Report on the Social and Environmental Impacts of the Camisea Gas Project by the International NGO Delegation to the Lower Urubamba

1 December 2003

August 2002

This report stems from a field mission from August 8-13, 2002, to the Lower Urubamba region by a delegation of international NGO representatives accompanied by Roger Rivas, President of the Machiguenga Council for the Urubamba River (COMARU). The delegation included Janet Lloyd (Amazon Watch, US), Nadia Martinez (Institute for Policy Studies, US), Henry Tito (CEADES, Bolivia), Carlos Cuasace (OICH, Bolivia) and Gregor Maclennan (Shinai Serjali, Peru). The following documentation is drawn from field notes, audio-visual recordings, TGP monitoring reports (available on www.camisea.com.pe) and COMARU documentation.

Downstream Component Impacts

The consortium Transportadora de Gas de Peru (TGP) is the sponsor for the downstream component of the Camisea Gas Project and Techint is the downstream operator primarily responsible for pipeline construction and operation.

The following documentation of downstream impacts is drawn from TGP's own monitoring reports available for April, May, and June 2002 and a field visit to Techint's Chokoriari camp on August 10, 2002. The delegation spent one hour touring the camp and meeting with Techint head camp engineer Oscar de Goma. The visible disorderly appearance of the camp, a lack of seriousness shown by Techint camp management when discussing significant project difficulties, and a lack of respect shown to female members of the delegation underscored Techint's lack of professionalism.

Several aspects of the Project impact the community of Chokoriari. The upstream part of the Project has established a camp of 2 hectares for pipeline construction workers within Chokoriari communal lands and the right of way will run through approximately 15 kilometers of their communal forests. In addition, much of their communal forests fall within Block 88. The community is being affected by the downstream aspect of the Project as well--Chokoriari community members reported to the delegation that inebriated workers from the Techint camp have entered their community on various occasions and there are problems with prostitution and physical altercations with members of the community. These are clear violations of the Consortium's workers' code of conduct.

In addition to major downstream impacts detailed below, the following illegalities and accidents should be noted:

Illegal Operations:

Even the TGP June monitoring report confirms the following unlawful operations in the lowland rainforest sector:

• The route of a stream was redirected without prior authorization by the property owner at Itariato (pg 113)
• Construction material was dug out of the banks of the Cumpurisato river near Kepashiato without authorization (pg 112)
• In Kepashiato, construction commenced on an additional access road without prior authorization. The monitoring report does not state that TGP stopped building the road--it simply states that in future additional roads should not be built without prior environmental impact evaluation and mitigation measures. No indication is given that steps were taken to resolve environmental impacts or legal issues arising from this road.

Fatalities and Accidents:

According to admissions by Oscar de Goma of Techint, the following incidents have occurred:

• In June, six workers were killed in the Kepashiato pipeline stretch at the Poyentimari River by machinery falling down steep slopes. The TGP June monitoring report notes several accidents at the Poyentimari River but does not give information about fatalities.
• A Techint consultant from England suffered major injuries while attempting to drive a motorcycle up an extremely steep slope as part of a game. The machine flipped backwards and crushed him and he was removed from the area by helicopter.

1) Loss of tropical forest cover and damage to critical natural habitat

Due to deficiencies in the Environmental Impact Assessment, construction delays and difficulties in access, the opening of the pipeline right of way (ROW) has resulted in significant damage to critical natural habitat and loss of tropical forest cover. Deviations in the ROW and excesses in ROW width indicate that Techint have contributed to greater forest cover loss and damaged more of the critical natural habitat found in this area than anticipated in the original design and the EIA.

• Deficiencies in EIA: According to Mr. de Goma, neither the firm contracted to do the EIA nor the contractors working on the design phase walked the ROW for the lowland rainforest portion of the pipeline route. Due to difficulties with access, i.e., broken terrain, thick forests, and lack of roads or paths, they assessed potential environmental impacts and designed the pipeline route via overflights and maps of the area. Consequently, the opening up of the right of way has presented more problems than anticipated.
• Deviations in the ROW: Mr. de Goma stated that with such steep terrain, engineers only know what's ahead of them when they reach ridge tops. As a result, several route deviations have been made--during the first two months of construction, 23 deviations were made along the entire pipeline route. As work on the ROW proceeded through even more difficult terrain in July and August, it is likely that there were many more deviations and deforestation!

It is not clear what physical damage has taken place as Techint encounters difficulties in opening up the right of way. It is very unlikely that the few environmental precautions that are referenced in the EIA to minimize negative impacts to this pristine tropical forest by opening the right of way have been adhered to. In fact, it seems as though more damage is taking place than was anticipated in the EIA. No independent evaluation and monitoring efforts have taken place as the right of way is opened up through this forest.

• ROW Width Exceeds Authorization: TGP's monitoring report mentions several places along the right of way in the sensitive Apurimac Reserve where they had to open up the ROW to a 60-meter width as opposed to the EIA recommendation of a 15-meter width and Techint's final decision of a 25-meter right of way (May, pg 82). Concerned stakeholders and observers had been assured that damage would be minimized in the pristine forested area. Actual practice to date does not reflect that this is the case and it is a significant cause for concern. Again, independent evaluation and monitoring is not taking place as the right of way is being opened up, so there are no mechanisms in place to effectively defend and protect this area or to control access, as the delegation that visited the camp witnessed livestock walking freely on the right of way.
• Prevention of Reforestation: In the exceptionally precipitous terrain of the Malvinas pipeline segment, up to 10 meters of earth is being removed from narrow ridge tops to allow the opening of the right of way. This earth is then used to fill in narrow gully bottoms (Luis Yallico, TGP engineer, IDB Consultation, Camisea August 12, 2002). This permanent removal of fertile topsoil will prevent adequate reforestation after construction is complete, preventing the restoration of the area to its former pristine state.

2) Contamination of a pristine critical natural habitat

Promises to maintain zero contamination and total material balance in the sensitive rainforest area have proven not to be feasible. Even TGP's monitoring report recognizes that the companies have not taken steps to rectify either of the following problems:

• Waste Waters Spillage: In May, waste waters from the Malvinas camp and the Kepashiato camp were draining into nearby creeks (May pg 45). By June, waste waters continuing to drain from the Kepashiato were considered a threat to local populations near the camp (June, pg 110).
• Major Fuel Spillage: On April 19, 150 gallons of diesel oil spilled from a storage tank at Malvinas camp into a creek and ran over 150 meters into the Urubamba River (April, pg 41). The June report revealed that 2 months later recommended improvements in fuel storage had not been carried out (June, pg 115). During the visit to the Techint camp in Chokoriari, the delegation noted metal fuel containers standing in open areas exposed to the sun, and no structure surrounding the main fuel tank to prevent contamination of the earth and the river in case of a spill. The companies have promised in public consultations and in their EIAs that there would be absolutely no contamination in the sensitive rainforest area. At the onset of the Project they have already shown how impossible this is for them to achieve--much less, maintain--throughout the life of the Project.

3) Significant erosion

Numerous major deficiencies and absences of erosion control techniques and the heaping of materials and earth alongside the pipeline right of way is causing significant problems with erosion, drainage, water run off, and landslides (May pg. 54,55).

Pre-rainy season rains have already hindered the opening up of the right of way and construction. Once the rainy season sets in it will be more difficult to implement erosion prevention measures. By June, many incidences of noncompliance with erosion recommendations prompted the TGP monitoring delegation to introduce an Erosion Control Recovery Plan for the entire pipeline route (June, pg 114).

• Landslide:

  In June earth and rocks removed and heaped beside the pipeline right of way without precautions collapsed into the Poyentimari River, blocking the river. At the same point, the pipeline route is too steep, causing rocks and earth to periodically slide into the river (June, pg 111).
  

