Credit Suisse and UBS have defended their roles in the financing of oil pipelines that sustained damage that caused millions of litres of oil to spill into the Amazon river.

The Swiss banks were responding to a report sponsored jointly by Amazon Watch and Stand Earth that named BNP Paribas, Credit Suisse, ING, Natixis, Rabobank and UBS as the largest backers of US$10 billion of shipments of Ecuadorian crude oil to US refineries.

The report was commissioned after it was revealed that a man-made catastrophe in April involved a landslide that damaged three oil pipelines in Ecuador causing 2.5 million litres of oil to spill into the Amazon river.

L/Cs employed

Credit Suisse and UBS provided letter of credit (L/C) financing to traders dealing in Amazon crude according to the report. It says UBS has made US$850 million available for the oil trade in Ecuador since 2009 while Credit Suisse may have provided as much as US$1.8 billion.

The report concedes that the Swiss banks have not directly financed the oil business in the Amazon, but it says that the trading firms active in the sector are using L/Cs pre-financed by the banks it names to cover purchases for the refineries.

Banks' response

In response to enquiries following the report's publication, UBS denied that it had breached its standards and said that it employs comprehensive environmental and social criteria to identify and assess ecological and social risks in the financing of raw materials' business.

Credit Suisse said it was committed to responsible business and carefully evaluated client activities.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.