies being a French company), and these refusals are coming from the company's former backers.
“With so many of Total’s financiers out of the running to join the $2.5 billion project loan the EACOP needs to proceed, the pressure is growing on those few that remain. This includes South Africa’s Standard Bank, Japan’s SMBC and MUFG, Industrial and Commercial Bank of China and Bank of China, as well as UK’s Standard Chartered, which as chair of the Net Zero Banking Alliance should not be going anywhere near new oil projects of any kind, especially not one as mired in human rights and environmental damage as this.”
-Ryan Brightwell, Campaign Lead Banks and Human Rights at BankTrack
EACOP has been condemned by the European parliament for its associated human rights abuses in Uganda and Tanzania. The pipeline and associated Tilenga oil field are expected to displace almost 118,000 people in Uganda and Tanzania, and since last week nine peaceful protestors were arrested following a student-led peaceful demonstration against EACOP in Kampala, Uganda.
“Lending or underwriting to projects that are mired in human rights violations, lacking in free prior and informed consent is wrong, shameful and unacceptable. The (re)insurers and banks that are still considering or are committed to underwriting EACOP cannot claim innocence, they are on the side of the human rights violators and this therefore makes them complicit.”
-Omar Elmawi, co-ordinator of the StopEACOP
Many of the insurance companies which have failed to rule out insurance for EACOP have syndicates at Lloyd’s of London, where the companies behind EACOP have reportedly been looking for insurance cover. These include Arch, AIG, and Chubb to name a few. These insurers must rule out EACOP immediately, to stand against the human rights abuses that are taking place in the name of this climate-wrecking pipeline. Lloyd’s Council urgently needs to commit the marketplace to policies ruling out new fossil fuel projects in alignment with the science on keeping global temperatures below 1.5C warming.
Companies who have not responded to the campaign's requests for comment are:
Aegis London, AIG, Arch, Brit, Canopius, Chaucer, Chubb, Cincinnati, Liberty Mutual, Lancashire Syndicates and Tokio Marine Kiln.
All of these have syndicates at Lloyds of London. The Lloyds council is responsible for regulating the Lloyds Marketplace (see Lloyds explainer here), and could bring in measures to stop fossil fuel projects, and those with human rights abuses, from being targetted.
We can see these tactics are working. But we need all insurance companies to rule out EACOP, and stop the toxic pipeline at its source. Next, we want Arch insurance to rule it out, and we know that constant pressure works.
Sign up here to commit taking regular action with us - it's easy to do from home!
Lloyd’s of London Chairman, Bruce Carnegie-Brown, has allegedly offered an ‘olive branch to eco-activists’ – as reported in The Insurer this week. Having listened to his comments, we’re not so sure – and we certainly won’t be placated until the insurance industry’s actions start speaking louder than their words.
Industry publication The Insurer has released two clips from a recent panel discussion on climate issues with Carnegie-Brown and Canada’s former Conservative prime minister Stephen Harper, chaired by The Insurer’s managing editor, Peter Hastie.
The Insurer’s basis for claiming Carnegie-Brown offered climate activists an ‘olive branch', is based around their assertion that he states ‘eco activists were “clearly” needed’ to bring about change. The clip from the discussion, however, presents a different story. Instead, Bruce describes ‘eco-activists’ as ‘unreasonable people.’ What Carnegie-Brown actually says is ‘clearly’ needed is ‘some change in our perceptions about the impact of the way we behave in our everyday lives.’ This speaks to a desire of top polluters and their enablers, the key drivers of climate change, to push the responsibility onto individual behaviour – and away from themselves. It also implies our everyday lives are equal in their contributions to climate change. In reality, the richest 1% of the population are responsible for more than 15% of global emissions. As highlighted by the United Nations’ IPCC, we need change on a much larger scale in order to avoid the worst effects of climate change. This includes, regardless of existing construction, no new coal plants to be built or become active.