• Erosion Mitigation Delayed:

  On the Malvinas section of the pipeline, 17 km of the RRW ROW are opened up, but erosion work is not being conducted as the route is opened; rather it is being left until just before the rainy season. Both Mr. de Goma and TGP chief engineer Luis Yallico stated that due to precipitous terrain, 8-10 meters of earth from the top of ridges is often removed to allow the pipeline to be laid. Earth is pushed to one side or used to fill in gully bottoms. Erosion control seems to be the last priority as the companies try to open as much right of way as they can prior to the rainy season.
  

• Difficult Terrain:

  By June, progress in the rainforest section of the pipeline is described as slow due to the difficulty of working in precipitous terrain. To open the pipeline route, huge amounts of earth and materials must be removed. Persistent heavy rains make the movement of heavy machinery and equipment difficult (June, pg 7). Oscar de Goma stated that on the Malvinas and Kepashiato pipeline sections, slopes are so steep in places (40 degrees) that men have to use ropes to pull themselves up and down and tractors can't get their tread. He also expressed uncertainty about the methods the company would have to employ when laying the pipeline tubes across the river, and especially once the river rises due to heavy rains.
  

• Difficult Climate:

  No independent evaluation and monitoring efforts have taken place here to assure that erosion measures are in place and will be in place for the upcoming rainy season. Oscar de Goma stated that this project will be entirely different in the rainy season as it will be impossible for the workers and machines to move around in deep mud, and it will be difficult to secure steep slopes against landslides and soil run-off. He also commented that the project engineers have no experience with working in such exceptionally rainy conditions present during the Urubamba rainy season.
  

• Drinking Water Contaminated:

  A COMARU letter to TGP dated August 2 details the contamination of drinking water sources resulting from uncontrolled erosion in the communities Poyentimari, Monte Carmelo, and Shimaá. These communities have repeatedly requested that TGP take measures to prevent contamination and supply them with an alternative source of clean drinking water.

4) Lack of independent monitoring and evaluation

In April 2002, TGP contracted the consultancy group Knight Piesold Consultores S.A. to conduct monitoring of project construction. The lack of independence casts doubt over the validity of the TGP monitoring system. Other major flaws in the monitoring process include:

• Inadequate Methods:

  In addition to the TGP monitoring system not being independent, TGP monitoring methods are far from rigorous--inspections of the pipeline right of way are done largely by helicopter and boat, not by foot, and only in areas considered of high risk due to topography, soil type, and construction status (May, pg 53). Walking the full pipeline right of way, more careful analysis of route alternatives, and a constant presence by monitoring delegations at the construction sites could have produced a fuller documentation of construction impacts and deficiencies.
  

• Control of Access:

  Furthermore, monitoring reports for April, May and June indicate that TGP monitoring activities do not include monitoring control of access along the pipeline route, although improved access is foremost among induced impacts. TGP has yet to clarify adequate mitigation measures to prevent increased colonization that will inevitably result from improved access.

Upstream Component Impacts

A consortium composed of Pluspetrol (36%), Hunt Oil (36%), SK Corporation (18%), and Tecpetrol (10%) is the sponsor for the upstream component of the Camisea Gas Project, and Pluspetrol is the upstream operator primarily responsible for seismic testing and production. Pluspetrol contracted the Canadian company Veritas to conduct seismic testing activities largely within the Nahua-Kugapakori Reserve, home to numerous groups of indigenous peoples living in voluntary isolation.

The following documentation of upstream impacts is drawn from field visits to Pluspetrol's Nuevo Mundo camp on August 9 and Veritas Peruanita camp on August 10. The delegation met with Jose Luis Carbajal from Pluspetrol, consultant anthropologist Michel Saenz from Veritas, and a Veritas seismic testing employee hereby called Worker X.

On August 11, the delegation was denied entry to the Pluspetrol Malvinas camp. A request from Roger Rivas, President of COMARU, to tour the Malvinas camp was also denied. Furthermore, the upstream consortium has not made available any other information about project impacts; therefore, it is currently impossible to make any evaluation of the social and environmental impacts of production operations in Block 88.

