Environmental Clean-Up in the Amazon once again postponed: Challenges of the Remediation Fund for Peru’s Contaminated River Basins

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Published on: June 21, 2017


Text by Sarah Kerremans & José Fachín, indigenous advisor

Photographs from the Chaikuni Institute & FECONAT Archive


On June 12 2017, the selection process for the Public and International Tender N°01-2017-FONAM for consultancy services to elaborate Rehabilitation Plans for 32 sites impacted by hydrocarbon activities in the basins of the Pastaza, Tigre and Corrientes rivers was nullified. None of the companies that presented themselves (Consorcio Tema Litoclean, J.Cesar Ingenieros & Consultores S.A.C. y Hidrogeocol-Ecuador CIA LTDA, Consorcio Ecodes Varichem, Seacrest Group Peru-NSF Envirolab S.A.C. , Domus Consultoria Ambiental) were deemed qualified enough to initiate the important work of designing rehabilitation plans for effective environmental remediation in these Amazonian river basins so heavily impacted by oil activities.

The tender opened on April 20 and was meant to lead to the selection of a company capable of designing these remediation plans in no more than 270 days from the date of engagement. The plans ought to describe the characteristics of the 32 prioritized impacted sites, evaluate health and environmental risks, and propose rehabilitation methods with a calculation of their costs. The elaboration of the rehabilitation plans is prior to the start of the remediation activities. However, the government promised to initiate remediation activities in 2017. With the public tender currently nullified, responding to one of the most pressing demands of the communities in the river basins of Loreto is once again being delayed. Moreover, there is the just worry that the government may now lower the minimum requirements for the public tender process, enabling a less adequate company to be signed on to carry out this highly specialized work as a consequence.

In addition, what will happen to other contaminated sites, which are not included in clean-up plans? In oil concession 192 alone, there are approximately 2 000 impacted sites. Will petroleum be aggressively exploited in lot 192 in order to make the North-Peruvian Oil Pipeline (ONP) profitable and increase state revenues from royalties, which will lead to a pretended social agreement between the communities and the state? Clearly, cleaning up 32 sites will neither resolve the pending demands nor the latent social unrest.

Proposal of aggressive petroleum extraction in Loreto

On May 19th this year, the government Commission for Amazonian, Andean, and Afro-Peruvian Peoples, Environment and Ecology, led by congresswoman Maria Elena Foronda, summoned a decentralized public hearing in Iquitos by request of the indigenous organizations affected by petroleum activity in Loreto. Besides debating the urgency and necessity to approve the proposed indigenous and local environmental monitoring law, the commission presented the advances of the Investigation Commission into the oil spills of the North-Peruvian oil pipeline (ONP). Congressman Cesar Villanueva, who is heading the Commission, stated that they had been able to identify two major problems: neglect of the maintenance of the pipeline and corruption. For the ONP’s future viability, strong investment is needed. For this reason, Villanueva presented two options; either the pipeline is left in its current state and no investment is made, or one works towards increased oil productivity, so that transport costs are reduced (currently approx. 10 USD/barrel). According to the congressional representative, there would need to be an explosive increase in production in order to save the ONP. “Under a new social agreement between the state and the communities in the river basins, the latter could accept this new model”, Villanueva stated during the hearing.

Doesn’t effectively cleaning up oil spills form a part of a credible social agreement?

The authorities know well that indigenous peoples living within the area of influence of the historic petroleum circuit (Lot 192, Lot 8, and along the ONP) have been putting an effective and complete remediation of their contaminated territories on the agenda for many years now. Furthermore, when the contract of Pluspetrol Norte SA for oil lot 192 expired in August 2015 and a consultation process for the new licensing of lot 192 was going to be initiated, different indigenous organizations demanded five minimal conditions which should be complied with before any kind of consultation process should start. Among these conditions is the remediation of their territories. To describe the magnitude of the environmental damage caused by over four decades of oil activity in Loreto lies beyond the scope of this article – but just as an indicator: approximately 2 000 contaminated sites exist in lot 192 alone, according to the records of Peru’s Agency for Environmental Assessment and Enforcement (OEFA) and the former operating oil company Pluspetrol. After the oil spills in Cuninico and San Pedro in 2014, the situation along the North-Peruvian pipeline became even worse in the past two years, with over a dozen spills recorded in 2016 causing further destruction and suffering. The local population repeatedly denounced the ineffectiveness of the remediation methods implemented. Generally speaking, after clean-up activities were declared finished, crude oil would reappear if the earth was stirred up. The “remediated” soil is not suitable for planting any crop, and during flooding in the rainy season, crude oil would rise to the surface.


