Current Topics Dakota Access Pipeline (DAPL)
In view of the high level of public attention and criticism that the Dakota Access Pipeline (DAPL) has attracted, we want to respond to questions about Credit Suisse's involvement in the project and to state our position regarding this matter.
We have repeatedly heard or read that Credit Suisse is playing an important role in the construction of the DAPL. What is the nature of Credit Suisse's involvement in the financing of the DAPL?
Credit Suisse is not involved in project finance for the DAPL. Claims that Credit Suisse is involved in project finance for the DAPL are therefore incorrect and are firmly rejected by the bank.
Like numerous other banks, Credit Suisse has business relations with companies that are involved in the DAPL project. Those companies include Energy Transfer Equity and its subsidiaries Energy Transfer Partners and Sunoco Logistics. Transactions include the provision of loans, the issuing of securities (notes) and advisory mandates.
Energy Transfer Equity, its subsidiaries and Sunoco Logistics Operate important infrastructure assets in the US that supply energy to the whole of the country. These assets include more than 100,000 kilometers of oil and gas pipelines and a network of gas stations in several states.
The capital supplied by banks and investors is being used for these activities. At present, around 20 infrastructure projects (pipelines, gas processing plants, distribution points, etc.) in various US states are at the planning stage or are being constructed.
Despite this, Credit Suisse's name is repeatedly mentioned in connection with the DAPL. What is the bank's position on this? What is the public's response to the DAPL?
Greenpeace launched a campaign relating to the DAPL that was taken up by some Swiss media.
The parties leading the campaign subsequently had to correct certain statements they had made about Credit Suisse's involvement – especially the claim that it was directly involved in project finance for the DAPL, as well as the total loan amount granted to Energy Transfer Equity and its subsidiaries.
We understand that there are different viewpoints and we are conducting a dialogue with various groups of stakeholders in this specific case – including NGOs, networks and the indigenous population affected by this matter.
Credit Suisse is also engaging in a dialogue with NGOs and networks – including Greenpeace and representatives of the affected indigenous population – regarding the DAPL. However, we believe that this discussion should be conducted in an objective manner based on correct facts, rather than on the basis of incorrect allegations.
What does that mean exactly? Which meetings and discussions have been held with stakeholders regarding the DAPL?
In the period since December 2016, various personal meetings and phone calls have taken place between representatives of Credit Suisse and Greenpeace, other NGOs and networks, as well as representatives of the Standing Rock Sioux. In addition, Credit Suisse has responded to around 40 client letters and 2,000 e-mails relating to the DAPL that were sent to the CEO of Credit Suisse as part of the Greenpeace campaign.
On April 4, 2017, international decision-makers from various functions within Credit Suisse met with a delegation of the Standing Rock Sioux in Zurich to discuss their concerns about the DAPL and the role of Credit Suisse.
This was an open and transparent discussion and the atmosphere was very constructive. This provided the bank with a valuable opportunity to discuss the matter from the perspective of the Standing Rock Sioux during this personal dialogue. During the talks, Credit Suisse stated that it takes concerns about the DAPL seriously and will consider them in the further development of internal guidelines.
As part of our longer-term commitment to sustainability, we will also continue to seek an active dialogue with Greenpeace and similar NGOs and networks.
Various banks have since refrained from providing further loans to the conglomerate involved in the DAPL project (ABN Amro, Bayrische Landesbank and BNP Paribas). Why is Credit Suisse maintaining its business relations with it?
The companies referred to were directly involved in the financing of the DAPL – unlike Credit Suisse. As explained, detailed due diligence was carried out in respect of Energy Transfer Equity, in accordance with regulations, and the transaction was subsequently approved. Against this backdrop, we want to be a professional and reliable partner to our clients.
Credit Suisse takes concerns about the DAPL seriously and will consider them in the further development of internal guidelines.
Media reports claim that violence has been used – including by the authorities – in connection with the project. What is Credit Suisse's view on this?
Credit Suisse does not condone the use of violence where there are conflicting points of view. Credit Suisse takes the allegations made by non-governmental organizations seriously. We are closely monitoring the situation and will address the issue with the client if necessary.
Why does Credit Suisse engage in business transactions with companies in sensitive industries?
Credit Suisse is committed to operating responsibly. It is not our policy to refuse to potentially do business with every client that operates in sensitive industries without due consideration.
In the case of the oil and gas industry, companies frequently play a key economic role in the supply of commodities and energy. In addition, they may be a major employer in economically weak regions. However, the projects and operations of companies such as these can also have significant impacts on the climate, biodiversity, water or the inhabitants of a specific area.
We are aware of the risks that can arise in this context and are committed to identifying and addressing them using our Reputational Risk Review Process (RRRP).
How does Credit Suisse review potential risks relating to possible transactions?
To identify and manage risks, Credit Suisse carries out a comprehensive analysis of potential transactions with companies in the oil and gas sector and other environmentally sensitive industries. We have also defined sector-specific policies based on standards developed by international organizations such as the UN and the World Bank.
If there are grounds to believe that a potential transaction or client relationship could pose an unacceptable risk or may not be compatible with our existing commitments, Credit Suisse conducts a bank-wide, standardized Reputational Risk Review Process (RRRP).
What was the outcome of the risk analysis relating to companies connected to the DAPL?
An in-depth analysis of the participation in transactions with Energy Transfer Equity was carried out using the RRRP and direct talks were held with representatives of the company. The DAPL was one of the issues addressed in this context; pipeline security, accident responses, the protection of biodiversity and habitats, and the consultation with local communities, including the indigenous population, were discussed in detail. The regulatory permitting process that applies to a project like the DAPL at the level of individual states and at a national level in the US was also discussed.
Based on the satisfactory assessment of these aspects, approval was granted for a business relationship with the company.
However, Credit Suisse made a conscious decision that it would not participate in the project finance for the DAPL.