Energy Transfer Partners’ lawsuit against NGOs it terms “rogue eco-terrorists” could damage future investments in controversial projects such as the Dakota Access Pipeline (DAPL) project, according to sustainable investment industry figures.
Speaking in response to ETP’s decision to sue several NGOs – including BankTrack and Greenpeace – Steven Heim, Managing Director at Boston Common, the US SRI specialist, told RI that, in his view, the new lawsuit “prolongs the controversy and keeps DAPL in the news. It could potentially make investors and lenders reluctant to take on this type of future pipeline project as it will raise the risk of future investments”.
This view was shared by Peter Chapman, Executive Director of Canadian shareholder body SHARE, who said: “Lawsuits against civil society organizations that are initiated by corporations risk reputational damage for companies and their shareholders and financing partners.
“Investors look for company commitment to good relations with indigenous communities backed up sound management, good governance and successful implementation. Investors expect companies to learn from their experience and be forward-looking.”
Boston Common helped lead the investor coalition that issued the investor statement in February to the 17 banks financing the project and it also helped organize other investor initiatives regarding DAPL including recruiting lead investors that filed shareholder proposals with Marathon Petroleum, Enbridge and Phillips 66.
Heim said he expected the coalition of investors that he’s worked with on DAPL to share its view that pipeline companies should have a consultative process with Indigenous Peoples as outlined by the Foley Hoag report commissioned by the DAPL lender banks.
He added: “We’ve just started to discuss this case with other investors and getting the details. We expect there will be more discussions by investors.”
It is alleged by ETP – the US based master limited partnership behind the Dakota pipeline project – that the NGOs collectively “manufactured and disseminated materially false and misleading information about Energy Transfer and the Dakota Access Pipeline”. It claims that these “co-conspirators” “aggressively targeted Energy Transfer’s critical business relationships, including the financing sources for DAPL and Energy Transfer’s other infrastructure projects, by publically demanding these financial institutions sever ties with Energy transfer”.BankTrack, the Dutch not-for-profit finance campaign group, says it “vehemently” rejects the accusations. It states on its website, that: “We consider it perfectly within our right…to inform the general public about the potential or actual negative social, environmental and human right impacts of projects financed – or in line for financing – by private sector banks.”
It says the suit is an attempt to “silence civil society”.
Similarly, Greenpeace spokesman Travis Nichols is quoted saying the suit “has no legal merit” and was “an attempt to silence public opposition, criminalize advocacy work and an attack on our democratic principles. As the case progresses, we’ll refute all outrageous claims”.
The Dakota project has continued to be a source of controversy for investors. In March RI reported that Norway’s KLP excluded four companies involved in the project as a result of a report by UN Special Rapporteur, Victoria Tauli-Corpuz warning that the approval of the 1,900km pipeline to transport unconventional oil was granted “without an adequate social, cultural or environmental assessment” and in “the absence of meaningful consultation or participation by the tribes”. Nordea’s RI team in February recommended excluding ETP, Sunoco Logistics and Philips 66 over DAP – saying: “The companies have declined any form of dialogue with Nordea.”
RI has reported in depth on how Californian pension giant CalPERS is engaging on DAPL and quoted Board Member Ron Lind saying ETP “is in violation of every one of our governance principles and investment beliefs”.
Greenpeace is a household name but BankTrack will be less familiar. It is based in the Netherlands and its funders include the KR Foundation and the European Climate Foundation, whose boards include heavyhitters from finance and politics.
The KR Foundation is chaired by Connie Hedegaard, the former European Commissioner for Climate Action.
The European Climate Foundation is chaired by Caio Koch-Weser, the former German Deputy Finance Minister who was until recently Vice Chair at Deutsche Bank. Its board includes Hedegaard and ex-Irish President and UN High Commissioner for Human Rights Mary Robinson. Its funders in turn include the likes of the Rockefeller Brothers Fund, the Grantham Foundation and the Children’s Investment Fund Foundation.