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Remediation Overdue: South American Countries Fail to Enforce Oil Cleanup Laws

In his May 2022 state of the nation address, Ecuadorian President Guillermo Lasso laid out his vision for the South American country’s hydrocarbon industry. “Now that the global trend is to move on from fossil fuels, the moment has arrived to extract every last drop of our oil reserves,” Lasso said. The statement was seen as an affront to Ecuador’s Indigenous and rural communities, particularly in the country’s Amazon region, where they have waited for decades for the oil industry to manage and rectify the environmental damage it has caused. According to official data, in Ecuador, the total number of environmental liabilities and “sources of contamination” from the oil industry stands at 4,675 cases across the nation.

Bolivia and Peru are not lagging in the race to expand hydrocarbons extraction, even though cleaning up the damage caused by previous activity has not happened yet. The Bolivian government, led by President Luis Arce, recently announced its plans for the exploration and extraction of hydrocarbons in 2023 and 2024. There are currently 18 projects underway, which Bolivia hopes will help efforts to assuage the gas and diesel subsidy crises that have plagued the country in recent years. In Peru, meanwhile, a new bill proposal seeks to amend existing legislation on protected natural areas, opening them up to the oil and gas industry.

In January, at the 2023 World Economic Forum in Davos, Switzerland, Colombian President Gustavo Petro, who has lately been facing a serious political crisis, spoke of the urgent need to “decarbonize” the economy in order to deal with the global climate crisis. Colombia’s National Development Plan has included a section dedicated to boosting the extraction of strategic minerals in order to smooth the path toward the energy transition. Concrete action has yet to be taken, however, and the country also faces 106 cases of “unresolved impacts” caused by hydrocarbons that are either in progress or awaiting action.

A recent investigation into the 8,278 environmental liabilities and other impacts caused by the oil industry across Bolivia, Colombia, Ecuador and Peru has found that the vast majority of these — 6,371 cases — have yet to be dealt with. This goes against current laws and regulations for environmental protection or damage remediation requested of private companies or the state in the four countries. In some cases, as has happened in Bolivia and could now happen in Peru, the outlook is even more critical, since the areas targeted for extraction include protected natural areas and Indigenous territories.

What political decisions have been taken to prevent the cleaning up of more than 8,000 cases of oil pollution, and what are the authorities’ outstanding responsibilities with regard to this issue? This article surveys the current situation in the four aforementioned South American countries.

Ecuador: A history of pollution

“In all honesty, it doesn’t not seem right to me to call something an environmental pasivo when it is active and causing damage,” said Pablo Fajardo.

Fajardo, an Ecuadorian lawyer who has spent nearly 20 years fighting the U.S. oil giant Texaco-Chevron over the most high-profile oil pollution case in Latin America, was speaking about the environmental damage the oil company left behind in the provinces of Sucumbíos and Orellana, in the Ecuadorian Amazon, where, according to information sent to reporters from the Ministry of the Environment, Water, and Ecological Transition, a total of 1,107 liabilities, including cases of waste pits filled with oil, hydrocarbon wells and oil spills, are yet to be dealt with.

“This reflects the weakness of the state’s policies and its ability to exercise control, as if an oil company causes a spill, it is obligated to deal with it and clean it up immediately. If it doesn’t, then the state must take action to protect the rights of the population, but what we see here is that the state is complicit in the oil spills and is incapable of demanding that those who are responsible deal with it,” a visibly irritated Fajardo stressed.

For the lawyer, what is lacking in Ecuador is the political will. “There is legislation, there is the constitutional framework. We also have the Organic Environmental Code, the Environmental Management Law and even the Constitution of the Republic of Ecuador, which establishes the obligation to immediately restore environmental damages. There is no political will, and when this government or others say that they are trying to increase foreign investment from transnational companies, they do this by not requiring them to exercise adequate environmental control,” he said.

