The Royal Bank of Scotland’s uncritical support for oil is contributing to major human rights abuses, underwriting repressive regimes and fuelling conflict.

Following Steven Spielberg’s withdrawal from the opening ceremonies of the Beijing Olympics, pressure has increased on other celebrities (and athletes) to follow suit. But whilst China is the popular whipping boy for the human rights disaster in Darfur, behind the scenes Britain’s second largest bank is helping prop up the Sudanese regime.

Royal Bank of Scotland doesn't only sponsor rugby. PLATFORM research has uncovered a recent RBS loan to an oil corporation working with and supporting the Sudanese regime. This follows a trend of RBS funding fossil fuel extraction in some of the world's most repressive and war-torn countries, including Burma, the DRC and Equatorial Guinea. In October 2007, RBS underwrote loans of $1 billion for Lundin Petroleum, together with BNP Paribas and HBOS. The Sudan Divestment Task Force (SDTF) classifies Lundin in its Top 5 “Highest Offenders”, for its direct support for the Sudanese government during the continued ethnic cleansing in Darfur.

*Working with the military*

Lundin is exploring for oil in Block 5B in south Sudan, together with Sudapet, the Sudanese national oil company, which is part of the regime. This is one of Lundin's major strategic growth areas, and will probably be where much of RBS' financing goes: 4 out of the 13 exploration wells Lundin will drill in 2008 are in Sudan. Its Sudanese assets are estimated at a potential 500 million barrels - 42% of the 1200 million potential barrels to be targeted in 2008.

Due diligence by RBS should have thrown up concerns as to Lundin’s suitability, based on its past record. Southern Sudan has been one of Lundin’s core sites of operation since 1997 - including during the destructive civil war. Human Rights Watch and Christian Aid asserted that, if not complicit, the company enabled Sudanese military operations against local civilians, including the clearing of villages and widespread rape.

While exploring and extracting oil from Block 5A (neighbouring its current operations in Block 5B), Lundin cooperated and worked with the Sudanese government and military. Lundin's construction of a bridge and road allowed year-round access by Baggara militias to attack local villagers, apparently leading to enormous human rights abuses and significant depopulation around Lundin’s operations.

Currently the ceasefire in the south continues to hold shakily, yet Lundin’s clear support for the Sudanese government and lack of commitment to human rights gives little hope.

Beyond Sudan, AllAfrica.com reported on 14 February that Lundin approached the government in Somaliland, Somalia's northern breakaway region, seeking exploration rights. Lundin is currently also investing in what it terms “high risk, high reward frontier exploration” in the Ogaden region of Ethiopia, a Somali-inhabited region suffering under the army’s current crackdown on separatist rebels.

Lundin Petroleum is not an exception; the self-styled “Oil and Gas Bank” has repeatedly underwritten the operations of oil and gas corporations working in conflict zones or highly repressive countries. The RBS oil & gas team cofinanced an $850 million financing facility for Tullow Oil, which is working with the state oil company of Equatorial Guinea to pump 44,000 barrels of oil per day from the offshore Ceiba field.

President Mbasogo maintains absolute control of Equatorial Guinea, claims to have received 97% in the most recent elections and has been criticised for extreme human rights abuses by Amnesty International.

Tullow Oil is also pursuing an “aggressive exploration programme” in the North Kivu region on the border of the Democratic Republic of Congo and Uganda. 400,000 civilians fled their homes in North Kivu during 2007 to escape fighting between government soldiers, local militia and Tutsi insurgents. The conflict in the DRC is widely seen as fuelled by attempts to control natural resource extraction.

*Financing occupation*

RBS finances numerous oil corporations contributing to human rights abuses globally. However, in some situations, the bank finances the problem project directly. In late 2007, the RBS Oil & Gas Team participated in an $884 million project financing BP’s controversial Tangguh LNG (liquefied natural gas) project in West Papua, occupied by Indonesia since 1963. Amnesty International has estimated that 100,000 West Papuans - one sixth of the population - have been killed by the Indonesian military.

Despite BP’s human rights assessments, local residents have raised issues around disempowerment, environmental degradation, social degeneration and a failure to fully compensate. Local NGOs LP3BH and Perdu have warned of increased militarization in the region and a failure in recognition of customary rights.

More insidiously, the Tangguh LNG project plays a key role in asserting and institutionalising Indonesia's occupation of West Papua. Repression is still rife.

Peaceful protests involving the Papuan flag have led to 15 year prison sentences. In 2004, US Senators wrote that “a military campaign in the Central Highlands has led to an inestimable number of civilian deaths and significant population displacement” and “government security forces are operating with impunity”.

Papuan NGOs reported in autumn 2007 that military “sweep operations” in the highlands were causing displacement and starvation. The Indonesian government’s restrictions on international media and humanitarian organisations makes assessing the reality in West Papua very difficult.

RBS assets also appear to be supporting the Burmese junta. With control over 8.25% and a seat for its CEO Fred Goodwin on the board, RBS is the most significant private shareholder on Bank of China, key backer of Chinese oil companies propping up the military regime in Burma. Petrochina and Sinopec have been criticised heavily for co-operating closely with the Burmese military rulers. Both named Bank of China as their principal banker and continue to borrow and repay loans of hundreds of millions of dollars.

In September 2007, Sinopec began drilling an onshore well in a joint venture with the Burmese regime’s Myanmar Oil & Gas Enterprise. The launch ceremony on September 26 coincided with the first day of the dictatorship’s brutal crackdown on civilian dissent and was attended by military officials and Sinopec executives. Oil & gas ventures in Burma have been repeatedly condemned by human rights organisations as propping up the regime. Sales of natural gas, such as those to Petrochina, account for the single largest source of revenue to the military government.

Whether through its assets, by financing specific projects or through corporate loans to oil & gas corporations, RBS' lending is contributing to major human rights violations across the planet. Whether this is through a wilful refusal to recognise human rights as a relevant concern or merely repeated failures at due diligence remains unclear.