One of Carnegie-Brown’s main criticisms of the growing global movement putting pressure on insurers worldwide was the ‘tendency to be single issue based.’ Instead, he argues that climate change cannot get addressed on a case-by-case basis. We would be the first to agree with that! We need market-wide policy to effectively mitigate climate change. This is something we have been continually pressuring Lloyd’s to take – our first demand of them is an immediate phase out of the insurance of all coal and fossil fuels. Lloyd’s targets are woefully inadequate, and there has been no effort to report on whether members are fulfilling their own commitments, though we know from other sources that they are not. In this sense, the same case-by-case basis ‘strategy’ that Carnegie-Brown is so critical of is driven in part by Lloyd’s own inaction and lack of transparency.
It is frontline communities who bear the brutal impacts of these projects. Our actions stand in solidarity with those most affected by extraction. It’s misleading to caution, as Harper does during the panel, that ‘satisfying the activists in London when you decommission a power plant, but on the ground in some emerging economy it may be terrible.’ This sets up a false dichotomy – implying those ‘on the ground’ are not actively campaigning against extraction, when in fact all the insurance campaigns we work on are led by communities on the ground who are demanding better alternatives to fossil fuels. There are the disastrous risks to people on the ground from the projects that continue to be insured on the London market, such as forced displacement, water contamination, catastrophes such as failed tailings dams, extensive habitat and biodiversity loss.
The concern voiced by the panel on behalf of ‘people on the ground’ is therefore misdirected. It would be better directed by placing exclusions on the Lloyds marketplace which would see these disastrous projects turned away at the door. We highlight that we are continuing to demand the democratisation of the insurance industry to force a just transition for all.
Carnegie-Brown also speaks of the need for ‘common data’ to support sector wide action on climate change. Yet the data is already there. And it says this: there can be no new fossil fuel projects starting after 2021 if we are to stay within 1.5 degrees of warming. Instead, Carnegie-Brown suggests a reduction of carbon intensive activity that ‘reduces every year to get to net zero by 2050.’ This flies in the face of existing data – net-zero by 2050 is not enough. At a bare minimum, we need the insurance sector to be meeting the United Nations’ Race to Zero criteria. Given the availability of extensive scientific evidence, the panel’s calls for ‘data’ in order to act seem really to be calls for data that support their current position, rather than challenge them to change.
So, while The Insurer reports on this positively, characterising it as recognising the need for climate activists to bring about change, at most this amounts to greenwashing. In a telling comment, Stephen Harper advises the insurance industry in the discussion to ensure that they ‘have a story’ (read: PR) about moving in a positive direction – whilst ensuring that this story doesn’t harm their ‘bottom line.’ As ever, profits come first.
A ‘story’ is not enough. We need those who currently hold the power to act to keep fossil fuels in the ground, and support just climate solutions. Until then, it seems we will have to carry on being ‘unreasonable.’
Talanx, Germany's third largest insurer, is the latest (re)insurance company to confirm to the #StopEACOP Coalition that they will not (re)insure the East African Crude Oil Pipeline (EACOP). They join 11 other (re)insurers, including 4 of the world’s biggest (re)insurance companies - Munich Re, Swiss Re, Hannover Re, and SCOR.
Talanx follows fast in the steps of three other (re)insurers (Argo Group, Axis Capital and RSA Group), who last week also confirmed they would not be involved in underwriting EACOP.
In an email to a member of the StopEACOP campaign, Talanx's Group Strategy and Sustainability Manager, Dr. Jan-Philippe Lüdtke, stated:
"I can now confirm that there is and will be no involvement in EACOP by Talanx or any of its subsidiaries."
This statement implies that Talanx subsidiary, Lloyd’s of London member Argenta Insurance, will also stay away from the controversial EACOP project.
The total number of (re)insurers who have confirmed they would stay away from EACOP is currently 13.
Despite recent media reports claiming that the EACOP has been fully insured through a local consortium, the #StopEACOP Campaign maintains that the project needs substantial international insurance and reinsurance to proceed. See the full statement here.
“More and more (re)insurers are learning about the many problems that EACOP is bringing to the people of Uganda and Tanzania and the health, social, and climate impacts that the pipeline will leave in its wake, and they are wisely distancing themselves from the project. It is time for other (re)insurance companies to follow suit and refuse to be accomplices to such dreadful projects that are premised to only benefit the oil companies Total and China National Offshore Oil Company (CNOOC) at the expense of everyone else,”
- Samuel Okulony, Chief Executive Officer, of Ugandan-based Environment Governance Institute (EGI).
