PKA, a provider of labour market pensions for the social and healthcare sector, blacklists two more companies involved in the controversial East African Crude Oil Pipeline (EACOP).
For years, EACOP has been accused of massive displacement, human rights abuses and destruction of nature and biodiversity.
In December 2023, PKA sold its shares in TotalEnergies with direct reference to the oil pipeline, for which the French energy company is responsible.
“Sometimes we have to draw a line in the sand. We had been in dialogue for a number of years but they had never been responsive to the criticism we had made,” Dewi Dylander, then Head of ESG at PKA, told Børsen in December 2023.
But as Danwatch reported in June, PKA’s divestment of TotalEnergies did not mean a complete exit from EACOP. The pension fund retained an investment in the South African Standard Bank, which is one of the main sources of funding for the oil pipeline.
Since then, Danwatch has also approached PKA about a continued investment in the American insurance company Marsh McLennan, which acts as insurance broker for TotalEnergies on the EACOP project.
Against this background, PKA is now placing Standard Bank and Marsh McLennan on its negative list, the pension fund informs Danwatch.
“We have chosen to exclude Standard Bank and Marsh McLennan because both companies play a leading role in the financing and construction of the EACOP pipeline. It remains our position that EACOPis a project with significant environmental and human rights risks, and therefore we do not believe that the information about the companies’ extensive involvement in the project is in line with our policies and guidelines,” Nicholas Rindahl, PKA’s press officer, writes in an email to Danwatch.
In June, PKA had DKK 3.2 million in Standard Bank, but the investment has since been divested for “investment reasons”.
“This is a coincidence and has nothing to do with the exclusion. Our equity investments are placed in a passively managed external mandate, which means it moves all the time depending on how the markets develop. On the other hand, the exclusion ensures that any investments we have in the companies are sold off and that they do not re-enter the portfolio as long as they are on our negative list,” writes Nicholas Rindahl.
He also states that PKA currently has DKK 19.5 million in Marsh McLennan, which is now being divested.
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Competitors maintain investments in TotalEnergies
While PKA does not want to contribute to EACOP, several other Danish pension funds maintain their investment in TotalEnergies.
The pension funds PFA, Danica and PensionDanmark have together invested DKK 3.4 billion in the French company.
In June, PFA, the largest Danish pension investor in TotalEnergies with more than DKK 2 billion, told Danwatch that they were “following the situation closely” and that “not all decisions made by TotalEnergies are agreed with by PFA”.
PensionDanmark has also previously expressed concerns about EACOP to Danwatch.
“The information about the treatment of local people in the area around the Kingfisher field is deeply concerning and we expect TotalEnergies and its partners to recognise and respect the human rights of local people and actively address the conditions described,” said Jan Kæraa Rasmussen, Head of ESG and Sustainability at PensionDanmark, when Danwatch in April described how fishermen near the Kingfisher oil field – one of two fields that will supply oil to EACOP – are exposed to gross violations by the Ugandan military.
However, neither PensionDanmark nor PFA have yet faced the consequences of the criticism of the project.
Wawa Wang, director of the NGO Just Finance International, which has been working with communities affected by EACOP for many years, urges the two pension funds to follow PKA’s example:
“It is commendable that PKA is standing up to Standard Bank and Marsh McLennan, who continue to deny that their financing of EACOP violates the rights of communities affected by the project. Unlike other investors, PKA has made the right decision,” she says.
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Protesters arrested
As the construction of EACOP progresses towards its expected opening in 2025, opposition to the project continues in Uganda’s capital Kampala.
On Friday, August 9, 50 students from universities across the capital were arrested for planning a demonstration against EACOP.
The Ugandan authorities have been repeatedly criticised for their heavy-handed treatment of EACOP’s critics.
“A pattern is emerging in Uganda where students who peacefully advocate for the protection of human rights and climate change mitigation are being violently arrested. I strongly urge the Ugandan authorities to change course,” said the UN Special Rapporteur on human rights defenders earlier this year
