The impact of the Camisea gas Project on energy governance...

IPSA 21st World Congress of Political Science: “Global discontent? Dilemmas of Change”, July 12-16 2009, Santiago, Chile.

Research Committee Session Globalization and Governance

RC 17 168 “Oil governance in the current energy crisis”

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Guillaume Fontaine

[email protected]

2nd draft

Please do not quote without permission from the author.

Abstract This paper analyzes the impacts of the Camisea Gas Project on Peru´s energy

governance. After a 15 year conflict of multiple dimensions, the launching of this mega

project in 2000 opened a new era for this oil importer country. Thus Peru became

energy self-sufficient and a medium-range carbon fossil fuel exporter in Latin America.

Not only the original block 88 is currently being exploited, but three additional blocks

are also being explored or about to start production. Our central argument is that the

Camisea Gas Project whilst becoming a driving force for Peru´s economy was also an

opportunity for the political transition governments to operate strong institutional and

legal reforms in order to respond to the civil society incidence strategy. Without these

changes in the energy governance system, the natural gas production would certainly

not have reached its current capacity. In the first part, we remind the contemporary

developments of energy governance in Peru and the economic impacts of the Camisea

Project. We analyze the evolution of the main energy balance indicators, stressing the

most relevant aspects for sustainable development. Then we briefly describe the

Camisea gas project before showing its results and mentioning some remaining

development problems. Finally, we present the recent evolution of FDI, with a special

emphasis on the carbon fuel sector, to illustrate the impact on private investments

related to oil and gas activities.

The second part is dedicated to the growing incidence by social actors in

energy governance. We start by reminding the conflictive context in which the Camisea

Project was born. Then we explain how political incidence would force an international

financial organization to assume social and environmental responsibilities in the project

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it would co-finance. We then explain how legal reforms and institutional innovations

were made under continuous pressure of the civil society. Finally we analyze the

articulation between local actors and transnational networks of environmental and

indigenous organizations.

Key words: governance, Camisea, conflict, natural gas, energy policy, Peru,

Amazon

Introduction The discovery of huge fields of natural gas in the 1980s placed Peru among the

group of intermediate carbon fuel fossil producers in Latin America and the Caribbean.

After a period of uncertainty, related to social conflicts where indigenous organizations

and environmental NGO openly opposed to the exploitation of these fields, the three

presidents who succeeded to Alberto Fujimori´s authoritarian government, in 2000,

have been multiplying offers for the exploration and the exploitation of new oil blocks.

The actual energy governance system relies on three structural elements: the inflow of

foreign direct investments (FDI) in the mining sector; the existence of transportation

infrastructures for natural gas and liquid gas; and the administration of local

communities’ relationships.

This paper analyses these elements from a more general problematic: what is

the impact of the Camisea gas project on Peruvian energy governance?

In the first part, we remind the contemporary developments of energy

governance in Peru and the economic impacts of the Camisea Project. We analyze the

evolution of the main energy balance indicators, stressing the most relevant aspects for

sustainable development. Then we briefly describe the Camisea gas project before

showing its results and mentioning some remaining development problems. Finally, we

present the recent evolution of FDI, with a special emphasis on the carbon fuel sector,

to illustrate the impact on private investments related to oil and gas activities.

The second part is dedicated to analyze the growing incidence by social actors

in energy governance. We start by reminding the conflictive context in which the

Camisea Project was born. Then we show how political incidence would force an

international financial organization to assume social and environmental responsibilities

in the project it would co-finance. We then explain why legal reforms and institutional

innovations were made under continuous pressure of the civil society, emphasizing the

role played in this case by political networks that involve local actors and transnational

networks of environmental and indigenous organizations.

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Evolution of energy governance in Peru since 1996

Key figures of energy governance During more than a decade, Peru has been showing consistently positive

energy balances that allow this country to export exceeding production. From 1996 to

2006, its average annual production of primary energy reached 13.2 million of tons of

oil equivalents (TOE) while the average final energy consumption reached 11.4 million

of TOE. After both production and consumption declined from 1997 to 2003, production

started to grow again from 2003-2004. (See figure 1.) Gas production took off in 2004

and reached 1.7 million TOE in 2006, while oil production was reaching 9.2 million of

TOE, hydropower 1.8 million of TOE, carbon production 0.8 million of TOE and

renewable combustibles 2.4 million of TOE (See figure 2). Between 1996 and 2006, oil

products consumption remained stable around 6.6 million of TOE, biomass energy

declined from almost 4 million to 2.2 million of TOE and electricity consumption grew

from 1.2 million to 2.1 million of TOE. Natural gas appeared in Peru´s total final

consumption in 2005 and reached 0.3 million of TOE in 2006. (See figure 3.)

