Norwegian Bank Pulls out of Dakota Access Pipeline

A press release claims that Norway's largest bank, DNB, has responded to a Greenpeace-supported petition by selling its assets in the controversial Dakota Access Pipeline. 

For those unfamiliar with the Dakota Access Pipeline, the US-based pipeline is being developed by Texas-based Energy Transfer and is intended to span 1,172 miles (1886.151km). An estimated 85% of the pipeline is completed already, and once finished it will reportedly carry 500,000 gallons of crude oil each day. 

It will cross under a lake that the government owns, over traditional lands claimed by indigenous communities, including burial sites, without those communities' consent, and it will cross the Missouri River, the longest river in the US and one of the country's most important watersheds.  

Federal regulators have temporarily halted the project as they re-review the proposal. 
President Obama has expressed hope that they can still address the concerns of indigenous and other activists. 

The project has resulted in numerous human rights violations, many of which have been outlined by the UN Special Rapporteur on the Rights of Indigenous Peoples, Victoria Tauli-Corpuz and the UN Special Rapporteur on Freedom of Peaceful Assembly and Association, Maina Kiai. Amongst the worst human rights violations are the use of police dogs and private military and security companies to disrupt protesters encamped near a construction site. Police dogs bit protesters, while police have reportedly used rubber bullets and mace, and there have been allegations that detained protesters "were housed in what appeared to be dog kennels, without bedding or furniture." 

The response to protests has also led to absurd attempts to silence media reports. Amy Goodman was famously arrested and charged with "participat[ing] in a 'riot'" because she reported from the protest area. During her 3 September report, she showed images of police releasing dogs on protesters. The violent imagery has been shared more than 300,000 times on Facebook (at the time of this writing). Despite her association with the news outlet Democracy Now, the state's attorney general argued that she was "basically" protesting herself since "[e]verything she reported on was from the position of justifying the protest actions." A judge dismissed that case in mid-October, but it represented a chilling attempt to silence the media. 

Despite the protests and the attendant human rights violations, the CEO of Energy Transfers has indicated the company will not (voluntarily) re-route the pipeline. President-elect Donald Trump has a $2 million dollar investment in the $3.7 billion pipeline.

Pressure has mounted on companies invested in the Dakota Access Pipeline. As outlined in the UN Guiding Principles on Business & Human Rights ("UNGPs"), all businesses are expected to respect human rights, and should utilize due diligence to identify potential risks they pose to the rights discussed in the Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights, and the International Covenant on Economic, Social and Cultural Rights, collectively known as the "International Bill of Human Rights." 

By allowing (requesting?) state police and private military and security companies to disrupt peaceful protests, to cage protesters in dog kennels, and to arrest journalists, all for the company's benefit, Energy Transfers failed to meet its responsibility to respect. If it had conducted adequate human rights due diligence, it would have undertaken consultations with the relevant indigenous communities. Data about impacts would have been disaggregated so as to determine any disproportionate impact on minority groups. The consultations and the disaggregated data should have shown the company's human rights impacts at the outset. 

Knowing those impacts, any company in Energy Transfers' position would be expected to work to mitigate the impacts and to remedy and repair any impacts it could not mitigate. Mitigation in this case would include re-routing the pipeline so as to avoid indigenous communities' sacred lands and to limit the potential impact on the Missouri River watershed. 

Instead, the Dakota Access Pipeline was re-routed to avoid an impact on a populated city, Bismark. This meant the pipeline was moved closer to the indigenous communities, leading to a larger negative impact. The move has been characterized by the noted activist Rev. Jesse Jackson as "the ripest case of environmental racism I've seen in a long time. 

Energy Transfers' actions implicate all of its associated companies, including investors such as DNB. All of this is outlined in the UNGPs, which expects companies to take responsibility not only for their direct impacts, but also the impacts that occur through their business relationships. 

Collectively, DNB's ownership and loans appear to have provided roughly 10% of the Dakota Access project budget. Even when a company like DNB is not directly responsible for a human rights violation, it is still expected to use its relationship and leverage to affect positive change. If its efforts are ineffective, it must determine (1) if the relationship is necessary for its operations and (2) if it can remedy its impact. If a relationship is not necessary -- and it's difficult to imagine how a loan relationship can be 'necessary' for the bank making the loan -- and the impact cannot be remedied, the company likely needs to cut off its relationship. 

It appears from its divestment, DNB has determined its leverage cannot adequately impact Energy Transfers' plans or conduct. The good news is that it recognized this and divested its ownership interests. The bad news is that DNB has not yet cancelled its loans. 

The bifurcated response by DNB raises a few questions. Since DNB is Norwegian, one might assume that the company has received adequate guidance about incorporating human rights into its loan conditions. If they have, why is the company continuing to provide three loans to Energy Transfers? If there is no human rights clause in the loan agreement, why not? 

DNB should explain its ongoing relationship with Energy Transfers. If the company has a human rights clause in its loan terms, then it needs to explain why it is still supporting these projects when it has recognized that Energy Transfers' actions are causing human rights violations. Either it must believe it can affect change -- in which case its ownership divestment may have been premature -- or it must recognize such attempts are futile and cancel its loans.

If, on the other hand, the company failed to include human rights in the loan terms, this should be treated as a potential 'learning moment,' in which the company assesses its practices and reforms so as to ensure its ongoing respect for human rights. But the Norwegian government and civil society should make it clear to DNB that the company only gets one 'learning' moment. Any repetition of this conduct should come with significant consequences from the state and from consumers who use the bank. 

This may be more difficult for the Norwegian government than it is for individual consumers. It turns out that the Norwegian sovereign wealth fund (a state-operated investment entity that generates revenue for the state) and the National Local Government Pension Fund (a state pension fund) have both invested in companies involved in the Dakota Access Pipeline. The state's own commitment to human rights should therefore be questioned. 

Norway is often hailed for its human rights compliance, but a state that benefits financially from repeated -- and serious -- violations of indigenous peoples' rights cannot be a paragon of human rights virtue. If Norway wants to retain the respect it has earned in the area of human rights, it must do the necessary work to actually comply with human rights. 

In this case, the Norwegian funds and the Norwegian state should be using their leverage to ensure the pipeline is rerouted so as to protect the indigenous community. If they cannot get the project rerouted, they need to terminate their relationships with the companies supporting the project. Anything less and we should assume the state is knowingly benefiting from ongoing human rights violations in the US, and condemn it for doing so.

UPDATE:  Since first writing this post, the situation for Dakota Access Pipeline protesters appears to have gotten worse. Much worse. Video from protesters last night indicate that the police used water canons on the protesters - at night in 26F/-3C weather. The police claim that water canons were not used, but instead that "water was only deployed to put out fires set by" the protesters. The use of water canons in this situation can give rise to a violation of the prohibition on cruel, inhuman or degrading treatment or punishment. It may even give rise to a violation of the prohibition on the use of torture, depending on the various factors. Given the gravity of these accusations, the US government is under an obligation to institute a proper investigation into the water canon allegations -- investigations that should not be done by the local Sheriff or state police agencies, but from independent and external agencies. Additionally, DNB and the Norwegian funds should begin their own investigation in line with traditional human rights due diligence.