Revealed: the £13bn at the heart of a global protest
Rob Edwards, The Herald
This weekend, Royal Bank of Scotland is facing its biggest protests in a long history of protests. Environmental groups and hundreds of climate protesters are camped on the lawn at RBS’s Gogarburn headquarters, on the outskirts of Edinburgh.
At the centre of the protest is a growing anger at the bank’s role in funding the world’s dirty oil and gas industries, at huge environmental cost. A report revealed today by the Sunday Herald shows that RBS has provided nearly £13 billion worth of funding to the oil and gas industries since it was bailed out by the taxpayer two years ago.
The report is the first authoritative and detailed account of the bank’s controversial financing of the companies blamed for causing global warming. Among the 66 companies backed by RBS are well-known names such as BP, Shell, ConocoPhilips, Tullow Oil, Trafigura and Cairn Energy. The bank has helped them raise many hundreds of millions of pounds to finance oil exploration, extraction and development around the world.
The figures themselves are not in dispute. There is, however, bitter disagreement over what they mean. To the hundreds of climate protesters camped outside the RBS headquarters, the revelations prove that the bank is guilty of an unforgivable crime against the planet. But to the bank they just show that someone has to raise the money to extract the fuels on which we all depend before we can work out how to phase them out.
Time and again, RBS has shown itself to be the oil and gas industry’s best friend.
Adam Ma’anit, researcher, Platform
According to figures from financial information company Bloomberg, RBS has directly loaned nearly £3.6bn to fossil fuel companies since the bank’s bailout on October 13, 2008 (see table). At the same time, the bank has helped raise equity finance worth £9.3bn.
The biggest amount has gone to the US oil giant ConocoPhilips, which gained access to £917 million thanks to RBS. Anglo-Dutch company Shell got £909m, while Britain’s BP netted £633m.
Another of the major beneficiaries of the bank’s efforts has been the British-based multinational Tullow Oil. Over the last two years, RBS has helped raise £448m for the company.
However, the oil firm’s activities in Uganda and the Democratic Republic of Congo have recently attracted fierce criticism. Production of up to 200,000 barrels of oil a day is scheduled to start soon in one of Uganda’s most environmentally sensitive areas.
“Tullow has colluded with the government to avoid a genuine assessment of the risks,” claimed Taimor Lay, a campaigner who has investigated what’s been happening in Uganda.
“Ugandans are still waiting for a strategic environmental assessment of the risks of drilling at Lake Albert and in the national parks. They are struggling to find ways to hold the company to account.”
In the Congo, Tullow has been trying to convince the government to do a deal on oil exploration by offering generous “signature bonuses”. The government, however, seems to have ended up awarding the licences to two companies which are registered in the British Virgin Islands.
RBS has also helped Trafigura raise £210m. Last month, the London-based oil trader was fined the equivalent of £840,000 by a court in the Netherlands for illegally exporting tonnes of toxic waste which allegedly made 30,000 people ill on the Ivory Coast in West Africa.
James Marriott from campaign group Platform said: “It’s outrageous that bailed-out banks like RBS are using public money to finance some of the most controversial fossil fuel companies in the world.
“The fossil fuel industry depends on injections of private finance to drill more wells, build longer pipelines and dig new mines. RBS has prided itself in specialising in this sector, so it’s no surprise it’s now facing a backlash from an increasingly climate-conscious public.”
Campaigners claimed that less than 10% of all RBS funding for the energy industry goes to help non-polluting technologies such as solar, wind, wave and tidal power. But the bank suggested the figure was more like 20%, and pointed out that 40% of its project finance in the last five years had helped renewable energy.
An RBS spokesman said: “As a major international bank we provide support for businesses working across many industries and reflect the make-up of society and the economy.
“Just as society as a whole has to make a transition to renewable energy sources, so will banks like RBS. In fact, in recent years, RBS has been one of the most active banks in the world in providing funding for renewable energy projects.”
There is also controversy over drilling off Greenland being carried out by Cairn Energy, which is based in Edinburgh. The company received £117m in loans and equity from RBS in 2009. Almost half of that directly helped it start exploratory drilling off Greenland in July this year.
Greenland is frontier territory for the oil industry because it hasn’t been exploited before. But as well as potential wealth, it will inevitably bring new environmental risks, all too obvious since BP’s disaster at the Deepwater Horizon well in the Gulf of Mexico.
