September 22, 2021
Mr. Junichi Hanzawa
President & CEO of MUFG Bank, Ltd.
2-7-1, Marunouchi, Chiyoda-ku, Tokyo, Japan[Letter of Request]
Do Not Finance LNG Canada Project andWithdraw from Coastal GasLink Pipeline Project
Dear Mr. Hanzawa,
As of September 2021, the Japan Bank for International Cooperation (JBIC) is considering
financing for the LNG Canada project in Canada, which plans to liquefy the gas being transported
through the Coastal GasLink pipeline your bank has already decided to finance1. We, the undersigned
groups, recognize that there are serious problems related to the pipeline project and the LNG Canada
project such as human rights violations of Indigenous Peoples and the risks of worsening climatechange. It is not clear which private bank is considering co-financing with JBIC for the LNG Canada
project. However, as there is a possibility that your bank will co-finance, we urge your bank not to doso. We also call for the suspension of financing for the Coastal GasLink pipeline project.
The LNG Canada project plans to transport shale gas extracted in the Montney Formation in
British Columbia (BC) through a 670 kilometer pipeline to Kitimat, where the gas will be liquefied
and exported to Asian markets. The project will not be made possible without the shale gas and thepipeline development projects which your bank has already financed, and therefore it is important tocarefully consider the impacts of these associated projects when considering financing the LNG
Canada project. We request you to review the following concerns carefully and make a sincere
decision.
Violations of Indigenous Peoples’ rights
1. Pipeline
The Coastal GasLink pipeline project plans to transport gas to the LNG Canada terminal
through the lands of the Wet'suwet'en Nation, but traditional chiefs of the nation have not agreed tothe pipeline project.
Wet’suwet’en has never given up their rights to the land, claiming that it is unceded land. In
fact, in regard to land rights, in 1997 the Supreme Court of Canada ruled that the ownership and useof land belong to Indigenous Peoples, including the land of Wet’suwet’en (Delgamuukw case)2. The
case also confirmed that the hereditary chiefs were the title holders.
Cas Yikh, a house group in the Wet’suwet’en First Nation affected by the pipeline, also
submitted a letter to JBIC, clearly addressing that they have not given up their rights to the land used1

Rainforest Action Network”WHO’S BANKING THE COASTAL GASLINK PIPELINE?””https://www.ran.org/the-understory/2020-update-whos-banking-the-coastal-gaslink-pipeline-2/ SEP 15, 20202
'We still have title': How a landmark B.C. court case set the stage for Wet'suwet'enprotests”,https://www.cbc.ca/news/canada/british-columbia/delgamuukw-court-ruling-significance-1.5461763,
CBC News, Feb. 13, 2020

for the pipeline. The letter also states that the project has violated the United Nations Declaration on
the Rights of Indigenous Peoples (UNDRIP)3.
In the interim ruling of a 2018 case brought by the Coastal GasLink Pipeline Limited, the BC
Supreme Court recognized that the company would suffer losses due to the protest of Indigenous
Peoples and permitted the continuation of the Coastal GasLink pipeline project. Coastal Gaslink
themselves argued that they had already suffered losses in the ‘tens of millions of dollars’ in the firstyear of construction4. As mentioned above, Wet'suwet'en have never relinquished their land rights,
and the land rights traditionally belong to Wet’suwet’en. There was also a nationwide solidarity strikein Canada when armed police cracked down on Indigenous Peoples protesting peacefully against thepipeline.
2. Gas development
The Blueberry River First Nations have filed a lawsuit claiming that their treaty rights havebeen infringed due to cumulative effects of development in the area of the Montney shale gas field.
The court has found that the rights to traditional land use guaranteed under the Treaty 8 have been
violated5. As a result, the court ordered the BC government to stop issuing any new permits for oil andgas development. The BC government announced that it will not appeal the case6.
In fact, as the Indigenous Peoples have pointed out, serious environmental damage anddestruction of their hunting grounds have been reported in the region7.
In addition, the project to build an additional pipeline between the gas development site andthe Coastal GasLink pipeline that JBIC is considering financing8 appears to be in the area where theBlueberry River First Nations' traditional land-use rights are recognized and respected. Building thepipeline could infringe their treaty rights.
3. Site C dam
All trains for the LNG Canada project will be driven by natural gas turbines, and all otherfacilities will be powered by the British Columbia and Hydro Authority (BC Hydro).
BC Hydro is developing the Site C dam with a generating capacity of 1,100 megawatts (MW)on the Peace River in northwestern BC. According to the company's website, construction began in
December 2014 and is scheduled to be completed in 2024. It is not known from which power plant
BC Hydro will supply electricity to the LNG Canada project, but once the dam is completed, it ishighly likely that the electricity supplied by the Site C dam will be used in the gas development in theregion. In fact it has been pointed out that the Site C dam is actually being constructed for gas
development9.
3

