AXIS Capital’s announcement against insuring Arctic drilling follows recent flawed, rushed and likely illegal lease sale
FAIRBANKS, ALASKA (January 15, 2021) – AXIS Capital—one of the world's leading insurers with $25.6 billion in assets and offices across North America—confirmed in a letter to the Gwich’in Steering Committee that it will not underwrite new insurance or facultative reinsurance contracts, or provide investment support, for projects covering the exploration, production or transportation of oil and gas in the Arctic National Wildlife Refuge. It is the third international insurance firm, after AXA and Swiss Re, to make such a commitment and the first North American firm to affirm they will not support destructive development of the Arctic Refuge.
“We believe climate-related risks are among the most serious issues facing the world today. We also recognize the importance of the Arctic National Wildlife Refuge to the [Gwich’in] and your families, as well as our planet,” wrote Conrad Brooks, general counsel and corporate secretary for AXIS Capital.
The news comes in the wake of a flawed, rushed and unlawful lease sale in the Arctic Refuge, which saw such little interest from oil and gas corporations that the State of Alaska jumped in at the last minute and spent over $12 million in taxpayer money to purchase leases at rock bottom prices. Of the 11 tracts leased, nine were won by the Alaska Industrial Development and Export Authority, a state corporation with a history of mismanagement and possible corruption that largely ignored the concerns of Alaska Natives who overwhelmingly spoke out against their plan. The other two leases were purchased by Knik Arm Services, LLC, a year-old company that, like AIDEA, has no history of development, and Regenerate Alaska, Inc., a subsidiary of Australia-based 88 Energy.
AXIS Capital’s announcement is yet another sign that insurers and investors still consider oil and gas development in the Arctic Refuge too great a financial and reputational risk, which may make it difficult for any leaseholders to find development partners. AXIS Capital’s decision is also a result of a continued insurer outreach campaign led by the Gwich’in Steering Committee and its Indigenous, social justice and environmental partners.
The Gwich’in have a cultural and spiritual connection to the Porcupine Caribou Herd, and the herd relies on the coastal plain of the Arctic Refuge as its birthing and calving grounds. That’s why the Gwich’in call the coastal plain where drilling is proposed ‘Iizhik Gwats’an Gwandaii Goodlit’ or ‘the Sacred Place Where Life Begins.’
Bernadette Demientieff, executive director of the Gwich’in Steering Committee, said, “Destruction of the Arctic Refuge is a direct attack on the rights of the Gwich’in Nation. The Creator blessed us with this land so we could care for it and protect it as we have done for thousands of years. The recent lease sale ignored all our concerns and dismissed the climate crisis, but the commitment from AXIS today show’s that other companies agree with us and respect us. We need more companies to stand with us, respect our human rights and our way of life. We cannot let the destruction of the Arctic Refuge happen – not today, not ever.”
Organizations working to prevent drilling in the Arctic Refuge have warned corporations that pursuing oil and gas in the refuge is fraught with uncertainty and exposes them to unnecessary reputational, legal, human rights and financial risk. Two-thirds of voters oppose drilling in the Arctic Refuge, and four active lawsuits challenge the legality of the sale. The United Nations also has issued two inquiries expressing grave concerns about the impacts of the project on the human rights of the Gwich’in. Additionally, President-elect Biden and his nominee for the Department of Interior, Deb Haaland, have been adamant supporters of the Arctic Refuge and could take immediate action to halt all oil and gas activities when they enter office.
Despite public opposition to drilling in the Arctic Refuge, the Trump administration completely ignored numerous concerns about the impact of oil development and did not adequately consult with Alaska Native Tribes. The Administration opened more of the coastal plain of the Arctic Refuge to oil and gas leasing with a controversial provision in the 2017 Tax Cuts and Jobs Act.
The three International insurance firms join more than two dozen global banks, including the six largest U.S. banks and five largest Canadian banks, that have taken positions against investing in oil and gas development in the region. The Gwich’in Steering Committee and its allies will continue to pressure insurance companies, including Liberty Mutual and AIG who have yet to comment, to ensure the sacred calving grounds are protected.
Tim Woody, (907) 223-2443, firstname.lastname@example.org
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