Opposition to Ecuador’s heavy crude oil pipeline (OCP) has been building for
10 years. Banks have become the latest arena for the dispute, even as
construction is well under way.
Opponents of the 450,000 b/d, $1.1 billion pipeline are trying to kill the
$900,000 line of credit extended by Germany’s Westdeutsche Landesbank
(WestLB). In response, the bank says it has signed contracts stating that
strict environmental standards – “even those of the World Bank” – will be
observed in the project’s implementation.
That set off the World Bank, which does not like to have its standards cited
in projects that it is not financing itself, unless they are verifiable. “We
would like to recommend that OCP provide specific, independent verification
of compliance with World Bank standards, or, alternatively refrain from
claiming any such compliance,” Ian Johnson, the bank’s top environmental
officer, wrote to OCP last month.
Johnson also said the World Bank wanted to “express our deep concern about
the impact of the construction of the OCP pipeline on the Choco-Andean
Corridor Project,” a bio-diversity project partly funded by the bank. It
says the line will pose “serious environmental risks” if it is not built or
operated properly, and Johnson urged OCP to consider providing some form of
ecological compensation to indigenous groups.
US-based Kerr-McGee has meanwhile said it plans to sell its two oil blocks
and its 4.02% share in the OCP to Perenco, a small French firm. Kerr-McGee
did not mention the OCP problems, but said it wanted to concentrate on its
US and UK operations. Other companies in the OCP consortium are Alberta
Energy, Occidental Petroleum, Perez Companc, Repsol-YPF, ENI and, as
builder, Argentine Techint.
Analysts say it is likely that the pipeline will be built, even if it must
reroute and slip on its late 2003 completion goal, given its importance to
the country and to the oil companies. So important does Ecuadorean President
Gustavo Noboa find OCP that he has threatened to give ecologists “war.”Email Colleague
