May 16, 2017
James Dimon, Chair and CEO
JPMorgan Chase & Co.
270 Park Ave.
New York, NY 10017
Dear Mr. Dimon,
We write to ensure the actions of your institution respect Indigenous human rights and protect the climate. As you know, JPMorgan Chase’s Environmental and Social Policy Framework commits the bank to aligning with the IFC Performance Standard 7 on Indigenous peoples, including ensuring the Free, Prior, and Informed Consent of Indigenous Peoples. It also recognizes the global consensus supporting the Paris Agreement to pursue efforts to limit global warming to 1.5°C, and it endorses the role the financial services sector has to play in combating climate change. We urge you to meet these commitments by ending your support for the Keystone XL pipeline.
After inviting TransCanada to resubmit its application to build the northern leg of the Keystone XL pipeline, the Trump administration issued the final federal permit for the project. Your bank supported TransCanada by leading two revolving credit facilities and participating in two others for TransCanada subsidiaries in December 2016. Your bank also supported the Dakota Access Pipeline project by providing general corporate finance to Energy Transfer Partners, Energy Transfer Equity, Phillips 66, and Sunoco Logistics Partners. Your support for TransCanada raises the serious concern that you are either unaware that Keystone XL raises similar issues around Indigenous rights, or your bank is not committed to upholding its own policies. We urge you not to finance or facilitate the financing of Keystone XL or TransCanada through project-level or general corporate lending, by the provision of underwriting services, or by investing in TransCanada directly, in recognition of the project’s grave human rights and climate risks. As an immediate step, we urge you to exit the TransCanada revolving credit facilities, before any further steps are taken towards construction of the pipeline.
The Dakota Access Pipeline “construction and use violates fundamental human rights, violates treaty-based customary ‘good faith’ international law, policy, and the rights of Indigenous Peoples as expressed by the United Nations, violates the 1851 and 1868 Fort Laramie Treaties between the government of the United States and the Great Sioux Nation (the Oceti Sakowin), and conflicts with numerous international human rights standards, norms, and principles,” as stated in the Water Protector Legal Collective letter to ING Group of March 10, 2017. The fast tracking and construction of Keystone XL raises the same issues.
As with the Dakota Access Pipeline, the proposed route for Keystone XL crosses tribal lands and sacred sites, as well as ranches and farms. TransCanada has failed to obtain consent from tribes along the route and the communities that stand to lose their source of drinking water. Numerous tribal nations including, but not limited to, the Standing Rock Sioux, Rosebud Sioux, Yankton Sioux, Cheyenne River Sioux, Crow Creek Sioux and Oglala Sioux have repeatedly expressed their adamant opposition to Keystone XL as well. Ninety-two landowners across the state of Nebraska have refused to sign easements with TransCanada because of the threat that a leak or spill from this pipeline poses to their land and livelihood, as well as the Ogallala Aquifer.
More than 120 First Nations and Tribes have signed a treaty opposing all tar sands pipelines, rail cars, and tanker traffic from crossing their traditional lands and waters. Any bank or financier supporting Keystone XL and TransCanada—or any of the five pipelines opposed by the Treaty Alliance and the companies backing those pipelines—runs a risk of contributing to further Indigenous rights abuses and the disruption of local economies and water supplies for generations. This constitutes a violation of corporate responsibilities to respect human rights under the U.N. Guiding Principles on Human Rights, which hold that businesses must avoid causing or contributing to adverse human rights impacts through their activities or business relationships.
As the Dakota Access Pipeline controversy continues, major European banks have sold their stakes in the project loan as they have recognized that insufficient consultation processes and gross human rights violations pose significant financial and reputational risks to banks and their clients in the fossil fuel industry. In the case of Keystone XL, those risks largely stem from TransCanada’s failure to obtain the social license to operate from Native and non-Native communities along the pipeline route. The Dakota Access Pipeline controversy has resulted in long-term brand damage and closures of more than $5 billion in individual, organizational, municipal and institutional accounts with the banks involved. Banks financing Keystone XL face analogous, and potentially even more serious, risks. Support for Keystone XL and TransCanada is a test of your bank’s commitment to upholding human rights.
Your decision to finance or not finance this project is also a test of your bank’s support for the goals of the Paris Climate Agreement. If built, Keystone XL would carry more than 800,000 barrels a day of toxic tar sands bitumen from the tar sands fields of Alberta, Canada to Nebraska, and from there to the U.S. Gulf Coast for refining and shipping. Tar sands oil is significantly more carbon-intensive than conventional oil, because of the additional refining steps required to process it. The Alberta tar sands are one of the world’s single biggest sources of carbon pollution, and continued tar sands production—let alone expansion of that production—is flatly incompatible with limiting climate change to 1.5 or even 2 degrees. Current pipeline capacity is sufficient for only existing and under-construction tar sands extraction. Provided market conditions align, if Keystone XL is built, then tar sands production will expand, thereby significantly increasing carbon emissions and exacerbating the problem of climate change.
The science has not changed since Keystone XL was rejected by President Obama in 2015. The project failed the climate test then. It continues to fail the climate test now. President Obama noted that approving this pipeline would have undercut U.S. global leadership on climate. Likewise, your bank continuing to fund TransCanada is incompatible with supporting the goals of the Paris Climate Agreement.
Finally, Keystone XL would also drive deforestation, as upstream expansion of tar sands oil extraction would result in significant additional clearing of Alberta’s boreal forests. These forests serve as a critical carbon sink, source of water, and habitat for endangered species. Extraction driven by Keystone XL would not only destroy huge swathes of these forests, it would also significantly pollute local water sources.
JPMorgan Chase has an established relationship with TransCanada, and will likely be approached for future general corporate finance, and project-specific finance, should the need arise. As a lead bank on two of TransCanada’s revolving credit facilities and a participant in two others, JPMorgan Chase is effectively already a financier of Keystone XL, until it exits those revolving credit facilities. Your bank received its share of criticism for supporting the Energy Transfer family of companies. We anticipate similar scrutiny for any financial institutions supporting Keystone XL and TransCanada—as well as the same company’s Energy East pipeline; Kinder Morgan and its Trans Mountain pipeline; and Enbridge and its Northern Gateway and Line 3 pipelines. We urge you to avoid these reputational and financial risks by refraining from financing Keystone XL and TransCanada going forward, by exiting TransCanada’s revolving credit facilities, and by aligning your institution with Indigenous human rights and a stable climate.
Tara Houska (Couchiching First Nation) National Campaigns Director
Honor the Earth
Jackie Fielder (Mnicoujou Lakota, Hidatsa) Organizer, Mazaska Talks
Rachel Heaton (Muckleshoot)
Matt Remle (Lakota)
Co-Founder, Mazaska Talks
Editor, Last Real Indians
Judith Leblanc (Caddo), Director
Native Organizers Alliance
Grand Chief Derek Nepinak, Assembly of Manitoba Chiefs
Treaty Alliance Against Tar Sands Expansion
Michelle Cook, J.D.
Enrolled member of the Navajo Nation, Honágháahnii Clan
SJD Candidate, University of Arizona, Indigenous Peoples Law and Policy Program
Hannah Adams, Deputy Director
Frank James, Director
Dakota Rural Action
Joanna Kerr, Executive Director
Annie Leonard, Executive Director
Florent Compain, President
Les Amis de la Terre France
Lindsey Allen, Executive Director
Rainforest Action Network
Heffa Schücking, Director