The EACOP project is a climate bomb. Its direction depends on the decisions (re)insurers make today. They have the power to save humanity, to rescue the thousands of people being displaced in Africa, to save the source of the longest river in the world, to save biodiversity that is on the verge of extinction which includes elephants, chimpanzees, giraffes, birds, insects, reptiles, forests, game reserves, rivers and waterfalls that people pay to visit in Africa. All these and more are at their mercy,”
- Hilda Flavia Nakabuye, climate activist and founder of Fridays For Future- Uganda.
“We now have 20 banks, 4 export credit agencies and 13 (re)insurance companies that have confirmed to us that they will not give project financing or underwrite EACOP. The other insurers and banks still considering any involvement in EACOP, like Industrial and Commercial Bank of China, Standard Bank-South Africa, and Sumimoto Mitsui Banking Corporation, are putting corporate needs and profits before people’s lives, nature and climate. It is time they choose sides. The whole world is watching and hoping they do what’s right – which is putting people’s lives before corporate greed.”
- Omar Elmawi, Coordinator of the #StopEACOP Coalition
Now Talanx CEO Torsten Leue must adopt a more comprehensive policy that excludes not just EACOP but all other new oil and gas projects. Talanx currently lags behind not just its major rival Allianz but also its own subsidiary Hannover Re, both of which adopted more comprehensive policies earlier this year.
“It is good to see Talanx HDI finally join the growing group of insurers who are snubbing EACOP. However, it is also imperative for the company to produce a sensible, comprehensive oil and gas policy that goes beyond oil sands alone. Instead of publicly advertising its expertise as an insurer of onshore and offshore fossil fuel extraction, Talanx HDI ought to swiftly exclude the complete unconventional sector, and in general, all new projects along the oil & gas value chain to then decisively phase out fossil fuels in line with climate science.”
- Regine Richter, Finance and Insurance Campaigner at Urgewald
Insurance providers Argo Group and Axis Capital, both Lloyd’s of London members, and RSA Insurance Group Limited, a leading UK insurer, have informed the #StopEACOP coalition that they will not be involved in underwriting the East African Crude Oil Pipeline (EACOP) project.
The decision by the three firms brings to 11 the total number of (re)insurers who have committed not to provide insurance coverage for the EACOP project. This is significant because the project needs substantial levels of international (re)insurance to proceed. The firms cite the EACOP project’s potential impact on people, nature and climate as among the reasons for their refusal to underwrite the project.
“We are able to confirm that providing insurance for the EACOP project, its construction, contractors, infrastructure or operation is not within our risk appetite. Therefore, we have not and will not provide insurance services associated with this project.”
- Alex Hindson, Chief Risk & Sustainability Officer, Argo Group
RSA Insurance Group Limited officially communicated that “our underwriters follow our Climate Change and Low Carbon Policy, which means we would not provide cover to the East Africa Crude Oil Pipeline.”
Axis Capital noted the insurance firm “…do[es] not support the East Africa Crude Oil Pipeline” and also confirmed that they “...do not envisage supporting EACOP in the future,” in email correspondence with Coal Action Network.
The EACOP and the associated Tilenga and Kingfisher oil fields are faced with widespread resistance locally in Uganda and Tanzania and globally, with over 1 million people signing a global petition against the projects. The planned pipeline is displacing tens of thousands of households in Uganda and Tanzania.
“TotalEnergies insists on forging ahead with the EACOP project even in the face of substantial local and global opposition. The company downplays the negative impacts of the project while arguing that the project is good for Uganda’s economic development. The truth is that the project is only good for Total and its shareholders and not the frontline communities facing displacement and human rights violations that have harmed their livelihoods. Financial institutions that are serious about protecting human rights and avoiding climate breakdown should rule out supporting the EACOP.”
- Diana Nabiruma of Africa Institute for Energy Governance (AFIEGO), Uganda
The EACOP, its associated upstream oil projects and related infrastructure such as roads, pose a threat to livelihoods, local cultures, sensitive ecosystems and wildlife, including endangered species in the Lake Victoria basin, Budongo forest, Murchison Falls National Park, Biharamulo Game Reserve and others.
The news comes against the backdrop of a worldwide concern that oil companies are making a killing by harming the environment and leaving communities where their projects exist languishing in poverty.
