Energy Shift Southeast Asia

JBIC’s environmental compliance arm to probe LNG activity in Philippine biodiversity hotspot

The Examiner for Environmental Guidelines of the Japan Bank for International Cooperation (JBIC) is set to investigate potential violations by the bank in relation to its support to the Atlantic Gulf & Pacific Company (AG&P), which built a liquefied natural gas (LNG) import terminal in the biodiversity hotspot Verde Island Passage (VIP) in the Philippines.

JBIC and Osaka Gas jointly invested USD 100 million in equity in AG&P — the developer of the first LNG terminal in the Philippines that began operations in May 2023.

In December 2023, fisherfolk leaders, local community members, and concerned groups led by Philippine-based environmental advocacy group Protect VIP filed a complaint with JBIC. AG&P’s LNG terminal in Batangas City is the subject of several complaints from stakeholders related to permit violations on tree cutting, land conversion, and environmental compliance. A confirmed violation of land conversion requirements, in fact, led to a cease and desist order by the Philippines’ Department of Agrarian Reform against the project in August 2022.

“We welcome JBIC’s decision. This is a first step for JBIC to finally hold itself accountable for its contribution to the proliferation of dirty gas energy in our Amazon of the oceans, in helping threaten the livelihood and overall well-being of communities, and in supporting a project that violated national laws. At the same time, it is a sign to all other developers and financial backers of LNG that communities will take a stand against their destructive plans,” said Fr. Edwin Gariguez, lead convenor of Protect VIP.

The investigation requested by Protect VIP and local stakeholders pertains to JBIC’s failure to monitor the compliance of AG&P local unit Linseed Field Power Corp. with Philippine national laws, failure to properly classify the environmental sensitivity of the project under its own regulations, and failure to take action as demanded by their own guidelines.

Hiroki Osada of Friends of the Earth Japan said, “We have seen the devastating impact on the marine biodiversity and livelihoods of fisherfolk in Batangas brought by several gas-related projects, one of which is the Ilijan LNG import terminal. JBIC’s examiners must look deep into the project’s multiple violations of its own guidelines in the procedure which is now underway so that JBIC takes responsible actions accordingly to protect the rights of fisherfolk who raised their voices even with the possible intimidation or harassment against them.”

The complaint is an unprecedented request for investigation to be accepted by the bank on LNG.

“When banks like JBIC fund destructive projects like the LNG terminal of AG&P, they are also funding the loss of livelihood of fisherfolk like us. We trust that they will be thorough in the conduct of this investigation. On our part, we will be vigilant to make sure that fisherfolk and communities in the VIP are given justice,” said Rodrigo de Jesus, President of Solidarity of Fisherfolk in Batangas.

Japanese banks are the top lenders of fossil gas projects in Southeast Asia, with JBIC as the biggest financier at USD 3.3 billion from 2016 to 2023. Alongside Vietnam, the Philippines is currently confronting the biggest propositions for new gas capacity in the region.

“Japan is one of the world’s biggest promoters of continued fossil fuel dependence and is driving global gas expansion today. Commencing this investigation with its public finance arm is a critical opportunity for Japan to right its wrongs to communities and countries suffering from fossil-fueled socio-economic, environmental, and climate crises. Even US President Biden’s recent decision to stop issuing LNG export approvals should be taken as a sign by Japan that it is high time to rethink its insistence on forcing more LNG and fossil fuels in the Philippines and the rest of the world,” said Gerry Arances, executive director of think tank Center for Energy, Ecology, and Development (CEED) and co-convenor of Protect VIP.