RBC Tables an Offer on Tar Sands

Written by Brant Olson

Topics: Finance, Oil

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The tar sands tide may finally be turning at Canada’s biggest bank. RBC is among the largest financiers of Canada’s Tar Sands but so far lacks policies adopted by other banks that seek to limit harm to Indigenous rights, water quality and climate.

That may be changing. Last week, representatives from RBC showed us a summary of the new draft Environmental Risk policy that it hopes will fill the gap. It’s too early to draw conclusions– the early draft has yet to be ratified by the bank’s Senior Management–but here’s our initial take on where we see progress relative to other banks, and where we still see distance.

Bottom line, we think bank is moving in the right direction on Indigenous rights and the environment but falls well short of establishing a significantly new standard for responsible banking. On a scale of 1 (worthless) to 10 (perfect), we gave the draft a 5. Here’s why:

On Indigenous rights, the policy acknowledges “free, prior and informed consent” (FPIC) as an international standard established by the UN, but requires it from clients only where FPIC is national law.  Elsewhere (including in Canada’s tar sands), the bank relies on the weaker World Bank standard of “free, prior, informed consultation” and meaningful accommodation. Essentially, RBC is proposing the same “recognize” language on FPIC that TD adopted in 2007, though RBC claims its application will be more robust.

We’ve been asking RBC’s to require evidence of consent from its clients no matter where they operate, especially in Canada’s tar sands where recent studies show that Indigneous communities are facing elevated rates of cancer. RBC maintains that demonstrating consent is impractical given the inconsistent interpretation of “consent”, the lack of a legal framework for establishing “consent” in Canada and overlapping and unresolved land claims and interests. We disagree. Our view is that consent is really just the product of consultation that takes “no” for an answer. It’s a hard pill for industry to swallow, but it’s the right thing to do.

On land and water, the bank singles out clients operating in “environmentally sensitive areas” which it defines as tropical forests, UNESCO world heritage sites, critical habitat for species at risk and High Conservation Value Forests. The policy would require an assessment of whether clients “prevent or mitigate” irreversible adverse impacts to these areas, but stops short of imposing clear penalties if they don’t.

We’ve been asking RBC to phase out financing to companies that can’t do business without wrecking the environment. Despite the bank’s assurances that these new guidelines will help weed out bad apples, we remain unconvinced. We like to see the bank defining “environmentally sensitive areas” but the policy lacks the teeth to avoid doing them harm.

Finally, we’ve been asking RBC to meet Unicredit’s commitment to measure and reduce its “financed emissions” of CO2 by reigning in financing to tar sands operators and other large CO2 emitters. They offered to encourage clients to disclose emissions under the Carbon Disclosure Project, but won’t cut clients that don’t. Again, good sentiment, but ultimately lacking teeth.

We want to see the policy improve but really it’s the practice that counts. And there’s no shortage of test cases in the queue. Analysts expect more than $100 billion to flow into tar sands developments within the next decade. We’re keeping an eye on two: the Enbridge Northern Gateway Pipeline strongly opposed by a number of well organized First Nations, and the Total Joslyn North Mine which threatens the Athabasca watershed with yet another toxic tailings pond. Both companies will likely come knocking at RBC for financial backing for these projects. How will RBC respond?

But enough pontificating from us. Let’s hear from you! One way or another, this policy will impact how the banks relate to the growing controversy over tar sands. How should we respond? Please give us your questions and ideas in the comments.

