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Project Overview Peru's Camisea Gas Project is arguably the most damaging project in the Amazon Basin at the time of writing. Located in the remote Lower Urubamba Basin in the south-eastern Peruvian Amazon, the $1.6 billion project includes two pipelines to the Peruvian coast, cutting through an Amazon biodiversity hotspot described by scientists as "the last place on earth" to drill for fossil fuels.
Nearly 75 percent of gas extraction operations for "Block 88", as the original Camisea concession is known, are located inside a state reserve for indigenous peoples living in isolation. In violation of both stated company policy and international laws such as ILO Convention 169 and the American Declaration on the Rights of Indigenous Peoples, employees of Veritas, a contractor working for consortia member Pluspetrol have made contact with these communities, pressuring them to abandon their ancestral lands. Pluspetrol also facilitated helicopter transport of missionaries to remote areas to contact isolated indigenous groups.
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Click to enlarge Camisea maps:
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Additionally, another 22 indigenous communities living in intermittent contact with outsiders, as well as dozens of farming communities have suffered a range of direct and "indirect" impacts, from the loss of local fish and game populations on which they depend for their subsistence to landslides, infectious diseases and STD outbreaks. A May 2004 report, published by the Peruvian health ministry's General Office of Epidemiology confirmed that that incidences of infectious diseases had increased in the reserve among one isolated group, the Nanti, to such an alarming extent that only one in four now reaches adolescence. These serious environmental and social impacts now affecting the entire local population were predicted by environmental and human rights campaigners.
In the first 18 months after it became operational in August 2004, the Camisea pipeline, which runs from the Amazon, over the Andes, to the Pacific Coast, has ruptured four times, with at least three major spills. This appalling record is highly unusual for such a pipeline and comes despite repeated assurances from the downstream consortium and the Inter-American Development Bank that no such problems would occur. According to a February 2006 independent report by non-profit engineering consultancy E-Tech International, the pipeline was constructed by unqualified and untrained welders using corroded piping and rushing to avoid onerous late completion fees that would have totalled $90 million.
The project also has upset many in Peru given the gas processing facility on the Peruvian coast was built within the buffer zone of the Paracas Marine Reserve, an internationally important wetland area recognised by the RAMSAR convention and Peru's only marine reserve. Despite repeated appeals by Peruvian civil society, the consortium refused to choose an alternative site.
In January 2006, Hunt Oil broke ground on a $1 billion plant to liquefy natural gas for export to planned markets in mainland Mexico and Western United States.
Hunt Oil Stands to Gain The Camisea Project is owned by two consortia of small companies with poor environmental records led by Hunt Oil - a Dallas-based company with close ties to the Bush administration. Chief Executive Ray L. Hunt contributed to President Bush's presidential campaign and also sits on the board of Halliburton, the company formerly headed by Vice-President Dick Cheney.
 The gas production consortia was composed of: Pluspetrol (36%); Hunt Oil (36%); SK Corporation (18%); Tecpetrol (10%). The gas pipeline consortia named TGP is operated by Techint (23%) and includes: Pluspetrol and Hunt Oil (22% each); SK Corporation and Sonatrach (11%); Belgium's Tractebel (8%); Gra–a y Montero (2%). Belgium's Tractebel was due to carry out gas distribution in Lima potentially financed by a Belgian export credit agency.
Inter-American Development Bank Flouts International Standards Following a 10-month delay caused by escalating criticism from indigenous groups, Peruvian civil society, international NGOs, US Congressional representatives and its own environmental auditors, the Inter-American Development Bank approved a direct loan of $75 million and a syndicated loan of $60 million to the transportation consortia in September 2003.
Contrary to the IDB's claim that Bank scrutiny would substantively improve the Camisea Project, the evidence from the field indicates that IDB endorsement effectively gave project companies a green light to continue without attending to significant project flaws. The IDB's failure to ensure that companies comply with its environmental loan conditions calls into question the Bank's commitment to adequate environmental and social protections, as well as its refusal to take seriously the concerns expressed by civil society groups during the IDB's public "consultation" hearings.
Commissioned some two years after Camisea broke ground, the IDB's "Environmental and Social Impact Assessment Report" has also been woefully inadequate, calling into question whether its real purpose was to provide cover for the project rather than seriously engage with the urgent issues facing the Lower Urubamba and its peoples. Only 21 of the report's 138 pages actually dealt with environmental and social impacts, and even then it largely minimised them. In the whole report, there was only a single paragraph dedicated to socio-cultural change, a massive issue for the affected communities as they face the loss of their cultures and traditional ways of life, impacting both their sense of wellbeing and their physical health.
© Amazon Watch.
Camisea construction crew. |
Meanwhile, the IDB also failed to honor loan conditions by refusing to release numerous documents related to the environmental and social management of Camsiea. The IDB thus moved rapidly towards closing its loan provision deal with the project companies without addressing the serious concerns of Peruvian civil society about indigenous rights abuses, impact mitigation, local development, community compensation and independent monitoring.
Critics also argue that public monies to Camisea flew in the face of internationally accepted safeguards including World Bank policies and the private sector Equator Principles. The United States Export-Import Bank refused to grant a request of $214 million of loan guarantees to the project citing unresolved environmental concerns while Citigroup and the Overseas Private Investment Corporation also rejected the project outright.
