For Peru’s Indians, Lawsuit Against Big Oil Reflects a New Era

By Kelly Hearn
Special to The Washington Post Thursday, January 31, 2008;

[youtube=http://www.youtube.com/watch?v=WpMkMEfurts]

NUEVO JERUSALEM, Peru — Tomás Maynas Carijano strolled through his tiny jungle farm, pinching leaves, shaking his head. The rain forest spread lushly in all directions — covering what oil maps call Block 1AB.

“Like the trunk of that papaya, the cassava and bananas are also dying,” said the spiritual leader of this remote Achuar Indian settlement in Peru‘s northern Amazon region. “Before Oxy came, the fruits and the plants grew well.”
Oxy is Occidental Petroleum, the California-based company that pulled a fortune from this rain forest from 1972 to 2000. It is also the company that Maynas and other Achuar leaders now blame for wreaking environmental havoc — and leaving many of the people here ill. Last spring, U.S. lawyers representing Maynas and 24 other indigenous Peruvians sued Occidental in a Los Angeles court, alleging that, among other offenses, the firm violated industry standards and Peruvian law by dumping toxic wastewater directly into rivers and streams.
The company denies liability in the case.
For indigenous groups, the Occidental lawsuit is emblematic of a new era. The Amazon region was once even more isolated than it is today, its people largely cut off from environmental defenders in Washington and other world capitals who might have protected their interests. Now, Indians have gained access to tools that level the playing field — from multinational lawsuits to mapping technologies such as Google Earth.
Oil companies that once traded money and development for Indians’ blessings are increasingly finding outsiders getting involved. “History has shown that oil companies will cut corners if someone isn’t watching,” said Gregor MacLennan of Shinai, an internationally funded civic group in Peru. “We try to get to local communities first to help them make informed decisions about oil companies and the changes they bring.”
Lured by global energy prices, Peru is placing record bets on Amazon energy lodes: Last year the country’s concessions agency, PeruPetro, signed a record 24 hydrocarbon contracts with international oil companies. EarthRights International, a nonprofit group that is helping represent the plaintiffs in the Achuar case, says half of Peru’s biologically diverse Amazon region has been added to oil maps in the last three years.
Occidental pumped 26 percent of Peru’s historic oil production from Block 1AB before selling the declining field to Argentina‘s Pluspetrol in 2000. “We are aware of no credible data of negative community health impacts resulting from Occidental’s operations in Peru,” Richard Kline, a company spokesman, said in an e-mail statement.
Kline said that Occidental has not had operations in Block 1AB in nearly a decade and that Pluspetrol has assumed responsibility for it. Occidental made “extensive efforts” to work with community groups and has a “long-standing commitment and policy to protect the environment and the health and safety of people,” he said.
The California-based group Amazon Watch has joined the suit as a plaintiff, and the case is now inching through U.S. courts. In a federal hearing scheduled for Feb. 11, company lawyers will ask a judge to send the case to Peru, where Indians say corruption and a case backlog will hurt their chance of winning.
Learning Their Rights
The primitive trumpet — a hollowed cow’s horn — brayed over this gritty river community at sundown. Residents of Nuevo Jerusalem, the Achuar settlement on the Macusari River, trudged up a path, toting shotguns and fishing nets. Some stepped down from palm huts, walking to the meeting in twos and threes. Soon, Lily La Torre was on stage.
“I’ve come to give you news of the Oxy suit,” said La Torre, a Peruvian lawyer and activist working with Maynas’s legal team. Barefoot women in dirty skirts circled the room, serving bowls of homemade cassava beer.

Indigenous Movement’s Protest of Oil Development


The Peruvian government, recently, has been involved in an intense campaign to exploit oil and gas resources in the Peruvian Amazon: as of 2007, more than 70% of the Amazon region has been marked for oil and gas development. This number has increased drastically, given that in 2004 only 13% of the area was in the hands of oil and gas companies. Given the ugly history of oil development in the region, indigenous people who make their home in the Amazon are extremely worried about the potential environmental, social, economic, and cultural consequences of such a massive influx of oil and gas exploitation. Moreover, the imposition of oil and gas development in the region without indigenous consent represents a violation of indigenous rights (national and international) to determine their own development path (e.g. International Labour Organization 169). 

Given the power of the Peruvian state and transnational oil companies to control and manipulate the process of oil development, AIDESEP (the Interethnic Development Association for the Peruvian Jungle) and FECONAU (Federation of Native Communities from the Ucayali Region of the Amazon) have asked for our assistance in making indigenous voices (protest) heard at the highest levels. On February 8th, 2008, in Houston, TX, Perupetro is sponsoring an event that is primarily designed to convince potential investors of the benefits of oil development in Peru. Contrary to Peruvian State’s pro-development discourse, leaders of AIDESEP and FECONAU want to manifest their opposition to oil and gas development in Peru and to firmly reject the entrance of petroleum companies on their communal territories. This decision was made on the 22nd of January in a FECONAU conference, with the presence of 120 indigenous leaders, where three (3) delegates were elected unanimously to send a message of protest at the Houston meeting.

