New research has thrown cold water over a French fossil fuel corporation’s plan to expand its destructive oil and gas exploration in the Democratic Republic of Congo (DRC).
A coalition of environment groups published a new report on 8 September exploring leading insurance companies’ environmental, social, and corporate governance (ESG) policies. The research suggested that these companies would be reluctant to underwrite new oil and gas licenses in the central African country.
Insurers rule out DRC oil and gas blocks
Greenpeace Africa, Insure our Future, Reclaim Finance, and Urgewald produced the damning analysis. The report centred round the DRC’s plans to issue new exploration licenses for oil and gas. In July 2022, the government began accepting bids for 30 new exploration blocks.
The campaign group wrote to 13 of the largest insurance and reinsurance companies from the US and Europe. Reinsurers provide protection to direct insurers, taking on a portion of their risk. Responses suggested that many of the big insurers would avoid insuring these new blocks, owing to environmental and social concerns.
A handful of the companies made explicit commitments to avoid insuring the new oil and gas blocks on auction. These included: Generali, Hannover Re, Talanx, and Zurich. Many of these have specific policies concerning fossil fuels.
Meanwhile, other insurers failed to comment on the DRC auction specifically, but provided evidence that their general policies could exclude the new oil and gas blocks. For instance, Allianz pointed Greenpeace to its recent policy which prohibits underwriting for fossil fuel projects, as of 1 January 2023. In spite of this, Greenpeace Africa did raise the possibility that the insurer could still provide coverage on a company level.
Similarly, insurers like AXA and Chubb indicated their policies on protected areas. Specifically, they would not support oil and gas projects in these conservation zones. However, Greenpeace once again noted that this could open up the possibility of insurance – this time on a project level.
On the whole however, the large insurers and reinsurers’ replies demonstrated the challenge that oil companies would encounter obtaining coverage. Overall, the report concluded that:
if the leading insurance and reinsurance companies follow their specific commitments to Greenpeace Africa, as well as their general ESG policies, then companies bidding for the DR Congo oil blocks would struggle to find coverage for their environmentally and socially destructive business plans or would find them significantly more expensive.
Environmental and human rights concerns in DRC oil and gas blocks
The new oil and gas blocks in the DRC presented a number of issues for insurers. Notably, the new blocks would open up 11.2m hectares of Congo rainforest to new, environmentally destructive drilling. As a previous report by Greenpeace identified, at least 13 of these new exploration areas overlap with protected areas. This includes the UNESCO World Heritage Site designated Virunga National Park.
Greenpeace Africa has visited communities living in eight of the new blocks. In April for instance, they spoke to fishers, farmers, traditional leaders, young people, and local non-profits in three blocks of the coastal basin. The zone is located near the towns of Muanda and Lukula. There, the organisation identified that locals had not been informed of the oil tender.
Given this, Greenpeace Africa highlighted that licenses in these areas would violate communities’ right to Free, Prior and Informed Consent (FPIC). Indigenous Peoples and local communities hold this right under a number of international human rights instruments.
Significantly, AXIS Capital Holdings specifically highlighted the lack of FPIC as in violation of its human rights policy. It therefore suggested that the company would not insure the new DRC projects.
The international lead of the Greenpeace Africa Congo Basin campaign, Irene Wabiwa, said that:
analysis shows that the biggest insurers and reinsurers are reluctant to underwrite and lend essential support to such disastrous neocolonial extraction.
Big polluter Perenco eyes new exploration
In spite of this, in May, French fossil fuel firm Perenco filed expressions of interest for two of the blocks on offer. This was the same company that spilled 200 barrels of oil into a biodiverse natural harbour in the South of England in March this year. Moreover, as the Canary reported at the time, the corporation has an infamous history of environmental and social harms.
In particular, Perenco has been the source of a litany of ecocidal and human rights crimes globally. The DRC’s sole current oil and gas producer, the company has caused over 167 pollution incidents in a fragile mangrove nature reserve.
What’s more, in a town at the heart of Perenco’s operations, oil and gas exploitation has further entrenched the poverty of local inhabitants. As a result, French non-profit CCFD Terre-Solidaire refers to the town of Muanda as:
the poorest oil city in the world
The new Greenpeace report noted that there has been a particular groundswell of opposition to oil and gas exploitation in the blocks where Perenco intends to operate.
In June, Extinction Rebellion groups in the DRC launched the ‘Pétrole Non Merci!’ (Petrol No Thank You!) campaign. The campaign opposes the 30 new oil and gas blocks. Local groups – including XR Moanda (Muanda) – have since sprung up to fight off the projects. At the beginning of September, activists in Muanda held a protest against the company.
Communities fighting back
In addition, a Congolese community leader from Muanda and Greenpeace campaigners are protesting at a key reinsurance event. Between 9 to 13 September, reinsurance majors are hosting the Rendez-Vous de Septembre (RVS) in Monaco. The campaigners and a local leader will be calling for firm commitments from AIG, Allianz, Axa, Berkshire Hathaway, Chubb, Fairfax Financial, Liberty Mutual, MAPFRE, Travelers, and the UK’s Lloyds of London. In particular, they demand that these companies avoid underwriting oil and gas development in the DRC.
The campaign follows similar protests against insurers in August. Activists targeted a number of insurers and reinsurers who have yet to rule out supporting the similarly destructive East African Crude Oil Pipeline (EACOP).
Notably, the EACOP pipeline could also be central to the new oil and gas blocks in the DRC. In May, the governments of Uganda and the DRC entered talks to initiate an agreement for the export of DRC oil via the EACOP.
The new Greenpeace report laid out in no uncertain terms the significant environmental and community impacts of the new DRC licenses. Evidently, large insurance companies should think twice about supporting any ecocidal fossil fuel corporation prepared to put people and the Congo rainforest at risk.
Already, it seems the tide is turning against destructive oil and gas projects. If insurance companies firmly ditch the DRC blocks, big oil will find it increasingly difficult to insure their risky plans there. Hopefully, major fossil fuel firms like Perenco will soon get the memo.
Feature image via Yvette Kaboza/Wikimedia, cropped and resized to 1910 by 1000, licensed under CC BY-SA 3.0 IGO
