Washington – The InterAmerican Development Bank (IDB) appears to be backtracking on a public commitment to condition future funding for Peru’s Camisea gas project on the satisfactory completion of an environmental and social audit of the project’s disastrous first stage, Amazon Watch said today.
Amazon Watch, a San Francisco-based environmental and human rights organization, voiced its concern after the IDB signed a “mandate letter” with Peru LNG, Camisea’s export consortium, led by Texas-based Hunt Oil, to begin the due diligence process for a $400 million loan to partially fund a liquid natural gas terminal and other infrastructure on the Peruvian coast. Although not a formal project approval, due diligence does usually lead to that and will use up valuable IDB resources.
The agreement, announced on July 27, appears to fly in the face of a promise made by Bank President Luis Alberto Moreno last April. Responding to criticism of Camisea, Mr. Moreno told the Financial Times: “We are not even close to approving the loan. Without the audit we can’t go to the second phase.”
That comment took some of the pressure off the IDB over its role in Camisea, which, local communities say, has had devastating impacts on one of the most remote and biodiverse areas of the Amazon, including erosion, deforestation, pipeline ruptures and pollution, depleted fish and game stocks on which indigenous communities depend, and forced contact with some of the last native Amazonians still living in isolation.
Currently there are two Camisea audits pending. One, to be commissioned by the IDB, will look at the social and environmental impacts of Camisea. The other, for the Peruvian government, is looking at the trans-Andean pipeline taking Camisea’s gas from the Amazon rainforest to the Peruvian coast, following a report by E-Tech International, a non-profit engineering consultancy that stated that the pipeline was built with rusty, surplus piping.
The scrutiny of Camisea and the IDB increased earlier this month when the U.S. Senate’s Committee on Foreign Relations held a hearing on the project. Carlos Herrera Descalzi, a former Peruvian Minister of Energy and Mines, told the public hearing that Camisea’s original objective of providing the Peruvian market with cheap energy had been subverted, allowing the project consortia to profit at Peru’s expense by exporting a large proportion of Camisea’s reserves.
Simeon Tegel, Amazon Watch Director of Communications, said: “It seems highly improbable that a comprehensive and independent audit of the social and environmental impacts of the first phase of Camisea would give it a clean bill of health. Starting due diligence on this latest loan before the audit has even begun is a particularly worrying example of the bank’s short-sighted decision-making that contributed to the project’s problem-riddled first phase. We have to ask whether Mr. Moreno’s comments in April were only intended to take the heat off the IDB, and whether the IDB has prejudged the results of this audit?”