In addition to major upstream impacts detailed below, the following illegalities and accidents should be noted:

• Illegalities:

  Pluspetrol and Veritas representatives stated that both companies practice forced contact with groups living in voluntary isolation within the Nahua- Kugapakori Reserve. Searching for and coming into forced contact with groups in voluntary isolation is in direct violation of international human and indigenous rights laws, notably ILO Convention 169, ratified by Peru.
  

• Fatalities:

  On August 25, in Kirigueti, a girl who had been washing at the riverside drowned after being dragged into the Urubamba river by the large wake caused by two Pluspetrol barges passing by her at full speed. According to environmental regulations, barges must slow down when passing indigenous communities. However, communities have frequently reported that barges do not obey speed restrictions, resulting in community canoes being tipped over on the river. Such incidences were reported to Pluspetrol and were raised at the IDB Public Hearing on August 12, but Pluspetrol clearly failed to respond to this major security concern.

1) Forced contact with indigenous groups living in voluntary isolation

Pluspetrol and Veritas representatives stated that both companies practice forced contact with groups living in voluntary isolation within the Nahua-Kugapakori Reserve in direct violation of ILO Convention 169, ratified by Peru. It is vital that the isolated groups themselves choose if, when, and how they come into contact with wider society--Pluspetrol does not have the right to make this decision for them.

Incidences of Hostile Contact:

During our 90-minute visit to the Veritas camp, we were informed about two incidences of hostile contact along Seismic Line 40 and Seismic Line 34 in the Reserve. Experts agree that isolated groups living within the Reserve have no history of aggression--their decision to resort to aggressive tactics is indicative of the impact the seismic testing operations are having on their lives.

• Worker X related that on August 9, 2002, seven indigenous individuals ("calatos," or naked ones), waving branches above their heads, shaking trees, and continually yelling, interrupted a work party operating in Seismic Line 40 within the Reserve. After the workers fled, a company helicopter hovered over the vicinity to "make them run away too" (field notes, Veritas Peruanita Camp, August 10, 2002).
• When questioned about incidents of hostile contact, Michel Saenz initially categorically denied that any incidents have taken place--"absolutely none, not even contact with an uncontacted person"--but on closer questioning confirmed that an aggressive contact situation had occurred in Seismic Line 34 on the week of August 5. The incident was under investigation (field notes, Peruanita Camp, August 10, 2002).

Instances of Forced Contact:

Jose Luis Carbajal openly admitted that Pluspetrol seeks and makes contact with groups living in voluntary isolation. Veritas and Pluspetrol representatives provided contradictory accounts of methodologies used for contacting peoples living in voluntary isolation.

• Jose Carbajal stated that a group of company representatives accompanied by a Machiguenga guide approach isolated peoples announcing their presence through a loud speaker. Initial contact is made by the guide who is followed by company representatives who take gifts. Worker X confirmed that indigenous guides move ahead of Veritas work parties using loud speakers to communicate with isolated peoples in Machiguenga.
• Veritas consultant Michel Saenz stated that none of his guides use loud speakers or seek out isolated peoples. Rather, they only approach isolated peoples when they are aware of their presence near construction parties: "we see if we speak today. I speak a bit of Ashaninka. I speak Machiguenga with them. They laugh and we become friends and we start to have a relationship with these people."
• In May a Pluspetrol search party sought out and made contact with a group living in voluntary isolation in the Alto Paquiria. A settled Machiguenga relative of the group accompanied them. Carbajal indicated that the party was only able to make contact with one old lady as the rest of the group had migrated from the area in line with their traditional patterns of seasonal migration.

2) Safety of Local Communities

The April 2002 Independent Review concluded that the safety of local communities could be threatened by the project. Since then, as the drowning of a child in Kirigueti demonstrates, neither Pluspetrol nor TGP have taken sufficient care to safeguard the health and security of local communities. Numerous violations of regulations have been repeatedly reported by communities, without any adequate measures being taken by Pluspetrol.

