Illustration: Oxfam Peru

- An essential case for indigenous population's living conditions when confronted with oil investments.

By Miguel Lévano*

Servindi, 18 July, 2015.- At the beginning of President Ollanta Humala’s term, the Peruvian Congress fast-tracked approval of the Indigenous Peoples Consultation Law. A year later the government did the same for the law’s implementing rule.

In a context of growing social conflict around extractive industry investments, the government chose to prioritize protection of the right to consultation as recognized in the International Labor Organization’s Convention 169 (ratified by Peru in 1994), which guarantees special protection for indigenous people’s rights.

Months after releasing the implementing rule for the Indigenous Peoples Consultation Law in early 2012, the government announced the first prior consultation process for oil exploitation in Block 192 (formerly Block 1-AB) in the northern Peruvian Amazon. This block makes up 11% of Peru’s oil production.

As Oxfam has described in past blogs, the block has experienced 40 years of oil development leading to significant pollution within an area rich in plant and wildlife diversity and home to indigenous peoples of the Pastaza, Corrientes, Marañón, and Tigre river basins.

Indigenous federations in the block took advantage of the process to bring attention to their demands for compensation for negative social and environmental impacts and use of their lands, remediation of environmental legacy issues, and land titling. In this context government institutions carried out several dialogue processes with the aim of creating conditions that would enable implementation of a prior consultation process for the new oil concession.

This year on March 10 the government finally reached an agreement with indigenous peoples in the block. This came after more than three years of dialogue, the government’s declaration of four environmental emergencies and one sanitation emergency in the block, and the creation of two government multi-agency committees.

Recent years were also marked by some moments of heated conflict in the face of unforgiveable delays by the government in assuming responsibility for the grave environmental and health issues in the block.

The agreement centered on four key issues: i) integrated and intercultural development; ii) environmental remediation; iii) land titling; and iv) licensing, prior consultation and citizen participation in block 192.

The agreement created the enabling conditions for the prior consultation process around the new oil block (which should be awarded to the new owner in August 2015) to proceed. Preparatory meetings for the consultation began immediately and in May indigenous communities and the government agreed on consultation plan in a participatory manner.

Changing the rules

This case is not only essential for the defense of indigenous peoples’ rights in Loreto's four basins, but also an influence on the practices and policies that affect the indigenous population's living conditions when confronted with oil investments.

On the one hand, the dialogue agreements addressed core issues for the communities, environmental remediation among them, which immediately resulted in the adoption of a law that created a contingency fund for environmental remediation in the face of oil activities, proposed by the central government and approved by congress, which received an initial contribution of 50 million nuevos soles (USD 16 million) to initiate remediation activities in the basins of block 192.

The law also specified that environmental remediation is the responsibility of the operator in charge, based on the principle of internalization of costs, required to comply through the appropriate mechanisms.

The fund will be supplied by the fines imposed by the Agency for Assessment and Environmental Control (OEFA). This action, therefore, has changed the response scenario to environmental emergencies, starting with the situation in the basins involved in block 192, and complemented by the important work carried out by volunteer community environmental monitors who made possible the identification of the areas that suffer the greatest impact.

The second change refers to the terms to be established in the new contract with whoever takes ownership of the oil block, both in terms of environmental prevention and control and in the inclusion of clauses that provide direct economic benefit for the indigenous peoples of the area, among others.

This involves active indigenous participation throughout the duration of the oil project to minimize damage and bring about a mechanism to provide a fund for the implementation of development projects, based on community life plans.

This will not just be an agreement between the private sector and the communities, but will be achieved by modifying the conditions of the contract signed by the State and the company awarded the concession, which would be done for the first time in Peru if an agreement were reached by July. The government has already accepted in the accord signed in March, and in the consultation plan, the possible modification of the contract if an agreement is reached.

In this respect, dialogue and consultation are playing a dual role: as the right of indigenous peoples, but above all, as a strategy to defend and exercise other fundamental rights. In order to achieve this it was essential, and will continue to be so, that the communities of different basins and indigenous groups succeeded in coordinating their respective agendas in the face of negotiations with the State; and maintained their willingness to dialogue, despite the various conflicting signals from government representatives.

Despite all the progress, however, there is still much to be done. Concerning the dialogue, several agreements on titling, health and remediation are yet to be realized, not limited to the creation of the fund but depending on the implementation itself, which will take several years.

And also on the compensation for which the company Pluspetrol Norte bears responsibility. In all this, the best criterion to verify compliance with commitments are the indigenous peoples themselves. They deserve this after enduring so much for 40 years.

And concerning the consultation process, and tender for awarding new ownership of the block, the least that the State should offer are agreements to modify the contract as well as changes in sectoral regulations. The rules cannot remain the same. In the face of another 30 years of coexistence with oil exploration the indigenous populations deserve more.

* Miguel Lévano Muñoz is Oxfam Peru Extractive Industries Program Officer.