Banking on Amazon Destruction

How European and U.S. banks fund the oil and gas industry despite environmental and social risks driving the Amazon over the brink The solution is exclusion

An Amazon oil and gas an Amazon Exclusion Policy is equally urgent and compelling. José Gregorio Díaz Mirabal, exclusion framework General Coordinator of the Coordinating As of December 2020, not a single U.S. bank Body of the Indigenous Organizations of the “For centuries, was willing to finance Arctic drilling. This Amazon Basin (COICA) shared: the Indigenous peoples have been responsible resulted from years of pressure on share- for the preservation of the largest forest on the holders, negotiations with banks, campaigns planet. We are being killed for defending our against banks, and efforts of several NGOs. home. An Amazon biome-wide exclusion of all Several European and international banks also oil and gas finance and investment, aimed at have Arctic exclusions in their environmental stopping oil expansion in the most biodiverse and social risk frameworks, working for years place on the planet, will keep the Amazon to remove from their finance and (in some Rainforest off the precipice of a disastrous cases) investment portfolios all of the projects ecological tipping point, eliminate toxic that no longer comply with bank policy. oil-related disasters, and end rights violations The geographic nature of the Arctic exclusions, perpetrated by the industry. This is the path as well as the climate change, biodiversity, and for a possible planet and the way for us to Indigenous rights rationale behind them, are guarantee that our rights are respected. The an example and a broad roadmap for a similar financial sector must invest in recovering what commitment in the Amazon. has already been lost and finance the solutions Additionally, while other fossil fuel exclusions our peoples offer to humanity in the climate tend towards unconventional oil and gas, change era.” the Arctic exclusions cover conventional and unconventional activities. The rationale for

27 Caracas

Tucupita

Ciudad Bolívar Mabaruma VENEZUELA

Georgetown Paramaribo Puerto Ayacucho GUYANA Saint-Laurent

Bogotá Cayenne COLOMBIA SURINAME GUYANE Inírida FR S.José del Guaviare Lethem Boa Vista Florencia Mitú Mocoa

Nueva Loja Quito Macapá ECUADOR Marajó Ambato Belém Puyo Riobamba São Luís Azogues Manaus Cuenca