As a consequence of this evolution, the structure of Peru´s primary energy

production and final energy consumption registered considerable changes between

1996 and 2006. On the one hand, the share of carbon fossil fuels (carbon, oil and gas)

in energy production increased from 61% to 68% and hydropower increased from 8%

to 14%, while the share of biomass and renewable combustibles was decreasing from

30% to 18%, geothermic and solar energy remaining marginal with a less than 1%

share. (See figure 4.) On the other hand, carbon fossil fuels´ share in energy

consumption increased from 56.7% to 63.2% and that of electricity increased from

10.2% to 18.9%, while biomass consumption was decreasing from 33% to 18.4%. (See

figure 5.)

Oil products are mainly consumed by the transportation sector, which

represented 3.9 million of TOE in 2006, compared to 1.5 million of TOE in the

industries and 1 million of TOE in the agriculture and residential sectors. (See figure 6.)

Between 1996 and 2006, transportation´s consumption of oil products grew from 3.3

million to 3.9 million of TOE (in spite of a slight decrease between 1999 and 2002) and

industries´ grew from 1.2 to 1.5 million of TOE. Meanwhile, agriculture and residential

consumption regularly decreased from 2 million to 1 million of TOE. Finally, non-

energetic use of oil product remains low, although it doubled from 52.000 to 215.000

TOE, which indicates a relatively low level of waste. (See figure 7.)

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The Camisea Gas Project The importance of the gas fields of Camisea – 8.1 trillion cubic feet1, that is to

say more than two thirds of the proven gas reserves of the country a the end of 2006 –

has been known since the early 1980s. (See map 1.) Nevertheless, before coming into

its exploitation phase, the Camisea Gas Project was postponed for nearly two decades.

Two reasons explain this delay: on one hand, the conflict between Royal Dutch Shell

(the operator of block 88 at that time) and Garcia´s first administration, then Fujimori´s;

on the other, social conflicts it provoked between the State and indigenous and

environmental organizations.

The discovery of gas fields in the region opened a first round of negotiations

between Shell and Garcia´s government. Without reaching an agreement on the

contractual modality, Shell gave up the project and left the country once in 1988. Not

earlier than in 1996, Fujimori´s government reactivated this project, by according a 40

year license to a consortium integrated by Shell and Mobil. Actually Shell once again

abandoned the project in 1998, because of a new differing with the government about

the gas price for electricity production, export rights to Brazil and the vertical integration

forbidden by the Peruvian anti-trust law. Thus, the Dutch company definitely lost the

400 million of dollars they had invested during the exploration phase, since 1981.

(Wise, 2007: 317-318.)

Not before 2000, in the troubled political context that preceded Fujimori´s fall (in

November 2000), was it possible to sign both contracts that would announce the

coming into production of the project. In February, the first one assigned the gas and

associated liquids exploitation for 40 years, to a private consortium, lead by Pluspetrol

Peru Corporation S.A. (Argentina) and conformed by Hunt Oil (United States), SK

Corporation (South Korea) and Tecpetrol from Peru (subsidiary of Techint, Argentina).

Then in October, a second contract assigned natural gas and gas liquids transportation

between Camisea and Lima for 33 years to the private consortium TGP

(Transportadora de Gas Peruana S.A.), conformed by Tecgas N.V. (subsidiary of

Techint), Pluspetrol, Hunt Oil, SK Corporation, Sonatrach (Algeria) et Graña y Montero.

