Citibank responds to pressure from Indigenous leaders and environmental organizations with new Amazon policy: a step forward to address oil and gas expansion

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GLOBAL – Last week, Citibank released its new environmental and social risk management (ESRM) framework, which pledges to no longer provide project-related financing for oil and gas expansion in Amazonia. Stand.earth and the Coordinating Body of Indigenous Organizations of the Amazon Basin (COICA) welcome this step forward, but call on Citibank to adopt stronger measures that include a geographic exclusion policy for all oil and gas financing in Amazonía, which would prevent and mitigate the risks to Indigenous Peoples, biodiversity, and avert an imminent tipping point in the Amazon.

The new policy excludes financing for project-related financial products or services for expansion of oil and gas operations in the Amazon. While the updates are an improvement over previous policies, which made no such explicit exclusion, project-related deals are estimated to be only 18% of Citibank’s overall direct financing for Amazon oil and gas. That leaves out an estimated 82% of the bank’s financing in the Amazon, according to research conducted by Stand.earth Research Group using the Amazon Banks Database. For the deals that would be covered by the new exclusion policy, key terms including ‘The Amazon’, ‘project-related’ and ‘expansion’ must be defined in order for the public to understand if these changes will have a positive impact. Citibank needs to provide clear definitions as soon as possible, including adopting the RAISG definition of Amazonia in line with other banks’ policies.

The policy update comes after years of pressure from Amazonian Indigenous organizations and environmental civil society groups, and amidst a mobilization of nonviolent civil disobedience in New York City against the bank dubbed “Summer of Heat,” where activists have called on the bank to end their funding of fossil fuel projects in the Amazon and beyond. Advocacy groups recently exposed the bank’s position as the top bankroller financing Amazon oil and gas and the world’s second largest fossil fuels financier. Stand.earth and COICA’s “Greenwashing the Amazon” report shone a spotlight on major gaps in Citibank’s risk and exclusion policies that are now partially addressed through this revised risk framework.

This update coincides with the start of fire season, and just months after the basin registered its worst drought in over 120 years. With over US$ 2.3 billion of direct financing to oil and gas in the Amazon over the past 20 years, Citibank is the most complicit in the sector’s destruction of the largest rainforest on Earth. In the last 20 years, Citibank was a major financier of some of the most notorious companies behind oil exploitation in the Amazon. Examples include PetroEcuador, the state-owned company responsible for the drilling in Yasuní National Park and threatening the last uncontacted peoples in Ecuadorian territory; and Petroperú, also a state company pursuing controversial oil expansion amid Indigenous resistance in Perú.  

Another important aspect of the introduced changes is that Citibank also commits to evaluating the risk profiles of all their oil and gas clients globally. Triggers for this enhanced screening include a) the geographic location of oil and gas assets, b) the risks associated with oil and gas activities, c) the overlap with areas of high caution (including the Amazon), and d) any patterns of regulatory violations, safety incidents, community opposition or litigation related to environmental and social issues. Specific to the Amazon, Citibank now stipulates that any general corporate purpose transactions for clients with operations in the Amazon will require enhanced due diligence. This is a step in the right direction for remedying the greenwashing highlighted in Stand and COICA’s recent “Greenwashing the Amazon” report.

These new policies suggest that deals like the US$ 500 million project-related bond deal in 2023 for Hunt Oil Peru should be a thing of the past. Hunt Oil Peru is a ‘pure play’ company focused solely on the Camisea Gas Project. It holds 25% interest in two gas power plants in Peru. In 2013, the UN called for the “immediate suspension” of any plans to expand the Camisea project, due to the high likelihood that by further intrusion into the Nahua-Nanti Reserve, territory of several Indigenous Peoples in voluntary isolation and initial contact, there could be an increased risk of disease and death. The deal is project-related, and the company is operating in an area of high caution with large-scale Indigenous opposition. There will be a close eye on Citibank’s Amazon-related deals in the coming months to see if deals like this continue to pass the bank’s new due diligence framework.

Finally, the policy falls short of recognizing the damaging role of Citibank-funded oil traders like Gunvor. Gunvor recently pleaded guilty for bribery and was ordered to pay approximately $662 million by the US Justice Department for a series of corruption scandals and penalties in the US and Switzerland. Unfortunately, the new Citibank policy does not mention any exclusions or screens related to oil trading. The bank’s policies must address the risks of all their areas of finance, and include special considerations for the high degree of risk posed by intermediaries, current clients of the bank.