According to Mariuxi Sánchez, a former member of Ecuador’s national assembly who represented the province of Orellana for the Union for Hope coalition of political parties, there is a lack of political will to restore environmental liabilities. Sánchez pointed to the example of the city of San Carlos, in the province of Orellana, where there are people who are unaware that their homes sit on sites of environmental liabilities, toxic waste pits that have been covered and left behind by Texaco-Chevron, Sánchez said. “Just imagine consuming water contaminated with crude oil; that’s why it is thought that the high rates of cancer in the province of Orellana are due to this source of contamination,” the former assemblywoman said.

Sánchez recalled a visit she made in 2012 to one of the areas contaminated by Texaco-Chevron’s activities, in which she saw one waste pit nearly 1 kilometer (0.6 miles) long. “When they were carrying out the inspection, they noticed the sheer size of this waste pit; it was awful. And it was incredibly painful to talk to people from the local communities who would tell me about the health problems they were having. I met one woman who told me that her sister, brother-in-law and niece had all died of cancer, and on top of all that, her last surviving niece also had cancer,” the Union for Hope representative said.

The Indigenous peoples of the Ecuadorian provinces of Orellana and Sucumbíos, in which Texaco-Chevron’s activities were based, are still pursuing a legal case against the company in international courts, despite the fact that the North American oil giant has already lost a lawsuit in Ecuador and received a penalty fine of nearly $9 billion. The fine remains, to date, unpaid. “We have had a minister for hydrocarbons, Fernando Santos Alvite, who worked as a lawyer for Chevron, and during the last government, he tried to deny the existence of the environmental liabilities left behind by this company,” Sánchez said, when speaking about public sector employees who had links with the private sector oil industry.

Bolivia: Laws remain unenforced

The lack of political will to deal with the environmental liabilities caused by extractive activities in the hydrocarbon sector was also an issue that was highlighted in the case of Bolivia. Cecilia Requena, a senator from the Civic Community Party, said that in Bolivia, “there is not even the capacity to implement the regulations currently in force, nor the Bolivian Constitution [the Political Constitution of the Plurinational State of Bolivia], which in terms of the text itself is very advanced, and also [other] laws which, for me personally, are declarative in nature, such as the Law of the Rights of Mother Earth.”

This law, approved in 2010 during the government of the former President Evo Morales, establishes the right to the diversity of life, water, clean air, natural equilibrium and the timely and effective restoration of life systems affected directly or indirectly by human activity, in addition to the right to live free from pollution. However, in practice, this law, like many others, has been found to exist only on paper.

Requena, who is also a member of the Bolivian Senate’s commission for land, territory, natural resources and the environment, noted that extractivism in Bolivia, particularly of hydrocarbons, has generated income for the country and this, she argued, has allowed the Movement Toward Socialism party (MAS) — which has been in government for more than 15 years — to stay in power. “I view them as being addicted to extractivism and incapable of understanding Bolivia in the context of the 21st century. They celebrate industrialization, but we are talking about nonrenewable natural resources. They are incapable of seeing that Bolivia could have other sustainable economic models, such as the rainforest economy, which could include environmental services. And now there is the madness of opening up the Amazon, which is the only thing that would help us in terms of climate resilience.”

Requena said she has been trying to deter efforts to expand hydrocarbon-related activities, but her bloc in the Senate has been unable to achieve major results because MAS, the movement that brought Luis Arce to the presidency, holds a majority. “We’re focused on inspection and reporting [of environmental infractions], but also on creating a narrative with a different vision of how Bolivia could be. We haven’t completely given up when it comes to regulations, but we are going about it in a, let’s say, strategic way.”

Another topic raised by the Civic Community senator was the lack of information and transparency from the government in relation to its activity in the oil sector. This situation was experienced firsthand during the construction of the database used as a foundation for this report: After several requests for information made to Bolivian government institutions, the data received showed only 101 liabilities and abandoned wells inside protected natural areas but did not offer any information on other sites of oil extraction.

“The lack of access to information is systematic and, at this point, I can tell you that it is deliberate in many cases. It serves as a way of protecting oneself against scrutiny from civil society, the media or from parliament,” the senator said. “Bolivia is one of the few countries in the region that does not have access to information law. Over the two and a half years of this parliament, the Civic Community have put forward two legislative proposals for access to information law, but neither have been approved. There is a very clear lack of will,” she added.