1 At this time, natural gas proven reserves amounted to 11.82 trillion cubic feet (1012 p3). Cf. Ministerio de Energía y Minas (2007), “Capítulo 3. Reservas”, in: Anuario estadístico de hidrocarburos 2007. Available [february 2009] at: http://www.minem.gob.pe/hidrocarburos/pub_anuario_2007.asp About Camisea´s proven reserves, see Ministerio de Energía y Minas (2007), “Capítulo 6. Miscelaneo”, in: Anuario estadístico de hidrocarburos 2001. Available [february 2009] at: http://www.minem.gob.pe/archivos/dgh/publicaciones/anuario2001/capitulo_6.pdf

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Economical results and development problems Up to now, the Camisea Project has had quite a positive impact on Peru´s

economy. After a decrease from 44 to 34.7 billion dollars between 1996 and 1998, the

gross domestic product (GDP) was stabilized until 2001 and then started to grow

constantly to reach 55.7 billion dollars in 2007. (See figure 10.) In spite of the growing

importance of carbon fuel energy in the national production and consumption, the

impact of Camisea Project on the economy remains manageable. Compared to other

oil and gas exporting countries the Peruvian economy doesn´t appear to be affected by

the problems often related to oil dependency, such as the Dutch disease or the

resource curse. Although the external public debt reached 36% of GDP, in 2007, the

share of public sector in GDP remained low (6%). Actually, the share of crude oil and

oil products in exports also remained low (8.3%) and their share in GDP was incipient

(0.5%). (See figure 11.) Las but not least, energy intensity of the gross domestic

product (GDP) is now close to the worldwide average and it even decreased from 0.27

to 0.24 TOE/1.000 USD of GDP. Thus Peru (along with Colombia) is the less intensive

energy consumer among Andean countries. (See figure 12.)

Peru´s fiscal incomes caused by the carbon fuel sector had already started to

improve significantly in 2003. Between 2000 and 2006, they grew from 35 million to

296 million dollars, which represents at the moment 5 to 7% of the State incomes.

These results can be compared with those of the mining sector, which grew from 70

million to 1.8 billion dollars during the same period. (UNCTAD, Op. Cit.: 137.)

Furthermore, royalties have consistently improved since the exploitation of adjacent

blocks of Camisea Project started. Considering only the Echarate district, where some

18.000 people are living, the government take rose to 44 million dollars (121 million

soles) (Propuesta Ciudadana, 2008). The so called “Gas Canon” law states that 30% of

these incomes have to be used to finance productive projects of the communities living

within the gas extraction area. Now, the capacity to spend these incomes faces with

two kinds of problems.

On the one side, the delimitation the extractive zones depends on the district of

Echarate, which can lead to marginalize local communities at the time of planning

public spending. On the other side, these communities´ spending capacity remains

limited by cultural and technical factors. Indeed, until the intrusion of the industry in this

region they used to live aside from the market economy, if not from monetized

economy. Additionally, their lack of qualified human resources and experts in

development restrains their proposal capacity and favors exogenous actors and local

public servants.

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The growing importance of FDI According to the Economic Commission for Latin America and the Caribbean

(ECLAC), FDI inflows to Peru reached 5.34 billion dollars (USD) in 2007, that is 5.21%

of the total regional inflow and 36.68% of the FDI received by Andean countries2

(CEPAL, 2007: 78). Peru is therefore the second Andean receptor of FDI, behind

Colombia, who received 9.02 billion dollars that year. From 1998 to 2007, these annual

flows triplicated, while only growing of 30% for the whole region. They particularly

increased between 2000 and 2002, when the contracts for Camisea Project were

signed, and from 2004 on, after the inauguration of the pipeline from Camisea to

Malvinas. (See figure 8.) As a result of this evolution, Peru´s share in Andean flows of

FDI thus increased from 15% to 34%, compared to 57% for Colombia. This shift was

essentially made at the expenses of Venezuela, where FDI flows have been negative

since 2006. (See figure 9.)

Peru´s FDI stocks, which amounted to 24.74 billion dollars in 2007, mainly

come from Spain (28%) and the United States (19%), whereas the total share of Latin

American countries barely reaches 16%, compared to 9% from South Africa. Finally,

energy and mining sectors respectively attract 10% and 20% of these stocks,

compared to 18% for the industry, 16% for the financial sector and 23% for

communications. (OCDE, 2008: 16.)