The area in which Cairn is drilling has been nicknamed “iceberg alley”. Earlier this month, an iceberg four times the size of Manhattan broke off the Petermann glacier in north western Greenland, believed by some to be because of the rising temperatures caused by climate pollution.
Experts point out that the melting ice will make exploration for oil easier in parts of Greenland – an irony that has been seized upon by the protesters. Sharon Condry is one of the many climate campers who are expected to take part in a mass action to try and close down RBS headquarters tomorrow. She said: “Companies like Cairn are despicably exploiting climate change by drilling for oil in areas that have only become accessible by glaciers melting. We are targeting RBS on Monday in order to throttle the flow of finance that enables fossil fuel companies like Cairn to trash the climate and endanger more catastrophic offshore oil spills.”
Adam Ma’anit, a researcher from Platform who has been investigating Cairn’s activities, called on the UK Government to stop “reckless” lending by RBS and to promote a moratorium on oil and gas exploration in the fragile Arctic region.
He said: “Companies like Cairn couldn’t drill in the Arctic without the support of financial institutions such as RBS. Time and again, RBS has shown itself to be the oil and gas industry’s best friend.”
Cairn Energy said it was grateful for assistance from RBS, adding that its move into Greenland waters had been triggered by the decision of the country’s government to open up areas for exploration, not by melting icecaps.
A company spokesman said: “Through its operations globally, Cairn has demonstrated the ability to develop and manage complex exploration and drilling projects successfully, while striving to minimise the negative impact on local communities.
“The biodiversity and environment offshore Greenland mean that Cairn has a particular responsibility to ensure its operations do not present unnecessary risks.”
A spokeswoman for Tullow said: “Both the decision by RBS to invest in Tullow and whether it is an ethical investment for them are questions for RBS and not for Tullow.”
When this week’s demonstrations are over and the campers have been arrested or gone home, RBS is likely to remain under pressure. Environmental groups have just launched a “people’s charter” in place of the bank’s widely advertised “customer charter”.
The people’s charter challenges the bank to pull out of environmentally damaging projects.
Mary Church from Friends of the Earth Scotland said: “RBS continues to invest heavily in the fossil fuel industry and deny any responsibility for the climate change and human rights implications of these activities….
“This position is untenable: if you sell someone an AK-47 rifle knowing full well what they are going to do with it, you clearly bear some responsibility for the consequences.”
The protest camp
It’s been a strange few days for staff at the imposing headquarters of Royal Bank for Scotland (RBS) at Gogarburn, just outside Edinburgh. Late on Wednesday evening, a group of green protesters “swooped” into their grounds and set up this year’s climate camp.
Since then, tents, teepees, brightly coloured toilets, a field kitchen and a wind turbine have been set up, and there has been talk of a permaculture garden. The police have arrived, while the campers have run workshops and erected banners.
On Friday, more than 100 activists penetrated the security cordon that had been thrown around the bank’s HQ. One woman “disguised as a banker” gained entry to the building and glued her hands to the front desk. Bank workers were invited to lunch at the camp to learn about what the protesters were doing and why. Some demonstrators entered the HQ’s revolving doors and held a “dance party”, before hearing speeches about RBS’s alleged evils.
The aim of the climate camp – which it is claimed will grow to more than 1000 people this weekend – is to shut down RBS HQ tomorrow by mass action. It is unclear exactly what they will do, or to what extent they will be successful, but arrests are likely.
Decisions on the exact plan of action are likely to be taken at last-minute meetings of campers, many of whom are veterans of protests at airports, power stations and events like the G20 meeting in London.
Confusingly for the authorities and the media, the protesters don’t tend to have ringleaders, and they don’t act in predictable ways. But they are part of a long tradition of non-violent direct action, from the suffragettes to the anti-nuclear movement.
“By financing dirty fossil fuels, RBS is bankrolling our swift descent into a bleak future of climate catastrophe,” one of the campers, Martina Rattigan, said. “By taking action against the bank we are acting in solidarity with the thousands of people already losing their lives each year to climate change, as well as the many communities around the world who live on the fence line of toxic fossil fuel projects.”
RBS has so far adopted a conciliatory tone towards the campers, even offering them water. But it has closed a privately-run crèche at Gogarburn to ensure the safety of the children.
An RBS spokesman said: “While we understand the protesters’ intent and publicity tactics we clearly cannot agree with their decision to target RBS. Our top priority is securing the safety of our staff and customers and we urge the protesters to make their point peacefully.”