21 Comments For This Post I'd Love to Hear Yours!

  1. We need to stop relying on banks’ good will, or even boycott campaigns of single banks like RBC, because as long as the mass murder happening in the tar sands is legal, some bank, somewhere in the world, will line up to make a killing off of it. We should be directing all our energy to Alberta and Canadian citizens, only the provincial and federal governments have the power the shut down the tar sands, and prohibit any further destruction of the Boreal Forest in general. That means of course elevating the Tar Sands as a national issue (and targeting banks is a fine tactic to do so) but in the long term we need to overthrow the Corporate governance of Canada in general.
    There is a campaign underway to unite the Green Party and NDP, which would have the power to do just that, check it out at
    http://www.facebook.com/group.php?gid=112428765465230&ref=ts

    Blessings,
    Gabriel

  2. robkinUK says:

    I concur 100% with Gabriel. This is an attempt at a fob-off. Don’t let them get away with it.
    Five out of ten is better than nothing, but it’s the future of the planet that’s at stake here. They can and must do better.
    As a bit of light relief the FB site “The Beaver Lake Cree vs. The Tar Sands” has just released a game called “Save the Caribou”. Play it, share it and spread the word a little wider:
    http://www.facebook.com/l.php?u=http%3A%2F%2Fwww.co-operativecampaigns.co.uk%2Fcaribou&h=10223

  3. Gabriel, try looking for the facts first. Mass murder in the tar sands? Here’s some of the comments from the scientific peer review of the most recent Cancer Study for Ft Chipewyan:

    “I agree that the observed, small increase in risk of cancer as a whole, and of some specific types of cancer, particularly cancers of blood and lymphatic system, could be due to chance and/or to increased detection. While a real increase in risk of cancer is also a possibility, I consider chance to be the most likely explanation.”

    Dr. Kim Barker – National Cancer Institute, Bethesda, Maryland

    “It is comforting to know that there were no cases of cancer in children in Fort Chip during the study period (p. 27). This supports the argument that there isn’t a major environmental source of the cancer, although it doesn’t prove it. It is also interesting to note that overall cancer rates among First Nations people in Alberta cancer rates among First Nations people in Alberta are lower than in the non-First Nations population (p. 31).”

    And here’s Dr. O’Connor’s retraction:

    Environmentalists have spent the last few years declaring that Fort Chipewyan, a town of about 900 located near Alberta’s Athabasca oilsands, is an example of how industrialism can run amok and poison innocents. But now it has just become an example of how cancer panic outruns fact in the media. The Alberta College of Physicians and Surgeons issued a formal finding last week that Dr. John O’Connor, a fly-in doctor who began raising concerns in 2003 about the incidence of both rare and common cancers in the largely aboriginal community, had been guilty of making “a number of inaccurate or untruthful claims” to the press.

    This was already known to be true, after repeated double-checking of Dr. O’Connor’s claims by epidemiologists and statisticians for Alberta Health, and he does not now deny it. He told the Edmonton Journal yesterday, rather sheepishly, that he regretted saying he had observed an enormously elevated rate of cancer in Fort Chip through direct diagnosis when all he really had was a strong suspicion that the population was significantly sicker. But in the meantime, his initial contentions about population health in the town have flown around the world, being repeated uncritically by countless journalists and environmentalists. Dr. O’Connor was even made the heroic whistleblowing centrepiece of a celebrated documentary called Downstream.

    His most alarming and sensational claim, made to the CBC in March 2006, was that “five people in Fort Chipewyan had died since 2000 from cholangiocarcinoma, a rare form of bile duct cancer that normally affects one in 100,000 people.” If true, this would have been universally regarded as a strong signal of environmental contamination by some carcinogen. But after Dr. O’Connor provided the names of six cholangiocarcinoma patients to the Alberta Cancer Registry, three turned out to have other forms of cancer and one patient, who perished from heart disease,
    had no cancer at all.

    The Alberta Cancer Board also checked on overall cancer rates in the community, and found that Fort Chip, given its fairly stable population and the distribution of age, sex and First Nations status, would have ordinarily been expected to suffer 39 new cancer cases between 1995 and 2006. The actual number, 51, was not significantly higher given natural random variation, even though other lifestyle characteristics of the town’s residents might have raised the expected background rate. (If the residents of Fort Chipewyan were especially health-conscious, it is equally possible that the expected background rate of cancer should have been lower. But it has been confirmed that the town has unusually high rates of other negative lifestyle indicators like diabetes and hypertension.)

    BTW – the Mikisew Cree First Nation of Ft Chipewyan put out a news release stating that “former chief” George Poitras does not speak for the community, even though he claims to.

  4. Brant says:

    Brenda, I see that you’re head of community relations for Suncor–among the biggest operators in the tar sands. We welcome your comments, but request that you disclose important associations like this.

  5. E. Murphy says:

    Brenda – the disclosure that you are being asked for here might be considered falling into the Free Prior and Informed portion of the matter – no?

  6. Anonymous says:

    this is a test

  7. David Taylor says:

    this is a another comment

  8. David says:

    As long as there’s a profit to be made by financiers of the tar sands, and as long as those governments that permit tar sands exploration don’t pass legislation that would outlaw such oil exploration, expect tar sands financing to continue. But one should also expect the fight against the tar sands by progressives the world over to continue, too. It’s time for progressive Canadians to unite against the unofficial Harper-Iggy coalition and, come the next election, vote out Conservative and Liberal MPs throughout the country. Both major parties, particularly in the post-Mulroney era, have helped weaken Canada’s environmental laws.

  9. Vince says:

    From whom would you require free prior informed consent? Consent should come from someone who is accountable to the affected people, for instance a democratically elected government. And in Alberta there is an elected provincial government that approves and regulates oil sands projects. Isn’t this FPIC?

    If FPIC were required from everyone in the vicinity of a project, no project would proceed anywhere ever because there is always someone who will say “not in my backyard.” This goes for wind farms, solar farms, geothermal facilities and anything else good or bad that changes the status quo.

  10. Ahni says:

    Hey Vince. Strictly speaking, “FPIC” is an indigenous right, which, in the case of the Tar Sands, the government would be required to obtain from the primary stakeholders before a project can go ahead. It’s the same as Canada’s “Constitutional obligation to consult and reasonably accommodate” any First Nations that “may” be effected by a project, as affirmed in some two dozen court rulings since 2005–except that, in the case of consultation, the project is assumed to be perfectly acceptable no matter what anyone says (even the Supreme court). But, the project still can’t go ahead until the First Nations are “reasonably satisfied.” That’s the law.

    Consultation, by the way, is supposed to take place on the Nation-to-Nation level. But, the government usually twists it by giving the company the OK before they ask First Nations, and then the company carries out their own brand of consultation (instruction) and accommodation (bribery or something like it. Temporary jobs, for instance. Or a new school. In Brazil, they hand out free bikes and chewing gum…).

    In the case of FPIC, the OK essentially rests with the Indigenous stakeholders. The government can say whatever it wants, but, they do not have the legal right to do whatever they want. However, they can submit a proposal, and they can sit down and talk.

    And sometimes the First Nation will say no, but that is within their rights, even if Canada denies it (… If they don’t have that right, then what we’re talking about is constitutional molestation).

    FPIC or no FPIC, it’s clear that both the Alberta and Federal governments have routinely failed to fulfil their constitutional obligations to First Nations. Just look at the Beaver Lake Cree: They’ve recorded tens of thousands of infringements on their territory. And the list goes on and on and on.

  11. David Sands says:

    Brant, since I end up responding to your comments at various blogs around the internets in my role as a social media spokesman for the Government of Alberta, your comment to Brenda Erskine intrigues me ona personal/professional level. I am pretty sure – correct me if I am wrong – I have come across you on a variety of blogs commenting on oil sands issues simply as “Brant” or alternatively, “Branto,” not Brant Olson, an employee of the Rainforest Action Network. So, what is the social media standard, here?
    - David Sands