The growing inflows of FDI in the energy sector can partly be explained by the

neoliberal reforms launched in the 1990s, which created attractive conditions for the

participation of multinational companies into national companies. Nevertheless, this

evolution has been dramatically accelerating since 2003, not only thanks to the

multiplication of private contracts for the exploration and exploitation of oil and gas, but

also thanks to the development of private investments in the processing and

transportation of gas. Indeed, from 1994 to 1999 (that is to say between the

privatization of Petroperu and the launching of the Camisea Gas Project), some 34

contracts had been signed for the exploration and exploitation of carbon fuel fossil,

within a 14 million hectares area. Now, for the mere 2005-2007 period, Perupetro

signed 31 contracts of that kind (UNCTAD, 2007: 57). At the end of 2008, some 50

multinational companies – coming from Northern and Southern America, Asia, Africa

2 Venezuela, Colombia, Ecuador, Peru and Bolivia.

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and Europe – were sharing 19 exploitation contracts and 61 exploration ones in Peru3.

(See Map 2.) One can see there an effect of Alan Garcia´s administration policy but it is

necessary to take into account the national gas production take-off since the pipeline

from Malvinas to Lima initiated activity, in August 2004.

The growing incidence of social actors in energy governance

The environmental conflicts Environmental conflicts related to oil exploitation in Peruvian Amazon used to

be concentrated in Loreto, Amazonas and Madre de Dios departments. Nevertheless,

indigenous and environmental movements soon worried about the perspectives of the

Camisea project and the social and environmental impacts that it would possibly

provoke. Faced with the opposition of similar protests in Nigeria (with the Ogoni

people) and the North Sea (with Greenpeace), Shell had to deal with the growing

opposition of international NGOs such as Oxfam America, Friends of the Earth and

Amazon Watch, as well as Peru´s main indigenous organization AIDESEP (Asociación

interétnica de desarrollo de la selva peruana). As a matter of fact, Shell´s first contact

with Lower Urubamba communities had resulted fatal for isolated indigenous, by

provoking a mortal epidemic of influenza. This tragedy started by the way a protest

campaign that lead, among other things, to the creation of the territorial reserve

Kugapakori and Nahua (RTKN) in 1990, partly located on Camisea fields.

Until their first interruption in 1988, negotiations between the company and the

Peruvian government only accidentally involved local actors and NGOs, although these

ones were claiming for more access to the information contained in the impact studies

and the environmental management plan. The most radical ones, who organized a

worldwide campaign of lobbying towards private investors, obtained the retrieval of the

Exim Bank from the Camisea Project, in August 2003. The more pragmatic ones

negotiated with the State a right to share some benefits and to exert incidence in order

to reduce the project´s potentially negative effects.

After while the government and the company became more opened to consult

with social actors. Shell´s strategy of corporate responsibility then related on the 169

Convention of the World Labor Organization (WLO 169) and pretended to make of the

Camisea Project an exemplary case of consultation with indigenous communities.

Whereas the State – under the pressure of these actors – was strengthening

3 Ministerio de Energía y Minas (2008), “Relación de contratos de explotación y exploración vigentes al 05.11.2008”. Available [february 2009] at: http://www.minem.gob.pe/archivos/dgh/publicaciones/directorio_contratistas.pdf

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environmental regulation and human rights protection, especially those related to

carbon fuel activities and indigenous territories management, the company was testing

new environmental monitoring and control procedures, as well as a stricter control of

contacts with local populations.

It is possible to observe a kind of “international labor division” between national

and international NGOs, indigenous organizations and local authorities. All in all, logic

of negotiation lead by the pragmatic sector of the civil society seems to have prevailed

on logic of confrontation. On behalf of indigenous organizations, CONAP

(Confederación de nacionalidades amazónicas del Perú) tried to negotiate with the

State and the companies financial and social counterparts, on behalf of the

communities located within the Camisea Project´s direct influence perimeter. Although

this organization basically acts as interplay at the national level for two local

organizations: CECONAMA (Central de comunidades nativas matsiguenga “Juan

Santos Atahualpa”) and FECONAYY (Federación de comunidades nativas yine yane),

it occasionally helped communities from another local organization, COMARU

(Consejo Matsiguenga del río Urubamba), affiliated to the rival organization, AIDESEP.

On the environmental NGOs´ side, the SPDA (Sociedad peruana de derecho

ambiental) acted both as an expert and facilitator for discussions. This corporation took

the initiative to organize a group from the civil society that would advocate for social

and environmental justice in the Camisea Project´s planning. While more activists

NGOs were pressuring to cancel the project, this group was assuming the position of a

“rival partner” with the government and the companies. Actually, the conflict took a

more constructive turn in 2000, with the IADB playing an active role, especially with the

pragmatic sector of civil society exerting incidence on the dialogue with the IADB.