What they are asking for:

One plane ticket from Lima to Houston.
Logistical support for food and hotel for a contingency of 4 people.
Transportation (car rental).

WE NEED YOUR HELP!
(You can make a donation with your credit card by clicking PayPal on the upper right corner of this blog or by phone 970-491-5754.)

All donations are 100% tax-deductible and any amount is greatly appreciated!

As you know, Village Earth has been in alliance with Shipibo leaders and indigenous organizations in the Amazon working for their rights to self-determination for over three years now. They are relying on us and our network of supporters to let their voice be heard. This is a seminal moment in protecting both the Amazon rainforest and indigenous livelihoods – WE HAVE TO ACT FAST and WE NEED YOUR SUPPORT!

US Congress Passes Free Trade Agreement with Peru

Reposted from: Upside Down World

Written by Jennifer Gunderman and April Howard
Wednesday, 14 November 2007
ImageA new trade deal with Peru that passed in the US Congress last week boasts non-binding concessions in terms of labor and environmental concessions, and promises more of the same damages to both countries.

President Bush seems to have scored another gain in his trade agenda as Congress approved a free trade agreement with Peru by a comfortable 285 to 132 margin. Still basking in his victory from the recent Costa Rica-CAFTA ratification vote in October, Bush and his supporters hope these recent victories will lead to the approval of pending free trade agreements involving Colombia and Panama.

Concessions That Don’t Concede

This apparent bipartisan free trade approval with Peru became a reality only after Democrats won concessions from the Bush administration regarding labor and environmental issues. These concessions stem from concerns over several NAFTA impact studies that criticized the trade agreement’s lack of protection against trade abuses as well as poor procedures and lack of program funding that could threaten the environment.

A statement released by Democratic Rep. Charles Rangel, chairman of the House Ways and Means Committee called “for the inclusion of labor standards [such as the right to go on strike] and environmental protections including access to medicines and logging controls that will create a landmark in free trade agreements.” However, actual environmental concessions in the deal only “require the US and Peru to enforce their domestic environmental laws and conform to international environmental standards.” According to Joshua Holland of Alternet, Tom Donohue, head of the U.S. Chamber of Commerce, said that his members were “encouraged” by assurances that the deal’s labor provisions “cannot be read to require compliance.”

Despite these concessions, according to Amazon Watch, the agreement “grants new rights for oil companies to drill in the Peruvian Amazon, potentially causing massive deforestation and environmental destruction; [which] will therefore lead to more road construction, literally paving the way for colonists, illegal loggers and poachers, fails to explicitly prohibit trade in endangered species, instead merely re-asserting the U.S.’s existing right to reject timber imports from species listed in the Convention on International Trade in Endangered Species (CITES); Includes in Chapter 10, investor rights provisions that would allow foreign companies to skirt Peruvian law and regulatory authorities [, which] . . . goes further than controversial equivalent clauses in NAFTA and CAFTA; [and] Will benefit U.S. corporations such as Hunt Oil, ConocoPhillips, Occidental Petroleum and Newmont Mining over Peruvian and U.S. citizens.” US copyright and trademark protection in agreement also means Peru’s poor could be hit as the price of medicine rises by 30%, according to the BBC.

Losses to Workers in Both Countries

Opponents to the Peru free trade agreement, most notably strong labor unions both in Peru and the United states, caution that this trade agreement does little to either benefit or protect workers in either country.

Jiron Cusco, president of the General Workers Confederation of Peru (CGTP) takes his opposition a step further stating that the Peru FTA will benefit only a small population of Peru’s wealthiest citizens and that the treaty would “seriously affect Peru’s economy.”

While textiles and agro-export industries, which already export to the US, could benefit, the real benefits are for US businesses. In an interview with Alternet
e=”font-family:georgia,times new roman,times,serif;font-size:100%;”>, research director of Public Citizen’s Global Trade Watch, Todd Tucker, named dozens of multinational businesses and corporations including Citigroup, Occidental Petroleum and Wal-Mart, who have “put their full might into getting the Peru deal passed, including showering millions in congressional campaign donations since January alone . . . [Hoping for] privatized social security systems for Citi, rainforest-destroying oil extraction for Occidental, and a push to Wal-Mart’s efforts to buy out Peru’s retail sector, just as they did in Central America just days after Bush signed [the Central American Free Trade Agreement].” Holland also names General Mills and the Grocery Manufacturers Association PAC as interested parties because they grow vegetables in Peru and plans to move processing facilities to the country as well. Financial service firms including Citibank also stand to gain from the deal’s provisions to allow the company to “sue the Peruvian government for damages if progressive activists succeed in reversing a disastrous social security privatization scheme” that has had disastrous consequences for millions of Peruvian retirees.

