Norfolk councils urged to cut ties with Russia-linked energy supplier
Some of our local authorities are being urged to ditch deals with TotalEnergies over Russia's invasion
Last updated 16th Mar 2022
Norfolk councils have been urged to sever their links with a controversial energy supplier which has refused to divest from its operations in Russia.
Tens of millions of pounds of Norfolk taxpayers’ money is tied up in contracts with French multinational TotalEnergies.
Six of the county’s local authorities have deals with the firm to provide gas and electricity to council homes, libraries, schools, public toilets, streetlighting and offices.
The company has become increasingly isolated in recent days as its rivals rush to exit Russia.
Two of its largest competitors, BP and Shell, have both said they will end all their shareholdings or joint projects in the country, chalking up billions of dollars of losses.
But TotalEnergies has stopped short of similar action and has instead said it will stop making any new investments in Russia, despite Ukraine’s foreign minister explicitly calling on the company to withdraw.
Locally, opposition politicians have urged Norfolk councils to end their contracts with the firm.
Brian Watkins, Liberal Democrat group leader at County Hall, said: “By keeping these contracts Norfolk County council is out of step with the views of Norfolk people who have been asking how they can help Ukrainian refugees.
“Through these contracts we are subsidising Russia off the back of the blood of Ukrainians and we should be doing all that we can to put the pressure on so the war can be stopped.”
Mr Watkins, a former Sheriff of Norwich, added: “The Conservative administration at County Hall should break the contracts with TotalEnergies as soon as possible, it should be a matter of priority rather than a set of feeble excuses.”
Green city and county councillor Jamie Osborn said: “It is very concerning that this company is refusing to divest from Russia, when we’ve seen the effect that that’s having, and that western companies are, in effect, supporting Putin’s war.
“I’d really urge the councils to look strongly at their contracts to make sure we have an ethical framework.”
Some councils have said they are currently reviewing the situation, while others have stressed it is very difficult to end the contracts at this stage.
Contracts totalling more than £14.8m over several years are currently held by TotalEnergies with Norfolk County Council, Norwich City Council, Broadland District Council, Breckland Council, Great Yarmouth Borough Council, and the Borough Council of Kings Lynn and West Norfolk.
The true amount of money committed to the company is understood to be significantly higher, because some authorities are believed to pay varying amounts to the firm month by month, depending on usage.
Most of the deals were arranged via a group called the Eastern Shires Purchasing Organisation (ESPO), which works to help public bodies use collective buying power to get lower prices.
The largest of the contracts are held with Norfolk County Council, with a spend in the last calendar year of £7.4m to TotalEnergies.
Last year, the authority struck a new deal to ensure the firm continues to supply it with gas until 2027.
Andrew Jamieson, the county council’s Conservative cabinet member for finance, said it would be impossible to pull out of the deal.
“Section 17 of the Local Government Act 1988 prohibits us from terminating these contracts on the basis of Total’s business interests in Russia,” he said.
A spokeswoman for Norwich City Council said: “As a council, we welcome TotalEnergies’ condemnation for the Russian actions in Ukraine and its decision not to fund new capital investment in the country.
“We are also supportive of ESPO’s work to review its supply chain in light of the situation in Ukraine and have specifically contacted the organisation regarding the TotalEnergies contracts. We will be reviewing our position in light of its feedback.”
A spokesman for Broadland District Council said: “We have been monitoring the announcements of the energy companies over the past two weeks and now that Total has made its position clear we are investigating all options open to the council and will decide how we move forward.”
A Breckland Council spokeswoman said the authority was “reviewing its contract to understand the options available”.
A spokeswoman for the Borough Council of King’s Lynn and West Norfolk said: “In light of their stance we are actively reviewing the terms of our contract to see what action can be taken.”
The Ukrainian minister of foreign affairs, Dmytro Kuleba, has explicitly called on TotalEnergies to withdraw from Russia.
“If they want to save peace, if they want to save lives of civilians, they must stop making business with Russia,” he said. “Trading with Russia is financing aggression, murder of civilians and destruction of peaceful cities…”
The firm said it “condemns Russia’s military aggression against Ukraine, which has tragic consequences for the population and threatens Europe”, adding that it “supports the scope and strength of the sanctions put in place by Europe and will implement them regardless of the consequences (currently being assessed) on its activities in Russia” and “will no longer provide capital for new projects” in the country.
The firm’s CEO Patrick Pouyanné has said the company has suspended trading Russian oil.
He added that all but one of TotalEnergy’s refineries were replacing Russian supplies and that it had come under no pressure from the French government to quit Russia because natural gas is currently exempt from sanctions.
An ESPO spokeswoman said the company did “not approve” of TotalEnergies’ continuing its investments in Russia.
“Because of events in Ukraine, we have been pressing TotalEnergies to change their investment strategy… We are extremely disappointed that they have not done so to date,” she said.
She added that severing links with the firm was “not straightforward” and removing them from their framework “would leave customers with significantly higher energy costs”.
North Norfolk District Council and South Norfolk Council both confirmed they do not have contracts with TotalEnergies.
Who are TotalEnergies?
With more than 100,000 employees across the globe, and total assets of $320.5bn, TotalEnergies is thought to be the 29th-largest public company in the world.
Along with competitors like BP, Shell, ExxonMobil and others, it is regarded as one of the world’s seven ‘supermajor’ oil companies.
The company has a large stake in a state-of-the art facility at Yamal in the Russian Arctic, producing liquified natural gas (LNG) – with the first cargoes shipped in 2017.
The French giant’s role in Yamal is thought to be important to its status as a major distributor of LNG, the consumption of which is expected to grow over the coming decade.
According to a 2017 report, the firm was one of the top 100 companies producing carbon emissions globally, responsible for 0.9% of global emissions from 1998 to 2015.
What do the contracts cover?
Norfolk County Council’s £7.4m contracts with the firm allow for gas and electricity to be supplied to the county’s libraries, schools, registry offices, depots, and streetlighting.
For Norwich City Council, TotalEnergies supply gas and electric to the city’s council housing, among other assets, via two contracts totalling £5.8m over four years.
Breckland’s contract – which provides gas and electricity to sites such as its Dereham headquarters, Elizabeth House – totals £1.344m over eight years.
In Broadland, public toilets in Coltishall, Reedham, Salhouse and Ranworth are all powered by TotalEnergies, and contracts with the firm also ensuring a supply of electricity to the council’s offices at Thorpe Lodge and Carrowbreck House, both on the edge of Norwich.
Broadland’s contracts with the firm total at least £258,500 over four years.
Great Yarmouth Borough Council confirmed that it too holds contracts with the firm, due to expire in 2023 and 2024. In December 2021 alone, the authority’s spend with the company was £36,444.
Its agreement covers crematoriums and the town’s marina centre, among other assets.
The Borough Council of King’s Lynn and West Norfolk also holds a contract, agreed via the Crown Commercial Service.
Under that contract, due to expire in 2023, some £31,333 was given to the firm by the borough in October to December 2021 alone.