The IADB´s role Since 1998, the World Bank´s Energy Sector Management Assistance Program

(ESMAP) recommended multilateral agencies to get involved into the Camisea Project

(Wise, Op. Cit.: 325). The IADB was already particularly interested in it and conceded a

5 million dollar conditional loan in 2002, in order to complete the legalization of lands

located around Camisea gas fields and to finance an institutional engineering, on which

we shall come back later. In 2004 the IADB granted another 75 million dollar loan for

14 years to the consortium associated with downstream activities. This was made on

two conditions: firstly, the bank would encourage a shared compromise from both

consortia, for environmental management and corporate responsibility; secondly, it

would ask for the creation of a financial fund for development, named “Camisea Fund”,

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financed by 7.5% of the royalties produced by the gas project. Eventually this fund

never came to light under its initial form, but the National Congress of Peru created the

“Camisea Fund for Social and Economic Progress” (FOCAM) in December 2004. The

main difference with the original idea promoted by the IADB is that the FOCAM was to

be administrated by the government and not by an independent financial institution.

Furthermore, the indigenous communities’ involvement in the Camisea Project

was consistent with the IADB´s principles exposed in its “Strategy for Indigenous

Development” (BID, 2006 b: 37.) That is why, beyond these conventional loans, the

bank´s role found an expression throughout its regular participation in discussions

between the Peruvian government, the companies and the civil society. At the same

time, the IADB thus became a blank for the lobbying of NGOs and a mediator to reduce

tensions between the different ministries compromised with the Camisea Project. It

would also veil to the establishing of institutional reforms and local communities´

participation in the process of dialogue, as well as the environmental and social

monitoring of upstream and downstream activities.

Legal and institutional innovations The liberalization of the carbon fuel sector started in 1993, through the Law

26.221 that allowed private companies to access to downstream activities (refinery and

commercialization), while announcing the opening of upstream activities (exploration

and exploitation) to FDI. From 1992 to 1996, the national company Petroperu was

restructured and the government created Perupetro. While the first one was losing the

monopoly of these activities and becoming an ordinary operator associated to

multinational companies, the other was made responsible to promote calls for new

investments. This opening of the sector to FDI accelerated in 2000, through the so

called “Updating Law of the Carbon Fuel Law” (Law 27.377), which prolonged the

exploration delay. In 2002, the Law 27.624 established the devolution of general tax on

sales (IGV) to companies executing exploration activities. It was followed by a series of

reforms intending to reduce royalties paid to the Peruvian State, from a range between

15% and 35% to a 5-20% one, in order to attract foreign direct investments to marginal

fields’ exploration. (Campodónico, 2007: 69.)

In the gas sector, the main legal reform occurred in 2000, considering the

exploration and exploitation of block 88, located in the Lower Urubamba, in the district

of Echarate. This came along shortly after signing of the “Memorandum for economic

and financial policies for Peru 1999-2002”, by Fujimori´s government and the

International Monetary Fund (IMF). This memorandum preceded by a few months the

intensification of exploration and exploitation of oil and gas throughout the country´s

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Amazon region. It especially announced the launching of the Camisea Gas Project,

with the creation of two different contracts for upstream and downstream activities. In

2003, a Supreme Decree reformed the obligation for companies responsible for the

exploitation of block 88 to guarantee the provisioning of the domestic market for 20

years. This decision was ratified by the Law 28.552 of 2005 that did not mention any

minimum period of provisioning. Finally, in 2005, the exploitation contract was modified

in order to allow the Camisea gas exportation.