Patricia Molina, director general of the Bolivian Forum for the Environment and Development, a civil society organization focused on environmental policy and the monitoring and inspection of environmental management practices, said that the issue of environmental liabilities has been going on for many years. It even goes back to the privatization and capitalization process in Bolivia, which began in 1985 with a wave of reforms. “An audit of the oil industry was carried out and included a section on liabilities, but it was almost a secret document, because the idea was to not pass on these liabilities to the companies that were coming [to the country] to invest,” Molina said.

The expert explained that current regulations have several gaps, one of them relating to the exact definition of an impact caused by oil activity. “In Bolivian regulations, including in the Constitution, the operative part is nonexistent and obviously makes any liabilities from the exploration phase null and void. It is considered a very low impact, so only the impacts of the exploitation [phase] are considered,” Molina added.

The environmental liabilities that the oil industry has left in its wake, particularly in the Chaco region of Bolivia, “are very serious” Molina told Mongabay. Essentially, these are “abandoned wells that are releasing hydrocarbons, gases and waste in a very important area, the Serranía del Aguaragüe, the source of all the water in a region that is already very dry.”

Peru: Thousands of liabilities are waiting for remediation

“At some point, we found an emblematic case in Tumbes. It was an environmental liability from the oil industry where oil waste was still being released and, from time to time, would catch fire. The people there saw it as a kind of tourist attraction, like hot springs. Adults and children would bathe in the well without realizing that it was an oil liability,” recalled Lissette Vásquez, an assistant to the Public Defender’s Office on matters of the environment, public services and Indigenous peoples. “This is just one example of the risk [such] cases pose to people’s physical well-being.”

Since 2014, Peru has kept an inventory of its liabilities relating to the hydrocarbon sector. The inventory contains more than 3,000 environmental liabilities from nine regions across the country, most of these found in the coastal regions of Tumbes and Piura.

“Impacted sites” is another term used to describe the places that have been contaminated or affected by oil activity, with these referring specifically to contaminated areas in Lot 192, formerly known as 1AB, in the Loreto region of the Peruvian Amazon. According to Peru’s Environmental Evaluation and Enforcement Agency, there are currently 171 sites of this kind, none of which have been dealt with accordingly.

Vásquez also said that in 2015, the Public Defender’s Office published A Call to Remediation, a report that warned about the delays in dealing with environmental liabilities and called for the Peruvian state, specifically the Ministry for Energy and Mines, to at least prioritize the remediation of outstanding liabilities that posed a high risk to people’s health, safety and to environmental quality. Eight years have since passed and no progress has been made, Lissette Vásquez said.

“There is a historical debt owed to the Indigenous populations of the Loreto region for the pollution caused by the oil industry over the years and urgent measures were required, with this remediation fund coming to help,” the Public Defender’s Office employee said, in reference to the Contingency Fund for Environmental Remediation that was created in 2015 for the purpose of dealing with high-risk areas.

Loreto is definitely not the only region of Peru afflicted by environmental liabilities from hydrocarbons extraction. More than 3,000 liabilities have been recorded, mainly in the regions of Tumbes and Piura, on the country’s northern coast. “These two regions are historically where oil exploration started and communities in these areas have always been affected by it. It puts at risk their lives, health and their right to live in a balanced and healthy environment,” Vázquez added.

The civil servant explained that while the regulatory framework existed, the problem is lack of management, as authorities fail to fulfill their duties and the state has yet to prioritize implementing existing regulations. “In Peru, no public body could make the case that the failure to restore sites affected by oil activity is because the legal framework is lacking,” Vázquez said, adding that the Ministry of Mines and Energy is the responsible body for dealing with the liabilities.

