Mammoth global insurance company Zurich has decided to abandon its role as principal insurer for the Trans Mountain pipeline when its coverage expires August 31.
The pipeline’s annual liability insurance contract filed with the Canada Energy Regulator April 30 “had shown Zurich was the lead insurer for the pipeline,” Reuters reports. “Zurich was the sole insurer for the first US$8 million of potential insurance payouts, and the company provided a total of US$300 million in cover with other insurers, the 2019-20 energy regulatory filing showed.”
“If you needed proof that petitions, emails, and calls work—this is it,” enthused Stand.earth, one of 32 groups urging Trans Mountain’s 26 insurers to abandon the project by August 31. “This project is never getting built.”
Two insurance companies, Munich Re and Talanx, had already decided to abandon the controversial pipeline.
The energy regulatory filing listed Lloyd’s of London, Chubb Ltd., Liberty Mutual, and a unit of the Munich Re group as other insurers backing the pipeline. Munich Re has “said it would review the contract given its new underwriting guideline on oil sands, which have a higher carbon footprint than conventional oil,” Reuters says.
A Trans Mountain spokesperson told the news agency the company still has enough insurance to operate and continue expanding the pipeline. “There remains adequate capacity in the market to meet Trans Mountain’s insurance needs and our renewal,” she said in an emailed statement.
But in a joint release, Stand, the Union of British Columbia Indian Chiefs, the Tsleil-Waututh Nation Sacred Trust Initiative, and Leadnow say the decision forces Trans Mountain to search for a new lead insurer.
“The existing 70-year-old Trans Mountain pipeline is a major environmental and public health hazard, with a long history of disastrous spills,” the organizations state. “The Trans Mountain expansion project, which has faced powerful Indigenous-led resistance for years, would multiply these risks.”
“Zurich has done the right thing by refusing to insure the Trans Mountain pipeline any longer. Hopefully Liberty Mutual and the other companies insuring it do the right thing before the end of August and drop it too,” said UBCIC President Grand Chief Stewart Phillip. “Any company insuring Trans Mountain is complicit in violations of Indigenous rights, because the proposed pipeline expansion does not have the consent of all impacted First Nations along the route.”
“Zurich dropping this destructive tar sands project means they’ve seen the writing on the wall for projects guilty of climate pollution and the trampling of Indigenous rights—there’s no room for them in our clean energy future,” said Leadnow Senior Campaigner Cherry Tsoi. “Trans Mountain’s other insurers should take Zurich’s lead and drop the pipeline before the costs of supporting Trans Mountain far outweigh the gains.”
Reuters notes that “all financial services companies are under pressure from environmental campaigners to cease doing business with the fossil fuel industry,” and the Trans Mountain expansion “has also drawn ire from some Indigenous leaders anxious about the impact on their communities.”
The Parliamentary Budget Office reported this week that the federal government has turned a C$29-million profit on Trans Mountain since it bought the pipeline 19 months ago