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An Oil Company in Peru & The Misleading Art of Commercial Deception

Pluspetrol, a large oil company in Peru, is painting a picture of supporter to local communities but a closer look that picture appears to be misleading.

“Working in harmony with nature and the community” reads the front of a pamphlet I picked up at this year's Expo Amazonica in Iquitos. The cover photo shows indigenous women in their native community, with the backdrop of the ever-green Amazon Rainforest. On the top left is the logo of Pluspetrol. Judging by the illustration, and not knowing who or what Pluspetrol is – although the name reveals its intentions – you might first think of an environmental NGO, an eco-tourism venture or a conservation organization.

Pluspetrol Pamphlet: "working in harmony with nature and local communities"

I rubbed my eyes... In this brochure, Pluspetrol Norte S.A., an Argentinian based Petroleum company, advertises itself as a pioneer of environmentally sustainable oil exploitation in the Peruvian rainforest (not an oxymoron?), a socially responsible enterprise supporting community projects, creating employment locally, providing health care, and as such a “neighbor” loved and welcomed by the local indigenous communities. However, the reality is much different.

Environmental emergencies

Pluspetrol has been operating the oil concession 1 AB in the northern region of Loreto in the Peruvian Amazon since 2000, when they took it over from Occidental Petroleum, which was in the region as early as 1971. Pluspetrol acquired operation rights over the neighboring oil block 8 from Petroperu in 1996.

In 2012, after more than 40 years of oil activity and many years of unanswered pleas and protest by the local indigenous population, the Peruvian government launched a commission to investigate the state of the environment in the different river basins where Pluspetrol operates. The first results, from the Pastaza River, came in March. They were devastating. Life-threatening levels of heavy metals and hydrocarbons were found in soil and water sources, from which the local Quechua people fish, harvest their food and fetch their drinking water every day. The Pastaza was declared an environmental emergency.

Courtesy Alianza Arkana/FEDIQUEP

Shanshococha lake in Lot 1AB, in May 2012: A Quechua Indigenous Environmental Monitor in the Pastaza shows what once was a lake, used on a daily basis by local communities, here entirely filled with crude oil.

The results of a second river basin, the Corrientes, were published in August 2013. They were dismayingly similar to the ones in the Pastaza. As expected, a few weeks later, the government declared an environmental emergency for the Corrientes River.

On October 10, the findings of the Tigre river basin were released. By now, the story has become too familiar. Water bodies and soils are heavily polluted. Of the 59 soil samples taken, 56 exceeded Peruvian Environmental Quality Standards. Out of the 59 points where soil samples were taken, 57 had never previously been declared by Pluspetrol. The upper Tigre river basin was declared an environmental emergency on November 29.

Currently, investigations are underway in the remaining basin affected by the oil activity of Pluspetrol, the Marañon River, which, just a bit downriver from Pluspetrol's installations, becomes the great Amazon. No one expects the results of these tests to be any less serious.

Pluspetrol denies any responsibility for the environmental damages in Lot 1AB, but blames its predecessor Occidental Petroleum. There is no doubt that “Oxy” – as they are commonly called in the communities – left an incredible mess. What Pluspetrol usually omits, however, is that they haven't complied with legal environmental management instruments, created to guide hydrocarbon installations and activities. As such, these instruments demand measures to remediate affected areas in order to comply with maximum acceptable emissions and discharges, as well as the management and disposal of waste.

At best, Pluspetrol hasn't complied with these legal instruments, but local communities, indigenous environmental monitors, and crude (oil-) facts indicate a more disturbing truth.

Over 100 oil spills over the last five years

The Indigenous Peoples of the four affected river basins have trained environmental monitors over the last years to monitor oil activity in their territories. PUINAMUDT (Pueblos Indigenas Amazonicos Unidos en Defensa de sus Teritorios), the platform in which the affected peoples have organized themselves, reports that these monitors in Lot 1AB alone have identified more than 100 crude oil spills over the last five years. FECONACO, the federation of indigenous people on the Corrientes river, reported three crude oil spills in 2013, from January to April alone. In August, a member of the Urarinas people, whose lands are being crossed by the pipelines that connect Lot 8, approached environmental and human rights organizations in Iquitos to report two major oil spills, one in May and one in July. More recently, ACODECOSPAT, the federation representing 57 indigenous Kukama communities on the Marañon, held a press conference and presented visual evidence of a recent large crude oil spill from Lot 8X, located within the Pacaya Samiria National Reserve.

