By Sophia Cole, from Anti-Corruption Data Collective
At the heart of the climate crisis lies the power of the fossil fuel industry, and the international norms that allow some companies to operate with impunity. When global and local frameworks concede power to the fossil fuel industry, human rights are the price we pay. Data-driven investigative approaches can unpack patterns linking the fossil fuel economy, abuses of power, and legislative gaps to help pave the way toward a more just and sustainable future.
In defiance of definitive scientific evidence that greenhouse gas (GHG) emissions are heating Earth’s atmosphere beyond what our ecosystems and societies can tolerate, the fossil fuels industry and its financial backers continue to invest in new extraction projects. Meanwhile, they are able to maintain current projects by using carbon offsets as a substitute for real emission cuts.
Decades of lobbying against climate science and solutions demonstrate the extent to which the industry will wield its wealth and influence to further its own interests. These companies are complicit in denying people their fundamental rights to clean water, clean air, quality food, health, social stability and even life.
As the clean energy transition gathers pace, it is essential to expose ambiguous frameworks and minimize malign corporate influence.
Oil companies’ complicity in Russia’s war in Ukraine
An increasing body of evidence reveals how parts of the Western energy industry have maintained ties to Russia since the invasion of Ukraine. In the first 100 days of the war, Russia’s oil and gas export profits reached nearly $100 billion. While exports have since fallen, Russia continues to reap billions in profit from oil and gas sales, exposing loopholes in current sanctions. Via indirect routes, Western markets have stayed open to Russian oil.
EU sanctions, for instance, have specific language banning trade in crude oil but not refined products. Western oil companies have continued to ship Russian-origin oil that has been blended with Kazakh oil and exported via the CPC pipeline. The ‘blending loophole’ is a critical weak spot in the coordinated attempt to cut off the oil and gas profits that finance the Russian military.
“Every barrel of Russian oil and every cubic meter of Russian gas is now full of the blood of Ukrainians,” says Ukrainian official Oleksiy Goncharenko.
Moreover, since the war started, Russia has shipped large amounts of crude oil to India, which then sells refined products to the U.S. and Europe. Essentially, Russia is laundering its crude oil to sell to the West. This weak spot will allow Western economies to legally use Russian oil products through at least 2023.
“The money that is funding this aggression comes from the same [place] as climate change does: fossil fuels…If we didn’t depend on fossil fuels, [Russia] would not have money to make this aggression.”–SVITLANA KRAKOVSKA, UKRAINIAN METEOROLOGIST
There are also signs that some Western companies have found ways to continue supplying Arctic LNG 2, a liquified natural gas development in Russia’s far north. Experts have identified Arctic LNG 2 as one of the ‘carbon bombs’ that must be stopped if there is any chance of global warming remaining under 1.5C. Records obtained by ACDC member Data Desk and Business4Ukraine show that Scottish oil company Baker Hughes sent drilling equipment to the project, after the Scottish parliament called for companies to cut ties with Russia.
ACDC recently supported reporting by Le Monde and Der Spiegel detailing Western companies’ continued involvement in joint ventures in Russia’s Siberian oil and gas fields. France’s TotalEnergies and Germany’s Wintershall Dea are among the fossil fuel companies to have dragged out severing business interests in Russia – a move that undermines coordinated economic sanctions, and – investigations show – fueled the Sukhoi Su-34 fighter bombers, aircraft that have been used to target Ukrainian civilians.
Both oil giants released vague statements claiming to be in full compliance with European sanctions. Wintershall Dea’s statement noted no payments were made to sanctioned persons or entities and their Russian activities are compliant under “applicable laws and contractual obligations.” Total promised to adhere to “strict compliance with current and future European sanctions, no matter what the consequences on the management of its assets in Russia.”
Both companies have announced they are exiting their joint ventures in Russia. The timeline for bringing this about remains unclear.
Ambiguity and legal accountability
The United Nations Guiding Principles on Business and Human Rights states that a company’s responsibility “to respect human rights is a global standard of expected conduct for all business enterprises wherever they operate.” These principles allow companies to take “appropriate action” in situations where human rights violations are enabled by businesses – as is clearly the case when companies help fuel attacks on Ukrainian civilians.
Yet loopholes persists even in these principles: “among the factors that will enter into the determination of the appropriate action are the enterprise’s leverage over the entity concerned, how crucial the relationship is to the enterprise, and the severity of the abuse, and whether terminating the relationship with the entity itself would have adverse human rights consequences,” the official commentary on the principles states.
