• European banks and investors have invested €700m and provided over €4 billion worth of loans to two oil companies operating in South Sudan linked to military aggression against civilians
  • The oil companies’ joint ventures are the main source of revenue for the South Sudanese military, which has a well-documented track record of targeting civilians and sexual violence since conflict broke out in the country in 2013
  • Control of the oil areas where the firms operate has been a major driver of violence, and local populations have been forcibly displaced by the military. Over the last decade of conflict, the companies’ links to violence against civilians have been flagged by the US Department of Commerce, the UN, and the Norwegian pension fund’s Council of Ethics
  • European banks and investors continue to knowingly finance both companies, highlighting the need for a new EU law to prevent banks from financing human rights and environmental abuses

Brussels, November 14 – 60 major European banks and investors – including Allianz, Deutsche Bank, and Intesa Sanpaolo – hold over €700 million in shares and bonds in two companies fuelling violence in South Sudan, which the UN says could amount to complicity in atrocities and war crimes, according to a new Global Witness investigation. European creditors have also provided over €4 billion worth of loans and underwriting services to the two companies in under seven years.

The investigation reveals how, despite widespread warnings against such investments, the European financial sector has bankrolled two fossil fuel companies with the biggest shares in South Sudan’s oil sector: Malaysia’s Petronas, and The China National Petroleum Corporation (CNPC). Both operate joint ventures with Nilepet, the state-owned oil company.

These companies generate revenue that government forces have used to finance violence against civilians. The UN states that ongoing violence towards civilians in the country is driven by the state’s need to control the oil-producing areas where Petronas’ and CNPC’s joint ventures are located.

The oil companies operate in areas where local populations have been “either pacified or [removed]… using extremely violent methods” according to a UN report. Petronas and CNPC even hire the National Security Services – a force accused of abuses that include torture and unlawful killings - and affiliated security companies to secure their projects.

Civilians have been targeted by the military for years, with the UN documenting their systematic use of sexual violence against women and girls, deadly attacks on unarmed civilians, and mass displacement of communities.

The oil companies have long been known to fuel violence against civilians. The US Department of Commerce concluded that the two companies’ profits are “used to fund the purchase of weapons and other material that undermine the peace, security and stability of [the country]”, while the UN noted that they “have caused or contributed to the ongoing armed conflict and the violations against civilians in their areas of operation.”

Meanwhile, the Norwegian pension fund divested from a smaller joint venture partner, the Oil and Natural Gas Corporation (ONGC) in 2021, after a report from its Council of Ethics suggested that the company risked contributing to atrocities that could amount to war crimes and crimes against humanity.

Despite this, the investigation reveals for the first time that major European banks and investors have held huge investments in Petronas and CNPC, two of the largest players in South Sudan’s oil industry, since the conflict began in December 2013. Germany’s Allianz and Deutsche Bank and Italy’s Intesa Sanpaolo all hold over €100m each in shares and bonds in both companies.

These investments fly directly in the face of human rights pledges made by the banks, highlighting the limits of voluntary promises, and demonstrating the urgent need for a new law to prevent banks from financing human rights and environmental abuses.

Deutsche Bank’s statement on human rights commits them to “preventing or mitigating adverse human rights impacts that are directly linked to their operations, products, or services.” Allianz meanwhile maintains “a watch list for sensitive countries where systematic human rights violations may occur’’, saying it applies a “general human rights guideline for all business in those countries.” These voluntary commitments failed to prevent them from investing in Petronas and CNPC.

Aurelie Skrobik, corporate accountability campaigner at Global Witness said:

‘’Deutsche Bank, Allianz, Intesa Sanpaolo and the rest have been funding companies linked to unspeakable aggression against civilians in South Sudan for years, yet they’ve done nothing but sit back and watch money roll in. We urgently need European governments to support a new law that could prevent banks and investors from financing companies linked to human rights and environmental abuses.”

The European Union is in the final stages of negotiating a sweeping new law – the Corporate Sustainability Due Diligence Directive – to prevent companies from profiting from human rights abuses and environmental damage. However, it could let the financial sector off the hook, after EU member states failed to support their inclusion in the new law in their position agreed last year, caving to pressure from finance lobbyists.

Deutsche Bank stated that they do not comment on information relating to clients or specific transactions, and claim to have adequate social, environmental and climate change risk and international sanction management policies in place. Deutsche Bank further emphasised its commitment to net-zero and asked to be distinguished from its asset management subsidiary, DWS. DWS stated it takes its responsibility regarding respect for human rights very seriously and emphasised its sustainability policies. 

Allianz and Intesa Sanpaolo did not respond to Global Witness’ opportunity to comment on these findings.