Sassenberg, Germany – Representatives from more than forty non-governmental organizations from eight countries, along with German parliamentarians and political party activists, concluded a 3-day summit today in Sassenberg on the growing environmental and social problems caused by the new oil pipeline in Ecuador – one of the World’s most controversial projects. The participants vowed to intensify the international campaign against the Ecuador Heavy Crude Oil Pipeline (Oleoducto Crudos Pesados, OCP).
The OCP pipeline has been embroiled in protests since it broke ground more than 15 months ago. In October 2002, one of the two financial rating agencies for the project, Moody’s, downgraded the OCP’s investment rating to borderline junk status (Baa3) citing, inter alia, growing environmental, political and economic risks.
The participants of the Summit made plans for stepping up the campaign in the home countries of the OCP consortium members, which include: EnCana (Canada, 31.4% share), Repsol-YPF (Spain, 25.6%), Pecom Energia (Argentina, 15%), Occidental Petroleum (U.S., 12.2%), ENI-AGIP (Italy, 7.5%), Techint (Argentina, 4.1%), Perenco (UK, 4.0%). The international campaign will also step up efforts to urge withdrawal of financial support for OCP by an international consortium of banks, insurance companies and pension funds from Germany, Italy, Spain, the United Kingdom, Portugal and the United States. Any further deterioration in the financial rating of OCP could lead to withdrawal of US insurance companies and pension fund investors, which legally cannot maintain large holdings in debt securities rated below ‘investment grade.’
OCP would transport heavy crude from Ecuador’s biodiversity rich Amazon rainforest region to the Pacific Coast. The pipeline route cuts through seven legally protected national parks and reserves, including a World Bank financed biodiversity project. In order to fill OCP, oil production is expected to double in Ecuador, with tremendous impacts on indigenous peoples and intact forests in the Amazon rainforest as well as along the 300-mile pipeline corridor to the sea.
The International NGO meeting took place in the province of North Rhine Westphalia in Germany because of growing public outrage over the environmental and social negligence of the lead syndicator of the OCP loans, the West Deutsche Landesbank (West LB). West LB is 43% owned by the provincial government of North Rhine Westphalia.
Groups taking part in the meeting reviewed evidence of continuing environmental, social, and human rights abuses associated with the pipeline. Despite a growing public protest over the past year, OCP and West LB as well as major financial partners such as the Italian Banca Nazionale del Lavoro have continued to ignore basic good international practice concerning the environment and social impacts.
West LB has publicly stated several times that compliance by OCP with World Bank standards is a condition of its financing which, if violated, could trigger a recall of the OCP loans. The summit participants noted that on November 7, 2002, two Vice Presidents of the World Bank wrote Andy Patterson, OCP CEO, reiterating that OCP should either stop claiming compliance with World Bank standards, or obtain independent verification of compliance, which to date not occurred.
“The public needs to know that West LB, OCP and finance consortium banks such as the Italian Banca Nazionale del Lavouro (BNL), continue to make blatantly false statements that the pipeline meets World Bank environmental standards. Such statements directly contradict several independent field studies over the past six months which all documented massive violations of World Bank guidelines,” said Bruce Rich of Environmental Defense, a major US group.
In response to the egregious lack of environmental and social due diligence by OCP and West LB, the Sassenberg summit is vowing to escalate the international civil society campaign to alert investors, governments and financial rating agencies to the growing financial and reputational risks of this project. The Sassenberg Summit condemned the OCP Consortium’s attempts to hastily complete pipeline construction, a move which has led to growing protests by groups in Ecuador as well as in countries where the consortium companies and supporting banks have their headquarters.
The Sassenberg International Civil Society Stakeholders’ meeting took place at the same time as OCP organized a closed door event in Coral Gables Florida that OCP has called a “stakeholders’ scoping meeting.”
“All of the Sassenberg participants agreed that the Florida meeting was just the latest of OCP’s misrepresentations and evasions. .Most of the civil society stakeholder groups who have been involved in this issue were in the Sassenberg event – – groups with more than a million members from Ecuador and seven other countries,” said Jaroslava Colajacomo, a delegate from the OCP campaign led by twelve major Italian groups, including Greenpeace and Friends of the Earth Italy. The Italian Campaign will intensify protests against Italian OCP financer BNI and Consortium member ENI-AGIP.
Natalia Arias, representing Accion Ecologica, an Ecuadorian national environmental organization, said “we came here to support the rapidly expanding international campaign that will carry the concerns of affected groups in Ecuador who are demanding that investors withdraw from such an environmentally and socially risky project.”
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