RBS accused over funding for tar sands 'blood oil'
Tuesday 02 March 2010
Royal Bank of Scotland (RBS) stands accused of "cashing in on blood oil" from tar sands just days after the taxpayer-owned bank was battered by the £1.3bn bonus scandal.
The bank denied the charge, maintaining that it has "very limited direct involvement" in such projects and pointing to its role as a leading arranger of finance for renewable power schemes.
Although Canada's tar sands contain quantities of recoverable oil second only to Saudi Arabia, the extraction is highly controversial, and green groups claim it damages local habitats and boosts global climate change.
In total, UK banks have underwritten 17 per cent of all the tar sands-related deals in the last three years, according to research by groups including the World Development Movement and the think-tank Platform. RBS has underwritten the largest number of loans, accounting for more than $7.5bn (£5bn) or 7 per cent of the global total, said the report. The even greater criticism is that $2.5bn-worth of the total has taken place since the bank was bailed out with public money in October 2008.
"RBS has been involved in providing more money in loans to destructive tar sands companies than any other UK bank," Mel Evans, from the finance and climate team at Platform, said. "When RBS executives get their bonuses, they are being rewarded for enabling oil companies to devastate traditional ways of life for indigenous communities in Canada, while making the problems of climate change much, much worse."
RBS said yesterday that it does not recognise the $7.5bn figure, and maintained that the bank had not provided project finance for tar sands since 2006. "We assess lending, investment and services decisions on an individual basis and take into account relevant social, ethical and environmental issues as a part of that process," a spokesman said. "We are determined to play our part in the global shift to a more efficient, innovative and equitable use of resources."
The report's authors are calling on the UK banking sector to stop providing finance to any companies involved in the extraction of unconventional oil. Politicians should use the public's 84 per cent stake in RBS to veto financing for tar sands, they said.
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