The Inter-American Development Bank (IDB) Wednesday unexpectedly put off until Aug. 6 a vote on whether to provide a 75-million-dollar loan for the controversial 2.6-billion-dollar Camisea gas pipeline project in Peru. The decision to delay the executive board vote, which is relatively unusual, came in the wake of a major campaign over the past two weeks by a host of Peruvian and international non-governmental organisations (NGOs) against public financing of the project, which is already about 60 percent complete, until serious environmental and social concerns can be addressed by the project's sponsors.
The campaign, which has included intensive lobbying of senior U.S. Treasury and IDB officials, appears to have moved the administration of President George W. Bush from supporting the project to leaning toward abstaining when a final vote is taken. Sources told IPS that the administration has yet to make a final decision, one of the reasons why the vote has apparently been put off.
U.S. officials declined comment, but IDB spokesman David Drosdoff told IPS that the delay came at the request of Bank President Enrique Iglesias, who ''wanted to give more time for some of the (executive) directors to consult with their governments''.
Drosdoff also indicated that the management still supports the IDB's participation in the project that, he said, ''will make it better and encourage the companies (implementing the pipeline) to better mitigate its impact''.
Environmental groups claimed a tentative victory after Wednesday's announcement, although they stressed that the vote should be delayed indefinitely.
''If this (delay) can be translated into doing something about the problems that are clearly arisen in the project, instead of being just a delay for one week and then they'll vote to approve it, that would be huge,'' said Aaron Goldzimer of Environmental Defense (ED), one of many groups that have been actively lobbying for a full review of the project.
In briefings with U.S. and IDB officials during the past week, said Goldzimer -- who just returned from the region affected by the pipeline construction -- ''their faces showed real concern after seeing the damage on the ground''.
ED joined four other major U.S.-based international environmental groups in calling for a further delay. ''Camisea in its current form is risky business and should not receive public financing,'' the groups, including Amazon Watch, Amazon Alliance, the Institute for Policy Studies, and Friends of the Earth, said in a statement issued after the announcement.
''Delaying the decision by a week will only be window dressing if the Bank approves Camisea without major modifications. One week from now Camisea will still be a disaster. We urge IDB executive directors to delay decision as long as it takes to implement modifications sought by Peruvian civil society,” it added.
Camisea, Peru's biggest development project, is designed to exploit a huge gas field in the Amazonian region of the country by running two pipelines, some 1,150 kms and 520 kms respectively, through Andean rainforests to Lima and the Pacific Ocean.
It also includes the construction of liquefied-natural-gas (LNG) processing plants, including one immediately adjacent to the Paracas National Reserve, Peru's only protected marine area, and one of the most important ecosystems -- home to extremely rare animal species, including green sea turtles and Humboldt penguins -- in the western hemisphere.
In addition to its environmental sensitivity, the project has also provoked growing concerns about its impact on the indigenous peoples who inhabit the Nahua-Kugapkakori Reserve, several hundred of whom have avoided or rejected contact with outsiders and lack immunity to common diseases.
Nearly 75 percent of the project's gas-extraction operations are located in that reserve.
When Shell undertook exploratory operations in the region in the 1980s, almost one-half of all of the Nahua people died from introduced diseases, and already evidence exists that contractors working for the Camisea project have actively sought uncontacted groups during the past year.
In a letter to Iglesias earlier this year, the NGOs charged that the project's sponsors, Pluspetrol of Argentina and Texas-based Hunt Oil, were ''forcibly contacting groups living in voluntary isolation'' in violation of internationally recognised rights of indigenous peoples, and may be responsible for reports of steeply rising death rates among Nanti children.
In addition, larger indigenous communities living just outside the reserve report sharp declines in fish in local streams and lakes over the past year due to severe soil erosion and massive landslides that have resulted from the pipeline's construction along steep ridges high in the Andes.
The fish declines are contributing to malnutrition among the indigenous people there, particularly children, according to local NGOs and officials.
Despite these and other concerns voiced by environmentalists and Indian rights groups, the pressures on the IDB for proceeding with the project are substantial. Officials in the increasingly beleaguered government of President Alejandro Toledo have lobbied hard for support from both the IDB and the U.S. Export-Import Bank (Ex-Im), whose own board also put off until at least next week a decision whether to approve 200 million dollars in financing for drilling operations.
Hunt Oil has extraordinarily close ties to the Bush administration. Its chief executive, Ray L. Hunt, was a major contributor and fund-raiser for Bush's presidential campaign and also sits on the board of directors of Halliburton, whose chief executive until the 2000 campaign was Vice President Dick Cheney.
Halliburton is considered the ''top candidate'' to build the one-billion-dollar LNG plant near the Paracas Park, according to the 'Washington Post'.
The IDB also has made little secret of its desire to be involved in Peru's most important development project. Indeed, it has argued that only its participation can ensure that the project's negative impacts could be mitigated by conditioning its involvement on improvements.
In addition to the 75-million-dollar loan the IDB hopes to provide, its directors must decide whether to lead a consortium of private banks that will lend the project several hundred million dollars more.
But opposition has mounted steadily as evidence of the environmental and social impacts of the project and of its poor planning and implementation has been documented by NGOs.
Earlier this year, the U.S. Treasury reported that involvement in the project by the IDB risked ''sending a signal that project sponsors can bring poorly designed projects to (international financial institutions) too late in the process'' to allow for changes.
The NGOs have made a similar argument. The fact that the project is so advanced, according to Goldzimer, reduces the IDB's and Ex-Im's ”abilities to affect project outcomes. It would also set a dangerous precedent -- companies would know that it pays to build a project first, re-making 'the facts on the ground', and then afterwards go to the IDB and Ex-Im for financing after most of the important decisions and environmental-social damage have already happened''.
Nine U.S. senators last week sent a letter to Treasury Secretary John Snow and the head of Ex-Im calling for a delay in the votes to allow more complete reviews. In addition, the U.S. Agency for International Development (USAID) reportedly sent its own recommendation to Treasury to oppose the project on the grounds that the environmental reviews carried out by the agency failed to meet the standards required under U.S. law.
Both the World Bank and the U.S. Overseas Private Investment Corporation (OPIC), which provides insurance and other forms of support to U.S. corporations doing business abroad, have kept their distance from the Camisea project.
IDB Camisea Environment and Social Impact Report
(pdf format) +Environmental Defense.
-----------------------------------
[c] 1998, InterPress Third World News Agency (IPS)
