Groups Call on AIG to Cut Ties With Trans Mountain Pipeline

WASHINGTON, April 29 (TNSCapV) -- Public Citizen issued the following news release on April 28, 2022:

Indigenous, climate, and consumer advocacy groups today called on insurance giant American International Group Inc. (AIG) to explicitly rule out insurance coverage for the Trans Mountain pipeline and adopt a policy to ensure that its clients respect Indigenous rights.

In the letter to AIG's Chief Executive Officer, signed by 44 organizations, including Public Citizen, Rainforest Action Network, Sierra Club, and Stand.earth, the groups say that the climate commitments that AIG adopted in March to restrict coverage for the tar sands sector do not match the urgency of the climate crisis.

"To ensure a livable planet, insurers must end all underwriting and investment support for fossil fuel expansion," the groups write in the letter. "This includes the Trans Mountain tar sands oil expansion project and other tar sands transport projects... We call on you to explicitly rule out support for all new tar sands transport projects, including the Trans Mountain pipeline network, and adopt a policy to ensure that clients respect the Free, Prior, and Informed Consent (FPIC) of impacted communities."

Last week, Lloyd's of London syndicate Aspen Insurance joined sixteen insurers who pledged to rule out coverage for the Trans Mountain expansion project. The expansion project would increase climate pollution equivalent to adding 2.2 million cars to the road. Its construction has been delayed in the face of resistance from Indigenous communities who do not consent to the pipeline's construction through their lands.

"AIG's commitment to rule out insurance for some tar sands projects does not go nearly far enough, unless they explicitly rule out Trans Mountain," said Charlene Aleck, spokesperson for the Tsleil-Waututh Nation Sacred Trust Initiative. "The Trans Mountain pipeline violates our Indigenous rights and threatens the land, water, and climate. A growing number of insurers are backing away from the massive risks related to the fossil fuel sector. In 2021, the climate crisis hit Trans Mountain hard, when record setting floods and forest fires forced Trans Mountain to shut down. AIG must wake up to the significant financial, reputational, and environmental risks of the highly polluting tar sands sector and explicitly rule out insurance for all new tar sands transport projects."

AIG recently committed to restricting support for coal, tar sands, and Arctic energy. However, the insurer has yet to clarify whether its policies apply to tar sands transport projects such as Trans Mountain. Further, AIG made no commitments to end support for oil and gas expansion or protect human rights.

"While AIG's new climate commitments are a step forward, the company's failure to clearly rule out support for new tar sands transport projects like Trans Mountain is unacceptable," said Hannah Saggau, insurance campaigner with Public Citizen. "The recent pledge from Aspen insurance shows that this project has major material risks that no insurer should be involved with. Trans Mountain violates Indigenous rights, its costs are ballooning, and it would unleash disastrous levels of climate pollution."

The estimated cost of twinning the existing pipeline has soared from approximately USD $10 billion to $17 billion, and the Canadian government, which owns the project, has pledged not to give any more money to the pipeline.

"The fact that seventeen insurers have now ruled out Trans Mountain should alarm any financial institution considering supporting this project," said Sven Biggs, Canadian Oil and Gas Program Director for Stand.earth. "This pipeline is a risk to the climate, a risk for the communities it runs through, and too great a risk for investors and insurers."

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To Mr. Peter Zaffino, CEO of AIG:

We, the undersigned organizations, write to urge you to clarify and strengthen your recent climate commitments in line with the urgency of the climate crisis. While we welcomed your restrictions on support for the tar sands sector and your commitment to phase out fossil fuels, they do not go far enough. We call on you to explicitly rule out support for all new tar sands transport projects, including the Trans Mountain pipeline network, and adopt a policy to ensure that clients respect the Free, Prior, and Informed Consent (FPIC) of impacted communities.

Global climate harms and the urgent need to end our dependence on fossil fuels are only escalating. The latest report from UN climate scientists found that climate impacts -- driving displacement by extreme weather, contributing to water scarcity and food insecurity, and exacerbating violent geopolitical conflicts -- are worse than anticipated. The report concludes that any further delay in global action to mitigate climate change "will miss a brief and rapidly closing window of opportunity to secure a liveable and sustainable future for all."

