AGL 5.60 Decreased By ▼ -0.18 (-3.11%)
ANL 8.90 Increased By ▲ 0.02 (0.23%)
AVN 76.85 Decreased By ▼ -2.07 (-2.62%)
BOP 5.26 Decreased By ▼ -0.02 (-0.38%)
CNERGY 4.63 Decreased By ▼ -0.07 (-1.49%)
EFERT 81.27 Decreased By ▼ -0.33 (-0.4%)
EPCL 50.08 Decreased By ▼ -0.83 (-1.63%)
FCCL 13.16 Decreased By ▼ -0.22 (-1.64%)
FFL 5.69 Decreased By ▼ -0.03 (-0.52%)
FLYNG 7.07 Decreased By ▼ -0.08 (-1.12%)
FNEL 4.79 Decreased By ▼ -0.03 (-0.62%)
GGGL 8.80 Decreased By ▼ -0.10 (-1.12%)
GGL 14.55 Decreased By ▼ -1.33 (-8.38%)
HUMNL 5.69 Decreased By ▼ -0.08 (-1.39%)
KEL 2.63 Decreased By ▼ -0.03 (-1.13%)
LOTCHEM 28.60 Decreased By ▼ -0.45 (-1.55%)
MLCF 24.49 Decreased By ▼ -0.61 (-2.43%)
OGDC 72.43 Decreased By ▼ -0.02 (-0.03%)
PAEL 15.36 Increased By ▲ 0.01 (0.07%)
PIBTL 5.00 Decreased By ▼ -0.05 (-0.99%)
PRL 16.10 Decreased By ▼ -0.19 (-1.17%)
SILK 1.08 Decreased By ▼ -0.01 (-0.92%)
TELE 9.14 Decreased By ▼ -0.23 (-2.45%)
TPL 7.23 Decreased By ▼ -0.10 (-1.36%)
TPLP 18.61 Decreased By ▼ -0.34 (-1.79%)
TREET 21.68 Decreased By ▼ -0.32 (-1.45%)
TRG 136.71 Decreased By ▼ -4.44 (-3.15%)
UNITY 16.88 Decreased By ▼ -0.14 (-0.82%)
WAVES 9.86 Decreased By ▼ -0.04 (-0.4%)
WTL 1.41 No Change ▼ 0.00 (0%)
BR100 4,225 Decreased By -29.6 (-0.7%)
BR30 15,518 Decreased By -214.7 (-1.36%)
KSE100 42,150 Decreased By -243.4 (-0.57%)
KSE30 15,588 Decreased By -75.7 (-0.48%)

European lenders exit Amazon oil trade after scrutiny by campaigners

  • Banks phase out financing for Ecuador oil exports.
  • Indigenous leaders in Amazon rainforest welcome the move.
  • Advocay groups call for moratorium on new drilling.
Published January 25, 2021
Follow us

ZURICH/LONDON: Credit Suisse, Dutch lender ING and France's BNP Paribas have decided to stop financing trade in crude oil from Ecuador, the banks said on Monday, after pressure from campaigners aiming to protect the Amazon rainforest.

The role of European lenders in backing the trade came under scrutiny in August, when a report by advocacy groups and Amazon Watch named six European banks as major financiers of Ecuadorean oil exports to US refineries.

Indigenous leaders battling to prevent further oil exploration in their territory said the banks' role had made them complicit in oil spills, violations of land rights and the destruction of rainforest by Ecuador's oil industry.

"The banks' commitment is a milestone," Marlon Vargas, president of the Confederation of Indigenous Nationalities of the Ecuadorian Amazon, told Reuters. "The banks should finance other forms of economic development, but not oil extraction."

The August report had named the three banks alongside France's Natixis, Switzerland's UBS and Dutch bank Rabobank as the main backers of the shipment of about $10 billion of Ecuadorean oil to the United States over the past decade.

Campaigners had accused the banks of using double standards for making climate change pledges while backing trade in oil from Ecuador, where the industry plans to drill hundreds of wells in the Yasuni National Park, a UNESCO World Heritage site.

