A number of organisations have officially ruled out involvement in the controversial East African Crude Oil Pipeline (EACOP) project, including re/insurance market players SiriusPoint, Riverstone International, Enstar Group, and specialty insurers Blenheim and SA Meacock.
28 re/insurers have now declared they will not offer insurance for EACOP because of the significant pollution and human rights risks that it poses.
These decisions come after months of targeted efforts by environmental companies, including Coal Action Network, Insure Our Future and StopEACOP, to hold insurance firms accountable for their involvement in dirty energy projects that endanger local communities and pollute vital ecosystems.
With even more companies ruling out their involvement, this will undoubtedly put pressure on remaining insurers, which includes AIG, Tokio Marine, Chaucer and Hiscox, to rule out their involvement in the pipeline.
Other major companies that have already ruled out involvement include reinsurance giant Munich Re, who announced that they would not insure the EACOP project, in 2022.
In addition, global reinsurer Hannover Re also previously ruled out involvement, as well as Swiss Re, Axa, Zurich and SCOR.
In a statement, Riverstone International announced to campaigners that it “does not underwrite the EACOP project directly or indirectly, and nor does it intend to”.
Both Enstar, Blenheim and SA Meacock offered equally clear statements, while SiriusPoint confirmed “[we are] not participating in the EACOP tender.”
It is very clear, that the decision of these companies to publicly distance themselves from EACOP underscore the project’s increasing financial risk and the growing consensus on the need to protect current and future generations from dangerous overheating and extreme weather events.
It is important to highlight, that the proposed pipeline is majority-owned (62%) by French oil giant Total, with stakes also held by the state oil companies of China, Uganda and Tanzania.
The project has struggled to raise adequate insurance, as well as $3 billion, which is needed in financing, which ultimately has caused for construction to be delayed by over four years.
In October 2023, Uganda’s Energy Minister said that securing insurance has been the “biggest challenge” to the pipeline’s construction.
Moreover, the plans for the 1443 km pipeline, intended to stretch from Hoima in Uganda to Tanga in Tanzania, have been marred by crackdowns on environmental and human rights defenders by authorities across Uganda and Tanzania.
Reports from Global Witness and Human Rights Watch have detailed harassment, rights infringements, as well as dozens of arbitrary arrests, while the European Parliament has condemned the project.
Meanwhile, the recent COP28 event made history, as over 190 nations acknowledged the necessity of transitioning away from fossil fuels and the importance of financial institutions investing in clean solutions.
Will Attenborough, Climate Finance Strategist for Coal Action Network, commented: “Insurers are the great enablers. They can determine whether polluters continue to put our kids and communities in danger, or whether we build clean energy solutions that will protect us from global overheating. What will AIG and Chaucer choose at this crucial moment? Short-term profits from dirty energy, leading to increasingly violent wildfires, floods and rising food prices? Or the safe, healthy world we all want for our loved ones? We need companies like Tokio Marine and Hiscox to make the right choice now – later is too late.”
StopEACOP Campaign Coordinator Zaki Mamdoo, said: “The decision by SiriusPoint, Riverstone International, Enstar Group, Blenheim and SA Meacock to rule out involvement in the EACOP project is a significant win and further proof that even the insurance industry, with its deep-seated history in providing cover for the harmful and damaging projects of profit-driven corporations, is waking up to the enormous climate and socio-economic risks of supporting new oil and gas projects. We urge the remaining insurers linked to EACOP, including Lloyd’s and Liberty Mutual, to follow suit and withdraw in the face of widespread human rights abuses and threats to communities and protected ecosystems across East Africa.”
Samuel Okulony, Director of Environment Governance Institute Uganda, added: “The withdrawal of these insurersSiriusPoint deals a major blow to the viability of the EACOP project and provides hope to local communities facing displacement and activists risking their lives to defend land and nature. The lack of insurance and rising costs reinforce that this pipeline contradicts Uganda’s climate commitments and the need for a just transition that protects human rights. Given the devastating social and environmental consequences, we call on all remaining project partners to put frontline communities above profit.”
