Social Cost and Material Loss: The Dakota Access Pipeline

67 Pages Posted: 12 Dec 2018 Last revised: 3 Jan 2019

See all articles by Carla Fredericks

Carla Fredericks

University of Colorado Law School

Mark Meaney

University of Colorado at Boulder - Leeds School of Business

Nick Pelosi

University of Colorado at Boulder

Kathleen Finn

University of Colorado Law School

Date Written: November 19, 2018

Abstract

This case study examines the numerous impacts attendant to the Dakota Access Pipeline (DAPL) project to highlight the costs that companies, financial institutions and investors linked to the project faced by not respecting the human rights of indigenous peoples. This case study thus serves as a basis for the assertion that social risk resulting from the absence of adequate human rights protections can have material impacts. The case study used multiple methods to quantify the material losses including a holistic cost assessment and, in part, an event study methodology. The results revealed that most DAPL tied entities experienced significant financial losses because of their association with the project. Significantly, this case study estimates that the costs incurred by Energy Transfer Partners, DAPL’s parent company, and other firms with ownership stake in DAPL for the entire project are not less than $7.5 billion, nearly double what the project was estimated to cost at the outset. The case study data points to several conclusions: notably that all entities must conduct thorough due diligence and disclosure on social risks related to human rights prior to any business transaction on or near indigenous lands; that costs accumulate to local communities, to taxpayers and to tribal governments as well as larger firms; and, that the #NoDAPL movement grew out of a growing social movement of indigenous peoples pushing for respect for their human rights as to development of their lands, territories, and resources.

Suggested Citation

Fredericks, Carla and Meaney, Mark and Pelosi, Nick and Finn, Kathleen, Social Cost and Material Loss: The Dakota Access Pipeline (November 19, 2018). U of Colorado Law Legal Studies Research Paper No. 19-1, Available at SSRN: https://ssrn.com/abstract=3287216 or http://dx.doi.org/10.2139/ssrn.3287216

Carla Fredericks (Contact Author)

University of Colorado Law School ( email )

401 UCB
Boulder, CO 80309
United States

Mark Meaney

University of Colorado at Boulder - Leeds School of Business ( email )

995 Regent Drive
Koelbel Building
Boulder, CO 80309-0419
United States

Nick Pelosi

University of Colorado at Boulder ( email )

1070 Edinboro Drive
Boulder, CO 80309
United States

Kathleen Finn

University of Colorado Law School

401 UCB
Boulder, CO 80309
United States

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