The International Energy Agency found in its net zero roadmap that there can be "no investment in new fossil fuel supply projects" if we are to reduce climate pollution enough to reach net zero by 2050. United Nations Secretary General Antonio Guterres made the implications for insurers clear in his remarks at the Insurance Development Forum in June 2021: "We need net-zero commitments to cover your underwriting portfolios, and this should include the underwriting of coal -- and all fossil fuels."

To ensure a livable planet, insurers must end all underwriting and investment support for fossil fuel expansion. This includes the Trans Mountain tar sands oil expansion project and other tar sands transport projects, which enable increased extraction of tar sands, one of the most polluting forms of oil. The Trans Mountain Pipeline Expansion Project would enable the extraction of an additional 590,000 barrels per day of dirty tar sands bitumen, unleashing an additional 152 million tons of carbon dioxide emissions every year.1 It is incompatible to support the development of any new fossil fuel projects and be committed to a net zero by 2050 pathway.

Thus, your company's announcement to restrict underwriting for and investment in tar sands oil is a significant first step, but does not go far enough. To date, 16 insurers have ruled out coverage for the Trans Mountain pipeline expansion project. We have not included AIG in this number, as it is unclear whether your policy applies to new tar sands extraction, transport, or related infrastructure. Further, AIG's tar sands restrictions contain many gaps that allow for continued coverage of companies operating in the tar sands sector.

Therefore, with respect to your restrictions on the tar sands sector, we call on you to:

1. Explicitly end insurance for all new tar sands extraction, transport, and related infrastructure projects.

2. Strengthen exclusions for companies with operations in the tar sands oil sector, and commit to increasing thresholds for exclusion over time in order to fully phase out tar sands companies in line with a 1.5 C pathway.

3. Establish, and adopt as policy, robust due diligence and verification mechanisms to ensure clients fully respect and observe all human rights, including a requirement that they obtain and document the Free, Prior, and Informed Consent (FPIC) of impacted Indigenous Peoples as articulated in the United Nations Declaration on the Rights of Indigenous Peoples.

Additionally, we urge you to adopt all the demands for insurers outlined by the Insure Our Future campaign, in line with your company's stated goals to align with the latest climate science to meet the goals of the Paris Agreement.

The Trans Mountain pipeline and its expansion project pose grave threats to public health, human rights. For over a decade, Indigenous communities have resisted the expansion project, which does not have the consent of all impacted Indigenous communities, in violation of their internationally established rights. The expansion would elevate the risk of oil spills contaminating drinking water and sacred waterways, enable additional tar sands extraction that harms the health of local Indigenous communities, and increase oil tanker traffic through the Salish Sea that already threatens endangered orcas and sensitive marine ecosystems. Further, the U.S. refineries where the tar sands oil is processed disproportionately expose Black and Latinx communities to toxic air pollution.

The Trans Mountain pipeline network violates Indigenous rights as defined by the United Nations Declaration on the Rights of Indigenous Peoples, and threatens sacred lands, waterways, and our climate. The cost of the expansion project has soared from approximately USD $10 billion to $17 billion,2 and the Canadian government, which owns the pipeline, has announced that it will provide no additional public funds to the project. There are major financial, reputational, and environmental risks related to supporting this risky project and the highly polluting tar sand sector.

We urge you to meet our demands in order to achieve your company's stated climate commitments.

Sincerely,

Rebellion San Francisco Bay Area

Friends of the Earth US

Friends of the San Juans

Future Coalition, on behalf of the Youth Climate Finance Alliance

Georgia Strait Alliance

Greenpeace Canada

Leadnow Society

Living Oceans Society

Mothers Out Front

New York Communities for Change

Olympic Climate Action

Platform London

Pro Information Pro Environment United People Network (PIPE UP)

Rainforest Action Network

RAVEN (Respecting Aboriginal Values and Environmental Needs)

Shift: Action for Pension Wealth & Planet Health

Sierra Club

Sierra Club British Columbia

Stand.earth

Stand Up To Oil Coalition

Texas Campaign for the Environment

Tlseil-Waututh Nation Sacred Trust

Toronto350

Union of British Columbia Indian Chiefs

urgewald

Waterkeeper Alliance

The WaterWealth Project

West Coast Environmental Law Association

Wilderness Committee

Women's Earth and Climate Action Network (WECAN)

350.org

350 Deschutes

350 Eastside

350 Hawaii

350 Maine

350Wenatchee