Evidence emerges of chronic regulatory weakness in oil and gas industries

26 July 2015

A team of investigative journalists called Convoca has produced a worrying report on possible environmental damage in the oil and gas sector. The team discovered last year that OEFA, the Oficina de Evaluación y Fiscalización Ambiental, inherited a time-bomb when it assumed its monitoring role in 2011. This 'bomb' was a large collection of reports on environmental incidents, handed in to its predecessor, Osinergmin, between 1998 and 2009.

This bunch of reports was never processed, so no action was ever taken. They are now out of date, since Peruvian law says that reports must be investigated within four years and if this does not happen they become null and void. It appears that OEFA decided to sign off on them formally between August 2013 and September 2014.

The documents comprise some 10,000 pages, principally concerning firms in the oil and gas sector. OEFA petitioned the Contraloría de la República to investigate the individuals responsible for this negligence, according to the director of the office in charge in OEFA; Convoca has no record of the response http://www.convoca.pe/.

Convoca has used the intervening year to assess and analyse the boxes of reports. It tells us that 70% of the cases concern oil and gas operations in 21 regions of the country, and that the company most benefitted by the failure to act on this information was the Pluspetrol group which operates the Camisea gas reserve as well as oilfields in the Peruvian jungle.

We have been reporting regularly on the poor state of resourcing of OEFA, and the cuts to its budget and mandate contained in last year's ‘paquetazo’, so we have considerable sympathy for OEFA’s present management which is faced with this challenge; the official in charge appears to have been open and cooperative.

When the very slow start to cleaning up environmental liabilities in the oil and gas sector is also taken into account (see http://www.perusupportgroup.org.uk/news-article-888.html, as well as the constant problems raised over Environmental Impact Assessments (EIAs), the challenges facing OEFA are worrying indeed, and the case for reversing the cuts to both its funding and mandate becomes ever stronger.

Footnote: Last week the High Court in Lima turned down a suit from the National Association for Mining, Petroleum and Energy (SNMPN) to declare the quota charged to mining companies to fund regulation by OEFA as ‘unconstitutional’ and ‘illegal’. A total of 33 mining companies have filed similar suits, of which nine have been overturned by the courts.

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