Inclusive Development International and 10 human rights and environmental organizations in Uganda and Tanzania, which are remaining anonymous due to fear of reprisals, filed a complaint to the U.S. government today alleging that New York-based insurance giant Marsh, a member of the Marsh McLennan group, violated international guidelines for responsible business conduct by serving as insurance broker for the highly controversial East African Crude Oil Pipeline (EACOP). The groups submitted the complaint to the U.S. National Contact Point (NCP) for the OECD Guidelines for Multinational Enterprises, an office within the U.S. State Department tasked with handling allegations against American companies.
“An insurance broker’s role is often invisible to the public, which allows them to avoid accountability, but Marsh deserves to be scrutinized,” said Coleen Scott, a legal and policy associate at Inclusive Development International. “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.”
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, including the United States. While the OECD guidelines are non-binding, they are an important and widely accepted international standard for ethical business conduct. The complainants are calling on the U.S. NCP to consider the allegations against Marsh and make recommendations to the insurance broker to bring its conduct in line with these standards. This is the first NCP complaint filed against an insurance broker anywhere in the world.
The complaint alleges that by providing insurance brokerage services, without which the EACOP could not move forward, Marsh is contributing to the serious harm that the project has already or is expected to cause, including:
- Improper land acquisition processes characterized by failure to provide prompt and adequate compensation
- Intimidation, harassment, threats and arbitrary arrests of community members, environmental and human rights defenders, as well as journalists critical of the project
- Inadequate consultation with affected communities
- Threats to natural resources relied upon by communities, including the risk of oil spills affecting vital freshwater resources such as Lake Victoria, which supports 40 million people
- Immense and irreversible harm to local ecosystems and habitats along the pipeline’s route, which passes through numerous protected wildlife areas in Uganda and Tanzania
- Increased carbon emissions that will tip the world closer to climate catastrophe
Marsh’s failure to conduct adequate human rights and environmental due diligence before engaging on this project, and its ongoing contributions to its harmful impacts, constitute a breach of the company’s responsibilities under the OECD Guidelines, according to the complaint. The complainants are calling on Marsh to bring its operations back into alignment with the OECD Guidelines by withdrawing from its role as broker for the project and committing to abstain 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.
“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,” said one of the Ugandan complainants, who has chosen to remain anonymous for security reasons. “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.”