March 31, 2006
President Luis Moreno
Inter-American Development Bank
1300 New York Avenue, NW
Washington, DC 20577
Dear Mr. Moreno,
As representatives of the under-signed indigenous, human rights and environmental organizations we write to convey to you the magnitude of the impacts and scandals that have resulted from the IDB-financed Camisea project in Peru – and to request formally a meeting between yourself and a small, self-selected group of civil society and indigenous representatives in Lima. We also urge you to undertake immediately an independent evaluation of the IDB’s and its Private Sector Department’s management of the environmental, social, and engineering risks of this project; if your new IDB Administration cannot learn lessons from this project’s failures, especially as it plans to prioritize future PRI and infrastructure operations, your Administration will be doomed to repeat them.
The Camisea pipeline has experienced an unprecedented five spills in only 18 months of operation. This has led to unparalleled negative publicity and public outrage, clearly tarnishing the IDB’s public image. Not only has the IDB’s involvement failed to result in significant environmental and social additionality (please find enclosed a special series published in the prominent Peruvian newspaper El Comercio after an investigative expedition to the project region), it has failed to prevent the construction of a pipeline that leaks, spills, and explodes.
We believe that the Bank’s senior management has paid insufficient attention to repeated warnings from civil society and its own project monitors about project risks and impacts on the inhabitants and fragile ecology of the Urubamba region. We point to the February 27, 2006 public meeting on Camisea at the IDB’s headquarters. Despite repeated pleas from our organization for senior management to attend, Executive Vice President Ciro de Falco arrived for only a few minutes, delivered a prepared statement, took no questions and missed the other presentations. Five days later, the pipeline ruptured for a fifth time, causing an explosion that injured two settlers and burned 35 acres of jungle and crops (see enclosed photos).
Given all of the above, we are extremely concerned about the Bank’s intention to move forward with the mandate letter with Hunt Oil and begin due diligence for an additional $400 million loan for the next phase of this project. We see no reason for the IDB to discuss future financing given the numerous outstanding commitments and project failures associated with the first phase.
Peruvian civil society has called for an independent audit of the social and environmental impacts, risks, and management of the Camisea project since the construction period – and the IDB always refused. It is unfortunate that it has taken repeated major spills for the IDB to discuss exercising this contractual right. Now a pipeline integrity audit will also be carried out at the behest of the Peruvian Government, and we hope that the IDB, as an investor in the project, will insist on its independence and transparency, as well as on public participation in the design of the audit. If results of these audits demonstrate negligence or contractual noncompliance on the part of project sponsors, we expect the IDB to commit to take appropriate measures to rectify fully the situation.
As the Bank moves towards a growing focus on financing large infrastructure projects, Camisea has become a glaring example of the IDB’s inability to ensure even the most basic engineering and construction standards, much less its commitments regarding environmental and social sustainability. The public’s faith in your institution’s ability to provide environmental and social additionality – as opposed to a liability – rests on your willingness to engage directly with this crisis.
In light of the aforementioned issues, we request a meeting with you, President Moreno, in Lima, where a small group of self-selected representatives from Peruvian and international civil society organizations and affected communities can discuss with you directly the Bank’s current and future involvement in the Camisea project. We also strongly urge you to undertake immediately a formal independent evaluation of potential structural, procedural, and policy failures at the IDB that may have contributed to an environmental, social, and engineering risk-management failure of this magnitude.
Sincerely,
Walter Kategari y Grimaldo Caristo Aladino, COMARU – Peru
Robert Guimaraes Vasquez, AIDESEP – Peru
Lily la Tore Lopez, Racimos de Unguarhui – Peru
Atossa Soltani, Amazon Watch
Peter Kostishak, Amazon Alliance for Indigenous and Traditional Peoples
Erick Meneses, Conservation International – Peru
Eric Holt-Gimenez, Bank Information Center
Aaron Goldzimer, Environmental Defense
David Waskow, Friends of the Earth, U.S.
Nadia Martinez, Sustainable Energy and Economy Network (SEEN)
Enclosed: Update on the Camisea Project, March 2006
