Is EACOP the World's Most Controversial Fossil Fuel Project?
The East African Crude Oil Pipeline — often shortened to EACOP — has long been one of the world's most controversial fossil fuel projects.
The project has drawn criticism, not only from locals in Tanzania and Uganda, but from climate conscious people around the world.
In October 2024, protestors took to the streets of London to express their discontent with EACOP. Specifically, the protestors congregated outside the offices of London's leading insurance companies, many of which are directly involved in the project.
The premises of Allianz, Hiscox and Chubb were targeted for action, with activists staging mass 'die-ins' unfolds outside the iconic Lloyd's of London headquarters.
Here, they vehemently demand discontinuation of support for the highly controversial EACOP, a lengthy and contested project reliant on insurance for its operational security.
Why is EACOP so controversial?
Speaking outside the HQ of Hiscox — a key insurer for EACOP —during the protests, Nicholas Omonuk Okoit of the End Fossil Occupy Uganda group highlighted the deep-seated injustices perpetuated by EACOP's "corporate neo-colonialism".
"European countries are profiting from African resources at the expense of people and the planet," he explained.
Nicholas' message has resonated with activists around the world, many of whom joined him in October's protest.
The deeper controversies surrounding EACOP
There are myriad reasons why the EACOP project is deemed unacceptable by many, particularly in East Africa.
Environmentalists are alarmed as the pipeline threatens ecologically sensitive zones including protected areas and crucial wetlands.
Additionally, the venture could devastate nature reserves vital for endangered species such as elephants, lions and chimpanzees, and risk contamination of vital water sources like the Lake Victoria basin.
From a climatic perspective, it's poised to produce an enormous 379 million tonnes of CO₂ equivalent emissions throughout its life.
Rights for human beings are also at risk as the pipeline proposes the displacement of more than 100,000 people, many of whom report coercion and insufficient compensation for their land.
Critics face harassment, threats and have been detained — a total of 47 since 2020.
Economically, the project prioritises foreign companies over local enterprises, foreseeing a scant 3,500 permanent jobs from earlier tens of thousands projected.
Moreover, TotalEnergies benefits from a 10-year tax relief, thereby limiting fiscal inputs to Uganda and Tanzania.
Financially, significant international banks and insurers are withdrawing support due to these compounded environmental and societal concerns.
How protests are giving insurance firms sleepless nights
Environmental campaigns are not new to targeting insurtech industries — their longstanding aim is to deter these companies from investing in fossil fuels.
In a statement by Ilana Winterstein of the Insure Our Futures campaign, she said the protests spotlight "the key role the insurance industry plays in the climate crisis".
She emphasises on the critical need for insurers to lead, converting these protests into an incentive for constructive change within the industry.
Indeed, some protests have proven effective. For instance, Allianz scaled back its investment in coal projects in the mid-2010s owing to environmental pressure.
Following similar protests, Probitas also pulled support for both the EACOP and the West Cumbria coal mine in the previous year, underlying a successful concerted effort by campaigners.
More recently, Sierra Signorelli, CEO of Commercial Insurance at Zurich, announced their company's alignment away from oil and gas projects, reinforcing a disconnect between such initiatives and their ultimate goal of net zero emissions by 2050.
No doubt, these protests pose challenging questions for the insurance industry, but they also highlight the potential for insurers to emerge as 'unlikely heroes' in the global environmental narrative by opting out of insuring fossil fuel expansion.
Oliver Baete, the former CEO of Allianz, articulated the company's position after ceasing support for coal projects in 2015.
He said: "As a leading insurer and investor, we want to promote the transition to a climate-friendly economy."
This statement reflects a growing trend among insurance companies to reconsider their involvement in fossil fuel-related investments and underwriting, as they recognise the long-term risks associated with climate change and the potential for un-insurability in certain sectors.
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