The complaint, submitted on Wednesday, targets Mitsubishi UFJ Financial Group (MUFG), Japan’s largest bank, and any other financial institutions that may be supporting the project, which is led by French energy giant TotalEnergies alongside partners ExxonMobil, Santos and ENEOS.
The Equator Principles are a global risk-management framework adopted by more than 130 financial institutions across 38 countries to assess and manage environmental and social risks in large-scale project financing. While the framework has existed since 2003, this marks the first time a formal, public grievance has been lodged against it.
According to the complainants, the Papua LNG project fails to comply with at least six of the ten Equator Principles. They argue the project poses significant risks to Indigenous communities, biodiversity and the climate, and lacks transparency and accountability.
The upstream gas development is expected to affect at least 12,700 people living in 39 predominantly rural and Indigenous communities in Papua New Guinea’s Gulf Province. The project area is described as one of exceptional ecological importance, with at least 100 species not yet described by external science and more than two dozen threatened terrestrial species.
Among the key concerns outlined in the complaint are an alleged absence of verifiable evidence that affected communities have given their Free, Prior and Informed Consent (FPIC), a lack of publicly available climate and human rights impact assessments, and what the groups describe as severe biodiversity risks.
Peter Bosip, Executive Director of the Centre for Environmental Law and Community Rights in Papua New Guinea, said the complaint reflects deep concern about the project’s implications for local communities.
“The people of Papua New Guinea deserve development that respects Indigenous rights, protects nature and safeguards the climate,” he said. “We are urging the Equator Principles to act.”
The complaint places particular scrutiny on MUFG, which has been reported to be acting as financial adviser to the Papua LNG project and seeking to raise financing, despite being a signatory to the Equator Principles.
Campaign groups argue that MUFG’s involvement contradicts its public commitments on climate action and risk management. They are calling on the bank to withdraw from the project pending a full investigation.
Environmental and finance campaigners also note that resistance to financing the project has been growing. Around one in ten Equator Principles banks have already ruled out involvement in Papua LNG based on internal policies. In 2024, Crédit Agricole stepped down as financial adviser, citing environmental and human rights concerns following sustained civil society pressure.
Major banks in Papua New Guinea, Australia, France and Italy are also reported to have declined to finance the project, including institutions that have historically supported TotalEnergies.
Advocacy groups say the Papua LNG case represents a critical test for the credibility of the Equator Principles themselves. While the framework does not include a formal grievance mechanism, the complaint has been lodged through an online process supported by the Netherlands-based NGO BankTrack.
Critics have long argued that the Equator Principles lack enforcement power. The complainants are urging the Equator Principles Association to investigate the allegations and formally alert all signatory banks.
Campaigners across Asia and the Pacific have also framed the dispute within a broader push for a rapid transition away from fossil fuels, warning that gas projects such as Papua LNG risk locking countries into carbon-intensive development paths.
The Equator Principles Association has not yet publicly responded to the complaint. TotalEnergies and MUFG have also not issued formal statements addressing the allegations raised.
If upheld, the complaint could intensify scrutiny of how global banks apply environmental and social safeguards to large-scale energy projects — particularly in biodiversity-rich and socially sensitive regions such as Papua New Guinea.
Post A Comment:
0 comments: