The following is the text of a joint letter sent to the IDB on March 11 by international NGOs urging delay of the signing of the Camisea loan agreement. The letter details concerns raised by leading Peruvian indigenous and environmetnal organizations about the Camisea gas project.
March 11, 2004
Dennis Flannery, Executive Vice President
Inter-American Development Bank
Mail Stop E1201
1300 New York Avenue, NW
Washington, DC 20577
Dear Mr. Flannery:
We are writing to urge the IDB’s senior management to delay financial closure of the Camisea project until the companies and Peruvian government (GoP) demonstrate full compliance with the IDB’s social and environmental loan conditions required for such closure. Based on information we have collected from affected indigenous communities in the lower and upper Urubamba valley and Peruvian civil society organizations, the GoP and consortia are in serious violation of many of the IDB’s loan conditions. These range from the consortium’s failure to implement mitigation conditions to a failure to implement required changes in Peruvian law that will protect sensitive rainforests in the case of future gas developments in the region. In a recent meeting with civil society representatives, IDB President Iglesias insisted that the IDB would not close on the loan if loan conditions have not been met. We therefore ask you to you to uphold Iglesias’ word and exercise internal oversight to ensure financial closure does not occur before full loan condition compliance has been demonstrated publicly.
We have attached a draft summary chart of the current status of compliance with key conditions compiled by groups in Peru. We would like to note, however, that this assessment should be considered preliminary as dozens of documents which are required to be available and accessible to the stakeholders and to the public have been impossible to obtain (see attached letter to the IDB, to which we have received no response). The lack of transparency and access to information is in itself a violation of IDB information policy and added loan conditions, and seriously hampers effective civil society monitoring and participation in the ongoing social and environmental management of this project.
Below is a summary of the status of non-compliance with many of the loan conditions. It is of particular concern that although indigenous and other organizations have repeatedly brought many of these matters to the IDB’s attention, on-the-ground improvements have not been delivered.
Failure to comply with conditions involving environmental and social mitigation measures
· TGP’s revegetation program is inadequate; native species are being used in some areas but many plants are of poor quality and have died, leading TGP to abandon re-vegetation in some areas. It is not clear whether effective revegetation is viable throughout the rainforest section, due to the loss of a massive amount of topsoil.
· There are serious ongoing failures in the companies’ programs to control immense erosion and multiple landslides; these problems are causing significant river sedimentation and an apparently massive loss of fish.
· GOP has failed to improve health service provision and health monitoring in the Lower Urubamba; in fact 150 new cases of syphilis have recently been reported by the health post in the indigenous community of Kirigueti. There is no baseline study on the health situation in the region, a necessary input for any effective health management and monitoring plan. There is serious concern that health programs be designed in a way which does not infringe upon the rights of the uncontacted indigenous groups.
· Civil society groups in Peru have only recently beenen informed about the status of the compensation plans for indigenous populations affected by completed and on-going construction at SM-1, SM-3 and Block 88 flowlines. Local indigenous organizations want assurances that compensation programs don’t result in loss of customs and traditions for indigenous peoples living in voluntary isolation.
· Many of the existing compensation agreements are in dispute; and several agreements have not been fully implemented. There is also a lack of an effective dispute resolution procedure for resolving the outstanding issues.
· There has been inadequate consultation and support for civil society input into the establishment of benchmarks related to biodiversity, erosion control, revegetation and control of the right of way (ROW).
· PlusPetrol has yet to commit any financial resources to reducing and controlling pollution along the coastal area, nor has the company made available the agreed upon $24 million support to the Paracas National Reserve.
Failure to comply with conditions regarding monitoring
· The government and consortia have so far failed to take the actions necessary to strengthen the monitoring (supervision) systems of all parties (GoP and consortia), based upon consultations with project-affected communities and civil society organizations, including, for example, “improvements in coordination among monitors, and establishing systematic and transparent procedures for addressing noncompliance events and complaints by project-affected people.”
· The GOP has taken no significant steps ensuring adequate independent community monitoring.
· Project monitoring reports have not been made accessible to COMARU or to local communities despite local efforts to provide information about project impacts to monitoring experts and teams.
· The lack of an independent monitoring system leads to a lack of confidence in the completeness of existing monitoring reports.
· There has been no effective civil society consultative mechanism within GTCI to improve coordination and dialogue between Peruvian civil society and GoP.
· The monitoring plan for the fractionation plant and marine terminal has numerous statistical, methodological, special and temporal shortcomings identified by groups in Peru.
Failure to comply with conditions relating to access control and migration to Upper and Lower Urubamba
· Neither TGP, GTCI or the GoP have assumed responsibility for establishing control and preventing access to the ROW; it remains unclear which government agency will assume direct responsibility or how different entities will coordinate and secure the necessary funds for controlling the ROW.
· Illegal settlements remain in the project’s area of influence (Aendoshiari and Monte Carmelo) and colonizers continue to enter communities and establish illegal settlements.
· There has been no training, funding or other support to strengthen community capacity to exercise migration control.
· The final Access Control Plan has yet to be made accessible to affected communities; yet based on the information available, it appears that the plan is inadequate. For example, it fails to identify high risk areas along the pipeline route and probable access points.
Failure to comply with conditions required to ensure adequate future protection and management of Lower Urubamba and coastal area
One of the most alarming consequences of the Camisea project is the future destructive gas exploration activities planned in nearby pristine forested areas and the lack of effective strategic environmental management plans to address all the indirect impacts from this project.