On Citibank’s new ESRM policy report, COICA and Stand.earth leaders offered the following statements:

Fany Kuiru, General Coordinator of the Coordinating Body of Indigenous Organizations of the Amazon Basin (COICA), said:

“Citibank has invested more than $2 billion in a massive expansion of oil and gas in the Amazon, invading our territories, polluting our rivers and making thousands of communities sick. While Citibank’s new policy is an important step toward ending oil and gas, it is insufficient with the Amazon on the brink of the tipping point. Indigenous leaders have repeatedly expressed to Citibank and its state partners the urgency of abandoning oil and gas exploration and exploitation in the face of an impending tipping point. Currently, we are facing profound climatic instability in the region. In Brazil, what began as a severe drought has turned into a humanitarian emergency due to flooding in the south of the country. Once again, I invite the leadership of Citibank to witness firsthand the effects of their decisions on the Amazon, our home. I urge Citibank to stop financing extractivism that threatens Indigenous Peoples and our livelihoods, while annihilating the biodiversity of our rainforest and driving its destruction.”

Martyna Dominiak, Senior Climate Finance Campaigner at Stand.earth, said:

“For over a decade, Citibank has been the largest and the most influential financier of Amazon oil and gas. The bank financed companies responsible for endangering uncontacted Indigenous Peoples, contaminating rivers, and driving oil expansion with rampant corruption. Citi’s new policy addresses some of these issues and is a welcomed next step. But with the Amazon heading for collapse, we need greater action commensurate with the problem. HSBC, another major Amazon oil and gas financier, has already shown how it can be done. Citibank must follow suit and urgently commit to ending oil and gas financing in the Amazon – for the sake of Indigenous Peoples, Earth, and humanity.”

Hannah Saggau, Senior Climate Finance Campaigner at Stand.earth, said:

“Despite new restrictions on Amazon oil and gas financing, Citi is still the world’s #2 fossil fuel financier. While our communities experience devastating climate chaos from fires, floods, hurricanes, and deadly heat, Citi is perpetuating environmental racism and Indigenous rights violations by funneling over $396 billion to the fossil fuel industry since 2016. The bank is reacting to our pressure with this positive step, but the pressure will continue until we see more significant reform of their fossil fuel financing.”

Angeline Robertson, Senior Researcher at Stand.earth Research Group and Lead Author of “Greenwashing the Amazon”, said: 

“Our recent report, ‘Greenwashing the Amazon’, showed how Citibank greenwashes their sustainability policies by ignoring that only 2% of the area of Amazonia, the most biodiverse place on the planet, is covered by their biodiversity exclusions. We will observe closely whether Citibank’s new Amazon exclusion for project-related financing for oil and gas expansion will truly impact the bank’s financial decisions in the coming months and years.” 

Exit Amazon Oil and Gas

Since Stand.earth launched the campaign Exit Amazon Oil and Gas, banks including Natixis, BNP Paribas, ING, and Credit Suisse have committed to ending their financing of trade in oil from ports in Ecuador and Peru, which covers much of the crude oil trade from Amazonia including the flow from the Colombian Amazon. In addition, BNP Paribas, Société Générale, Intesa Sanpaolo, HSBC, Standard Chartered, and most recently Barclays have also committed to various oil and gas exclusion policies across the Amazon, some also on a corporate level. 

Citibank’s move, although far from ideal, sends an important signal to other banks who hold the most influence in the region: JPMorgan Chase, Bank of America, and Santander. These banks must acknowledge the risk posed to Amazonia and Indigenous Peoples by oil and gas extraction, the legacy of corruption, pollution, deforestation and violence caused by extractive industries, and the responsibility banks have to uphold their commitments to protecting biodiversity, safeguarding human rights, and fighting the climate crisis. 

— ENDS —

Notes to the editors:

Stand.earth and COICA recommend that banks adopt a geographic exclusion covering all transactions involving the oil and gas sector in the Amazon. This is a similar, but more comprehensive, approach to the Arctic exclusions adopted by banks in 2020 to protect the globally significant environmental and social values of that region. This is proposed as the only viable solution to avert a tipping point in the Amazon, which must remain at least 80% protected in order to avoid a tipping point, stop biodiversity loss, mitigate climate change, and uphold Indigenous Peoples’ and local communities’ rights.

Contacts:

Europe: Martyna Dominiak, martyna.dominiak@stand.earth

Americas: Lays Ushirobira, lays.ushirobira@stand.earth
Cari Barcas, cari.barcas@stand.earth
Bryan Ludeña, bryan.ludena@coicamazonia.org