U.S. Agency to Vote on Financing Controversial Pipeline Through Endangered Amazon Forest in Bolivia Environmental Groups Warn: Destructive Project Violates OPIC Policies and Clinton’s Pledge


For more information, contact:

Ada Recinos at +1.510.473.7542 or ada@amazonwatch.org

WHAT: On March 9, the Board of Directors of the Overseas Private Investment Corporation (OPIC) will consider providing financing – backed by US tax dollars – for a natural gas pipeline that will cut through 200km of primary tropical forest and 100km of pristine wetlands in the Bolivian Amazon. The pipeline will bisect the world’s largest intact tropical dry forest. This globally important forest is the headwaters of the Pantanal watershed—the world’s largest wetland.

In a joint letter sent to OPIC’s Board this week, Amazon Watch, Friends of the Earth, and World Wildlife Fund reminded the agency that OPIC is prohibited by the Foreign Assistance Act from funding projects in "primary tropical forests" [OPIC’s 1999 Environmental Handbook] and asked the board to deny financing to the project at this time. The letter further pointed out that "approving the Project would seriously undercut President Clinton's 1997 United Nations General Assembly Special Session (UNGASS) pledge for strengthened environmental standards for bilateral lending agencies including a prohibition on extractive and infrastructure projects in primary tropical forests."

The Project’s Environmental Impact Assessment (EIA) and independent scientists classify this region as "primary tropical forest" [expert statements attached]. Enron, the main project sponsor, contends that the forest is "secondary" due to sporadic logging activity in some parts. OPIC staff is accepting the company’s contentious conclusion even though it is contradicted by scientific authorities and the Project’s own EIA.

WHERE: The proposed 630-kilometer pipeline starts in Ipiás, Bolivia, where it branches from the main Bolivia-Brazil pipeline (already under construction), runs northeast to San Matias, and thence to Cuiabá, Brazil.

WHO: The project sponsors are the US-based Enron International, and Shell International Gas Ltd. Non-governmental organizations such as Amazon Watch, Friends of the Earth, and World Wildlife Fund-Bolivia are urging OPIC not to approve the project at this time [letter to OPIC’s Board available].

WHEN: OPIC’s board is scheduled to consider the project March 9 at its meeting in Washington, DC. Enron is reported to have already begun clearing the right of way and moving in construction equipment.

WHY: Opposition to the project is based on the following reasons.

• Negative impacts on the fragile primary tropical forest and wetland ecosystems traversed by the pipeline.

• Lack of sufficient consultation and final agreement between project sponsors and affected populations regarding compensation, mitigation, and indigenous peoples development plans (the proposed route crosses the Santa Teresita indigenous area).

• Increased logging, hunting, and colonization resulting from the use of the pipeline’s 30-meter wide right of way as an access road (this effect is already occurring with the main Bolivia-Brazil pipeline project).

• Inadequacy of the Environmental Impact Assessment, which does not contain ecosystem assessments sufficient to make effective mitigation proposals.

• Lack of local government capacity to monitor and regulate Enron and Shell’s environmental performance.

• OPIC’s failure to respond formally to concerns raised and documented by NGOs since November 1998.

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