Project sponsors have picked up over $600 million of project costs while the Andean Development Corporation (CAF) provided $75 million in financing and the Brazilian development bank BNDES granted a loan of $109 million to TGP. Remaining funding was expected to come from companies' own bond issues, private sector financiers and the company's own resources.
Camisea Pipeline Scars Primary Rainforest The Camisea project has devastated some of the most diverse and threatened biological complexes in the world. The remote and hitherto inaccessible Lower Urubamba is a roadless region of global ecological significance. The pipelines cut through the Vilcabamba region, an area considered by conservationists to be of almost unparalleled biological richness.
Yet, as with pipeline projects throughout the Amazon, the opening up of forest to build the Camisea pipelines has threatened to bring a wave of migrants, loggers and developers to the area resulting in deforestation, environmental degradation and social pressures on the vulnerable indigenous communities. The pipeline consortium would not close off the pipeline route after the piping had been laid and left responsibility for preventing colonization along the pipeline route in the hands of local communities, potentially placing them at the center of future conflicts over land and forest resources.
© 1998 Lilly/Amazon Watch.
Camisea is one of the most pristine and biologically diverse rainforests in the world. |
Camisea companies have habitually breached both modern industry standards and international environmental guidelines. Disregard for safety regulations by project workers has already led to the death of nine workers and one Machiguenga child, drowned in the wake of a speeding consortium boat. Technical experts have repeatedly documented irreparable impacts on critical natural habitat resulting from persistent multiple landslides and massive soil erosion and river sedimentation from the pipeline's extremely steep route. The companies' consistent disregard for erosion control during and after pipeline's construction has allowed heavy rains to wash thousands of tons of soil and vegetation into local rivers. In addition, 4 liquid gas spills, in the first 15 months of the pipeline's operation have fouled the rainforest environment.
Indigenous Peoples Pay the Price for Company Profits We have this deep fear for our children and for the heritage that will be left behind. Because our children will have children and our grandchildren will too. But maybe we won't exist anymore. Marianeli Mantaro Ortega, Shivankoreni Community, June 2003
© 1998 Lilly/Amazon Watch.
Some of Camisea's children. |
The Camisea Project continues to jeopardize the health and safety of Machiguenga indigenous communities who live in small communities along the Urubamba and Camisea Rivers. The reduction in fish and game stocks caused by project construction has adversely affected their staple diet of fish and game. Illness is on the increase throughout the Urubamba Ð recently dozens of new cases of syphilis were reported by the health post in the indigenous community of Kirigueti. Local health workers have testified that small children are at risk from chronic malnutrition. A Machiguenga man stated: Now there is such a combination of illnesses that we can't identify the illnesses that we get.
The Nahua, Nanti, and Kirineri are semi-nomadic peoples who live in voluntary isolation in the Nahua Kugapakori State Reserve, neighboring the Urubamba River, and had little or no contact with the outside world. The government of Peru created the Reserve in 1990 to protect these vulnerable peoples from outside intrusion. However, in violation of internationally recognized indigenous rights, Camisea companies forcibly contacted them, robbing them of their right to choose their own lifestyle and exposing them to sickness.
Forty-two percent of the Nahua population had already died from introduced diseases to which they have no immunity when Shell conducted gas exploration in the mid-1980s. There is evidence that increased disease among the Machiguenga was also infecting peoples within the Reserve. This drove the Nahua to take the unprecedented step of publicly communicating through local advocates their rejection of all oil and gas operations within their lands:
In the past, Shell worked here and almost all of us died from the diseases...We know that if another company comes here, our rivers and land will be destroyed. What will we eat when the rivers are dead and the animals have run away?
To fuel its ambitious export project, Hunt Oil has acquired another oil concession, Block 56, located on the lands of Machiguenga communities adjacent to Block 88. The demands of indigenous organisations for a transparent, free and informed consultation process regarding Block 56 were ignored, with no major structural changes to the process by which Block 88 was opened up. Along with neighboring blocks 57 and 90, an area or rainforest totalling nearly four million acres, some 10 times larger than the original Camisea concession of Block 88, will now be opened up to the devastating effects of gas extraction and the cumulative impacts this will have on both the ecosystems and their indigenous inhabitants.
© Amazon Watch.
Camisea has a diverse indigenous population. |
Camisea Consortia's Deadly History Pluspetrol and Techint have appalling environmental track records. In 2000, a Pluspetrol oil spill devastated one of Peru's largest protected areas, the Pacaya-Samiria Reserve, and seriously affected the health of the Cocamas-Cocamillas people who suffered severe diarrhea, skin diseases and malnutrition after their food and water supplies were decimated by toxic pollution. In the northern Peruvian Amazon, Pluspetrol continues to pump oil wastes into local rivers causing stomach ailments, cancer and respiratory diseases among Achuar and Quichua communities.
© Amazon Watch.
Camisea construction from the sky. |
In early 2002, a huge explosion --the second in less than a year--- along an Argentinean gas pipeline operated by Techint, the contractor for the Camisea pipeline, again sent flames leaping through the Yungas forest, an area of critical conservation status, home to jaguars and other rare species. In Ecuador, Techint constructed the OCP pipeline and was embroiled in controversy, facing lawsuits, protests, and fines for the destruction of protected areas and the habitat of rare endangered species.
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