Following the publication by Total of a tender for insurance / reinsurance brokerage services for the East African Crude Oil Pipeline (EACOP), an international coalition of organisations is calling upon leading re/insurance brokers to reject the tender and not to support the project due to its anticipated climate, nature and human impacts.
EACOP threatens the water resources and livelihoods of millions of people in the Lake Victoria basin, along with some of the world’s most important elephant, lion and chimpanzee nature reserves. At peak capacity, the pipeline would transport enough oil to generate over 34 million extra tons of carbon emissions each year.
“Uganda and East Africa can be the climate leaders that the world needs. We have the potential to lead on climate by pioneering a clean energy economy and modeling a prosperous, healthy future free of fossil fuels. The proposed East African Crude Oil Pipeline is an 18th century project, and one which is not fit for either Uganda or the world today. The project is already forcefully displacing local communities, endangering wildlife and protected biodiversity areas, and tipping the world closer to climate catastrophe.”
The tender notes that EACOP needs a solvent reinsurance and insurance program. Total has asked for submissions of interest from re/insurance brokers by 19th June. The broker would, for example, be responsible for sourcing reinsurance in the international market.
“We are calling on the world’s largest re/insurance brokers Marsh, AON, Willis Towers Watson and Arthur J Gallagher to show climate leadership by not responding to this tender and by instead making a clear public statement that they will not provide their services to EACOP due to its obvious incompatibility with the Paris Agreement goal of limiting global warming to 1.5C.”
The tender comes after the International Energy Agency (IEA), in a welcome reversal of long-held positions, concluded recently that “there is no need for investment in new fossil fuel supply” in a 2050 net-zero pathway and confirms that insurance companies no longer have any justification for supporting new oil, gas or coal projects.
More recently António Guterres, Secretary General of the United Nations in his closing speech to the Insurance Development Forum summit, in a message directed to the insurance trade, stated that, “We need net zero commitments to cover your underwriting portfolios, and this should include the underwriting of coal – and all fossil fuels.”
, : “This tender for broker services clearly states that Total will soon also be looking for international reinsurers for this project. We therefore also call on leading international re/insurance companies including Allianz, AXA, SCOR, Munich Re, Swiss Re and Zurich, to be consistent with their own net zero climate pledges and commit to not providing re/insurance cover to EACOP because is a clear example of a project that is not compatible with Paris Agreement climate goals.”
Total’s effort to mobilize insurance for EACOP comes shortly after several of the world’s largest commercial banks made public commitments to not finance the project, with some calling it “too hard to defend.” The bank statements were made following public pressure from the #StopEACOP campaign, including through an open letter signed by over 260 civil society organizations from Africa and around the world.
"French banks have already committed not to fund EACOP, and all eyes are now on AXA who is leading the Net Zero Insurance alliance. AXA recently made a mockery of its own climate commitments when it voted in favor of Total’s greenwashed strategy. It's time to make up for it and there would be no better way to reaffirm its commitment to achieve carbon neutrality than to announce it won't insure this project or any other new oil and gas production project carried out by the French major, in line with the latest IEA net zero scenario. No responsible insurer should support the building of a massive crude oil pipeline in the midst of a climate crisis, particularly one with impacts of this magnitude on nature and human rights."