As a result of the demands of the indigenous peoples of the Pastaza, Tigre, Corrientes and Marañón River basins, the “law which creates the contingency fund for environmental remediation” (Ley N° 30321) was approved in May 2015. The Contingency Fund (henceforth called “the Fund”) was created to finance environmental remediation activities for contaminated sites in Northern Loreto – the sad legacy of over four decades of hydrocarbon exploitation. The contaminated sites have generated major risks to health and the environment, and deserve the state’s immediate attention and prioritization. As seed funding for remediation activities in the geographic area of the four affected Amazonian river basins, 50 million Peruvian soles were transferred to the Fund with 30 million soles coming from the Ministry of Energy and Mines (MINEM) and 20 million soles from the OEFA. The fund is managed by the National Fund for the Environment (FONAM) and administered by a board consisting of nine representatives, including four indigenous representatives from the respective river basins. According to the legal regulation DS N° 039-2016-EM, those four indigenous representatives come from four indigenous organizations (namely FEDIQUEP, FECONAT, ACODECOSPAT and FECONACO) which participated in the Multi-sectorial Commission that was implemented according to the Supreme Resolution Nº 119-2014-PCM. The regulation was approved at the end of 2016; nearly two years after the publication of the law. Its approval was fast tracked thanks to a massive protest of indigenous peoples from five river basins, all of which have been affected by oil activity. They were united in protest in the native community of Saramuro/Saramurillo from September to December 2016 (see the Saramurillo agreement: “The government commits to approving the Regulation of the Law of the Contingency Fund for Environmental Remediation no later than January 15th, 2017”).

One of the seven points brought forth by indigenous organizations in Saramurillo (there are about 20 organizations in the area of the historic petroleum circuit) was the demand for an effective remediation. One of the solutions to this demand, as proposed by the delegates of the state during the intercultural political dialogue in Saramurillo, was to implement this through the Contingency Fund of the FONAM. As a result, the following additional agreements were reached in Saramurillo regarding the functioning of the Fund:

• The representatives of the government commit to push for a legislative initiative in order to modify the Law 30321, as soon as possible, with the goal to include a representative from the Chambira River basin in the Fund.
• From this day on, half of the meetings of the Administering Board of the Fund shall be decentralized [i.e. not be held in Lima but in the provinces]. The organizations will appoint their representative per river basin. His/her name will be communicated to the FONAM. Representation per river basin can rotate. This mechanism should be integrated in the regulation of the Law 30321. FONAM shall facilitate the implementation of the meetings.


The Fund was created over two years ago: what has been done?

Two years have passed since the Fund was created through Law 30321. Different opinions exist with regards to these past two years. From a legal-technical viewpoint, one could argue that the two years served to (i) take a decision about the equal distribution of the funds per river basin (12.5 million soles each); (ii) for the board to publish a list of over 32 prioritized contaminated sites (this list is different from the list initially proposed by OEFA); (iii) to elaborate important instruments (the regulation of the law, and amongst others, an environmental management instrument for application, and terms of reference); and (iv) to assure indigenous participation in the decisions to be taken and the remediation work to be carried out. In an area that has been dependent upon on the oil industry for 45 years, the demand for employment from the communities and the communal businesses that some have formed seems to be a constant in these times of low oil productivity. In other words, employment is an important part of the indigenous agendas.

The perseverance and efforts of many who participated in the different meetings and spaces of the Fund during those two years should be recognized and admired. However, it is worth evaluating the Fund’s two years of existence from a more political perspective, in the context of the defense of fundamental human rights.


Is technification deviating attention from a process that is fundamentally about the defense of basic human rights?

The stakeholders involved in the Fund – the board, technical groups – have met countless times over the last two years. Both the number of meetings and the “unexpected agenda” to solve gaps in the legal normative (due to the diffuse definition and/or the interpretation of the law) have nurtured a different viewpoint, equally valid. It is legitimate to argue that the meetings have served to keep essentially political actors busy in a space which is exclusively legal-technical during decisive moments (such as during the prior consultation process of the oil lot 192, the withdrawal of Pluspetrol from lot 192, or the defense measure in Saramurillo). Put differently, a technical dialogue with indigenous organizations may serve other ends, when in reality what was needed is strong political will from different sectors of the state.

It is not just a few isolated, discontent or misinformed communities who questioned the slow process and the seemingly infinite number of meetings. FECONAT, the long-standing organization from the Tiger River representing 25 indigenous Kichwa communities which has legally been part of the administrative board of the Fund from its beginning, has questioned this “technification” on several occasions as well as its distancing from the fundamental demands of indigenous peoples. Moreover, in July 2015, during the prior consultation process, FECONAT suspended its participation in the meetings in FONAM in order to focus on the important consultation process underway. They did the same from September to December 2016 during the defense measure in Saramurillo, in which the organization participated actively. A letter from FECONAT to the FONAM on September 27 2016 reads:

“… through this letter we express the following: For 27 days now, there has been an indigenous protest on the Marañon River organized by peoples of the river basins, as a consequence of years and years of contamination and suffering due to the oil activity, and on the other hand few concrete results. It is illegitimate to be dialoguing in Lima while the peoples are demanding immediate remediation. FECONAT is part of this legitimate protest and demands that adequate measures be taken in this matter in order to solve the fundamental demands for all of us who are living in the affected river basins…”

In order to facilitate participation in the technical meetings, FECONAT suggested several times that meetings be held in Iquitos. At the end of 2015, when four communities from the upper Tigre River led by the former president of FECONAT decided to form a new organization (OPIKAPFE) and demanded to participate in the meetings of the Fund, FECONAT immediately displayed positive intentions to resolve the problem to the benefits of the whole river basin. The minutes of the second session of the board, held in Iquitos on December 16 2016, confirms this. It was decided that OPIKAPFE will be participating in the meetings actively but without the right to vote due to the legality issue of the Fund’s administration. FECONAT even suggested to the board that OPIKAPFE should be included since they are all relatives belonging to the same affected people. Consequently, they accepted that OPIKAPFE participates in the recently formed selection committee for the company to be contracted for elaborating the remediation plans.

During the debates in Saramurillo, FECONAT as well as other representatives from organizations that are not yet legally a part of the Fund, strongly questioned its functioning. Many called it a typical example of what happens in a lot of the spaces that the Peruvian State creates for dialoguing: countless meetings, few tangible results, technification of the debates, decisions are taken by somewhat closed groups, and meetings are often held in the capital far away from community assemblies. Furthermore, they also questioned the representations within the Fund’s administrative board.


Is the state obliged to include everyone affected in its participation mechanism?

The Peruvian state – one may claim as an intentional strategy – tends to excessively put emphasis on the procedures (due process) of the different spaces of dialogue, in such a way that these spaces convert themselves into closed or exclusive spaces. It is difficult for the indigenous organizations and leaders not to adopt the same idea. The state and/or other actors use a language of legality and legitimacy, which is attractive and somewhat validates the work and effort of some. When other representations appear, indigenous peoples also start to use a language of legality and legitimacy (e.g. they are not part of the law, they were only just founded, they just recently started to care, their agenda is not legitimate) which distracts from the essential issues at stake. In other words, the indigenous peoples loose themselves in discussions on procedures and due process, often forgetting their own customs and traditions of decision-making. In some occasions, as in the case of the Contingency Fund, technical groups are formed, such as to support the administrative board. Interlocutors in the form of advisors/professionals – the large majority of them being non-indigenous individuals, occupy these spaces. Not all organizations manage to find the kind of financial or technical support to be duly represented in these arenas. Additionally, some NGOs or professionals, be it out of ignorance or personal interest, adopt the same discourse about legitimacy (which is far beyond their role). This generates inequalities regarding participation and access to information, and consequently in decision-making processes. In some cases, it even leads to an appropriation of the issues by the interlocutors. For the above reasons, the participants of the protest in Saramurillo firmly rejected what they call the path of eternal technical debates. Instead, they proposed an intercultural debate directly between indigenous leaders, without interlocutors.

Furthermore, the defense movement in Saramurillo strongly questioned the representation within the Fund for the Marañon River basin, since there are many different indigenous organizations along this river. (“From what we hear, the Marañon River is just one person. But there are a lot of indigenous organizations in the Marañon. We cannot permit that a few individuals decide over our future and that of our river basins.” – Miguel Manihuari, President of AIDECOS during the debate in Saramurillo). The fact that not everyone affected was invited by the state to participate within the ambit of the law was also strongly questioned by representatives from the other river basins. Contamination is not a stable element. It cannot be (mis)used to foster competition between organizations that represent the same people, affected by the same cause. (“The dialogue roundtable [of the Four River Basins] wasn’t representing four river basins. It represented four organizations”, Daniel Saboya, president of FEPIAURC, during the debate in Saramurillo). Moreover, the organizations have their own internal dynamics, which are subject to a constant process of change. For the same reasons the debate in Saramurillo questioned the method applied by the board to select the 32 prioritized impacted sites. Respecting the law, intervention should be prioritized according to variables such as major health and environmental risks, and not on the basis of other possible variables (e.g. whether or not they are part of the geographic area of one or another organization, in order to later argue that this organization has more prioritized sites).

With the aim of contributing to a solution regarding the representation issue, the organizations gathered in Saramurillo agreed that the one representative per river basin shall be elected by the river basins (and not by any single organization), according to the customs and traditions of the peoples. Moreover, it was agreed that half of the sessions should be decentralized, and either be held in Iquitos or in the communities, in order to strengthen indigenous participation and the intercultural dialogue, without interlocutors from Lima.

Nonetheless, when approving the regulation of the law 30321 on December 26 2016, the state didn’t integrate any of the agreements from Saramurillo. By doing so, and only a few days after the agreements in Saramurillo were signed, FONAM lost the opportunity to strengthen and enrich its participation mechanisms and include all the affected communities from the river basins. There was a real hope that this new government would be different, with a genuine will to establish a new social agreement between the state and the indigenous peoples. For this reason, the indigenous peoples continue to demand the fulfillment of the agreements reached in Saramurillo and the modification of the law and the regulation. During their last visit to the capital, in a meeting with the different sectors on June 15 2017, the indigenous leaders demanded that FONAM urgently organizes a decentralized meeting inviting all the affected and responsible parties.


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