Marsh reported to US government over role in controversial East Africa pipeline
Human rights and environmental groups have filed a complaint to the US government alleging that Marsh has violated OECD guidelines by broking cover for the planned East African Crude Oil Pipeline (EACOP). The groups want Marsh to stop acting as insurance broker for the controversial pipeline and have urged the US government to help bring about this change in behaviour.
The complaint has been submitted by US-based Inclusive Development International, as well as ten human rights and environmental organisations in Uganda and Tanzania, to the US National Contact Point (NCP) for the OECD Guidelines for Multinational Enterprises. This is an office within the US State Department tasked with handling allegations against American companies.
It is the first such complaint ever filed against an insurance broker anywhere in the world, according to Inclusive Development International.
The OECD Guidelines set out principles and standards for responsible business conduct across a range of issues, including human rights and the environment. These standards apply to multinational enterprises with operations or headquarters in OECD countries. The OECD guidelines are non-binding but are an important and widely accepted international standard for ethical business conduct.
The complaint argues that Marsh failed to conduct adequate human rights and environmental due diligence before engaging in the EACOP project, and therefore breached its responsibilities under the OECD Guidelines.
The complainants are calling on the US NCP to consider the allegations against Marsh and recommend that the insurance broker brings its conduct in line with OECD standards.
They are also appealing directly to Marsh to change course. The groups have asked the broker to bring its operations “back into alignment with the OECD Guidelines by withdrawing from its role as broker for the project and commit to abstaining from offering brokerage services for the EACOP project in the future”.
“Given the severity of the claims, the complainants suggest that Marsh should at minimum commit immediately to withhold its services until the complaint is resolved,” they added.
Coleen Scott, a legal and policy associate at Inclusive Development International, said the role played by insurance brokers is often invisible to the public. She said this allows brokers to avoid accountability and believes Marsh “deserves to be scrutinised”.
“Marsh is playing a critical role enabling the East African Crude Oil Pipeline to move forward in the face of widespread opposition and overwhelming evidence that the project will be a disaster for Ugandans and for the planet,” continued Scott.
One of the Ugandan complainants, who has chosen to remain anonymous for security reasons, said Marsh’s website advertises its commitment to sustainability and “building a more resilient world” but the company is “actively contributing to a massive and irresponsible fossil fuel project that will have the opposite effect”.
“The EACOP project isn’t just a shortsighted investment in oil as the world is trying to transition to alternative fuels, it is also diverting resources away from renewable energy projects that Ugandans want, and threatening natural resources and existing industries that we rely on,” it added.