Global alliance to UBS: End fossil fuel financing in Verde Island Passage, stop backing PH’s dirtiest gas companies

Lucerne, Switzerland – A global alliance of environmental and human rights organizations urged Swiss bank UBS to withdraw its support from fossil fuel projects in the Verde Island Passage (VIP) – a critical biodiversity hotspot – during the bank’s Annual General Meeting held in Lucerne, Switzerland on April 10. The calls are championed by Protect VIP, an international network led by Filipino Catholic priest Father Edwin Gariguez.

As the second-largest European investor of San Miguel Global Power Holding, the power subsidiary of San Miguel Corporation (SMC), UBS’ investments total to USD 16.3 million – making it the sixth-largest institutional investor of the conglomerate worldwide.

SMC is planning to build 8 gas power plants and a liquefied natural gas (LNG) terminal in the Philippines, positioning itself as the largest gas expansionist in the country and the whole of Southeast Asia. Three of these projects are set to be built at the Verde Island Passage, one of the most biodiverse marine ecosystems in the world.

“This very ecosystem is now under threat, and the decisions made in this room directly contribute to this peril, impacting the lives and livelihoods of our people. This is not the first time that we have come to you about Verde Island Passage, but despite the discussions, you have continued your investments with San Miguel Corporation. Now, you’re also complicit in the dirty deals of its allies Meralco and Aboitiz”, Fr. Edwin Garriguez said during his speech appearing in front of the UBS’ shareholders.

UBS also served as the financial advisor to fellow dirty energy giants Meralco PowerGen Corporation (Meralco) and Aboitiz Power in the joint venture with SMC for the acquisition of the LNG import terminal and the power plants South Premiere Power Corporation (SPPC) and Excellent Energy Resources, Inc. (EERI) in Batangas.

This joint venture and power contracts entered into by the power plants - also with Meralco as distribution utility - are now the subject of challenge by consumer groups in the Philippines as an anti-competitive practice violative of national law. Section 45 of Republic Act No. 9136, or the Electric Power Industry Reform Act, the law that regulates the Philippine power sector, states that no distribution utility like Meralco can source more than 50% of its energy from associated power plants, which is now the case for SPPC and EERI.

These gas expansion plans are blocking the Philippines’ energy transition goals as SMC continues to harness energy from fossil gas in spite of its “vast potential to transform its power sector to near-100% renewable energy”, according to a Climate Analytics study commissioned by the Center for Energy, Ecology, and Development (CEED).

“We ask the board and shareholders: how can you justify your continued investments in fossil gas when renewable energy is most viable, rapidly expanding, and a transformative alternative for the people and the climate?”

The Protect VIP lead convenor also pointed out that safeguarding the marine corridor from destructive industrial activities is “a global issue”. In February, the Philippines was subjected to a review session at the 77th Session of the United Nations Committee on Economic, Social, and Cultural Rights (CESCR) as a party to the ESCR covenant. During the session, the committee has recommended measures for protecting the Verde Island Passage as part of efforts to uphold human rights.

“UBS is a huge, powerful, and formidable financial institution. But it is still accountable to international standards that align with global climate goals and the advancement of human rights. The suffering of our communities and the disruption of our marine ecosystems in the Philippines must never be at the price of your pursuit of greater profit”, said Gariguez. ###