BACKGROUNDER ON ESG RISKS JAPANESE BANK FINANCING of the East African Crude Oil Pipeline (EACOP)

The document details the significant ESG risks of the East African Crude Oil Pipeline (EACOP), including threats to biodiversity, human rights violations, and climate incompatibility. It highlights the financial and reputational risks for Japanese banks, particularly SMBC, and compares their policies with peers like Mizuho and MUFG.

• The EACOP project presents severe environmental risks, including the potential to endanger the water supply of over 40 million people as approximately 460 km of the pipeline will cross the Rift Valley and the Lake Victoria basin.
• The project threatens internationally recognized ecosystems, including the Murchison Falls-Albert Delta wetland system and two other Ramsar-designated sites, with plans to drill about 130 oil wells in Murchison Falls National Park.
• EACOP is incompatible with the Paris Agreement's 1.5°C goal; at peak production, it is expected to generate 34.3 million metric tons of CO2 annually, which is seven times Uganda's current annual emissions.
• The project has caused significant social harm, impacting approximately 120,000 individuals in Uganda and Tanzania through displacement, lack of proper compensation, and threats against human rights defenders.
• The project faces substantial governance and legal risks, including litigation in French civil courts and the East African Court of Justice, as well as Ugandan legislation designed to override environmental and social protections.
• Japanese banks face reputational and financial risks, including 'stranded asset risk' as three associated oil blocks are among the top 15 projects deemed not viable under the IEA’s Sustainable Development Scenario.
• Sumitomo Mitsui Banking Corporation (SMBC) is identified as having a higher risk profile than its peers, Mizuho and MUFG, due to weaker standards on human rights and transition risks for oil and gas projects.

APA

Center for International Environmental Law (2022). BACKGROUNDER ON ESG RISKS JAPANESE BANK FINANCING of the East African Crude Oil Pipeline (EACOP). https://www.ciel.org/wp-content/uploads/2022/06/OCI_CIEL_EACOP_2022_vA4_FINAL.pdf

Chicago

Center for International Environmental Law. BACKGROUNDER ON ESG RISKS JAPANESE BANK FINANCING of the East African Crude Oil Pipeline (EACOP). 2022. https://www.ciel.org/wp-content/uploads/2022/06/OCI_CIEL_EACOP_2022_vA4_FINAL.pdf.

Wikipedia

{{cite report |author=Center for International Environmental Law |title=BACKGROUNDER ON ESG RISKS JAPANESE BANK FINANCING of the East African Crude Oil Pipeline (EACOP) |date=June 2022 |url=https://www.ciel.org/wp-content/uploads/2022/06/OCI_CIEL_EACOP_2022_vA4_FINAL.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{centerforinternationalenvironmentallaw2022backgrounder, author = {{Center for International Environmental Law}}, title = {{BACKGROUNDER ON ESG RISKS JAPANESE BANK FINANCING of the East African Crude Oil Pipeline (EACOP)}}, institution = {Center for International Environmental Law}, year = {2022}, month = jun, url = {https://www.ciel.org/wp-content/uploads/2022/06/OCI_CIEL_EACOP_2022_vA4_FINAL.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }