Natixis unveils plan to stop financing trade in Ecuadorean crude oil

France’s Natixis is set to join the ranks of financial institutions that have stopped supporting trade deals involving Ecuadorean crude oil.

The French bank informed Reuters last week that it intended to stop financing trade in Ecuadorean oil by April 2022. It stressed that it had been ramping down its involvement in such transactions since mid-2020 and intended to cut the volume of Ecuadorean crude for which it provided financing even further this year and in early 2022.

Natixis did not say exactly why it had taken this step. Presumably it was swayed by its inclusion in a report published in March 2020 by two advocacy groups, Stand.earth and Amazon Watch, on financing arrangements for Ecuadorean heavy crude shipments to US refineries over a 10-year period. In the report, the two groups noted that the shipments consisted of around $10bn worth of oil from fields near the upper reaches of the Amazon river. They also argued that continued development of these sites posed threats to ecosystems and indigenous communities and urged financial institutions not to support such operations.

Additionally, they singled out six European banks for their involvement in such deals – BNP Paribas (France), Credit Suisse (Switzerland), ING (Netherlands), Natixis, Rabobank (Netherlands) and UBS (Switzerland). BNP Paribas, Credit Suisse and ING responded by declaring in January 2021 that they intended to exit or scale back their operations within Ecuador’s oil sector.

Meanwhile, Rabobank reminded news agencies that it had already stopped financing Ecuadorean oil exports before August 2020. For its part, UBS said in a statement that it had “declined transactions where the origin of oil is verifiably associated with breaches of our standards, such as indigenous peoples’ land rights or UNESCO World Heritage Sites.”

Natixis, meanwhile, responded to criticism by saying in January 2021 that it intended to look into the issues outlined in the report. It also pointed out that it had not provided credits to any new clients for Ecuadorean oil shipments since mid-2020 and was working with a smaller number of customers involved in such deals.