“As oil companies continue their operations in Africa, raking in huge profits, local communities are left to deal with the negative socio-economic and environmental impacts of these exploits. We welcome the move by Argo Group, Axis Capital and RSA not to offer (re)insurance coverage to the EACOP project, a project that not only comes at a huge cost to people, nature and climate but also jeopardizes key sectors that employ the majority of people in Uganda and Tanzania such as agriculture, tourism and fisheries. We call on other financial institutions that are yet to distance themselves from EACOP to do so and seal the fate of this harmful project.”
- Omar Elmawi, Coordinator of the #StopEACOP Coalition
These commitments illustrate the growing level of rejection of the project by international (re)insurers. EACOP can not proceed without international (re)insurance. RSA is a leading UK insurer, while Argo and Axis are members of Lloyd’s of London, the world's largest (re)insurance market. This adds to the pressure on the other Lloyd’s members and the wider insurance market also to reject EACOP. We also call on insurers as investors to proactively support renewable energy projects in Uganda, Tanzania and throughout Africa, where such projects are not in conflict with communities or ecosystems.
In addition to the 11 (re)insurers that have distanced themselves, 20 banks and 4 export credit agencies have committed not to provide project financing for the EACOP project.A recent report noted that the EACOP presents various violations of the IFC Performance Standards and Equator Principles in terms of both human rights and climate impacts.
Reposted from original press release by Insure our Future
Utilities are struggling to find insurance to build new coal power outside China, finds a report released today by the Insure Our Future campaign and Korean non-profit Solutions for Our Climate, which have obtained documents providing a rare snapshot of the state of the industry.
The insurance contracts for KEPCO, Korea’s national power utility, also reveal that it is having to turn to smaller, inexperienced companies to secure cover for coal power plants that are already in operation as growing numbers of mainstream insurers withdraw from the sector.
“Major international insurers have withdrawn from coal projects and been replaced by a haphazard coalition of the willing, consisting of a few global climate laggards, small speciality insurers and assorted companies from the Global South. Our report exposes Starr, Liberty Mutual, Berkshire Hathaway, Allied World and Lloyd's of London as the coal industry’s last lifeline."
- Peter Bosshard Global Coordinator of the Insure Our Future Campaign and report author
Since the Insure Our Future campaign launched in 2017 at least 39 insurers have ended or limited their cover for new coal projects. However, the report confirms that even prominent international brands like Hannover Re (Germany), SCOR (France), QBE (Australia) and Helvetia (Switzerland) continue to underwrite existing coal plants, supporting companies like KEPCO that have no plans to phase out coal in line with climate targets.
Coal is the biggest single source of carbon emissions. To stay on track for the 1.5°C Paris Agreement climate target, consumption of coal must fall by 9.5% per year.1 No investment in new fossil fuel production is consistent with that target, according to the International Energy Agency, yet it warns that coal demand could reach all-time highs in 2022 and stay at that level until 2024.2
The insurance industry is under growing pressure to align its policies with 1.5°C. UN Secretary General Antonio Guterres told the Insurance Development Forum last year: “We need net zero commitments to cover your underwriting portfolios, and this should include the underwriting of coal – and all fossil fuels!”3
Asia is at the centre of global coal power generation and development, accounting for 91% of all plants planned or in construction worldwide (414GW out of 457GW) and 73% of operating coal plants (1,518GW out of 2075GW).4 KEPCO is a major player, developing and operating coal power projects in several Asian countries and arranging insurance on the global market.
In March 2018, KEPCO signed contracts with 19 insurers to underwrite the construction of the 1.3GW Nghi Son 2 plant in Vietnam for a total $7.2 billion. Four years on, 72% of the insurance capacity which underwrote that project has been withdrawn from the market.
“It is now unlikely that large new coal power plants outside China can be insured. The withdrawal of so many insurers has made it much more cumbersome and expensive to obtain cover. The few insurers who remain will find it challenging to provide the vast expertise and capacity required to insure a complex new coal power plant.”
