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Talara, Peru – A burgeoning coalition of Peruvian Amazonian Indigenous peoples and fishing organizations are demanding to meet JPMorgan Chase & Co. and Citigroup to warn against any new financing for state-operated oil company Petroperú because of its history of oil contamination and flagrant disregard of Indigenous and human rights.
The coalition, collectively known as the MarAmazonia alliance, aims to stop the banks’ reported involvement in a $1 billion bond issuance for Petroperú. The company’s oil operations have led to significant oil contamination in the Peruvian Amazon and along the north Peruvian coast, severely threatening local biodiversity and communities’ way of life, and demonstrating its disregard for human and Indigenous rights. In addition, Petroperú may soon move forward with plans to exploit additional oil blocks in the Peruvian Amazon, such as Block 64, which lack Free, Prior, and Informed Consent (FPIC).
The coalition has requested meetings with bank executives in April, close to the company’s Annual General Meetings, to present their serious concerns and demand no new financing for Petroperú.
The alliance includes the Peruvian Federation of the Achuar Nationality (FENAP), the Autonomous Territorial Government of the Wampís Nation (GTANW), the Autonomous Territorial Government of the Chapra Nation (GTANCH), the Fishing Association of Cabo Blanco, and the Macroregional Organization of Fishing Associations of the Northern Coast of Perú.
The communities recently gathered to denounce the impacts of Petroperú’s oil activities and to discuss strategies to oppose any new financial support for Petroperú in the city of Talara in the northern coast of Peru, where Petroperú’s refinery is located. The gathering also shed light on the involvement of financial institutions based in the U.S. and Europe in financing Petroperú.
“This is the message of the Seven Indigenous Nations and our brothers and sisters of the coast, gathered here in front of the Talara Refinery. We have requested a meeting with the banks involved with Petroperú to explain to them why we don’t want any oil company in our lands. We have seen what happens to other indigenous peoples when oil exploitation arrives.”
Senar Irar, President of the Achuar Nation
The request to meet comes at the time of news reports which state that Petroperú intends to proceed with a $1 billion bond issuance to recover from its massive debt of up to $6.5 billion resulting from the constriction of its Talara Refinery. The coalition argues that new financing of the company may provide the capital to accelerate plans to exploit oil blocks located in the northern coast of Peru and in the Peruvian Amazon. Such actions pose an existential threat to local communities, their habitats, biodiversity, and the climate at large. Furthermore, the letter highlights that activities in these oil blocks lack the social license of fishing guilds, face increased opposition from Indigenous peoples, and may violate FPIC. All of this contradicts the banks’ human rights and climate commitments.
For years, we have seen how oil production has only brought poverty and contamination to our neighbors. Petroperú has been unable to repair any damage. We have seen how the pipelines are rotten and the government is never responsible for anything. And the product of this ends up here in this refinery. The organizations of the Amazon and the Sea are united to stop this destruction.
Neil Encinas, Wampís Nation Delegate
This meeting request comes as leading U.S. banks, including JPMorgan Chase and Citi, pulled out of the Equator Principles. The decision of these banks to abandon the bare minimum framework, which sets basic standards for managing risks to the environment and vulnerable communities associated with project financing, reinforces the ongoing threat of regression in climate and rights commitments by financial institutions.
Citi has faced backlash from investors due to its involvement in funding linked to rights violations, while both Citi and JPMorgan Chase stand accused of human rights violations linked to funding of Saudi Aramco.
Petroperú’s new pursuit of financing also comes at a time when European banks Santander and HSBC are facing intense scrutiny for their financial support of the Talara Refinery in 2021. This scrutiny has been fueled by concerns about potential breaches of its own climate commitments and policies.
The collective stance of these organizations underscores the grave concerns about Petroperu’s financial stability. It emphasizes the company’s perceived necessity to expand its oil extraction operations in the Amazon and the northern coast of Peru to meet its financial obligations to creditors, including Bank of America, Santander, Deutsche Bank, and HSBC. These institutions have either directly funded or underwritten the construction of Talara Refinery, which is considered one of the costliest and largest in the region. The letters also reference the financial risks of investing and financially supporting Petroperú. The company faces even more financial instability, diminished credit ratings, and corporate governance issues, as highlighted in the report entitled The Risks of Investing in Petroperú.
