The UK Government's £25 billion cash injection into Royal Bank of Scotland (RBS) is being challenged by three pressure groups because it failed to take into account the bank’s harmful projects.
It is the second legal action brought by pressure groups who claim that public money has been used to fund projects that involve environmental and human rights violations.
The World Development Movement, PLATFORM and People & Planet first launched legal action in June last year over the initial bail-out of what campaigners have called ‘the dirtiest bank in the UK’.
However the judge refused to proceed to a judicial review, upholding the Treasury’s argument that the bank should be run in a ‘commercial’ manner.
This latest legal challenge involves the Treasury’s failure to properly assess the harmful activities of RBS before injecting £25 billion into the bank in November.
Having previously said that imposing wider Government policy objectives would be inappropriate, the Treasury payment to RBS under the Asset Protection Scheme imposed conditions limiting staff bonuses and increasing lending to households and businesses.
However, it did not set any environmental or human rights standards for the bank’s activities.
In December, the Ecologist reported that during the last year, RBS has invested in tar sands extraction in Canada, an opencast coalmine in Bangladesh, and oil exploration in war-torn central Africa.
In March 2009, RBS was part of a consortium of banks that lent £1.4 billion to Irish Company Tullow Oil to explore and extract oil on the border between Uganda and Democratic Republic of Congo (DRC), an area which has seen fierce fighting between rival armies and militias who are competing for access to oil.
According to Mel Evans, campaigner at Platform:
‘RBS is continuing to channel public money into projects around the world that impact communities, ecosystems and the climate – the Treasury demonstrated that it is within its power to prevent this, which is exactly what we are calling on them to do.’
The Treasury agreed that the cash injection required a ‘Greenbook Assessment’ of environmental and social impacts of RBS activities but lawyers have said the assessment that took place was inadequate.
‘The assessment completed by the Treasury fails completely to comply with the mandatory requirements of its own guidance and its failure to apply a consistent policy by insisting on control over the payment of bonuses but not over the lending to climate change and human rights damaging projects is unlawful,’ said Rosa Curling of Leigh Day & Co Solicitors.
The Treasury has 21 days to respond to the pressure groups’ application to the High Court.
World Development Movement
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