ENRON's Bolivia-Cuiaba Pipeline Called a World Class Disaster --- Citing Serious Violations of Loan Conditions, Groups Urge OPIC to Cancel Loan

AMAZON WATCH - FRIENDS OF THE EARTH

For more information, contact:

Ada Recinos at +1.510.473.7542 or ada@amazonwatch.org


Washington, D.C. - Friends of the Earth and Amazon Watch called on the Overseas Private Investment Corporation yesterday to immediately terminate its financing deal with ENRON international for the Bolivia-Cuiaba pipeline project on the grounds the ENRON is violating OPIC's loan conditions. At a meeting with Overseas Private Investment Corporation and representatives from the US agencies that serve on the board of that agency – Agency for International Development (USAID), Treasury Department, State Department, Commerce Department, etc. – representatives of the aforementioned environmental groups and the World Wildlife Fund, presented detailed reports, photos and videotapes of how Enron and its partners (Shell and Transredes) were systematically failing to adhere to the environmental and social safeguards that OPIC required and that ENRON accepted as part of its $200 million loan agreement for the project.

The controversial pipeline traverses the globally significant Chiquitano tropical forest, one of the largest tracts of intact dry tropical forests in the World. This project was approved by OPIC in June despite environmental and local communities' demands that the route be altered to avoid this fragile area. OPIC's own environmental guidelines prohibit financing of projects that adversely affect primary tropical forests. However, OPIC staff used loopholes in their definition to sidestep the prohibition.

"When seeking approval, the sponsors and OPIC made a lot of promises of how this project would be a 'world class project' and include 'unprecedented safeguards' to protect the biodiverse Chiquitano Forest and local Indigenous communities," said Atossa Soltani of Amazon Watch. "Unfortunately, what we have witnessed happening on the ground is a world class disaster. Enron has continuously demonstrated a clear lack of commitment to protect the fragile ecosystem and address the concerns of locally-affected people."

Groups are pointing to failure of the company to control erosion, water and air pollution, illegal hunting, and unauthorized access to the 100-feet wide route (the right of way). Additionally, site visits show that without receiving proper authorization from Bolivian authorities, Enron has built a new air strip; widened several access roads; and installed new workers camps in pristine forested areas and adjacent to small towns. Of great concern is Enron's plans to build new access roads through pristine tropical forests. New access roads are a clear violation of their loan agreement with OPIC. So far no environmental impact studies have been done and the Bolivian Ministry of Sustainable Development has not granted authorization for new roads.

In addition to the environmental impacts, the groups list a number of social problems caused by the project including failure to disburse funds as promised to Indigenous communities for land titling and Indigenous Development Plan (IDP). The company is also failing to adequately enforce the workers code of conduct. Between 700 - 1000 workers (mostly men) pour into small Indigenous and campesino towns on weekends bringing prostitution, violent crimes, trash, and disrupting these culturally sensitive communities. Several small towns have been divided into two by the pipeline's right of way including one town which lost its soccer field to the pipeline.

"Our Videotapes and photos don't lie. OPIC has been caught red-handed in violations and broken promises," said Jonathan Sohn from Friends of the Earth. "It is time that the OPIC's Board of Directors, the GAO, and the US Congress did an investigation of how OPIC is using tax-dollars to finance tropical forest destruction."

Amazon Watch released a 10-page report today detailing the specific violations.

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