CU Boulder study found Dakota Access backers lost $7.5 billion

BOULDER — A new study from the University of Colorado Boulder found that the companies involved with constructing the Dakota Access Pipeline, or DPL, lost at least $7.5 billion.

The study came from CU Boulder’s First Peoples Investment Engagement Program, a partnership between the Colorado Law School and the Leeds School of Business and housed at the Center for Native American and Indigenous Studies.

The financial impacts stem from protests, boycotts and legal challenges opposing the 1,172-mile-long oil pipeline. From 2014 to 2017, the DAPL went through significant delays due to opposition by the Standing Rock Sioux Tribe and other tribes with ancestral lands along the path of the pipeline. Indigenous people and allies from across the globe joined in protests and boycotts.

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As a result, Energy Transfer Partners, the parent company of the DAPL, saw a 20 percent decline in stock prices over that period. (For reference, the S&P 500 grew 35 percent over that period.)

The cost ballooned to nearly double its initial budgeted cost, the study determined. Financial backers also saw divestment campaigns surrounding the #NoDAPL movement. City governments cost banks more than $4.3 billion by divesting while individual bank account holders contributed to a $86 million loss.

Carla F. Fredericks, with CU Boulder’s American Indian Law Clinic, and Mark Meaney, with the Center of Ethics and Social Responsibility, studied the financial impacts. They found that had backers of the project taken into consideration the social pressures that would oppose DAPL ahead of time, they could have stemmed the significant losses.

“These losses show how important it is for companies to fully account for environmental, social and governance risks before projects get going,” Meaney said in a prepared statement. “Social risks are clearly overlooked in the market.”

The study shows the need for companies and investors to consider how they engage with indigenous peoples.

“Across the board, this project was out of line with the existing principles outlined in the United Nations Declaration on the Rights of Indigenous Peoples and other international standards for resource development near indigenous peoples’ lands,” Fredericks said in a statement. “The losses in this study underline that companies need to take those principles into account.”

Going forward, Fredericks and Meany recommend companies develop processes to incorporate free, prior and informed consent into their projects. They designed a questionnaire to help investors in their engagement with indigenous peoples.

“This study shows the importance of robust engagement between investors and indigenous peoples,” Fredericks said. “Companies can and should be developing inclusive and culturally responsive due diligence processes when project development occurs on and near indigenous peoples’ lands or with their resources.”