Peru’s Minister for Energy and Mines last week finally announced agreement on some of the key demands of the indigenous leaders in the valleys of the Corrientes, Tigre, Pastaza and Marañón rivers in Peru’s northern Amazon. This follows more than 40 years of contamination and neglect, and almost three years of negotiations between the state and the representatives from more than 100 communities and some 20,000 indigenous people.

Still, local conflicts have yet to be resolved between communities along the Corrientes and Tigre rivers and the Argentine oil company, Pluspetrol. These have resulted in the closing of transport along the Tigre River for over a month and the suspension of production of 14 oil wells in the upper Corrientes river basin.

A history of pollution and neglect

Since the beginning of oil production in the region in 1971 a succession of companies have extracted crude oil with little regard for the impacts on the environment and the local indigenous population. There was no environmental legislation before the 1990s, and it was not until 2006 that there was official recognition of these impacts or any attempt to mitigate them. At that point the Corrientes River indigenous Federation (FECONACO) led the occupation of Pluspetrol’s installations, forcing the company and the state to negotiate and meet their demands. Agreements were reached in the now historic Dorissa Accord.

Difficulties in ensuring the implementation of the agreement, especially by the Loreto Regional Government, coupled with the realisation by the indigenous peoples of the other three valleys of the impacts of oil production activities on their livelihoods and environment, resulted in the formation of an alliance between the indigenous federations of the four valleys. Their aim was to seek redress for the damage to health, caused to livelihoods and the environment.

In 2012, the environment minister announced that oil block 1AB (renamed Block 192), exploited by Pluspetrol, would be the country’s first experience with free, prior and informed consultation under the then recently passed prior consent law. Pluspetrol’s contract was due to expire in August 2015 and would be opened for bidding. The indigenous leaders (or apus) announced that they would be willing to participate in the prior consultation process regarding the conditions of the new oil contract, but only after their historic grievances had been addressed.

Multi-sectoral commission

A multi-sectoral commission was created in May 2012 and given a year to negotiate a settlement. A year later, in view of the limited progress in reaching agreement, the commission was extended for another year. Meanwhile, four state institutions (OEFA, ANA, DIGESA and OSINERGMIN), under the leadership of the Environment Ministry, undertook studies and issued reports that confirmed contamination by hydrocarbons, arsenic, heavy metals (cadmium, lead etc) and other elements in the lakes, rivers and soils of the indigenous territories. This resulted in the declaration of environmental emergencies in each of the four valleys separately and a health emergency in the four valleys as a whole.

By mid-2014, the demands of the communities had still not been satisfactorily addressed, despite the official documentation and recognition of the environmental and health crises. These demands included the titling of indigenous territories, remediation of the affected areas (over 100 sites of oil contamination were detected), indemnity for the damages caused, compensation for the use of indigenous land and resources, and the implementation of a health and development programme. The Government responded with the creation of a multi-sectoral development commission, but by the end of 2014 the negotiations seemed to have reached a dead end.

The pending issues needed to be resolved for prior consultation process to begin and for agreement to be reached on the conditions governing the contract bid. Without agreement, the bidding process itself could not be undertaken and concluded before the expiry of the current contract. But the representatives of the multiple national ministries and government agencies and regional and local governments involved were unable to develop, coordinate and present acceptable proposals, whilst those with the political authority needed to overcome these difficulties had other priorities.

As the deadline for beginning the bidding passed, the prospect loomed of the interruption of an important part of the country’s oil production, as did that of another baguazo (military intervention). Such threats suddenly catapulted the issues to the top of the government’s political agenda. Local conflicts between the communities and Pluspetrol arose from the company’s strategy of seeking to undermine the negotiations by insisting on dealing with compensation claims community-by-community, not with the four federations.

Agreements reached

Proposals and demands that had been repeatedly ignored, opposed or declared impossible over almost three years of frustrating negotiations suddenly began to receive serious attention, so that last week the government announced the following agreements:

  • The state’s health programme (SIS) will be strengthened in the four valleys and a National Health Strategy for Indigenous Peoples will be implemented with a budget of 10 million soles to benefit 100,000 indigenous people. The quality of water for human consumption will be monitored.
  • Water treatment plants for 62 communities will be implemented with a budget of 48 million soles.
  • The state will guarantee environmental remediation in Block 1AB by the oil company, including the areas of contamination identified by OEFA and others. It will also promote participatory environmental monitoring between OEFA and the federations.
  • The Ministry of Finance will assign 3.5 million soles for land titling by the Regional Government with technical support from the Ministry of Agriculture. An additional six million soles will be assigned for land titling from a project funded by the Inter-American Development Bank (IDB).

Negotiations will continue to complete the agenda presented by the federations, dotting the ‘i’s and crossing the ‘t’s. But while the negotiation of the local disputes involving the oil company will begin next week, the indications are that the logjam has been broken. Agreements will still need to be reached that oblige the state to implement the agreements reached, as well as a mechanism for monitoring implementation.

It remains to be seen, however, whether this lengthy negotiation process and the outcomes will become a model for addressing other pending issues in the Peruvian Amazon.