[PRESS RELEASE] CSOs Condemn Japan’s Decision to Finance LNG Canada Project - Japan Digs Deeper into Fossil Fuels Even as the Rest of The World Moves to Phase Them Out
Movement toward a phase out of coal and other fossil fuels accelerated at the 26th session of the Conference of the Parties (COP 26) to the United Nations Framework Convention on Climate Change (UNFCCC) that started on October 31 in Glasgow, Scotland, UK. However, on October 29, just before COP 26, the Japanese government went in the opposite direction with a decision to provide public financing for LNG Canada, a major fossil fuel project.
In response, on November 10, Japanese civil society organizations (CSOs) handed a statement to the Japan Bank for International Cooperation (JBIC), condemning JBIC’s decision to provide up to US $850 million (over CAD$1 billion) for the LNG Canada Project*. After delivering the statement, the CSOs organized a protest in front of JBIC’s Tokyo office calling on the bank to withdraw the decision on the grounds that it ignores the climate crisis and the rights of Indigenous Peoples. The statement has been signed by 93 organizations from 30 countries around the world (Updated on November 12: 95 organizations from 30 countries).
On November 4, a statement was announced by the UKgovernment, the chair of this year’s COP, calling for measures that included the suspension of public support not only for coal but for all overseas fossil fuel energy projects. The statement was approved by more than 20 countries, including the United States and Canada.
Meanwhile, the Japanese government, through JBIC and other public financial institutions, has been the world’s second largest provider of public funds for fossil fuel projects, providing an average of $10.9 billion annually from 2018 to 2020. In 2021 alone, JBIC decided to finance the Waitsia gas project stage 2 development in Australia and the LNG Canada project, and it is currently considering financing the Barossa gas development project in Australia.
As the world moves away from fossil fuels such as oil, gas, and coal, Japan is increasingly being left out of the global decarbonization initiative. It still has no roadmap to completely phase out its involvement in coal power domestically and internationally. The Japanese government should decide to stop supporting the Indramayu coal power project in Indonesia and Matabari 2 in Bangladesh, and should immediately move toward the suspension of public support for oil and gas.
Please see the statement text for more detail as below.
> PDF version of the statement
[STATEMENT]
JBIC and Private Banks Must Reconsider Decision to Finance LNG Canada Project
CSOs Strongly Condemn JBIC’s Decision Just before COP 26 to Provide Public Finance That Ignores Climate Crisis and Rights of Indigenous Peoples
November 10, 2021
On October 29, the Japan Bank for International Cooperation (JBIC), a public financial institution fully owned by the Government of Japan, announced in a press release that it has decided to provide up to US $850 million for the LNG Canada Project (1).
The decision by JBIC just ahead of the 26th session of the Conference of the Parties (COP 26) to the United Nations Framework Convention on Climate Change (UNFCCC) that started on October 31 in Glasgow, Scotland, UK, goes against the call by the UK government to stop public financing for fossil fuels (2), and shows that Japan’s approach to climate change is still out of line with the rest of the world. Japan will once again become the target of criticism from the international community. Serious violations of Indigenous Peoples have also been pointed out in a project associated with the LNG Canada project.
We strongly condemn JBIC’s decision to provide financing and disregard impacts on climate change and the human rights of Indigenous Peoples, and we call on the companies and financial institutions involved to immediately withdraw from the project.
The LNG Canada project plans to liquefy shale gas extracted from Montney, British Columbia and transported through the 670 kilometer Coastal Gaslink pipeline to Kitimat. The gas would then be exported to the Asian market. Investors include Mitsubishi Corporation and Royal Dutch Shell. JBIC plans to provide $1.85 billion in co-financing for the project with private financial institutions. It is not clear which private financial institutions are co-financing the project, but Japan’s three largest banks, Mizuho Bank, Sumitomo Mitsui Banking Corporation and MUFG Bank, have already provided financing for the Coastal GasLink pipeline project, and therefore it is likely that they are also involved in the LNG Canada project.
The Paris Agreement, an international treaty on climate change, sets a goal of limiting global average temperature increase to 1.5 degrees Celsius, and to achieve this goal, global greenhouse gas emissions must be reduced to net zero by 2050. A report released in May by the International Energy Agency (IEA) called for an immediate halt to new investment in all fossil fuels to achieve net-zero emissions by 2050 (3), making it clearer than ever that we need to end public finance for fossil fuels. In addition, the LNG Canada project is scheduled to start operating from 2024 for 40 years, meaning that it will produce liquified natural gas (LNG) after 2050. This is a clear violation of the Paris Agreement.