  12. David Sands says:

    And while I’m thinking about it, Brant, permit me another question. A week or so ago “Brant” was commenting on a blog from Australia, I think, that covers issues of interest to pension funds. In this, Brant was highly critical of a Canada Pension Plan investment in a particular in situ development whose proponents I recall are publicly stating their intention to develop the resource with the same or possibly lower carbon intensity as conventional oil. Now, that comment raised no issues for the GoA to address, so I didn’t take much note, but again it raises a personal/profession interest; if you oppose an in situ oil sands development, which sites are far more quickly remediated (witness Imperial oil, over a billion barrels produced since the 1960s near Cold Lake, with several former well pads you probably couldn’t even identify as such) and with a carbon intensity lower than oil produced in your own state, is there ANY oil sands development that RAN would not oppose? You seem to imply in your post above that there are… could you clarify for me where your ENGO stands?
    - David Sands

  13. Brant says:

    @David touche’ sir! I neglected to mention my affiliation on the Global Pensions post–an error, I will correct.

    As for your question about whether there are “ANY oil sands development that RAN would not oppose”, the simple answer is probably not. We’re generally opposed to the dead-end strategy of chasing after non-renewable resources, and in favor of developing renewable energy and conservation strategies that don’t require trashing the planet and its peoples.

    Of course that’s a very tall order, so our campaigns are focused on achieving short-term objectives toward that vision. In this case, mainstreaming best-practices on human rights and the environment within the banking sector, the topic of this post. Make sense?

  14. taylor says:

    well, it must mean something if David Sands and Brenda Erskine are on this blog attempting to weaken the push for a clean energy future. Go RAN! in response to David’s comment about Cold Lake, i can say now, after meeting with several farmers in the area, that i could definitely point out where these wells are, as one of them has begun spewing up water that has a peculiar chemical smell to it, and has caused all the crop in the surrounding area to die out. i wonder if your comment about things going on in one’s backyard isnt a bit ironic, as i doubt your backyard overlooks a smelting plant or any other such destructive and polluting invention. i wonder indeed how much dirty money you are paid to monitor sites like these, that empower people to take on the status quo and work together to build a better future than you seem to be leaving you kids.

    SHAME. you seem an intelligent guy. join the side that feels good about their job at night.

    Taylor Flook.

  15. Dr John O'Connor says:

    Brenda Erskine was someone that, as Head of Stakeholder Relations, sent a rep. to Ft Chip for the premiere of “Downstream”, to meet with me. “We would like to be part of the solution, and not the problem” was the then-incredible statement to me by the rep., and I was asked if I would head a health study for Ft Chip. This was industry, the polluter. No government rep., had ever come close to anything like this. Trust was established. And a no. of conversations have occurred since. I have gone to bat for Suncor, and urged Ft McKay and Ft Chip to build on this connection. Obviously, my trust was betrayed. Now I know, I guess.

    The bile duct cancers–5–in Ft Chip–are all confirmed. At least 2 were Cholangiocarcinoma. Blood and lymphatic cancers rates were also elevated, as were colon cancers–including a 33 yr old, whose mother died around the same time. I did not “sheepishly” back down from anything–I stand by what I stated. I was not found “guilty” of anything. And scientific studies since have found evidence of toxins in the Athabasca that emanate from the Tarsands, entirely connectable with the types of cancers in Ft Chip.

    The gloves are well and truly off.

    Dr John O’Connor

  16. Dr John O'Connor says:

    If anyone has any doubt about the polluting effects of the Tarsands, read the reports from Drs Erin Kelly and David Schindler, Drs Kevin Timoney and Peter Lee, and the reports from the Cdn Federal Environment Commissioner, the Royal Society of Canada, and the Environment Canada Scientific Panel. Compare the findings with that of Dr Jeff Short, the lead U.S. Exxon Valdez Toxicologist, who has spent years studying the effects of that disaster. And remember–I am a Family Doctor,a “reporter” in many ways– not an expert, and have concluded to now, that the causes of cancer in Ft Chip lie somewhere in the realm of: genetics, lifestyle, bad luck, and environmental origins. Given the independent scientific findings, the lack of monitoring of the Tarsands, and the defence of industry, by government and industry itself, and Brenda Erskine’s statement, I must be touching on a very sensitive area.