It seems as though Western companies have leaned into this ambiguity. Before announcing its exit from Russia in January 2023, Wintershall Dea had promised to halt new projects but retained current assets in Russia. The company earned nearly 1.5 billion Euros from its Russian business over the course of the war in 2022. Now, Wintershall Dea’s parent company, BASF is seeking government reimbursement to cover exit losses.
Total reasoned that staying in Russian joint ventures was preferable to withdrawing and giving Russia unequivocal control over assets. Total later announced the sale of its stake in the gas field that features in Le Monde’s reporting.
Oil corruption in impacted, indigenous communities
The war in Ukraine has made the links between the fossil fuel economy and human rights abuses a front-page story in the West. But frontline communities in many resource-rich countries have long suffered at the hands of fossil fuel interests.
The extractive industry sector is inherently vulnerable to corruption thanks to its large rents, isolated project locations, and inequitable power dynamics between local communities and management. Globally, environmental activists and human rights defenders (HRDs) play a critical role in pushing back on corruption in the extractive industries, environmental and human rights infringements, and planned fossil fuel extraction that threatens the future of our planet.
Activists in resource-rich countries who oppose oil, gas, and mining projects face huge risks when they stand up against these investments. In 2021, two hundred people were murdered while defending their communities against the extractive industry. Global Witness reports that one HRD was killed every two days in the past decade. Indigenous peoples were disproportionately impacted. Though accounting for less than five percent of the global population, indigenous communities protect 80 percent of the planet’s biodiversity. Forty percent of HRD murders in 2021 occurred in indigenous communities.
The rigged rules of the transition
While many aspects of the fossil fuel business that severely impact human rights continue largely as usual, the voluntary carbon offsets market is booming. The sector has a real value of $2 billion, with 500 million credits traded in 2021.
A recent investigation found that an alarming number of these were not credible.
Conceptually, carbon offsets offer an innovative path for companies to reduce their carbon footprint and deliver on the sustainable development goals. However, weaknesses in accountability and regulation harm the people and planet that the program is designed to protect.
The entire system is founded on the assumption that one offset credit equates to the storage of one tonne of carbon. Yet, the math behind this linchpin idea is shaky: Offset credits trade a known amount of GHG emissions for an unknown future amount to be stored. As these discrepancies are increasingly becoming of international concern, a new data driven investigation by SourceMaterial likened the industry to an “empty PR exercise for polluters.”
The global voluntary carbon offset market is entirely unregulated, and compliance with quality standards is voluntary. Companies can wipe GHG emissions from their books without making any real improvements in sustainability. Brands tout ‘carbon neutrality’ or ‘net zero’, when in reality the true amount of GHGs offset is unknown. This lack of regulation also opens up the risk of fraud and manipulation in the form of dubious auditing practices, sky-high broker fees, and misleading claims.
Not all credits are equal – many low-quality projects violate conditions such as additionality, double-counting, permanence, leakage, and independent audits. Poor-quality offset projects cause harm to local communities and environments, leading to human rights abuses and climate injustice.
Research from the world’s largest offset programs, the Clean Development Mechanism (CDM) and Joint Implementation (JI), both managed by the United Nations under the Kyoto Protocol “suggest that up to 60-70% of their offset credits may not represent valid GHG reductions”.
“Carbon offsets give the worst polluters in the world a free pass to keep polluting and exploiting, so it’s no surprise that offsets are a favorite of corporations and the politicians they’ve bought,” – ROSHAN KRISHNAN, CLIMATE FINANCE CAMPAIGNER, AMAZON WATCH.
Data-driven approaches can expose these weaknesses and point to solutions. Techniques such as satellite imagery that tracks wildfires and vegetation loss, analyses of offset ‘retirements’, and web scraping to collect information can help determine the real value of a project’s carbon credits. Analyzing the types of credits bought by big polluters and what they know about the quality of the underlying asset can help keep them accountable for ‘net zero’ pledges and prevent greenwashing.
In the absence of rigorous data-backed analysis and regulation, the carbon offset market risks being just another example of a loose framework that enables fossil fuel corporations to avoid accountability and operate with impunity.
We cannot sever our reliance on fossil fuels overnight. But we can correct the loopholes in processes that support the transition to renewable energy and hold fossil fuel companies accountable for their negative impact on human rights.