Loja Iquitos Leticia Araguaia- Zamora Tocantins

Moyobamba Amazonas Chachapoyas

Cajamarca

Pucallpa Porto Velho Huánuco Rio Branco Palmas PERÚ BRASIL

Cobija Lima Huancayo Puerto Maldonado

Cusco

Trinidad

Cuiabá

La Paz BOLIVIA Brasília Cochabamba Santa Cruz de la Sierra

Sucre 0 100 200 300 400 km RAISG, 2020 AMAZONIA BACKGROUND IMAGE: GEBCO; NOAA NCEI

Map 1. ScreenshotMAP 1. BOUNDARIES of map showing OF AMAZONIA the biogeographic AND THEIR MULTIPLE boundaries CRITERIA: of the Amazon (in green), the full extentTHE of BASIN, the Amazon THE BIOGEOGRAPHIC Biome (in red), AND the THE administrative RAISG BOUNDARIES boundaries (purple), and the hydrographic basin (blue dotted region). Reproduced from RAISG “Amazonia Under Pressure”, (2020), In our analysis of “Amazonia Under Pressure” we “The expressions Amazonia, Panamazonia, South https://www.amazoniasocioambiental.org/en/publication/amazonia-under-pressure-2020 RAISG BOUNDARY (Maximum boundary of Amazonia) BIOGEOGRAPHIC BOUNDARIES have used the term Amazonia to refer to the set of American Amazon, Amazon Region or Greater biome + administrative regions + hidrographic basin 7.004.120 km2 8.470.209 km2 national Amazon regions that make up this regional Amazonia, comprise different approaches, insights HIDROGRAPHIC BASIN unit. However, irrespective of whether ‘Amazonia’ and spatial representations. In general, these terms (AMAZONAS, ARAGUAIA-TOCANTINS AND MARAJÓ) ADMINISTRATIVE REGION or ‘the Amazon region’ is the term used, it must be refer to the largest humid tropical forest on the The Amazon biome 6.925.918 km2 The Amazon Exclusion also applies to the Ecuador (RAE) and Brasil (Amazônia Legal) assumed that its definition and delimitation consider planet, located in the north of South America; to Foz do Amazonas and Para Maranhão its various aspects. For example, some use the the hydrographic basin of the Amazon River; to the Like Arctic exclusions applied by banks, the term to refer to the area occupied by tropical forest, Nations that have territory in these vast regions; (...) basins — areas of offshore drilling at the mouth often called the Amazon biome. Others talk of the to the peoples that inhabit it, and to their terrestrial Amazon biome (see Map 1) is not defined by Amazon River basin which, from a hydrographic and aquatic fauna.”1 of the Amazon River. These are defined political boundaries. The most commonly perspective, refers to the area drained by the rivers exploration and production (E&P) areas by that feed their waters into the Amazon River. Some In an article published in 2001 in the Latin Upper image: Table-top accepted definition uses hydrological, eco- mountains in the Serrania de define the area based on administrative boundaries, American Research Review, David Cleary points the Brazilian National Petroleum Agency logical, and biogeographical boundaries.55 Chiribiquete National Natural related in some cases to environmental variables. out a common mistake in the characterization of TABLE 1. AREA OF AMAZONIA BY COUNTRY AND PROPORTION OF TOTAL(ANP). AREA56 IN While EACH the scorecard focused on the Park, Colombia. Wilfredo A. Garzón Thus, there are different ways of understanding the Amazonia. “Scholars typically take refuge in the The lowland Amazon Rainforest is the central Paipilla, 2013. Guyane meaning of the terms Amazonia or the Amazon illusory certainties of physical geography and use Country Bolivia Brasil Colombia Ecuador GuyanaAmazonian areasPerú Surinameof Ecuador,Venezuela Peru,Amazonia Brazil, and Française region, at both regional and national levels. the term Amazon as a synonym for the Amazon subregion, comprising the total extent of the 1 Cardona, C.A.S. & Umbarila, Colombia, the Amazon biome definition is an E.R. (2015). Perfiles urbanos en basin, the area drained by the main channel of the Amazon area of 714,834 5,238,589 50 6,181 132,292 211,157 84,226 9 66,19 0 146,523 470,219 8,470,209 Amazon basin, including* its historical extent. la Amazonia colombiana, 2015. Over the years, various organizations and Amazon and its tributaries. But this approach is the country (km²) expansion that includes parts of Bolivia, and Bogotá: Instituto Amazónico researchers have tried to determine the extent of also problematic since in this part of the world the de Investigaciones Científicas The other subregions have a strong direct or Amazonia. Among these, the work of the Amazon boundary between land and water fluctuates”.2 % of Amazonia in Venezuela, as well as Guyana, Suriname, and «sinchi». 8.4% 61.8% 6.0% 1.6% 2.5% 1.0% 11.4% 1.7% 5.6% 100.0% indirect influencethe country on the basin. Cooperation Treaty Organization (ACTO) and the French Guiana. 2 Cleary, D. (2001). Towards Amazonian Scientific Research Institute (SINCHI) an Environmental History of the of Colombia stand out, both warning of the 28 Amazon: From Prehistory to the * Area calculated by GIS using Sinusoidal Projection, Nineteenth Century. Latin American impossibility of adopting a single parameter for -600 meridian and adjusted to national boundaries. Research Review, 36(2), 65-96. describing the region. GIS coverages may differ from national level data.

08 09 Exit Strategy Coverage

It’s clear that this can’t happen overnight. For complete coverage, the exclusion should Banks need to create and communicate exit include all oil and gas activities including strategies detailing their targets and timeline exploration, development, production, trade, for full implementation of the exclusion. transport (e.g. pipelines), general purpose An exit strategy should include: financing (for oil traders), and any other sup- porting services dedicated to these activities. 1. Immediate commitment (latest by end Additionally, all project, trade, and corporate of 2021) to no new oil and gas financing financing activities, including syndicated loans and investment in the Amazon biome, to oil traders active in the biome, should be in line with the recent announcement by excluded. On the investment side, all equity the IEA, with Paris Climate Agreement and bonds held directly by the bank should targets, and with net zero by 2050 be excluded. In addition, companies that have commitments and decarbonization more than 5% revenue from oil and gas activ- trajectories.57 ities should be considered high risk in ESR 2. Existing trade finance exclusions for frameworks and subject to annual reviews and oil from the western Amazon should transaction screenings. Companies holding be immediately extended to the entire any oil or gas reserves in the Amazon biome Amazon biome (by end of 2021) as part also should be considered high risk in ESR of the exclusion, and should be crafted frameworks and subject to screenings on a to exclude crude oil and refined prod- transaction basis to ensure that any finance ucts that are exported out of key ports. or investment activities by the bank are not related to Amazon oil and gas. 3. A commitment to exit all loans, letters of credit, and revolving credit facilities (RCFs) for all oil traders active in the Connection to other policies Amazon biome as soon as contractually An Amazon-wide exclusion would comple- possible and no later than the end of ment other policies such as cross-sectoral 2024, especially those who have been policies on biodiversity and human rights, and implicated in corruption controversies. extend the effectiveness of those policies in 4. A commitment to exiting all existing oil the Amazon. It would also complete existing and gas financing and investment in the oil and gas sector policies and exclusions that Amazon biome as soon as possible and are currently not far-reaching enough, and no later than the end of 2025. contribute to climate targets of achieving net zero by 2050.

30 “The financial sector must invest in recovering what has already been lost and finance the solutions our peoples offer to humanity in the climate change era.” — José Gregorio Díaz Mirabal, General Coordinator of COICA