    What is the truth? Thank God the world is watching!

  17. First, full disclosure. I am the Director of Stakeholder Relations for Suncor Energy, a company that has been operating in the oil sands for more than 40 years and has relationships with all the First Nations and Metis communities in the region. I lived and worked in Fort McMurray for almost 30 years, and 13 of those were with Suncor.

    Second, an apology to the owners of this blog and the participants, for dropping into this conversation back in July of last year to say my piece, and then dropping out again. That was poor communications, and in a face to face conversation would be considered rude. I will confess to writing that earlier response in a moment of frustration, after coming across the words “mass murder” in a previous entry. Dr. O’Connor is right. Such accusations are so ridiculous they don’t deserve a response. But they are there, in black and white, so what is one to do…ignore them? I am all for public debate that pressures industry, investors and government to become more environmentally and socially responsible, but not when it turns into vitriolic sloganeerig. The words “dirty oil” and “blood oil” are an example. The industry’s response then becomes “ethical oil” . It’s just PR, and we need more than PR to get at the depth of issues around how we develop and use the world’s energy resources, and who benefits from those activities.

    Third, a public apology to Dr. John O’Connor, who has taken great offence at some of the things I said in that blog entry. I have a lot of respect for Dr. O’Connor and his efforts to improve the standard of health care in Fort McKay and Fort Chipewyan. He truly cares about these communities. His use of new technology like Telehealth is having a positive impact on the standard of care in both of those communitries, and Suncor is proud to provide assistance with these programs. Dr. O’Connor plays a crtical role in ensuring the planned baseline health study for Fort Chipewyan goes ahead. Industry is not involved in that study, nor should we be, but Suncor is hopeful that the work will begin soon, so the communities get the information they need to address their concerns.

    I made a mistake in quoting the Globe and Mail article as “proof” that Dr. O’Connor acknowledged publicly that the 5 or 6 cases of cholangiocarcinoma he reported turned out to be 2. Having worked in the oil sands industry for more than 10 years, I fully acknowledge that the media doesn’t always get the story right. I should let Dr. O’Connor speak for himself, and will do so in the future!

    As for not being aware of the facts, and using only the facts that support my own argument, I am fully aware of all the studies that have been done, but in terms of CANCER RATES in Fort Chipewyan, the Cancer Board’s Study released in early 2009, from which I quoted a scientist who performed a peer review, is the best information we have at the moment. It may not be perfect, as it is a snapshot in time, but it’s a good place to start.

    I can only hope that the medicial community, the scientific community and the communities within Fort Chipewyan will come to agreement on next steps for a baseline health study. Because of Dr. O’Connor’s role in the community, I hope he will continue to be involved, and that his voice will be heard.

    Finally, because I have relocated to another country and a different area of Suncor’s business, I will not likely be monitoring this issue and this website on a regular basis, although I will continue to be passionately interested. I would encourage anyone who has questions about Suncor’s role in this issue to contact Martin O’Brien Kelly (mobrienkelly@suncor.com).

    Thanks!

  18. J-M says:

    Corporations apply for financing according to their cash flow and revenues and there is very little, if any, under status quo model, to improve practice to include First Nations rights, environmental disclosure. As much as I despise the activity of the Tar Sands and the consequences of further exploitation given climate science and peak oil, going after RBC and other Canadian banks seems to be a red herring. The money to finance the truly bad oil and gas companies will always find a source if they can prove value. Let’s focus on BIG OIL, GAS and COAL, not banks.

  19. Barry says:

    As someone who went to med school with John O’Connor, I have been dismayed at the way in which his reputation has been trashed by Health Canada, the CPSA and others. The charge of ‘causing undue alarm’ has a
    creepy, totalitarian ring to it and should never have been brought against a physician acting reasonably and in good faith to protect his patients. I think we need to know a lot more about how these sinister charges were made.

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