10/02/2023

Complaint against insurance broker Marsh over its role in brokering the East African Crude Oil Pipeline (EACOP) project

On 7 February, Ugandan, Tanzanian and US-based human rights and environmental non-governmental organisations filed a formal complaint with the United States National Contact point for the OECD (Organisation for Economic Cooperation and Development) alleging that insurance broker giant Marsh is violating OECD guidelines for responsible business conduct by serving as insurance broker for the planned East African Crude Oil Pipeline (EACOP).

The claim is the first of its kind against an insurance company.

EACOP is a proposed 1,443km oil pipeline (296 km in Uganda and 1147 km in Tanzania) that would transport crude oil extracted from oil fields in the Lake Albert basin in Uganda to the coast of Tanzania. If constructed it would be the longest heated crude oil pipeline in the world and is estimated to cost US$3.5 billion.

The complaint argues breaches of due diligence standards by Marsh, as well as breaches of human rights and environmental standards under the OECD Guidelines. The complainants are calling for Marsh to drop its insurance brokerage role for the EACOP.

The route of the pipeline passes through 231 villages in Tanzania and 178 in Uganda. Civil society organisations report that it would require the displacement of roughly 118,000 people along the pipeline’s route, primarily farming communities, who live off their land. The complaint argues that the pipeline project would adversely impact rural, poor communities in East Africa, (including indigenous and tribal peoples) who would be displaced from their land. In addition, the pipeline runs through or by freshwater resources relied on by millions for drinking water and fishing. Approximately 460 km run along Lake Victoria, which is Africa’s largest lake and the largest inland fishery in the world, supporting over 40 million people in East Africa. The complaint argues that these important water resources would be at risk of oil spills.

The complaint also alleges that the pipeline threatens to have an irreversible impact on a number of legally protected and/or internationally recognised wildlife areas along its route and off the coast of Tanzania. EACOP would run through some of the most ecologically sensitive areas in the world. The complaint argues that the significant biodiversity risks are so inherent to the project design that it is impossible to mitigate them adequately. Finally, the complainants argue that the full value chain emissions of EACOP are expected to reach 379 million metric tons of CO2 over the pipeline’s 25-year operational lifetime, posing unacceptable climate risks, incompatible with the Paris Agreement and the pathway to limit warming to 1.5°C.

TotalEnergies East Africa Midstream BV is the main shareholder of EACOP.

Monica Feria-Tinta was instructed in the preparation of the complaint.

See the Inclusive Development International’s summary here.