• River Traffic Violations Result in Fatality:

  Before the fatality in Kirigueti, Pluspetrol had already been informed about company barges failing to obey speed restrictions. On August 12, 2002, at a public hearing for the Camisea gas project in Camisea, community spokespeople questioned Pluspetrol representatives about company barges breaking speed regulations. Jose Luis Carbajal replied that the company is training 7 delegations to supervise fluvial traffic and that barge speeds were discussed and agreed with communities during community consultation workshops. The Kirigueti incident causes little surprise given the inadequacy of Pluspetrol's response to major safety issues.
  

• Loads Falling from Helicopters:

  In violation of safety regulations, there have been repeated instances of helicopters carrying external loads flying over populated areas. In May the President of the community of Nuevo Mundo reported to Pluspetrol that heavy boards (tablas) fell from a helicopter into a community agricultural plot. The materials have yet to be removed and helicopters carrying external loads continue to fly over the community (IDB Consultation, Camisea, August 12, 2002).
  

• Absence of Game and Fish:
  
  All communities visited by the delegation in Lower Urubamba reported that a severe reduction in game and fish in the Urubamba River is adversely affecting the diet and health of main river communities. Increased high-speed river traffic, fuel spills from the Malvinas camp into the river as reported by TGP, and odorous waste water pouring from a flow pipe from the Nuevo Mundo camp into the river (footage available) should be investigated as potential causal factors. When questioned on this by a member of the Puerto Rico community, Jose Luis Carbajal responded that river contamination was also the responsibility of other river users and a study of river fauna might be undertaken in the near future (IDB Consultation, Camisea, August 12,2002). Given the existing detrimental impact on community diet, this response is inadequate.

3) Poor Community Relations

Since the publication of the Independent Review in April, already strained community relations have noticeably deteriorated. Company negotiations with local communities have served to divide and confuse local communities and weaken indigenous structures of organization. When asking about positive and negative project impacts in each community visited, the delegation repeatedly heard the expression "the company doesn't fulfill its promises" (la empresa no cumple).

• No Clear Methodology for Compensation:

  No clearly defined methodology has been used for compensation, and negotiation tactics have caused confusion and anger. The companies use varying methodologies and formulas for assessing value and determining compensation without clearly defining the criteria for applying a particular methodology. Furthermore, community compensation payments are not made in full until project completion, thus pressuring communities to comply with the consortium.
  
• Assurances Withdrawn:
  
  Women from the community of Kirigueti informed us that Pluspetrol representatives had informed the women that the company would fund the purchase of a modest amount of equipment for a Mothers' Club to allow women to make and sell craftwork. After various visits by company representatives to negotiate the amount of equipment, the offer of funds for the Club was withdrawn in an abrasive manner, accusing the community women of "asking too much." (Kirigueti, August 10, 2002)
  

• Disreputable Negotiation Tactics:

  The August 2 COMARU letter to TGP states that the community of Shimaá has been subject to harassment by Techint in seeking to gain permission to open a new road through community lands. During a period when community leaders were absent, Techint proceeded to open the road, only to have to close it again due to community protests. Techint has offered to pay the community US $3,500 in return for authorization, while simultaneously stating that the road will be build with or without authorization and compensation.
  

• Refusal to provide information:

  Not only have the communities not been adequately informed of the companies' plans and responsibilities affecting the communities, but when asked directly by community members, the companies have also refused to provide the information requested. A member of the Ticumpinia community of Chokoriari stated that when she inquired about certain project details, instead of being provided with an answer, she was asked why she needed to know. (Ticumpinia, August 11, 2002)

4) Lack of independent monitoring and evaluation

There is no system of independent monitoring and evaluation for the upstream project. The volunteer community monitoring delegations (Brigadas de Vigilancia) developed by COMARU have been undermined by Pluspetrol's practice offering money and resources to delegation members to join parallel monitoring systems ran by Pluspetrol through the Peruvian NGO ProNaturaleza. Monitoring reports from this parallel system are made to the consortium or organizations working for the consortium and are not publicly released. At the IDB consultation on August 10, 2002, Jose Luis Carbajal noted that the company receives frequent letters from communities about project impacts; however, there is no clear system for managing and responding to community complaints and evaluations.