Duties will be immediately eliminated “on 80% of industrial and consumer product exports to Peru, and more than two-thirds of farm exports.” Many worry that the disastrous effects of NAFTA in Mexico will be repeated in Peru as subsidized US agricultural produce, including wheat, maize and cotton, will rob Peruvian farmers if business and drive up food prices within the country. In fact, Peru’s government reports that it has put aside about $77 million in order to compensate farmers who suffer losses during the first five years of the agreement.

“We will have an absolutely unjust competition between Peruvian agricultural products and North American agricultural products, because the US subsidizes its agricultural products and we don’t”, says Javier Diez Canseco, head of the Peruvian Socialist Party and a former presidential candidate. “So there is a very strong difference between the conditions of production and the subsidies that the US farmers receive and those that Peru has to deal with.” Nearly half of Peru’s population still lives on less than $2 a day.

According to the Third World Network, though Peru’s economy could increase by $417 million increase in the first year of the agreement, “these gains will be directed almost exclusively at the [mainly coastal] urban sector, which could benefit by $575 million.” Lima-based public policy research institute, GRADE, predicts that the poorest of the rural sector, Quechua and Aymara subsistence farmers in the rural highlands, and in the Amazon interior will suffer losses to the tune of $158 million. TWN says that “The findings of this report echo impact analyses conducted in Colombia and Ecuador, who are negotiating similar FTAs with the US.”

On the other end of the spectrum, a study by the Economic Policy Institute’s Josh Bivens found that US neoliberal trade policies have depressed the wages of 70 percent of the U.S. population. In a statement released by the Teamsters Union, president Jim Hoffa cites the “slim margin” of victory in the Congressional approval of the Peru FTA as evidence of its lack of protection for American workers affected by “off shoring of American jobs.” Hoffa is calling on Congress to focus on trade policies rather than ratification of free trade agreements.

Democratic Support and Dissent

One of the most surprising parts of the agreement was the Democratic Party support it received: 109 Democrats voted yes and 116 voted no. Even House Speaker Nancy Pelosi commented on the paradoxical nature of her for the agreement. “Frankly, I have largely been on the other side of it than I am tonight,” she said. During the debate, many Democrats accused Pelosi of betraying the party’s base.

Journalist Steven R. Weisman of The New York Times Media Group points to two factors that led to democratic support. First, the concessions won in terms of “protections for workers and for the environment in Peru, and by extension in trading-partner countries in future trade deals.” And second, “sizable campaign contributions from the sectors that are benefiting the most from the global economy. These include financial services firms, computer chip makers and other high-tech manufacturers, the entertainment industry and farmers dependent on selling to markets overseas.”

Presidential candidates, “who receive support from unions but also from export-oriented industries,” demonstrate the conflict generated by the issue. O
pposed to the deal were John Edwards, Dennis Kucinich, Christopher Dodd and Joe Biden. Sen. Hillary Clinton, surrounded by pro-free trade Clinton administration officials, sent mixed messages, including asking for a review of NAFTA negotiated by President Bill Clinton, but then decided to
support the agreement. According to Alternet, Sen. Barack Obama, “said that he’d vote for the Peru deal because “it contained the labor and environmental standards sought by groups like the AFL-CIO,” but the AFL-CIO released a statement saying that, because of “several issues of concern to working families,” the AFL-CIO “is not in a position to support the Peru FTA.”

However, Lori Wallach, director of Global Trade Watch at the advocacy group Public Citizen said that “Despite all the pressure, most Democrats, most committee chairmen and three-fourths of the freshmen in the House said no to Speaker Pelosi. The Democrats must now abandon the Bush trade agenda and work on an agenda they can agree on.”

Oil Companies to Begin Drilling in Masisea

Above: This map shows the different exploration and exploitation blocks leased out by the Peruvian government to the oil companies. 

Below: A view of the proposed drilling area as seen from satellite images.

The Shipibo expressed their grave concern about the exploitation of Block 114 which is home to dozens of Shipibo and other indigenous communities. Not only are the communities living within the confines of Block 114 worried, but also those downstream because of the expected water contamination from the oil sites.

PanAndean Resources has purchased the rights to Block 114 and is expected to begin drilling in 2008. 

