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Oxy Denies Peru Blame

Occidental is blamed for environmental damage in Peru - nearly a decade after it left and transferred operations to another company.


In a case eerily reminiscent of the lawsuit against Chevron in Ecuador, Occidental Petroleum is being blamed for environmental damage in Peru and - like Chevron - denies any wrongdoing.

On Friday, a group of Amazon Indians and their supporters - including actress Daryl Hannah - dressed in white hazmat suits demonstrated outside a hotel in Los Angeles to demand that Oxy clean up the toxic waste created by 30 years of drilling in the Peruvian rain forest, according to the San Jose Mercury News. "Who would go into somebody's house, decimate it, poison it and just because they've left say they're no longer responsible?" said Hannah. "That's what Oxy did."

Oxy left Peru nearly a decade ago - in 1999, when it sold its operations at Block 1-AB to Argentina-based Pluspetrol after operating in the country since 1970. "30 years of oil production in Block 1AB in the northern Amazon has left indigenous peoples, who have lived in the area since time immemorial, suffering malnutrition, sickness and social disruption," Amazon Watch, an environmental group heavily involved in the Chevron lawsuit, says on its web site. "Since 1971, Los-Angeles-based Occidental Petroleum, using practices outlawed in the U.S., pumped an average of 800,000 gallons a day of salty formation water and other toxic wastewaters into local rivers with appalling consequences for local communities."


However, Oxy denies any environmental damage. “Oxy’s former operations in Peru were conducted consistent with applicable Peruvian government requirements and approval, and with internationally recognized operating standards for oil and gas operations in similar environments,” Oxy spokesman Richard Kline says. “We are aware of no credible data of negative community health impacts resulting from Oxy’s operations in Peru.”

As for any liability, when Oxy sold the block to Pluspetrol, the Argentine company assumed responsibility for past, present and future operating conditions in Block 1-AB, Kline adds.  In an agreement with representatives of the indigenous communities and the Peruvian government in late 2006, Pluspetrol, committed to certain operational changes, environmental remediation and public health initiatives in its operations at that and an adjacent block. Leaders of the Federation of Communities Native to the Corrientes River stated publicly in October 2006 that the agreement signed with Pluspetrol “achieved 98 percent of our demands” to resolve environmental and health issues associated with oil operations in the region, Kline says.

This statement is confirmed by a 2007 report of the Ombudsman Office of Peru (Defensoria del Pueblo), which is constitutionally empowered to investigate social and environmental conflicts arising from the activities of the extractive industry, he adds.  "The Ombudsman report found that the conflict regarding environmental conditions in the Corrientes River Basin had been resolved by the Pluspetrol agreement," Kline says. "Furthermore, the report did not indicate the existence of any past or present conflicts between local communities and Occidental."


Oxy also says that it has maintained a good dialogue and relationship with key Indian groups in Peru. Following a 2001 government-sponsored informational workshop to initiate dialogue on oil and gas development attended by leaders from five area Achuar and Non-Achuar Federations, Oxy personnel met nine times with the federations and their leaders to discuss the scope of a proposed work plan in Block 64, Kline says. (Oxy has recently transferred its interests in Blocks 64 and 103 without ever initiating production operations in those blocks).

Following a request by one of the federations, Organizacion Shakay Achuar del Morona (OSHAM) — and under the oversight of the Peruvian government — Oxy supported two training workshops for community members that were taught by independent consultants.  In 2002 and 2004, OSHAM and Oxy signed agreements that granted Oxy the right to conduct seismic work and drill exploration wells. Included in the agreements were jointly developed codes of conduct setting the standards for the interaction of natives with project personnel, defining scope of operations, protection for the environment, and ensuring the tranquility of the community.  

“During the months and years following the agreements we reached in the Amazon region, there was some fracturing of the community groups, which led to establishment of splinter groups and changes in position by various factions,” Kline says. “Oxy continued to negotiate agreements with legitimately established and represented community federations reiterating and reinforcing all previous agreements."


Like Chevron, Oxy has been the target of a U.S. lawsuit. The suit was filed in May last year, but Judge Philip Gutierrez of the U.S. District Court for the Central District of California ruled last month that it should be moved to Peru. “The plaintiffs are fully prepared to litigate this case in Peru, and Oxy will be held liable for their decades of toxic contamination,” Marco Simons, Legal Director of EarthRights International (ERI), counsel for the plaintiffs, said in a statement.

The plaintiffs and their counsel, including ERI, the Venice firm Schonbrun, DeSimone, Seplow, Harris & Hoffman LLP and San Francisco lawyer Natalie Bridgeman, are currently weighing the next steps in the case, including the possibility of appeal, the statement said.

Moving the case to Peru will likely help the plaintiffs, Amazon Watch argues. “When Chevron was sued for similar toxic pollution in the Amazon, they succeeded in moving the case to Ecuador,” Maria Ramos of Amazon Watch said in the same statement. “Now they're facing $7-16 billion in damages from the Ecuadorian court.”

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