(Reuters) French bank Natixis said it plans to stop financing the trading of Ecuadorian crude oil by 2022, after pressure from campaigners over the trade’s links to environmental damage in the Amazon.
The role of European banks in backing the trade came under scrutiny in August, when a report by advocacy groups Stand.earth and Amazon Watch named six European banks as major financiers of Ecuadorean oil exports to U.S. refineries.
Natixis was one of those named as being involved in the trade and at the time said it would look into the concerns raised by the report, which tracked shipments worth around $10 billion over the last decade.
Indigenous communities in the Amazon region have been resisting the oil industry’s push into their territories, part of the world’s largest rainforest and which is steadily being destroyed by businesses involved in resource extraction and farming.
As well as the felling of the forest, the oil industry has been responsible for spills that have contaminated local rivers, a key source of food and water for the local population.
Natixis told Reuters it had amended its official policy on April 7 and would now look to “significantly reduce” the volume of Ecuadorian crude it finances in 2021 and stop all financing by April 2022.
Analysis of U.S. customs data by Stand.earth and Amazon Watch said Natixis financed cargoes of 5.5 million barrels of oil from the Ecuadorian Amazon from July to December last year.
“Natixis constantly enhances its ESR (Environmental and Social Responsibility) policies in line with its commitment to halt financing for the most sensitive sectors with regard to both human and environmental impacts,” a Natixis spokesman told Reuters.
“Natixis has been proactively reducing its exposure to the trade financing of Ecuadorian crude oil since mid-2020, notably by declining to finance any new clients and by reducing its number of existing clients, and has committed to a complete exit from the sector by April 2022.”
Petroecuador responded in a statement that it maintains “the highest standards required by the oil industry” and that projects are subject to environment ministry oversight.
“We carry out a community relations program that provides 890 communities with health, education, cultural support and infrastructure,” it added.
Marlon Vargas, president of the Confederation of Indigenous Nationalities of the Ecuadorian Amazon, said the decision by Natixis was “a great step forward and sets a precedent for more banks to reflect on their actions.”
Tyson Miller, Forest Programs Director at Stand.earth, said the move showed that oil from such a critical, bio-culturally diverse region would increasingly be seen as high risk and controversial.
“It’s the last place on Earth where oil drilling should be expanding.”