The country’s largest retirement fund is calling on financial institutions with investments in the Dakota Access Pipeline to browbeat the project’s developers into rerouting it away from American Indian tribal grounds.
California Public Employees’ Retirement System (CalPERS) believes construction on the $3.8 billion line will lead to an “escalation of conflict and unrest as well as possible contamination of the water supply.” The $309 billion fund thinks any violence related to the so-called DAPL could potentially damage future investments.
“We call on the banks to address or support the tribe’s request for a reroute and utilize their influence as a project lender to reach a peaceful solution that is acceptable to all parties, including the tribe,” CalPERS wrote in a letter Friday to various banks it uses to toggle retirees’ benefits.
Its action was likely a response to proposed legislation from California directing the fund to divest from all companies investing in the project. The bill, spearheaded by Democratic Assemblyman Ash Kalra, would compel the group to sell off shares in Dakota Access LLC and Energy Transfer Partners (ETP), the company behind the 1,178-mile-long project. It would also have to sever relation with 11 other banks associated with DAPL.
Kalra said he was impressed by CalPERS’ stance ‚Äì yet he still intends on pushing forward on legislation forcing the fund to purge its investments in the line.
“As a significant investor in the Dakota Access Pipeline, it is important that California continues to take steps to respect the sovereign rights of the Standing Rock Sioux tribe and raise awareness on the environmental impacts the Dakota Access Pipeline would have on its lands,” Kalra told reporters in a statement.
Democrats have targeted CalPERS’ fossil fuel investments in the past. Democratic Congressmen Ted Lieu and Mark DeSaulnier, for instance, sent a letter to the fund’s CEO Anne Stausboll in March 2016 suggesting the pension fund’s decision to invest in Exxon Mobil is “morally suspect.”
The fund, meanwhile, maintains that staying involved in ETP gives CalPERS the ability to force projects like DAPL to change direction ‚Äì the group’s staff argued Monday that there is “considerable evidence” that divesting is a fool’s errand, because it’s merely a transfer of ownership from one institution to another.
Opposition to 1,172-mile-long pipeline ratcheted up recently after President Donald Trump signed a pair of executive orders in January approving the construction of the DAPL and Keystone XL. The Army Corps of Engineers, through the Obama administration, rejected the route Dakota was supposed to take across Lake Oahe.