At least 10 human rights and environmental groups in Uganda and Tanzania, with support from international backers, on Tuesday filed a formal complaint against US insurance giant Marsh for allegedly violating guidelines for responsible business conduct. This is in regard to the company’s role as the broker for underwriting services for the East African Crude Oil Pipeline (Eacop) whose construction is expected to start this year.
The complaint alleges that the New York-based insurance giant, a member of the Marsh McLennan Group, breached the guidelines of the Organisation for Economic Cooperation & Development (OECD) for multinational enterprises and responsible business conduct by serving as insurance broker for the controversial Eacop, the activists said in a statement.
The complaint lodged with the US National Contact Point (NCP) — an office within the Department of State tasked with handling allegations against American companies — is the latest in a string of setbacks that the developers, potential financiers and insurers of the project have faced.
“An insurance broker’s role is often invisible to the public, which allows them to avoid accountability, but Marsh deserves to be scrutinised,” said Coleen Scott, legal and policy associate at Inclusive Development International (IDI).
The US-based IDI is one of the forces backing non-governmental organisations in Uganda and Tanzania to pile pressure on sponsors of the world’s longest heated pipeline to abandon the project, terming it a ticking bomb in the climate crisis but also a human rights issue that has seen an alleged 100,000 people displaced from their land.
“Marsh is playing a critical role enabling the East African Crude Oil Pipeline to move forward in the face of widespread opposition and overwhelming evidence that the project will be a disaster for Ugandans and for the planet,” Ms Scott added.
A summary of the complaint says that Marsh should be scrutinised based on OECD guidelines, which set out principles and standards for responsible business conduct across a range of issues, including human rights and the environment.
These standards apply to multinational enterprises with operations or headquarters in the rich global north countries, including the United States.
Ethical business conduct
While the guidelines are non-binding, modelled against the UN Guiding Principles on Business and Human Rights, they are an important and widely accepted international standard for ethical business conduct.
This is the first NCP complaint filed against an insurance broker anywhere in the world, and the activists want the Department of State office to review the allegations against Marsh and advise the company to halt its Eacop-related activities, in line with these standards.
The groups opposed to the construction of the 1,443km crude oil pipeline from Hoima city in western Uganda to Tanzania’s Indian Ocean port of Tanga have accused the project’s lead investor TotalEnergies and its partners of violating human rights and causing harm to the delicate Albertine rift ecosystem.
The allegations include improper land acquisition processes characterised by failure to provide prompt and adequate compensation, intimidation, harassment, threats and arbitrary arrests of community members, environmental and human rights defenders, as well as journalists critical of the project.
On January 24, as Uganda launched its first drilling rig for the Chinese operated Kingfisher oilfield, the police blocked a public debate on the impacts of Eacop and arrested its organiser, Bob Barigye, which IDI claims is a sign of increasing repression against critics of the project.
The complaint also argues that Marsh is going ahead to broker insurance for the project on the back of inadequate consultations with the affected communities, threats to natural resources relied upon by communities, including the risk of oil spills affecting vital freshwater resources such as Lake Victoria, which supports 40 million people.
According to the complaint, there will be immense and irreversible harm to local ecosystems and habitats along the pipeline’s route, which passes through numerous protected wildlife areas in Uganda and Tanzania and will lead to increased carbon emissions that will tip the world closer to a climate catastrophe.