· Policy and legal changes requiring all future hydrocarbon concessions with output through Camisea to conform to IFC standards and ILO 169 have not been implemented or enforced; in fact new agreements have been signed in nearby block 57 and 56, and environmental impact studies are moving forward without meaningful prior consultation of affected indigenous populations, in clear violation of the World Bank Policies and ILO Convention 169.
· The Supreme Decree O28-2003-AG does not adequately protect or strengthen the NKR reserve. The national indigenous organization, AIDESEP, has filed a legal petition against the Peruvian government arguing that Supreme Decree #028-2003-AG violates the fundamental rights of isolated peoples by allowing for future drilling and other harmful activities in the reserve. The petition maintains that the decree violates UN human rights conventions, ILO 169 and the American Declaration on the Rights of Indigenous Peoples.
· Insufficient information has been made available regarding the Camisea Fund. One concern is that the Fund will exclude the Cusco area, which is expected to receive 50% of project royalties. However, given that there are no criteria for how this money will be spent, there is a risk that affected communities will not benefit adequately and indeed may be damaged by development projects, such as the proposed road into the Lower Urubamba. It is therefore recommended that the design of the Fund complement any plans surrounding the investment of royalties in Cusco.
· Effective strategic multi-stakeholder environmental planning for the lower Urubamba area has not taken place. Indigenous groups continue to demand that a fund be established that is designed and administered by indigenous groups in the lower Urubamba.
· Communities have little information regarding plans to ensure necessary and sufficient resources to implement management plans for Otishi NP, Ashankinka and Machiguenga LR, Sanctuary Megantoni, Nahua Kugapakori Reserve (NKR) and the Paracas Reserve.
· The GoP has yet to allocate required funds to the Paracas Bay Sustainable Development Commission, which has been working for six months already under the auspices of CONAM.
As representatives of civil society organizations, we are troubled by the lack of progress in addressing these and other critical environmental and social concerns in the Camisea gas project. We believe that this raises one of the fundamental problems with IDB’s approval of the Camisea loan, namely the lack of political will and management and institutional capacity on the part of the government to effectively implement the environmental and social safeguards. While we applaud the Bank’s financing of an institutional strengthening loan, $5 million is woefully insufficient to address the broad-based institutional reform and strengthening needs that exist in the Peruvian government. In the future, IDB should devote far greater resources to creating the conditions necessary in country to effectively prevent, mitigate and control the negative impacts of large infrastructure projects.
While there are many critical actions that need to be taken in order to meet the IDB’s conditions and improve the overall social and environmental management of this project, one critical first step is the establishment of a clear, reliable, transparent and fully resourced independent biodiversity and socio-economic monitoring system with systematic procedures for information dissemination, meaningful stakeholder participation and conflict resolution with civil society, including support for independent community monitoring. In establishing this system, we strongly urge you to convene an independent panel of experts to oversee monitoring of the project’s restoration and mitigation efforts and its operation over the long term.
We also ask the IDB comply with its own information policy and loan conditions and release numerous documents related to the environmental and social management of this project that we have previously requested. Access to this information will enable civil society organizations and affected communities in Peru to participate more effectively in the overall monitoring and consultation processes. It is crucial that civil society have both access to and time to review these documents prior to financial closure.
We are concerned about the possibility that the IDB may be rushing to financial closure, given the serious questions remaining about compliance with the IDB loan conditions. If the Bank moves ahead to finalize the Camisea project loan without ensuring that its own conditions have been met, it will send a dangerous signal to the consortia, the GoP, and other current and future borrowers that the Bank and its shareholders are not serious about enforcing their own loan conditions or maintaining social and environmental standards. The IDB’s claim to have provided significant environmental and social additionality to this project rests upon compliance with its loan conditions, in spirit as well as in letter, and upon real restoration, mitigation, compensation, monitoring, and development benefits felt on the ground.
We would like to request a written response to the concerns outlined in this letter as well as a meeting with you and the Project team as soon as possible regarding these matters.
Sincerely,
Johnson Cerda and Peter Kostishack, Co-Directors, Amazon Alliance
Aaron Goldzimer, Environmental Defense
Francis Grant-Suttie, World Wildlife Fund
Nadia Martinez, Sustainable Energy and Economy Network, Institute for Policy Studies
Abigail Parish, Bank Information Center
Jon Sohn, Sr. Policy Analyst, Friends of the Earth-US
Atossa Soltani, Executive Director, Amazon Watch
Cc:
Enrique Iglesias, President, Inter-American Development Bank
Jose Fourquet, US Executive Director
Philippe Birebent, Camisea Project Manager, PRI
Ciro deFalco, Manager, Regional Operations Department III
Carlos M. Jarque, Manager, Sustainable Development Department
Hiroshi Toyoda, Manager, Private Sector Department
Janine Ferretti, Chief, Environment Division
Robert Montgomery, Environmental and Social Unit, PRI
John Ferriter, External Relations
John B. Taylor, Under Secretary (International Affairs), U.S. Treasury
Ricardo Riesgo, Centro para el Desarrollo del Indígena Amazónico (CEDIA)
Roger Rivas, COMARU- Consejo Machiguenga del Rio Urubamba
Manuel Pulgar-Vidal, SPDA
