Letter to the OPIC Board of Directors

OPIC Board of Directors:

Andrew S. Natsios, Administrator, Agency for International Development
Gary A. Barron, President, Strategic Alliance Partners
Jon M. Huntsman, Jr., Deputy U.S. Trade Representative, Office of the U.S. Trade Representative
Melvin E. Clark, Jr., President and Chief Executive Officer, Metroplex, Washington, D.C.
Peter S. Watson, President and Chief Executive Officer, Overseas Private Investment Corporation
George J. Kourpias, Retired President, International Association of Machinists & Aerospace Workers, Upper Marlboro, Maryland
Alan P. Larson, Under Secretary of State for Economic, Business, and Agricultural Affairs, U.S. Department of the State
John J. Pikarski, Jr., Gordon & Pikarski, Chicago, Illinois
Grant D. Aldonas, Under Secretary of Commerce, U.S. Department of Commerce
Lottie L. Shackelford, Executive Vice President, Global USA, Inc., Little Rock, Arkansas
D. Cameron Findlay, Deputy Secretary of Labor, U.S. Department of Labor Private Sector Member
John B. Taylor, Under Secretary for International Affairs, U.S. Department of the Treasury

1100 New York Ave., N.W.
Washington, D.C. 20527

Dear OPIC Board of Directors:

We enclose the attached letter, which was recently sent from various NGOs to the Bolivian Ministry of Sustainable Development, in order to highlight a number of outstanding issues related to Enron and Shell's Cuiaba Pipeline in Bolivia. In addition, we wish to respond to a number of points Mr. Watson raised in his letter of May 22, 2002. In this letter, he states that as OPIC's Finance Agreement expired, OPIC no longer has contractual authority to intervene in the project. Moreover, he indicates that OPIC is not willing to meet with representatives of Bolivian NGOs (and, presumably, representatives of indigenous communities) to resolve outstanding issues as OPIC was not a "formal" party to the Chiquitano Forest Conservation Program (CFCP).

Amazon Watch does not share this view for a number of reasons. As the May 6th letter to OPIC from various NGOs noted, it is widely known that OPIC boasted the $20 million conservation fund as a basis for loan authorization. OPIC's Board made the CFCP a condition of project approval: "The protocol with the five conservation organizations have been signed creating the Chiquitano Forest Conservation Consortium (CFCC); creation of a steering committee; and legal establishment of the CFCC trust fund (Board Condition for the Cuiaba Pipeline Project)".

As various reports and articles document, OPIC's loan approval enabled Enron and Shell to construct the pipeline directly through the Chiquitano Forest. Moreover, as our previous letter indicated, OPIC promised ongoing monitoring and prevention of secondary and cumulative project impacts that are now becoming real and dangerous threats to the Chiquitano Forest and local communities.

Given OPIC's extensive involvement in the project, its complicity in triggering the pipeline to be built along the controversial route, and its role in perpetuating the issues that are outlined in the attached letter, we maintain that regardless of whether or not the Finance Agreement has expired, it is imperative that OPIC assume responsibility and hold a meeting with interested parties in order to establish a mechanism for repairing the damage incurred and resolving outstanding promises.

Finally, while we appreciate Mr. Watson's explanation of how OPIC applies the Foreign Corrupt Practices Act (FCPA), and are pleased to learn that OPIC has requested that the Department of Justice (DOJ) determine potential violations of the Foreign Corrupt Practices Act, we hope that both OPIC and the DOJ are aware of recent allegations reported in the San Francisco Chronicle that in 1994 Enron paid a $US 2.5 million bribe to representatives of Bolivia's state-owned oil and gas company (YPFB) to influence the capitalization process. We also look forward to learning whether Enron engaged in these sorts of actions since that time, and expect that OPIC will disclose any information on subsequent violations.

Thank you for your consideration. We look forward to your response.


Derrick Hindery, M.A., C. Phil
Bolivia Coordinator
Amazon Watch

2350 Chumash Road
Malibu, CA 90265
Telephone: 310 456 9158
Fax: 310 456 9138

email: derrick@amazonwatch.org

Honorable Michael Oxley, Chairman, Committee on Financial Services
Doug Bereuter, Chairman, International Monetary Policy and Trade Subcommittee
Honorable Sue Kelly, Chairperson, Oversight and Investigation Subcommittee
Jon Sohn, Policy Analyst, Friends of the Earth
Emilie Thenard, Center for International Environmental Law
Aaron Goldzimer, Environmental Defense Fund
Daphne Wysham, Institute for Policy Studies
Doug Norlen, Pacific Environment
Coalition for Corporate Accountability

Amazon Watch, Center for International Environmental Law, Friends of the Earth, Environmental Defense, Institute for Policy Studies, Pacific Environment

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