ING and the Dakota Access pipeline
Updated 19 May 2017
ING has reached an agreement for the sale of its loan to the Dakota Access pipeline. The sale follows a constructive dialogue between ING and representatives from the Standing Rock Sioux Tribe and has the full support of the Tribe. Read our full statement here.
How did ING get involved in the Dakota Access pipeline?
ING was one of 17 banks financing this project. When presented with the funding request, we carefully screened the project according to laws and regulations as well as ING’s environmental and social risk policy framework. We do this with all projects we finance.
The US government had issued all necessary permits, an independent legal review confirmed the project complied with all laws and regulations, and an independent contractor hired to do further due diligence also gave us a green light.
How much money did we lend to the project?
The syndicate of 17 banks, led by Citibank, has provided a USD 2.5 billion credit facility. ING’s share was USD 120 million.
What did ING do after learning the Standing Rock Sioux Tribe was against the pipeline?
We learned that the Standing Rock Sioux disagreed with the processes utilised in the granting of licenses/permits. In response, we:
- Publicly expressed our concerns about the project and the violence used against the protesters.
- Requested an independent human rights expert to review matters related to the permitting process (together with the other banks).
- Publicly expressed our disagreement with the lack of constructiveness and respect shown by the companies, our clients.
- Sold the shares we had in the parent companies, as this kind of investment is not contractual and can be terminated (approximately USD 220 million).
- Decided to stop doing any new business with the companies, not renewing credit facilities that expire, effectively ending the relationship.
- Continually tried to use our influence to resolve this issue in a way that all parties could be satisfied with.
- Met with members of the Standing Rock Sioux Tribe on 10 February 2017, where we shared our willingness to either continue trying to positively influence the course of the project, or to distance ourselves by selling our stake in the loan.
- Signed an agreement to sell the loan. Under the terms of the agreement with the buyer ING retains a potential risk in case of non-payment under the loan.
Why didn’t ING sell earlier when ING could still influence the project?
We are not able to halt the project, and we never were. Our role as a bank is indirect. Being a lender to the project, we first tried to engage and use any influence we may have to encourage a satisfactory outcome for all parties involved.
However, there was even less room for lenders to positively influence the project after construction had been resumed by the client once the permits had been granted. So there were basically two options left: to either continue monitoring developments closely and continue trying to positively influence the course of the project or to distance ourselves from the project by selling the loan.
We discussed both options with the Tribe, after which we decided to continue to pursue the sale of the loan. They are fully supportive of the sale.
How did ING exert its influence?
One way was by engaging with our client. Another was by commissioning additional research to be conducted by an external independent human rights expert (along with the other banks in the syndicate) and by closely monitoring developments. We also engaged with the Standing Rock Sioux Tribe, sharing our willingness to either continue trying to positively influence the course of the project, or to distance ourselves by selling our stake in the loan.
On 21 March 2017 we announced that we have sold our stake in the Dakota Access pipeline loan.
This case has been challenging due to the fact that local laws outlining the requirements for engaging with indigenous communities are not always aligned with international best practice. Therefore ING, as member of the Steering Committee of the Equator Principles, supports the initiation of a Designated Countries Working Group to review options to improve the due diligence process.