BayernLB under pressure over Dakota pipeline investment

Bavaria's state bank is set to invest about $120 million in the Dakota Access Pipeline, which threatens a Native American reservation and drinking water. Other banks have already sold their stake.

Deutsche Welle, 6 February 2017

There aren't many members of the Sioux tribe living in Bavaria but, thanks to the tentacles of international finance, the protests against the Dakota Access Pipeline (DAPL) being built near the US's Standing Rock Indian Reservation have reached the state capital, Munich.

Last week, protesters from an alliance of NGOs arrived on the doorsteps of the BayernLB bank to deliver more than 700,000 signatures collected via worldwide petitions against the investments of 17 financial institutions into DAPL. These included more than 220,000 signatures specifically aimed at BayernLB's contribution that had been collected in a few days. By Monday 6, the online petition had reached close to 300,000 signatures.

Despite an invitation from the environmental campaigners Urgewald, Bavaria's state bank declined to send any representatives outside the building to receive the petition. "But we were allowed to go in with a delegation of three people, and we gave the petition to the press spokesman," said Regine Richter, banking specialist at Urgewald.

The bank itself is unwilling to give interviews on the subject and in response to DW's request would only send the public statement it issued in December, which made many conciliatory noises. "BayernLB is following the running discussions about the route of the pipeline very carefully and, as part of the consortium financing the pipeline, supports an amicable result of the discussions between the parties," it read.

Wait and see

BayernLB said it was waiting on a report from the US law firm Foley Hoag that was commissioned in December to look into how the local indigenous people had been consulted for the project. That report is due out later this month, but it may come too late. In January, US President Donald Trump signed an executive order decreeing that the environmental review for the project be fast-tracked.

"Nobody is really sure that means, but we are concerned that DAPL could get the green light any day now," Nick Pelosi, corporate engagement director for the campaign group First Peoples Worldwide, told DW. "It's such an urgent matter at this point that we really don't have time."

Not only that: The study is being conducted behind closed doors and may be no more than a desktop assessment. "From what we understand, it is a study on tribal consultation, which is the crux of this issue - that the tribe was not consulted properly about this pipeline," Pelosi said. "But nobody's reached out to the tribe, so it's essentially a study on consultation without any consultation."

The 17 banks insist that the loans for DAPL - amounting to $2.5 billion (2.3 billion euros) - are now legally committed. "But some have shown concern and that they are willing to exert the limited influence that they have," Pelosi said.

"I definitely think they're feeling the pressure," he said. "But what the tribe is asking is not necessarily for the banks to pull out, but to use their influence as project lenders to pressure the company into rerouting to avoid their treaty territory."

The banks say that influence appears to be very limited indeed: They argue that they can't impose new conditions on the loans and that it isn't their role to determine the route. "Which is true - it's the US government's responsibility - but we're asking them to support the reroute, not dictate it," Pelosi said.

Dozens of protesters have been arrested
at the Standing Rock reservation

Passive bank

Compared with other banks, BayernLB has been particularly recalcitrant. "BayernLB was one of the few that outright rejected our request for dialogue," said Pelosi.

"BayernLB is being much too passive," Richter said. "Banks like the Dutch ING and the Norwegian DNB are at least expressing public criticism of the pipeline consortium's behavior or are selling stakes in the companies involved."

Meanwhile in Germany, BayernLB's involvement in the project (a $120 million contribution to DAPL) has raised some political hackles - firstly because it is partly owned by the state, and secondly because it received a colossal taxpayer-funded 10 billion-euro ($9.3 billion) bailout during Europe's financial crisis in 2008.

"BayernLB should not be allowed to support the dirty business of climate denier Donald Trump," said Anton Hofreiter, the Greens' parliamentary leader and a native of Bavaria. "This project destroys the environment, is a risk for the drinking water from the Missouri River and, at the same time, desecrates the Native Americans' cultural heritage."

Hofreiter, along with other German politicians, is sure that BayernLB's commitment to the project could be reversed by Bavaria's state government. "I'm sure it's possible," Frank Schwabe, Bundestag member for the Social Democrats, told DW. "The bank has oversight committees, and there is political influence on that, so it would be good if the politicians in Bavaria would take a clear position on it. We're discussing the issue of company and bank responsibility more and more, and I think that a state bank in particular needs to stick to that."

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