Canadian banks funded oil and gas drilling in the Amazon

Canada’s financial heavyweights have pumped at least $1.3 billion into companies drilling for oil in the Amazon rainforest, new financial data reveals.

In an expansive study published Tuesday, advocacy groups Stand.earth and the Coordinator of Indigenous Organizations of the Amazon Basin (COICA), which represents over 500 Indigenous communities across nine countries, traced financial investments in oil and gas companies operating in the Amazon rainforest in Peru, Colombia, Brazil and Ecuador. The findings revealed approximately $26 billion invested in fossil fuel companies between 2009 and 2023.

Most of the oil exported out of the Amazon is destined for California, and the bulk of the financing comes from just eight major U.S., European and Brazilian banks: JPMorgan Chase, Itaú Unibanco, Citibank, HSBC, Banco Santander, Bank of America, Banco Bradesco and Goldman Sachs. But three Canadian banks and a private equity firm were also named as significant contributors between 2011 and 2019. They are RBC, Scotiabank, CIBC and former Toronto-based GMP Securities (which was acquired by Missouri-headquartered Stifel in 2019).

Even though Canadian banks are not among the worst offenders, Stand.earth lead researcher Angeline Robertson told Canada’s National Observer the findings are still cause for concern. As European banks increasingly adopt stricter climate policies and cease financing to fossil fuel companies, it appears Canadian banks step in to take their place. It’s one of the reasons RBC is now the world’s top financier of fossil fuels, according to the annual Banking on Climate Chaos report published earlier this year.

In 2022, RBC financed coal, oil and gas companies around the world to the tune of $55.4 billion, bringing RBC’s total financing of the fossil fuel sector to approximately $332.6 billion since the Paris Agreement was signed in late 2015.

Of the $1.3 billion worth of financing identified, the money flowed primarily to two Calgary-headquartered firms: Frontera Energy and Gran Tierra Energy. At least $390 million was used to directly finance Amazon oil drilling, with the remaining amount indirectly supporting the companies.

RBC, Scotiabank, CIBC, Stifel and Frontera did not return requests for comment by deadline.

Gran Tierra told Canada’s National Observer it has a policy called “Beyond Compliance,” which involves the company going beyond what is legally required on environmental, social and governance issues.

The Stand.earth-COICA study describes opposition to a Gran Tierra project in the Amazon, called APE la Cabaña. The local Inga people, who have seven reserves in the area, “claim that their right to free, prior, and informed consent has been violated by the Colombian government and the company,” the report reads.

Gran Tierra said in regards to that project, it is acting in accordance with Colombian law. The project was suspended in 2015 following a tribunal ruling that ordered the Colombian government to confirm Indigenous Peoples lived in the area. In 2022, the company ultimately chose not to move ahead with drilling in the area, “however, (Gran Tierra Energy) has fulfilled all the orders issued by the legal, environmental, and prior consultation authorities,” a spokesperson said.

Frontera and Gran Tierra operate “in the Colombian and Ecuadorian Amazon, and Frontera formerly operated in Peru,” Robertson said. Frontera “actually operated one of the most notorious blocks in the Amazon for pollution, which was Block 192.”

Advocacy group AmazonWatch has described Block 192 as “Peru’s most important oil field,” responsible for about 20 per cent of the country’s oil output. Oil in Block 192 was first discovered in the early 1970s by American company Occidental Petroleum Corporation (Oxy), and ever since, companies have been drilling. In 2007, AmazonWatch published a report detailing environmental and Indigenous rights abuses carried out over decades, including Oxy’s use of outlawed technology and its dumping of 850,000 barrels of toxic oil byproducts into the river used by the Indigenous Achuar people. Over 30 years, more than nine billion barrels of this poison was dumped. Oxy was sued, and the case was settled in 2013 with terms undisclosed.

Frontera, which still operates in the Amazon, left Block 192 in 2021 without cleaning up the site, Robertson said.

“If they exited Block 192 without fulfilling their remediation commitments, then what is their practice going to be in other places?” she said.

In a statement on behalf of COICA, Colombian Indigenous leader Fany Kuiru called oil expansion in the Amazon an ongoing threat to important ecosystems and Indigenous territories, putting at risk uncontacted peoples who depend on the Amazon’s ability to provide.

“Combined degradation and deforestation confronts us with an imminent point of no return that, for our peoples, translates into chronic diseases as a consequence of contamination, the loss of our food sovereignty due to heavy metals found in fish and the water we drink, and systematic violence against those who defend our home,” she said. “The banks, finance companies, and other companies that invest in the region and whose profits are derived from oil exploitation are accomplices in the death of our leaders, of our cultures and ways of life.”

The Amazon rainforest is also a vital ecosystem for the planet, representing the largest carbon reservoir on any continent. It sucks planet-warming carbon dioxide out of the air, but as climate change worsens, the Amazon is at risk of breaking down, climate scientists warn. The rainforest will transform into dry grasslands as the Earth heats up, causing far less rainfall and releasing billions of tonnes of CO2 into the atmosphere.