A proposed law before Congress to regulate investment in the hydrocarbon sector is currently causing concern among indigenous groups vulnerable to oil development. The bill proposes to modify 23 articles of the existing 1993 Hydrocarbons Law (Law 1622) proyecto de Ley N°2145/2017-PE.

The government and oil industry see the changes as smoothing the way for new exploration and development by reducing bureaucracy and lengthening the life of concessions. The criticisms focus primarily on what is not in the legislation (or in the original law) and on the variety of ways in which removing obstacles would weaken the defence of indigenous interests.

Two environmental NGOs have published detailed critiques of the proposal: DAR (Derecho, Ambiente y Recursos Naturales) and SPDA (Sociedad Peruana de Derecho Ambiental).

Four indigenous federations have sent a letter to the president of the Congressional Commission for Energy and Mines and to the Defensoría del Pueblo.

What is not in the proposed Law has drawn most fire. The indigenous federations are protesting loudly about the lack of any requirement for prior consultation in the bill. This is of particular concern since the proposed extension of exploration contracts by up to 20 years might severely affect their interests.

While the examination of the case for any extension will review the behaviour of the contractor over the whole period up to date, there is a specific exemption from grounds for non-fulfilment. The terms of the grounds for exemption are somewhat unclear. Exemption applies in any situation where the company is in controversy with an arm of the government in any area involving administrative or judicial or arbitration issues (en sede administrativo, judicial o arbitral).

Both DAR and SPDA maintain that the revised law pays no attention to the debates around climate change that have emerged since 1993. DAR criticises the institutional changes proposed; in particular it argues that it is inappropriate to leave Perupetro, the agency that promotes investment, with the responsibility for providing information on the environmental, technical and social contexts.

The role to be given to Perupetro, the Ministry of Defence and the Ministry of the Interior in guaranteeing the security of contractors (Article 36 in the bill) is questioned in view of the existing criminalisation of protest, the more than 100 agreements between the police and private companies for security provision, and the way this can lead to human rights abuse.