- Peter Bosshard
The Insure Our Future report, EXPOSED: The Coal Insurers of Last Resort, analyses documents provided by the Office of Korean National Assembly Member Soyoung Lee, which give details of insurance contracts for five KEPCO coal power projects. Governments, insurers and insurance brokers do not normally disclose information about which companies insure which projects, so it presents a unique insight into the withdrawal of insurers from the world’s leading coal market.
When KEPCO insured the construction of Nghi Son 2 in March 2018, most international insurers had yet to adopt coal exit policies. The project was underwritten by numerous large multiline and speciality insurers and reinsurers, led by Germany’s Allianz with $1.1 billion.
By October 2021, when KEPCO insured the construction of the 1.2GW Vung Ang 2 plant in Vietnam for a total $4.4 billion, most large international insurers had withdrawn from the coal market. Asian insurers provided 55% of total capacity, led by Japan’s MS&AD with $1.2 billion of cover, North American insurers provided 38% and European insurers 7%.
Half (53%) of the insurance capacity provided to Vung Ang in October 2021 has now been withdrawn from the market with MS&AD, Sompo and Tokio Marine in Japan, Hiscox in the UK and AIG in the US announcing that they will no longer insure new coal projects. China also announced in September 2021 that it will no longer build coal power projects overseas and Chinese insurers are expected to exit the international market.
Five “insurers of last resort” now provide 72% of the capacity for Vung Ang 2 which is still available for new coal projects: US companies Starr, Berkshire Hathaway and Liberty Mutual (the only insurer with a coal exit policy that allows it to continue covering new projects); Allied World in Bermuda; and eight other insurers operating in the Lloyd’s market. 5
Lloyd’s of London insurers, which include Allied World and two Liberty Mutual subsidiaries, now provide 37% of the capacity still available to the market. In December 2020, Lloyd’s ruled out insuring new coal projects from 2022 but has since made clear that it will not require insurers in its market to follow the policy.
"These findings make clear that the Lloyd's market, Starr, Liberty Mutual, Berkshire Hathaway and Allied World are the world’s coal insurers of last resort. At a time when we urgently need to accelerate the transition away from fossil fuels, their reckless support for new coal projects drives us ever closer to unmanageable climate breakdown."
The replacement of large, experienced international insurers with a wide variety of smaller actors also affects the operation of existing coal power plants. In June 2021, KEPCO had to find 24 different insurers to provide $556 million of cover for the operation of its small 206MW Cebu Naga power plant in the Philippines. Eleven were not insuring any other KEPCO projects and one, New India Insurance, lacks the A-credit rating that project financiers typically expect insurers to provide.
Global insurance broker Willis Towers Watson warned as early as January 2019 that “the exodus of many international insurers from the market for coal risks complicates securing property coverage” and “this reduction in available capacity will invariably see upward pressure on rates and coverages.” 6
However, the report also shows that many insurers with coal exit policies are continuing to provide cover for companies such as KEPCO that have no credible plans to phase out coal production. They include leading brands Hannover Re, which only plans to phase out insurance for the biggest coal companies by 2025, SCOR and QBE, which have a 2030 target, and Helvetia, which has no phase-out target.
“KEPCO and other power utilities need to rapidly phase out their coal power fleets in line with global climate targets, and insurance companies should stop insuring power utilities which have no credible phase-out plans. Power utilities and their insurers need to urgently move beyond a pathway which is projected to take the planet to a catastrophic 2.7°C of global warming by the end of the century.”
Only 37% of OECD coal power capacity (100GW) is scheduled to close by 2030 and 6% of non-OECD capacity (100GW) by 2050. 7
The report says that for insurers to align with the Paris target they must:
1 One Earth Climate Model, Sectoral Pathways to Net-Zero Emissions, 18-5-22
2 IEA, Coal power’s sharp rebound is taking it to a new record in 2021, threatening net zero goals, 17-12-21
3 UN, Secretary-General’s closing remarks to Insurance Development Forum, 18-6-21
4 Global Energy Monitor, Global Coal Plant Tracker: Coal-fired Power Capacity By Region, January 2022
5 Beazley, Chaucer, Canopius, Markel, Antares, Cincinnati, AEGIS and W.R. Berkley.
6 Willis Towers Watson, Ready and Waiting? Power and Renewable Energy Market Review 2019
7 Global Energy Monitor, Boom and Bust Coal, April 2022
Read the full report here