The Amazon plays a vital role in regulating the Earth's climate by absorbing carbon dioxide, one of the main greenhouse gases responsible for global warming.

ING said it shared many of the concerns in the report over protecting the Amazon and had decided to review its exposure to oil and gas exports from Ecuador.


"Our research and resulting engagements are ongoing," the bank said. "In the meantime, we have decided not to engage in any new contracts for the financing of oil and gas trade flows from the Ecuadorian Amazon."

Credit Suisse said it had decided to phase out financing for oil exports from the Ecuadorean and Peruvian Amazon after completing existing commitments.

"Credit Suisse reviews and updates its sector-specific policies on a regular basis," the bank said.

BNP Paribas said it had decided in December to exclude oil exports from Ecuador's Esmeraldas region - home to Ecuador's export terminal for oil from its Amazon region.

"BNP Paribas is committed to the continuous improvement of its sustainability strategy," the bank said.

Rabobank said in August that it had stopped financing Ecuadorean crude cargoes earlier in 2020.

UBS, for now, has stopped short of committing to end its financing of Ecuadorean crude oil cargoes. The bank said it maintained dialogue with advocacy groups and was committed to the highest environmental and social standards.

"As such we have declined transactions where the origin of oil is verifiably associated with breaches of our standards, such as indigenous peoples' land rights or UNESCO World Heritage Sites," the bank said.

Natixis, meanwhile, financed cargoes of 5.5 million barrels of oil from the Ecuadorean Amazon from July to December - more than double the volume it backed in the first half of the year, according to an analysis of US customs data by and Amazon Watch.

Natixis said that it continued to "proactively" screen transactions for potential environmental or social risks and understood that financing Ecuador's oil exports could encourage plans by the industry to expand into the Yasuni National Park.

"Given this situation, Natixis has declined to finance any new clients involved in oil exports from Ecuador since mid-2020 and has reduced the number of existing clients it works with in this area," a Natixis spokesperson said.


Ecuador's oil industry says that taking care of the environment and maintaining a harmonious relationship with people living in its operational areas is a priority. State-owned oil company Petroecuador did not respond to a request for comment.

With oil output of about 0.5 million barrels per day, or 0.5% of global volumes, according to BP's statistical review, Ecuador ranks as a mid-sized producer. Much of its oil is used to pay the country's debts to China.

The move by the banks could complicate the export of oil from Ecuador because trading companies that were using their services will have to find other banks to back their transactions. Swiss trading house Gunvor, identified in the report as one of the firms trading Ecuadorean crude, declined to comment.

"Any banks involved in this trade will face growing scrutiny, unless Ecuador's government puts a moratorium on new drilling and addresses the environmental damage and rights violations caused by existing production," said Tzeporah Berman, international programmes director at

"Ecuador is going to need support to get out from under crushing debt, but new drilling in primary forests without consent from indigenous peoples is not the solution."

With asset managers under pressure to rebalance their portfolios to help to slow climate change, tropical deforestation and the loss of biodiversity, the stance of emerging market governments on such issues is facing growing scrutiny.

"We have to position as investors with countries that are taking an active approach to governing and environmental concerns, and obviously some countries are better placed to do that than others," said Carlos de Sousa, an emerging market debt portfolio manager at Vontobel Asset Management, which has exposure to Ecuador's sovereign bonds.


Comments are closed.

European lenders exit Amazon oil trade after scrutiny by campaigners

Pak diplomat escapes assassination attempt at Kabul

FY22 trade with US soars 38.3pc to $10.5bn YoY, NA told

Nov POL products’ sales down 12pc to 1.55m tons YoY

PM urges Chinese co to invest in renewable energy sector

PM seeks reform plan: Power sector PDM govt’s Achilles heel

SPI down on decrease in food prices: PBS

Import of urea: PPRA refuses to give fresh exemption

OPEC set to stick or cut more amid plan to cap Russian oil price

Muttaqi speaks to Bilawal

US designates four AQIS, TTP leaders as SDGTs