But even if one doesn't believe the reports from indigenous groups, as many in Peruvian politics and business still don't, the national body responsible for monitoring oil installations – OSINERGMIN – reported that 25 oil spills occurred in Lot 1AB between 2010 and 2011. The renowned online portal for indigenous affairs, SERVINDI, cites a report that states that Pluspetrol has registered 78 oil spills between 2006 and 2010 in Lot 1AB and 8.

Attacking rusty old pipelines

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How does Pluspetrol explain these oil spills? Vandalism! Pluspetrol claims that local and indigenous people are vandalizing pipelines and creating oil spills in their forests, lakes and rivers. Vandalism exists, but this explanation omits large portions of reality.

If one makes the effort to journey to these remote areas and look at these pipelines that move thousands of barrels of crude oil every day, one quickly notices the poor state they are in. They look like they came from another century. The vast majority of them have never been changed since operations began over 40 years ago; they are rusty and covered with corrosion. In some spots, leaks have been patched. Moreover, tubes can be found lying on the ground, without adequate support to keep them above ground, lacking simple access paths. Finally, in some instances, large parts are submerged in water in sensitive wetlands. As such, these pipelines are violating several national laws and guidelines.

Stefan Kistler/Alianza Arkana

State of oil pipelines which move thousands of barrels of hot crude oil around every day: This particular picture is from the pipeline that connects Lot 8X with the oil installations in Saramuro on the Marañon River. Sixteen kilometers of tubes in similar or worse conditions cross through the Pacaya Samiria National Reserve.

Furthermore, the crude oil that is transported through these pipelines is under high pressure, and very hot. Independent experts agree that one would put his own life at risk if one was to try and sabotage a pipeline by making a hole in it. Photographs of oil stains three to four meters high on surrounding trees illustrate this risk very well.

By now, the picture Pluspetrol paints of harmonious relations with the communities and environmental stewardship has started to fade.

Polluted production waste water straight into the rivers

In concessions 1AB and 8, it wasn’t until 2009, after several years of prolonged and firm protests by the local population – that Pluspetrol finally re-injected all of its production water back into the ground. Pluspetrol boasts of the half billion U.S. dollars they have invested in the construction of this re-injection system. What they don't mention, however, is that until 2009 their practice was to dump this production water – with temperatures ranging up to 194° F, highly salty, and with a high barium content – directly into the rivers and creeks.

For each barrel of crude oil produced, 100 barrels of water are used. Thus, every day, Pluspetrol dumped approximately 1,100,000 barrels of production water directly into the Pastaza, Corrientes, Tigre and Marañon.

Although the construction of the re-injection system is of course one of the more positive developments during the recent years, it is worth adding that having stopped releasing the production waters into the surrounding water bodies, doesn't mean that the damage of all the previous years' contamination has been reversed.

Health care and employment

Flipping through that Pluspetrol brochure, I stare at the picture of children in a modern school building, and read about the health care Pluspetrol's medical station is providing. According to the company, their medical center in Andoas (on the Pastaza River) – the main industrial camp and airport are based around this village – provided 24,000 medical consultations in 2010. They also, in emergencies, provide free transport on their flights for patients from the communities to Iquitos, the regional capital.

Locals confirm much of the above and express appreciation. However, it is necessary to look at this issue from another angle. The prolonged exposure to hydrocarbons and heavy metals, such as mercury, barium, aluminum, cadmium, arsenic, and Iron—all of which have been found in soils and water sources in the Pastaza basin around Andoas, as well as in the Corrientes and the Tigre basins – have been scientifically proven to lead to such diverse and serious illnesses as cancer, increased blood pressure, muscle debilitation, nervous system damage, chronic headaches, kidney failure, to mention but a few. People in the affected villages complain about the increase of “unknown” diseases, as well as chronic headaches and stomach aches.

Seen from this perspective, much of the health service provided by Pluspetrol merely helps to alleviate some of the serious health damage they have caused in the first place. It is a bit like cutting off someone's leg and then congratulating yourself for donating an artificial limb.

The Quechua indigenous leader from the Pastaza, Aurelio Chino Dahua, who has seen his forest lands turned into an environmental emergency by Pluspetrol, is more direct in his message: “they are trying to cheat us.”

Stefan Kistler/Alianza Arkana

Indigenous Quechua leader Aurelio Chino sits on what is now a huge constructions site. Recently, Peru's Agency for Environmental Evaluation and Control OEFA), fined Pluspetrol with over $7 million for irreparable environmental damage to the lake.