In addition to its climate impacts, serious human rights violations against Indigenous Peoples have been reported in an associated project of the LNG Canada project, the Coastal GasLink pipeline project. The Coastal GasLink Pipeline Company is now pushing ahead with construction, ignoring the rights of the Wet’suwet’en First Nation. The Wet’suwet’en, who are directly affected by Coastal GasLink, have never given up their land, and in 1997 the Supreme Court of Canada ruled that the ownership and use of land belong to Indigenous Peoples (Delgamuukw case) (4).
On December 13, 2019, the UN Committee on the Elimination of Racial Discrimination adopted a resolution calling on the federal government to immediately halt the Coastal GasLink pipeline project, the Trans-Mountain pipeline project, and construction of the Site C Dam, until “Free, prior and informed consent (FPIC)" has been obtained (5). In other words, it has been pointed out internationally that FPIC has not been obtained for Coastal GasLink, associated with the LNG Canada project, and JBIC’s decision to finance the project clearly violates JBIC’s Guidelines for Confirmation of Environmental and Social Considerations, which require that FPIC be obtained from Indigenous Peoples prior to financing.
The Equator Principles, which are signed by private banks, also call for projects to obtain FPIC from Indigenous Peoples and to comply with “the rights and protections for Indigenous Peoples contained in relevant national law, including those laws implementing host country obligations under international law." The decision to provide financing for this project clearly goes against this. The Wet’suwet’en and more than 100 other organizations around the world submitted a request letter on October 19 to investors and financial institutions, including Japan’s three largest banks, calling on them to divest from and stop financing the Coastal GasLink pipeline project and the LNG Canada project (6).
We strongly urge JBIC and the private financial institutions involved in the project to immediately withdraw their financing to the project, and urge Mitsubishi Corporation to withdraw from the project.
Footnotes
(1) Japan Bank for International Cooperation, “カナダにおけるLNGカナダプロジェクトに対する開発資金を融資 日本のエネルギー資源確保に貢献” (Japanese) October 29, 2021https://www.jbic.go.jp/ja/information/press/press-2021/1029-015352.html
(2) Chloé Farand, “UK seeks alliance to end public finance for coal, oil and gas projects overseas” https://www.climatechangenews.com/2021/10/01/uk-seeks-alliance-end-public-finance-coal-oil-gas-projects-overseas/ Climate Change News, October 1, 2021
(3) International Energy Agency, ”Net Zero by 2050: a Roadmap for the Global Energy Sector” https://www.iea.org/reports/net-zero-by-2050 May 18, 2021
(4) Jon Hernandez, “‘We still have title’: How a landmark B.C. court case set the stage for Wet’suwet’en protests”,https://www.cbc.ca/news/canada/british-columbia/delgamuukw-court-ruling-significance-1.5461763, CBC News, Feb 13, 2020
(5) Committee on the Elimination of Racial Discrimination, “Prevention of racial discrimination, including early warning and urgent action preceedure” https://tbinternet.ohchr.org/Treaties/CERD/Shared%20Documents/CAN/INT_CERD_EWU_CAN_9026_E.pdf?_ga=2.171294304.1158930249.1618 324061-1016472279.1618324061 December 13, 2019
(6) “Indigenous-led campaign, endorsed by 100+ groups, urges global investors and banks to divest from and stop financing Coastal GasLink and LNG Canada; Financing violates racial justice commitments and reconciliation; Campaign builds on TMX campaign that saw 16 insurers drop the project” https://static1.squarespace.com/static/5c51ebf73e2d0957ca117eb5/t/616e48f02d0094632c4c290a/1634617585249/211005-+Divest+from+Coastal+GasLink+Press+Release++-Canada.pdf The Gidimt’en Checkpoint, October 19, 2021
LIST OF SIGNATORIES
This statement is signed by 93 organizations, including those working at international and regional levels plus organizations working nationally in 30 countries.
(Updated on November 12: This statement is signed by 95 organizations, including those working at international and regional levels plus organizations working nationally in 30 countries.)
> Please see the PDF version of the statement for the list of signatories.
Contact
Friends of the Earth Japan
info@foejapan.org
tel: +81-3-6909-5983/fax: +81-3-6909-5986
* What is the LNG Canada project?
The LNG Canada project plans to liquefy shale gas extracted from Montney, British Columbia and transported through the 670 kilometer Coastal Gaslink pipeline to Kitimat. The gas would then be exported to the Asian market. Investors include Mitsubishi Corporation and Royal Dutch Shell. JBIC plans to provide $1.85 billion in co-financing for the project with private financial institutions. It is not clear which private financial institutions are co-financing the project, but Japan’s three largest banks, Mizuho Bank, Sumitomo Mitsui Banking Corporation and MUFG Bank, have already provided financing for the Coastal GasLink pipeline project, and therefore it is likely that they are also involved in the LNG Canada project.
