The World Development Movement, PLATFORM and People & Planet have today launched legal action against the Treasury for allowing public money, poured into the Royal Bank of Scotland to be invested in energy companies, and projects linked to climate change and human rights violations.
Since RBS was bailed out in October 2008, it has contributed to loans worth an estimated £10 billion in coal, oil and gas companies. Coal is the biggest source of carbon emissions globally, which contributes to dangerous climate change. The campaigners believe that by investing in RBS, the Treasury is in direct conflict with the government’s legislation and policies to reduce carbon emissions and prevent dangerous climate change.
Julian Oram, from the World Development Movement said:
“The government has spent billions on a bank with a track record of financing energy companies’ dirty and destructive projects. We’re launching this action because the Treasury has displayed a blatant disregard to the government’s own commitments to tackling climate change, and its rules for spending public money. The taxpayers’ interests would be vastly better served by RBS investing in a low carbon future than in undemocratic regimes and environmentally devastating projects around the world.”
Kevin Smith, from PLATFORM said:
“The government can’t pretend to be a global leader on dealing with climate change while at the same time refusing to rein in a public body that is financing new coal, oil and gas projects all over the world.”
Ian Leggett, from People & Planet said:
“The government now controls RBS and has an exceptional opportunity to drive investments in low carbon jobs and infrastructure – not to repeat the recklessness of the past. If we are to stand a chance of stopping catastrophic climate change, the first priority is to make a clear and irreversible commitment to stop investing in high carbon companies and projects, but to prioritise investments in renewable energies.”
Rosa Curling, solicitor from Leigh Day said:
“The government has the power and control to ensure public money provided to UK banks is not invested in or lent to projects that harm the climate or individual human rights. The refusal by the Treasury to even consider whether an investment could contribute to climate change or result in human rights abuses is clearly unlawful and completely out of line with the government’s own guidance, policies and targets on these issues.”
Since its bail out, RBS has taken part in an estimated £10 billion in loans to coal, oil and gas companies including:
- £6 billion to controversial energy giant E.ON, which is aiming to build the first new coal power station in the UK for over 20 years.
- In January 2009, RBS helped raise £400 million for the Irish company Tullow Oil, and in March 2009 RBS was part of a consortium of 14 banks that lent £1.4 billion to Tullow Oil. Tullow Oil is involved in the exploration and extraction of oil on the border between Uganda and the Democratic Republic of Congo (DRC). This area has seen some of the fiercest fighting in an extractive resource-driven civil war as rival armies and militias have struggled for control of the land, leading to thousands of civilian deaths and refugees.
RBS has previously promoted itself as ‘the oil and gas bank’, financing fossil fuel projects and companies around the world. Between May 2006 and April 2008, RBS took part in loans to the coal industry worth nearly $100 billion.
The campaigners believe that the evidence submitted to the High Court today provides convincing grounds to order the government to ensure that taxpayers’ money in RBS supports investments in the wider public interest, by promoting a low carbon, sustainable and ethical future.
Take action now:
Tell the Chancellor to make the bailed out banks clean up their act
Visit our appeal page on Justgiving:
For more information, please call:
Kate Blagojevic – World Development Movement – 020 7820 4900 / 07711 875 345
Kevin Smith – PLATFORM – 0207 403 3738 / 0784 5502063
Ian Leggett – People & Planet – 01865 245678/ 07880 652207
Notes to editors:
- RBS was first recapitalised by the UK government in October 2008, the government’s voting stake is currently capped at 75 per cent .
- On March 2, 2008, the Treasury established the framework for the management of public investment in recapitalised banks via UK Financial Investments. The framework sets out the basis for how the board of UKFI should manage government shares in the banks, but makes no reference to the need to consider social and environmental criteria, nor indeed supporting or even being consistent with other public policy objectives.
- The Green Book: Appraisal and Evaluation in Central Government requires central government to undertake a comprehensive and proportionate assessment of all new policies, programme and projects so as to best promote the public interest when using government resources (GB:1, para 1.1). One of the stages of this appraisal is the ‘option appraisal: that is, an appraisal of a range of different options against key variables such as costs, benefits and distributional, unvalued and non-market impacts [including environmental impacts including, but not limited to the impacts of policies and measures on greenhouse gas emissions (GB: 9, para.2.25, 63 – 64, paras. 37 – 43)].
- In a letter dated 21 April 2009 from the Treasury to legal council instructed by PLATFORM, the Treasury states that “The environmental and human rights records of the individual banks were of no relevance to the decision and therefore the appraisal of the decision that was carried out did not consider the environmental or human rights records or policies of the individual banks.”
- In a report published on 16 March 2009, Pre-Budget Report 2008: Green fiscal policy in a recession, the Environmental Audit Committee made the following recommendation to the Treasury on green finance. “The Committee also calls on the Treasury to look at the benefits and practicalities of imposing some form of environmental criteria on the investment strategies of those banks in which the state had a controlling stake.”
- The World Development Movement (WDM) tackles the underlying causes of poverty. We lobby decision makers to change the policies that keep people poor. We research and promote positive alternatives. We work alongside people in the developing world who are standing up to injustice. www.wdm.org.uk
- For over 20 years, PLATFORM has been bringing together environmentalists, artists, human rights campaigners, educationalists and community activists to create innovative projects driven by the need for social and environmental justice. www.platformlondon.org
- People & Planet is the largest UK student campaigning organisation, with more than a hundred groups in universities, colleges and schools taking action on world poverty, human rights and the environment. For more info, see https://peopleandplanet.org/