DAPL’s Financial Risks Raise Red Flags on Wall Street; Banks Behind DAPL Hire Independent Human Rights Expert

(Credit: Wikimedia)

We wrote Thursday about how the Evangelical Lutheran Church in America (ELCA) is engaged in shareholder advocacy around the Dakota Access Pipeline (DAPL). The ELCA is one of several religious organizations raising moral questions of corporate social responsibility regarding DAPL.

In a new turn of events, Wall Street, too, is raising red flags about DAPL. Financial markets are simply looking at the bottom line, apparently becoming skittish of companies investing in the pipeline because of unidentified financial risks. They are asking tough questions, according to Bloomberg, a business news service.

The following is an excerpt from a Dec. 1 Bloomberg story headlined: Investors Take Stand on Dakota Access Pipeline:

Investors concerned about the Dakota Access Pipeline have started submitting shareholder proposals to the energy companies building the pipeline as well as to the lenders behind it, urging the companies to better disclose the risks to their business from the controversial investment.

The third largest U.S. pension plan, the $178.6 billion New York State Common Retirement Fund, is one of the investors leading the charge.

Click on the link above for the full story. It’s hard to know how optimistic to be about these reports, but we’ll take the good news where we can get it.

Meanwhile, companies providing credit for the pipeline seem concerned about potential risks, too. For more positive news, keep reading.

Divestment advocates have focused on banks such as Citi, Wells Fargo, and U.S. Bank that are financing DAPL-related companies. The movement seems to have started with research by Food & Water Watch. Its work got picked up by Yes! Magazine, Democracy Now, and other outlets.

Citi issued a statement Nov. 30 that seems to indicate that public pressure against the pipeline and its financial backers is having an impact. The Citi Blog reads in part that “Citi has been closely monitoring developments related to the Dakota Access Pipeline (DAPL), and we continue to be concerned about the situation.” Further:

Foley Hoag LLP, an independent human rights expert, has been retained to advise the lenders to the Dakota Access Pipeline and to review various matters related to the permitting process, including compliance with applicable law related to consultations with Native Americans.

As we have reported before, two Norwegian financial institutions already have pulled their investments — DNB (the largest bank in Norway) and Odin Fund Management. (See blog.) The Minneapolis City Council and the city of Seattle are reviewing their relationships with companies financing DAPL.

Fracking Has Contaminated Drinking Water, EPA Says

In a related matter, the Environmental Protection Agency has reversed a preliminary finding and concluded that fracking can contaminate drinking water, according to a New York Times story. DAPL is supporting the process of “hydraulic fracturing, the oil and gas extraction technique also known as fracking.”

DAPL is part of the infrastructure supporting fracking.

According to the story:

Fracking is subject to only light federal regulations. The Obama administration has put forth one rule intended to protect water from fracking waste. But that rule applies only to fracking on public lands, which hold about 100,000 fracking wells — representing about 10 percent of all fracking in the United States. The vast majority of fracking occurs on state or private land and is governed by state and local regulations.

Environmentalists seized on the new report as evidence that the federal government should strengthen federal protections on fracking.