Black money pays for suffering

By Liz Murray



IN 2008 the UK government spent more than £45 billion pounds of taxpayers’ money propping up the Royal Bank of Scotland after a catastrophic financial loss.  The UK government now owns 83% of RBS on behalf of the taxpayer. Three years later, we see a huge government deficit and similarly large cuts in public spending. 

These two things are not coincidental.  RBS’s bail-out was enough to fill the cut to the Scottish budget this year thirty-five times over.  We should be very angry about this.

If that wasn’t bad enough, RBS is now investing our money in companies whose activities are trampling human rights and threatening to make runaway climate change a reality. And the government, despite being majority shareholder, refuses to do anything about it.

RBS is the UK bank most heavily involved in financing the global fossil fuel industry and is using our money to finance companies that mine and drill for oil, coal and a new carbon-intensive fuel known as tar sands.  RBS’s involvement in financing tar sands mining is contributing to the expansion of this highly polluting industry.  In fact in the last year alone, RBS raised £2.2 billion of finance for companies involved in tar sands mining in Canada, the global test-bed for the industry.  And the effects of this are devastating. 

The Indigenous First Nation people of Northern Alberta have had their land and water supplies decimated by tar sands mining in what has been described as the most destructive industrial project on earth. Oil companies have clear-cut ancient forests and strip mined the soil beneath in an area the size of Wales, and then used huge quantities of fresh water and natural gas to separate the oil from bitumen. This process leaves behind giant toxic lakes that are linked to abnormally high rates of cancer in neighbouring communities and are large enough to be seen from space.  The ancestral lands of many First Nations communities are being decimated, their way of life threatened and their health compromised.

“My people are dying, and we believe British companies are responsible. My community, Fort Chipewyan in Alberta, Canada, is situated at the heart of the vast toxic moonscape that is the tar sands development. We live in a beautiful area, but unfortunately, we find ourselves upstream from the largest fossil fuel development on earth. UK oil companies like BP, and banks like RBS, are extracting the dirtiest form of oil from our traditional lands, and we fear it is killing us.” George Poitras, former chief of the Mikisew Cree First Nation.

Canada isn’t the only place that the oil multinationals are looking for tar sands.  RBS has lent £303 million to the French oil company Total which is preparing to extract tar sands deposits from the Bemolanga oil field in the Melaky region of Madagascar. 

This area is one of the poorest in Madagascar with 70% of the population living below the poverty line and 50% of children under the age of three having stunted growth due to malnutrition.  Over 120,000 people living in villages within the Bemolanga oil field could have their water supply disrupted and land poisoned as a result of the tar sands project.  Oil deposits are also being investigated close to the Tsingy de Bemaraha nature reserve, a UNESCO World Heritage Site containing undisturbed forests and mangrove swamps essential to the ecology of Madagascar.

Fortunately there is a vigorous international campaign to prevent tar sands going global.  Campaigning organisations across Scotland, the UK, Europe, North America and Africa are working together to highlight the links between the investment banks, the multinational oil companies and the threats to human rights and the environment from tar sands mining.  Only last month in Edinburgh, the World Development Movement (WDM), along with Canadian First Nation’s activists and other NGOs demonstrated at RBS’s annual general meeting, letting the public and other shareholders know about the bank’s unethical lending and putting pressure directly on RBS to change its investment criteria.  Later in May WDM will be hosting an environmental campaigner from Madagascar to raise awareness of the threats to this African biodiversity hotspot.

RBS has played a major part in the financial crisis that we are now all paying for.  And their investments are fuelling the climate crisis that many of the poorest people in the world are already paying the price for.  There is an urgent need to move away from fossil fuel use and to a low carbon economy. 

Scotland has the most ambitious greenhouse gas emissions reduction targets in the industrialised world, and yet the investment activities of one of Scotland’s iconic high street banks are undermining this.  RBS could be part of the solution rather than fuelling the problem. We challenge RBS get over its fossil fuel addiction and become the Royal Bank of Sustainability.

Liz Murray is Head of Scottish Campaigns at the World Development Movement

Forthcoming events about Madagascar and the campaign to stop tar sands going global

Hear directly from Holly Rakotondralambo, toxic pollution & health researcher for VOARISOA Observatoire Madagascar, about the campaign to stop tar sands in one of the world’s poorest counties and greatest biodiversity hotspots, and how we in the UK can help.

23 May – Public talk.  Boyd Orr Building, Glasgow University, with the Glasgow Centre for International Development, 6-8pm, free.
24 May – Public talk and Petropolis film screening.  Augustine United Church Edinburgh EH1 1EL, with Take One Action, 6-8pm, entry by donation for film.
25 May - Public talk and Petropolis film screening. Malet Suite, University of London Union WC1E 7HY, 6-8:30pm, entry by donation for film.

Book online at: http://www.wdm.org.uk/events/madagascar-stop-tar-sands-going-global