Pan Andean Resources is headquartered in Dublin, Ireland. Here is an excerpt from their website: 

Block 114 located in Central Peru: 1.85 million acres;
At least 10 anticline structures identified in Block:
Estimated oil resources in block: 400 millions Barrels; API of oil: 30 – 35°;
Easy river access to refineries. Exploration commenced Q3 2006.
First phase involves reprocessing and interpretation of 500 kilometres of seismic followed by 150 kilometres of new seismic and one well.
Technical and environmental work in progress on Rio Caco structure.
Drilling up to 3 wells on Rio Caco to be completed by April 2008.
Block 114, located in the Ucayali Sub Andean Basin, north of the world-class Camisea gas-condensate field, with proven and probable reserves in the range of 15 TCF of natural gas and 600 million barrels of condensate. Block 114 is located to the south of important oil and gas fields such as Maquia, Aguas Calientes and Aguaytia. The immediate focus will be on confirmation and production drilling of the Rio Caco Structure. Potential recoverable reserves are in the range of 90 million barrels. Production would reach 30,000 barrels per day in 2012. The Work Plan will be to carry out the required Environmental Impact and Technical Evaluation work, in order to be drilling the Rio Caco confirmation well beginning in August-September 2007. Should that well be successful, three additional wells would be drilled as soon as practical and production would be flowing beginning in March-April 2008.”

There is no mention of the thousands of indigenous people that inhabit the region, nor the possible consequences to the health of the world’s largest remaining tropical forest, nor to the world’s largest watershed.
According to Peruvian Law: “The Organic Law for Hydrocarbons, Law N° 26221, was enacted on August 19, 1993, coming into effect on November 18, 1993. Such norm was modified by Law No. 26734 as of December 30 1996, No. 26817 as of June 23, 1997, and Law No. 27343 as of September 01, 2000, No. 27377 as of December 06, and Law No. 27391 as of December 29, 2000. This norm, which is intended to foster the investments in fuel resource exploration and exploitation activities, created PERUPETRO S.A. as a Private Law State Company of the Energy and Mining Sector. 

Considering such law, the Government promotes the development of Fuel Resource activities based on the free competition and access to the economic activity, guaranteeing the juridical stability of the contracts according to provisions set forth in article 62° of the Constitution of Peru.Likewise, it guarantees the Contractors the stability of the taxation and foreign exchange regimes in force to the date of the signing of the contract.

Law No. 26221 sets that Fuel Resources exploration and exploitation activities will be carried out under the form of License Contracts as well as Service Agreements or other contract modalities authorized by the Ministry of Energy and Mining, and governed by the Private Law, and which after being approved and signed, may only be modified according to a written agreement signed by both parties. Likewise, any modification must be approved by Supreme Decree.” (Source: PeruPetro.com) 

However, also according to Article 89 of the Peruvian Constitution:
“Rural and Native Communities are legally recognized and enjoy legal status. They are autonomous in terms of their organization, communal working, use and free disposal of their land, as well as economically and administratively within the framework established by law. Ownership of their land is imprescriptible except in the case of abandonment described in the preceding article. The government respects the cultural identity of the Rural and Native Communities.” 

Although indigenous communities are given the legal titles to their land, their is little protection afforded to these communities under Peruvian law against foreign companies contaminating their watersheds and destroying their forests. 

According to the International Labour Organization’s Convention (No. 169) concerning Indigenous and Tribal peoples in Independent Countries:

Article 15

1. The rights of the peoples concerned to the natural resources pertaining to their lands shall be specially safeguarded. These rights include the right of these peoples to participate in the use, management and conservation of these resources.

2. In cases in which the State retains the ownership of mineral or sub-surface resources or rights to other resources pertaining to lands, governments shall establish or maintain procedures through which they shall consult these peoples, with a view to ascertaining whether and to what degree their interests would be prejudiced, before undertaking or permitting any programmes for the exploration or exploitation of such resources pertaining to their lands. The peoples concerned shall wherever possible participate in the benefits of such activities, and shall receive fair compensation for any damages which they may sustain as a result of such activities.

For more information about the destruction caused to the environment and indigenous communities by oil companies, check out Amazon Watch and Oilwatch. There are hundreds of resources available on the internet documenting the destruction to the world’s indigenous and other marginalized communities and their environments around the world by oil companies.

 

No matter how environmentally-friendly these oil companies claim to be, it is impossible to extract oil in such a fragile environment without damaging the ecological integrity of the region. 

The Shipibo depend upon their rivers and forests for their subsistence and livelihoods. Their economy, culture, and health depend upon
their access to healthy ecosystems.Village Earth is working with communities to help them protect and defend their territories and environments.

What can you do to help?

  • You can donate to Village Earth’s efforts to help protect indigenous land in the Peruvian Amazon.
  • Lessen your dependence on oil and oil-based products. In the global market economy, only when demand for oil drops will drilling cease. Therefore, the future lies in YOUR hands.
  • Write to these companies and let them know that you disapprove of drilling for oil on or near indigenous lands in the ecologically-fragile Amazon region:Dr. John Teeling
    Pan Andean Resources
    162, Clontarf Road
    Dublin 3
    Ireland

    Below: The indigenous people of Masisea are learning to use GPS through a Village Earth initiative, so that they can monitor their lands and borders.