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CORRUPTION-PERU: Parliament Investigates PetroTech Sale

Ángel Páez

LIMA, Feb 18 2009 (IPS) - At the government’s request, the Peruvian parliament has set up a commission to investigate alleged irregularities in the sale of Petro Tech Peruana (PTP) to Ecopetrol, the Colombian state oil company, and the South Korean National Oil Corporation (KNOC). But opposition politicians are sceptical of the outcome and have refused to participate.

The stated aim is to determine whether the purchase, transacted at the beginning of February for 900 million dollars with the Offshore International Group which owned PTP, was carried out in accordance with Peruvian law.

PTP administers 9.5 million hectares of oil blocks. However, since the sale was conducted abroad, the Peruvian state was unable to levy tax on the sale and consequently stands to receive nothing for the sale of rights to its national resources.

The opposition is boycotting the investigation commission, alleging that it is merely a ruse to ensure that parliament will ultimately approve the transfer of PTP.

Against all odds, lawmakers of the governing Peruvian Aprista Party (PAP/APRA) installed the parliamentary commission, chaired by one of its own members, APRA Congressman Jhony Peralta.

In the absence of opposition members, lawmakers Aldo Estrada and Wilder Ruíz, both ruling party allies, and Cecilia Chacón, from the Fujimorista sector that supports former President Alberto Fujimori (1990-2000) and that is taking the government’s side in this issue, are the remaining members of the commission.

“The fact that the chairperson of the commission is a member of the governing party does not disqualify the conclusions to be arrived at by the investigation,” said Javier Velásquez, the president of the Peruvian parliament.

“One should not prejudge the issue, but have confidence that the commission will carry out its investigation within parliamentary guidelines,” he said.

The view from the opposition benches is different. “All this new investigating commission will do is anoint and sanctify the sale of PTP,” said lawmaker Daniel Abugattás of the Peruvian Nationalist Party (PNP).

“The governing party and its allies protect foreign interests above our own national interests. There is no intention to really investigate this sale or anything of the sort,” he added.

Speaking at his installation as chairperson of the commission, Peralta promised that the investigation would be absolutely transparent. However, immediately contradicting himself, he announced he would make no comments to the press until the investigation is over, and that the sessions will be held behind closed doors.

The PTP sale was no secret because Ecopetrol and KNOC representatives made the details public at a press conference on Feb. 6, in which they even said they had the approval of Peruvian President Alan García.

Commissioner Ruíz also guaranteed the transparency and probity of the investigation. He said if irregularities were found in the PTP sale, he could not rule out intervention by the authorities.

“The sessions will be closed so that witnesses are not under duress when they testify to the facts,” Ruíz told IPS. “We want to avoid turning the work of the commission into a media circus.”

“PTP has been scrutinised by the Comptroller General of the Republic and by the Supervisory Body for Investments in Energy and Mining (OSINERGMIN), so there is sufficient cause to investigate the contractual terms of its sale to the Colombian and Korean companies,” he said.

“For example, Rafael Samaniego, formerly head of PeruPetro (the government licensing body that promotes investment in the oil industry and grants concessions to oil companies operating in Peru), had to resign because it was discovered that he had been manager of PTP. Don’t worry, we will get to the bottom of this business,” he said.

It is not the first time PTP has been investigated. In October, tape recordings implicated government officials in collusion with representatives of Discover Petroleum, a Norwegian company which wanted concessions for five oil blocks. Parliament set up an investigating commission chaired by the opposition Nationalist Party’s Abugattás.

That commission concluded that the Fujimori regime had illegally given contracts and concessions to PTP, and therefore those licences should be reviewed, because they were detrimental to the interests of the Peruvian state.

However, three members of the now-dissolved Abugattás commission, Miguel Guevara of PAP/APRA, Fujimorista Carlos Raffo and the pro-government Rafael Yamashiro, refused to accept the commission’s conclusions, and put forward another report which instead absolved PTP of wrongdoing.

Chairperson Abugattás and fellow opposition member Edgar Reymundo submitted a minority report.

On Jan. 31, parliament approved the pro-government report which favoured PTP. Soon after, on Feb. 5, Ecopetrol and KNOC bought PTP.

“The Comptroller’s Office found that the Fujimori government signed contracts with PTP for the exploitation of the important Lot Z-2B without having secured the approval of the Council of Ministers as the law requires, and because of this finding, PTP faces an investigation by the authorities,” Manuel Dammert, principal adviser to the opposition benches in parliament, told IPS.

“Although it has been proved that the Fujimori regime broke the law in authorising the contract with PTP, the owner, U.S. citizen William Kallop, went abroad and sold it to Ecopetrol and KNOC with the obvious aim of evading justice,” Dammer said.

“After they (the government supporters) refused to sign the report we prepared, saying that PTP obtained an illegal contract and recommending that all their oil contracts be reviewed, they now want to fix up the situation by setting up a new investigating commission,” Abugattás told IPS. “It’s a travesty.”