ENVIRONMENT-BOLIVIA: US Agency Approves Gas Project

By Jim Lobe Reprint | | Print |

Jim Lobe

WASHINGTON, Jun 15 1999 (IPS) - A major US export-credit agency has approved 200 million dollars in concessional financing for a pipeline project in Bolivia, that environmentalists say will destroy the world’s last intact dry tropical forest.

The Overseas Private Investment Corporation (OPIC) agreed Thursday to finance a package for Texas-based Enron Corporation after a two-hour board meeting which added several conditions that supposedly will mitigate the impact on the environment.

Environmental activists, who mounted an intense eleventh-hour campaign to defeat the deal, remained disconsolate.

“It’s a bunch of nothing,” said Jon Sohn, an analyst at Friends of the Earth (FoE), in commenting on the the conditions added to the package. Sohn once worked as an environmental policy analyst at OPIC.

Activists representing 60 non-governmental organisations (NGOs) from 25 countries argued that the pipeline’s proposed route threatened one of the world’s most diverse habitats, the Chiquitano forest.

They also charged that the decision violated a two-year-old pledge by President Bill Clinton to ban US support for infrastructure projects in primary tropical forests.

The Enron project formed part of a 2.1-billion-dollar, 3,150-km scheme to transport natural gas from Bolivia to Sao Paulo, Brazil. Enron, along with Shell Oil, are major stockholders of Gas Transboliviano, SA, which will transport the gas within Bolivia.

The pipeline, one of the world’s most ambitious infrastructure projects, already has attracted hundreds of millions of dollars in financing from the World Bank, the Inter-American Development Bank (IDB), the Andean Development Corporation and the European Investment Bank.

It will start in Ipias, Bolivia, where it branches off the main Bolivia-Brazil pipeline, then goes northeast through San Matias to Cuiaba, Brazil, where Enron is building a 480-megawatt, combined- cycle natural gas power plant.

“Nearly 90 percent of the pipeline route in Bolivia traverses extremely unique and pristine tropical forests and Pantanal ecosystems,” according to Atossa Soltani, director of Amazon Watch, a California-based advocacy group.

“Given how isolated the region is, the 30-meter pipeline right of way will open up the heart of this pristine region to uncontrolled exploitation, illegal hunting, logging, poaching, and colonisation,” she says.

Her views were echoed in a letter to OPIC President George Munoz from the 60 environmental NGOs. They charged OPIC with violating its own ban on supporting infrastructure projects in primary tropical forests and demanded that the agency conduct a new study.

OPIC delayed a board decision twice in the past year. “This is one of the most controversial projects OPIC has faced in many years,” according to Kari Hamerschlag, an analyst at the Bank Information Center (BIC) here.

Whether the Chiquitano forest qualifies as a “primary tropical forest” has been at the heart of the controversy.

OPIC defines it as one that is “relatively intact…(and) has been essentially unmodified by human activity for the past 60-80 years.”

The independent Bolivian consulting firm Entrix found in an initial study paid for by Enron that the area around the planned pipeline route consisted of “low to fairly intervened secondary forest.”

A supplemental environmental assessment (SEA), conducted by 28 scientists hired by Entrix, found that 60 to 70 percent of the area around the pipeline’s right of way was degraded, according to a 10-page summary distributed by Enron and OPIC.

But a third study, assembled by a coalition of Bolivian and international NGOs organised by the World Wildlife Fund (WWF), reached a different conclusion. “The block transected by the Cuiaba gas pipeline project is…a forest climax community or primary forest,” it said.

Moreover, NGOs charged that the SEA summary disseminated by OPIC distorted the actual findings in the much longer report.

For example, in the actual report, the ornithology, mammalogy, herpetology, and entomology groups all concluded that the forest was virtually untouched by human activity and that alternative routes for the pipeline should be sought.

“OPIC was quite manipulative in selectively summarising their own report’s findings,” said Soltani.

“Saying the Chiquitano isn’t primary forest is like saying the Earth isn’t round,” added Brent Blackwelder, president of the Friends of the Earth.

Nearly 100 mammal, bird and reptile species, including hyacinth macaw, maned world, jaguar, and ocelot in the Chiquitano are currently protected by the Convention on International Trade in Endangered Species, according to the ISEA.

OPIC said that its financing will be conditioned on Enron’s agreement to re-route the pipeline a total of 30 kms in the Chiquitano and another 69 kms of the Pantanal wetland system to protect “well-conserved” areas of the forest.

In addition, the agency board said it will require that an independent engineer to monitor the project; that a plan to ensure that colonisation along the right-of-way is minimized is developed; and that Enron fulfill its pledge to spend over 20 million dollars to implement an environmental conservation programme in the area.

A WWF spokesman said his organisation wanted to study the conditions required by the OPIC board before commenting. But most activists scorned OPIC’s conditions as inadequate.

“OPIC’s supposed safeguards on the loan will not prevent serious and irreversible damage to the forest,” according to Soltani. “OPIC should have insisted on changing the route.”

Soltani and Son said the NGOS intend to continue their fight to save the Chiquitano, both by mobilising international pressure against the pipeline and by appealing to Shell, which in recent years has adopted its own environmental guidelines.