For Ruth Luque, a congresswoman from the coalition Democratic Change – Together for Peru, one of the problems is the lack of coordination between the different responsible sectors of the hydrocarbon industry. “There is serious institutional weakness across the whole of the environmental management system in general. There just aren’t the people to carry out monitoring activity and constantly follow how the health of the populations at risk is impacted. This was evident after the Repsol [oil spill in 2022],” said the congresswoman and vice president of the Peruvian Congress’ Commission for the Environment, Ecology and Andean, Amazonian and Afro-Peruvian Peoples.

The most recent development in Peru has been the announcement of a new proposal that would seek to make changes to the Law for Protected Natural Areas. This proposal would clear the path for the exploration and extraction of hydrocarbons to take place in protected areas of Peru with the highest levels of conservation status, such as national parks, national sanctuaries and historic sanctuaries. The plan to modify the law has been tabled by the executive branch of government and is a clear sign of its interest in opening up the country’s most biodiverse areas to extractive activities for oil and gas.

Colombia: A new law in the making

“It is not only an environmental debt, but a legislative one, too, of recognizing these environmental impacts,” Cristian Avendaño, a Green Party member of Colombia’s Chamber of Representatives, said. “We must start by characterizing the liabilities, overcoming the legislative deficit for recognizing the liabilities and make way for regulations from the Ministry of the Environment and Sustainable Development on the mechanisms for environmental compensation,” Avendaño added.

The legislator was speaking in reference to the legislative proposal tabled by his political party in October 2022 — whose aim was to regulate and manage the environmental impacts left in the wake of extractive activities, as well as from waste landfill sites — that has recently been passed in Colombia’s Senate and has been sent to President Petro for his final approval.

Colombia has been awaiting legislation to specifically characterize the environmental impacts left behind by oil activities, mining and other extractive activities. In the case of the hydrocarbons sector, the damages caused by these activities are known as “unresolved impacts,” with data from the Colombian National Authority for Environmental Licenses showing 161 such cases spread across the departments of Antioquía, Boyacá, Putumayo and Santander.

The legislative proposal seeks to remedy the lack of information and create an official registry of the impacts caused by extractive activities. “In accordance with this law, the Ministry of the Environment and Sustainable Development will be responsible for classifying and identifying environmental liabilities. Once classified, Congress will then be responsible for drafting another bill that will allow for a much wider-ranging and more specific approach to environmental compensation,” Avendaño said.

When asked why Colombia had taken so long to address this legal void, Avendaño said it was because the dominant vision of governments in the country had been “a conservative and extractivist [one]. This is all to do with an anthropocentric vision of ecosystems development.”

Armando Sarmiento, a professor in ecology and territory in Javeriana University’s environmental studies school, explained that oil activity in Colombia, based on volumes and sites of production, is a recent phenomenon. According to the website of the country’s National Hydrocarbons Agency, low levels of oil production at the start of the 21st century led to the belief that the country would have to import fuel. This eventuality did not materialize, and currently, according to the Ministry of Mines and Energy, “the proven reserves of oil increased from the 2,039 million barrels reported in 2021 to 2,074 million barrels in 2022.”

On the topic of current regulations, Sarmiento claimed that “the environmental authorities are rigorous, but there are still things to improve. However, over the last 30 years the situation has evolved significantly, and we now have control and monitoring instruments.” According to him, one example of this evolution was the 1993 Environmental Law, which created the Ministry of the Environment, which saw the setup of the environmental licensing system and the introduction of methodological standards for regulating oil activity in the country that are used to this day.

Mauricio Cabrera, governmental and international relations adviser for WWF Colombia, said the main goal of the law that has just been approved is “to have a definition of environmental liabilities, because without a definition, taking action is very difficult. The regulation and definition of environmental liabilities [categorized] by subsectors should be with us in a year. It has been a 20-year-long fight for this law.”

Cabrera also saw the approval of the new legislation in Colombia as a message for the other countries in the region that are yet to establish laws on environmental liabilities. “It’s important for things to advance at a regional level, for liabilities management to be regulated across Latin America, as well as to develop legislation for other extractive activities, such as illegal mining, which leaves behind liabilities mainly in the Amazon region,” he said.

Source: Mongabay