Eye on the Amazon

Trouble for Oil in the Peruvian Amazon?

Protesting pipeline leaks in Saramurillo in the northern Peruvian Amazon. Photo credit: Sophie Pinchetti / Chaikuni Institute

Reports of oil companies leaving the Peruvian Amazon made weekly headlines in March, providing encouragement to those of us who love the Amazon and know that humanity must move away from fossil fuels. In addition to the announcement by two oil companies that they will abandon drilling projects in important oil blocks, a Peruvian court annulled a controversial oil contract within indigenous territories for lack of proper consultation.

Of course, all this news comes on the heels of a disastrous 2016 for the Peruvian Amazon, dominated by repeated reports of oil spills along the Northern Peruvian Oil Pipeline. The year culminated in three and a half months of indigenous mobilizations that forced an extensive series of agreement with the national government. At the same time, over the course of 2016 some fifteen oil block contracts ended. While oil continues to be a major threat to the Amazon and indigenous peoples, these developments might be indicative of a positive trend.

Here's a snapshot about each of the recent cases:

Block 135 (Northeastern Peruvian Amazon)

Mid-March saw the announcement of the departure of Canadian oil company Pacific E & P from Block 135, along Peru's eastern border with Brazil. The operation had long been criticized for threatening uncontacted Matsés indigenous people. Peruvian indigenous federations like AIDESEP, ORAU, and ORPIO, supported by UK-based campaigning group Survival International, had repeatedly raised grave concerns with the company. Pacific, for its part, denies that it decided to leave due to community pressure, though they "reiterate[d] the company's commitment to conduct its operations under the highest sustainability and human rights guidelines."

Block 76 (Southeastern Peruvian Amazon)

In late March, the Peru's El Comercio newspaper announced that U.S.-based Hunt Oil would abandon Block 76, in the southern Peruvian Amazon. The business press lamented the move, pointing toward unsuccessful exploratory drilling and high costs of oil platform construction due to burdensome regulations. Unmentioned in that coverage were the years of challenges from indigenous peoples, who rejected the project and denounced the lack of proper consultation. Block 76 was superimposed over the Amarakaeri Communal Reserve, a classification of protected area managed by indigenous peoples. In 2009, for example, the ten indigenous communities located within the Reserve unanimously rejected entry of the company into their ancestral territory through a joint statement posted on the website of the regional indigenous federation FENAMAD.

Block 116 (Northwestern Peruvian Amazon)

Further complicating prospects for the oil industry, on March 28th Peru's Fourth Constitutional Court annulled an oil contract held by Maurel Et Prom (France) and Pacific (Canada) for Block 116 on the grounds that it hadn't properly consulted with the indigenous communities there. Near the border with Ecuador in the department of Amazonas, the region is home to the Awajún and Wampis peoples, for whom resistance is deeply ingrained. This is the region where the infamous Baguazo confrontation between indigenous communities and the government over oil drilling occurred in 2009. In 2014, indigenous federations, with support from Peruvian church and human rights groups, filed a lawsuit against oil operations in Block 116.

The ruling is significant, affirming the indigenous communities' claims that they were not properly consulted. The court ordered a suspension of oil exploration activities in Block 116, nullified government approval for the current contracts and environmental impact studies, and stipulated that any new contract must not only be consulted but must also obtain the consent of affected indigenous peoples.

The ruling has the oil industry terrified about the possibility this might serve as a national legal precedent, not only with oil and gas reserves but also against mining projects. The Peruvian Society for Hydrocarbons - the national oil lobby - has gone on a media offensive, stating that the ruling creates "legal uncertainty" for investments. They claim to respect Peru's Prior Consultation Law, which was brought into force in 2011. The court's ruling, however, is based on Peru's legal obligations under international law, specifically International Labor Organization Convention 169, which Peru ratified in 1994. The ruling has been appealed, and it will likely be heard by a higher court.

What the future holds for these oil blocks remains to be seen. The departure of Pacific, Hunt Oil, and other companies doesn't guarantee perpetual protection. If oil prices increase again, new companies might try their luck in the same places. Furthermore, the administration of Peruvian President Kuczynski is taking executive action to further weaken protections for the environment and communities, in the name of facilitating investment in extractive industries.

But at least in the short term, the oil and gas extraction threat facing the Matsés (Block 135), Harakmbut (Block 76), and Awajun (Block 116) indigenous peoples has diminished. Let's take a moment to offer our appreciation to the heroic efforts of the indigenous communities and leaders who campaigned and agitated over years. These cases illustrate that indigenous resistance is one of the best protectors of an ecosystem that we cherish and a climate we need.

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