By: Rebecca Adamson
Founder/Executive Director, First Peoples Worldwide
In August 2016 the Standing Rock Sioux Tribal Chairman and Council asked First Peoples Worldwide to lead an investor engagement strategy to stop the financing going to Energy Transfer Partners (ETP) for the construction of the Dakota Access Pipeline (DAPL). Working with tribal governments, Native leaders, grassroots groups, asset owners, asset managers, banks and a global Indigenous-led divestment campaign is an unprecedented chance to show how key environmental, social and governance investment principles and shareholder advocacy are being used to uphold tribal self- determination.
Tribal sovereignty, like the sovereignty of governments around the world, is simply the power of people to come together to solve their own problems. But that is not happening in many places around our country as governments increasingly prioritize corporate interests over those of the people. North Dakota is a perfect example. The Standing Rock Sioux Tribe fears DAPL will leak toxic oil into its main source of drinking water, Lake Oahe. There were 292 oil spills in North Dakota over the past two years and the legislative response was to stop reporting on spills. The Tribe does not want the 1170 mile pipeline and has been on record since 2007 that it opposes any pipelines crossing their treaty territory. Along the route of the pipeline are sites of religious and cultural significance to the Sioux people, including ancestral burial sites. The state has other interests to protect.
Conflicts of Interest: The fast tracked process through which environmental assessments were skipped and construction permits were approved is coming from state and federal politicians who either own ETP stock or receive political contributions from ETP and the oil industry. These politicians approved DAPL to pass under the drinking water of over 18 million people – in spite of the fact that Sustainalytics ranked ETP as dead last among its peers in environmental performance. ETP faces lawsuits “in 5 states over contamination of groundwater” and citation from “7 states for releasing hazardous materials from its pipelines and facilities.”
Government priorities: Since 2010 the rapid oil and gas development has brought an unprecedented rise of sexual violence against women in North Dakota triggered by the influx of cash and thousands of oil workers. This dirty by-product of the oil industry has tripled rates for murders, aggravated assaults, robberies, sex crimes, forcible rape and prostitution. Sex trafficking has increased 20.2 percent. Over the past 5 years the State has allocated $100,000 to protect women and children who are victims of this violence. Over the past 5 months, since August 2016 the State of North Dakota has spent $22 million on protecting Energy Transfer Partners property and security for DAPL.
The Rights of Citizens: Opposition to DAPL goes beyond the Standing Rock Sioux Tribe. Over a dozen lawsuits have been filed by North Dakota landowners. Court documents stated, “the landowners (were told) that if they did not agree to the amount offered (by ETP) they faced losing money, having their land taken by eminent domain…The statements of Dakota Access LLC were false, misleading, and unfair statements designed to induce the Morton County landowners to sign the necessary DAPL easement agreements at a lower price than other Morton County landowners.”
In today’s political climate, citizens all over the nation are seeking tools to hold government accountable to the needs and priorities of its citizens; tools to counter the rampant control of politicians by corporate interests.
Social License = Community Consent:
Having the social license to operate simply means the people in the communities and neighborhoods where a company operates, want the company to be there. DAPL is not the first project to receive permits without full consent from a tribal government, local community or private land owner. But more investors are understanding the financial risk associated with companies that choose to do business without the social license to operate. Risk is a routine concept in investing. Natural resource companies must mitigate environmental risks for drilling, fracking, or mining. Standards are set for ground water quality, strip mining, air pollution, and waste management. But more and more Investors are adding social license to their risk portfolio because of the explosive costs associated with a community opposition, project delays, possible cancellation, and damage to corporate reputations. The costs add up as indicated in the figures below. (Sources for the figures below can be found on www.firstpeoples.org)
1. “There is a cost somewhere between $20 million to $30 million a week for operational disruptions by communities.”
2. “The time it takes to bring oil and gas projects on-line has doubled over the course of the past decade due to community opposition, creating significant financial loss.”
3. “Nearly three quarters, 73% of their project delays were due to “above ground,” non-technical risk or community opposition.”
4. The Anglo American CEO estimates that a full third of all new mining capital, $25 billion, is at risk due to community opposition.
Call for Action: Shareholder Advocacy
The movement to stop the Dakota Access Pipeline (DAPL) is wreaking financial havoc on the companies and banks involved. In August 2016, Energy Transfer Partners reported “it could lose $1.4 billion in a year if delays continue…Even a temporary delay would mean loses of over $430 million.” ETP is attempting to raise new debt. This could mean that the banks are ramping up pressure on the company to repay their loans out of concern DAPL will never be finished. In November 2016, Energy Transfer Partners announced a merger with sister company Sunoco Logistics in order to raise much needed cash to finish construction. Energy Transfer Partners’ own shareholders are filing a lawsuit to block the merger, alleging conflicts of interest.
Join the consumers who have closed checking or savings accounts worth over $53 million from the banks financing DAPL – contact www.defundDAPL.org
Join the investors. Proxy season is from March to July, the next six months will be crucial. If you are an asset owner or asset manager join the Investors and Indigenous Peoples Working Group contact SHeim@BostonCommon.com
Join the campaign contact DivestInvest Campaign Director Vanessa Green Vanessa@divestinvest.org
Source: DAPL FLYER 02-01-2017