Letter to JBIC by Cas Yikh, https://www.foejapan.org/aid/jbic02/lngcanada/pdf/210327_en.pdf,
Sunny Deol Affidavit May 10th, 2019 Huson vs CGL
5
Yahey v. British Columbia, 2021 BCSC 1287, https://www.bccourts.ca/jdbtxt/sc/21/12/2021BCSC1287.htm#_Toc75942743
6
Government of British Columbia “Attorney general’s statement on Yahey v. British Columbia” 28 July 2021
https://news.gov.bc.ca/releases/2021AG0117-001488
7
Eliana Macdonald “Atlas of Cumulative Landscape Disturbance in the Traditional Territory of Blueberry RiverFirst Nations, 2016” https://davidsuzuki.org/wp-content/uploads/2017/09/atlas-cumulative-landscapedisturbance-traditional-territory-blueberry-river-first-nations-2016.pdf, June 2016.
8“RE: Determination of Application Number 10011026” https://www.jbic.go.jp/ja/businessareas/environment/projects/pdf/62412_5.pdf
9“To understand B.C.’s push for the Coastal GasLink pipeline, think fracking, LNG Canada and the Site Cdam” https://thenarwhal.ca/to-understand-b-c-s-push-for-the-coastal-gaslink-pipeline-think-fracking-lngcanada-and-the-site-c-dam/, The Narwhal, March 3 2020, https://www.sitecproject.com/faq FAQ on Site C dam
by the BC Hydro clearly mentions “The electricity needs of Liquefied Natural Gas (LNG) facilities would
further increase demand.”
4

The Site C dam project has been in the works for more than 30 years, but it has been rejected
twice because of its cost and environmental impact10. The construction of the Site C dam will
submerge the land of the West Moberly First Nations and result in the loss of biodiversity land andwetland called tufa seep. This has led to strong opposition from environmental groups and Indigenous
Peoples.
Concerns about the weak foundation in the area where the project will be carried out are alsosignificant11. West Moberly has requested BC Hydro and the BC state government to disclose theirsafety documents to the BC court. In May 2021, the BC Supreme Court granted the appeal of West
Moberly and ordered BC Hydro and the state government to disclose the documents12.
Furthermore, the area where the Blueberry River First Nation is entitled to traditional land use
overlaps with the Site C dam site, and the aforementioned ruling may affect the Site C dam project.
On December 13, 2019, the United Nations Committee on the Elimination of Racial
Discrimination adopted a resolution calling on the federal government to immediately suspend theconstruction of the Coastal GasLink pipeline project, the Trans-Mountain pipeline project and the Site
C dam project until free prior, informed consent (FPIC) is obtained13.
Your bank has adopted the Equator Principles, and for “[p]rojects with impacts on lands andnatural resources subject to traditional ownership or under the customary use of Indigenous
Peoples”14, the Equator Principles demand you make financing decisions based on the International
Finance Corporation (IFC) Performance Standard, which requires banks to obtain FPIC. In addition,
your MUFG Environmental and Social Policy Framework states that impact on Indigenous Peoples
communities will be carefully considered, and “if the environmental and social management approachof client’s is not considered sufficient relative to the level of the potential risks or impacts, financing
will not be provided.”15 This means that if your bank decides to finance the LNG Canada project, it
will violate your own policy. It is also clear that the continuation of financing for the Coastal GasLink
pipeline project needs to be reviewed in light of the Equator Principles and your policy.
Environmental impact of shale gas development
The environmental impact of shale gas extraction cannot be overlooked. Much of the gas isstored in underground sandstone, but shale gas is contained in shale layers hundreds to a thousand
meters underground, which require drilling down to the shale layers to create cracks (fracks) in therock and break it up under high pressure. This method is called hydraulic fracturing (fracking) andcauses a high environmental impact. There are various risks, such as seismic risk, water pollution
from water injected for fracking, air pollution risk, and global warming risk from methane emission.
Because of these risks, fracking has been banned in France in 2011 and Bulgaria in 2012, and a ban

10

See footnote 4“Top B.C. government officials knew Site C dam was in serious trouble over a year ago: FOI docs”
https://thenarwhal.ca/site-c-dam-geotechnical-problems-bc-government-foi-docs/, The Narwhal, Oct 21 2020,
12“BC Hydro, province ordered to release secret Site C dam docs to West Moberly First Nations”
https://thenarwhal.ca/bc-supreme-court-site-c-documents/, The Narwhal, May 5 2021,
13
Committee on the Elimination of Racial Discrimination “Prevention of racial discrimination, including early
warning and urgent action preceedure” https://tbinternet.ohchr.org/Treaties/
CERD/Shared%20Documents/CAN/INT_CERD_EWU_CAN_9026_E.pdf?_ga=2.171294304.1158930249.161
8 324061-1016472279.1618324061, Dec 13 201914
The Equator Principles July 2020, https://equator-principles.com/wp-content/uploads/2021/02/The-EquatorPrinciples-July-2020.pdf p.12
15
MUFG “Environmental and Social Policy Framework” https://www.mufg.jp/english/csr/policy/index.html
11

on fracking is being implemented in more countries and cities these days16. Fracking is the method
used for gas extraction in the Montney, and operations in parts of the Montney have been suspended
due to earthquakes believed to have been triggered by fracking17.
Inconsistency with climate targets
The Paris Agreement, an international treaty on climate change, sets a goal of limiting global
average temperature increase to 1.5 degrees Celsius. To achieve this goal, global greenhouse gas
emissions must be reduced to net zero by 2050. In other words, the development of new gas fields,
mining, and construction of gas-related facilities will lead to the long-term lock-in of new greenhousegas emissions, and do not meet the goals of the Paris Agreement. The LNG Canada Project isscheduled to start operation in fiscal 2024 for 40 years. If the project proceeds as planned, liquified
natural gas (LNG) production will continue even after 2050.
Your bank announced the MUFG Carbon Neutrality Declaration in May 2021, and stated thatyou would aim to achieve net zero greenhouse gas (GHG) emissions across its finance portfolio by
205018. If your bank truly plans to aim at the net zero by 2050 target, financing a LNG project, whichis expected to operate after 2050, is fundamentally inconsistent with this declaration.
You also touch upon the consistency with the Paris Agreement in your MUFG Environmental
and Social Policy Framework. The report ("Net zero by 2050") released by the International Energy
Agency in May 2021 made it clear that new oil and gas investments should not be made after 2021.
Based on this report, your bank should not finance the LNG Canada project which allows large
amounts of additional greenhouse gas emissions in order to be consistent with the Paris Agreement.
Financial risks
The costs of the pipeline and the dam projects have already increased due to opposition from
Indigenous Peoples, lawsuits and construction delays caused by the spread of COVID-19. The Coastal
GasLink pipeline project is already facing cost overruns and is currently in dispute over the cost ofgas with LNG Canada due to these extra costs and delays19. The Site C dam's construction costs havedoubled from an initial estimate of CAD 8.8 billion to CAD 16 billion20.
If regulations and restrictions on the use of fossil fuels including gas are promoted in the
future as a measure against climate change, assets related to gas may become stranded assets in the
future21.
16
GNHRE “The legal status of fracking worldwide: An environmental law and human rights perspective.”
https://gnhre.org/2020/01/06/the-legal-status-of-fracking-worldwide-an-environmental-law-and-human-rightsperspective/ Jan 6 2020
17
Natural Gas Intelligence ”Montney Fracking Suspended at Least 30 Days Pending Earthquake Investigation”
https://www.naturalgasintel.com/montney-fracking-suspended-at-least-30-days-pending-earthquake-investigation/, Dec 7th 2018, NGI “Further Research Exposes Montney Shale Earthquake Risks”
https://www.naturalgasintel.com/further-research-exposes-montney-shale-earthquake-risks/ Sep 26 201918
Mitsubishi UFJ Financial Group Inc. (MUFG) “MUFG Carbon Neutrality Declaration”
https://www.mufg.jp/dam/pressrelease/2021/pdf/news-20210517-003_en.pdf May 17, 2021
19
“LNG Canada project threatened amid cost dispute over Coastal GasLink pipeline” Financial Post 29 July
2021 https://financialpost.com/commodities/energy/oil-gas/shell-lng-project-threatened-amid-cost-dispute-overgas-pipeline
20

Global Energy Monitor “Gambling On Gas: Risks Grow For Japan’s $20 Billion LNG Financing Spree”
https://globalenergymonitor.org/wp-content/uploads/2020/07/JapanLNG_2020_r2.pdf July 2020.
21“Gas is the new coal with risk of 100 billion in stranded
assets” ”https://www.bloomberg.com/news/articles/2021-04-17/gas-is-the-new-coal-with-risk-of-100-billion-instranded-assets. Bloomberg, April 17 2021.

Moreover, according to a report by Global Energy Monitor, the LNG business in Japan has
been exposed to risks even before the spread of COVID-19. According to data published by trading
companies in 2020, the LNG-related businesses of ITOCHU, Marubeni, Mitsubishi Corporation,
Mitsui, and Sojitz together experienced a US $625 million year-on-year decline in profit.
For the reasons addressed above, we request that your bank refrain from providing financing
to the LNG Canada project that has serious concerns about Indigenous Peoples and the environment,
as well as risks for climate change. It also involves financial risks. We furthermore call for a review ofthe financing of the Coastal GasLink pipeline project and the withdrawal of the project.

Friends of the Earth Japan
Cas Yikh (Gidimt’en Clan, Wet'suwet'en Nation)
Wilderness Committee
Kiko Network
Japan Center for a Sustainable Environment and Society (JACSES)
350.org Japan
Mekong Watch

Contact:
Friends of the Earth Japan
1-21-9 Komone, Itabashi-ku, Tokyo 173-0037
TEL: (+81) 3-6909-5983 e-mail: info@foejapan.org