In the meantime, important reforms were made in the environmental regulation

area and the protection of human rights. In 1997, the Law 28.611 – called “General

Law for the Environment” – derogated and replaced the “Environmental and Natural

Resource Code” to regulate the use of renewable and non-renewable natural

resources (particularly mining). During the same year, the “Organic Law for Sustainable

Use of Natural Resources” was voted and introduced the concept of “ecological and

economical mapping”, while on the other hand, the new “Natural Protected Areas” law

established three classes of areas according to their regime of administration (national,

regional and private). In 2001, the Law 27.446 – known as the “National System of

Environmental Impact” law – created the obligation to present detailed impact

evaluation studies as a prerequisite to any kind of extractive activity. On the other

hand, the regulation for the law on protected areas established that carbon fuel

activities were to be submitted to specific procedures including the coordination

between the Energy and Mining Ministry and the National Institute of Natural

Resources (the latter being in charge, among other things, of the definition of terms of

reference for impact studies). In 2006, a supreme decree derogated and replaced the

regulation for environmental protection of carbon fuel activities, specifying in particular

norms for the elaboration of impact studies. Another supreme decree approved the

“Unified Text of Administrative Procedures of the Energy and Mining Ministry” that

compiles obligations for the approval of such studies. Finally, in 2008 was approved the

regulation of citizen participation for energy activities.

For the Peruvian society´s interests to be taken into account, it was necessary

to proceed to a series of reforms, of which the Camisea Project only meant the

beginning. Among institutional innovations brought after the Camisea contracts were

signed in 2000, the first was the creation of the Technical Group of Institutional

Cooperation (GTCI) and the corporation Defense of Camisea, in 2002. The GTCI,

which acts under the authority of the Ministry of Energy and Mining, is in charge of

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coordinating the action of twelve public institutions4. Among other activities, this cluster

would organize the previous consultation among local actors and diffuse technical

information about the project. From 2002 to 2006, more than a hundred of meetings

were organized by them in the whole area of the Camisea Project and in Lima, the

country´s capital city. It also diffuses all technical documents produced by the

companies and the State – in particular, environmental impact studies, expertise

reports and investments projects – through a free access website5.

The Defense of Camisea was made responsible to the management of conflicts

related to this project and the report of all abuses or fails in the execution of the

operations, whether in the upstream or the downstream. This responsibility was

granted to the Conflict Resolution Centre, from the Catholic University of Peru. In spite

of the obvious functional vocation of this instrument, it constitutes an interesting

innovation for the prevention of conflicts related to the project and allowed to process

many social demands and complains related to environmental problems, before

perverse effects of carbon fuel fossil activities would take a dramatic turn and would

provoke more radical conflicts.

A second institutional innovation completed these instruments: the

Communitarian Environmental Monitoring Program (PMAC), which involves until now

local communities and technical teams of the operators. Although it was strongly

encouraged by the IADB, this program had a difficult start, considering the fact that it

was financed by Pluspetrol. Indeed it fell under suspicion that this company could

restrain access to activities areas or even alter the results of expertise, so that the

PMAC would eventually act as an entity legitimating a posteriori the environmental and

social management plan for the block 88. As a matter of fact, this was not the case,

while the technicians capacitated by the NGO responsible for its coordination, Pro

Naturaleza, have always been recruited among communities affected by the project

and gained legitimacy as time went by. PMAC has published many social and

environmental assessments that completed more traditional instruments, such as the

impact studies or monitoring and control assessments elaborated by companies

specialized in environmental management. Lately, this program has been expanded to

other blocks of gas exploration and exploitation, which is a clear demonstration of the

credibility of its methods. 4 In 2008, these institutions were the Energy and Mining Investment Supervisor Organism (OSINERMIN), the National Commission for Andean, Amazonian and Afro Peruvian Peoples (CONAPA), the National Council for Environment (CONAM), the Defense of the People, the National Institute for Development (INADE), the General Direction of Captaincies and Cost Guards (DICAP), the National Institute for Culture (INC) and the ministries of Agriculture, Health and Transportations. 5 http://www.gtci-camisea.com.pe/

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Local actors and transnational networks It is actually impossible neither to eliminate environmental hazards nor to

guarantee a zero risk for carbon fuel activities. Therefore, political incidence networks

play a key role to limit its scope by their constant monitoring and control on exploitation

and transportation sites, as they do by informing the public opinion and forcing the

stakeholders to take responsibilities. During the phase preceding the launching of the

Camisea Project, networks were organized around indigenous organizations

(AIDESEP and CONAP), national NGOs like SPDA, local ones like CIPA (Centro de

investigación y promoción de la Amazonía) and international organizations like Oxfam

America. These networks allowed local actors to access formerly restricted information

and debate with the government and the companies, thanks to independent

assessments.

For instance, in April 2002, a former executive of WWF-Bolivia, Patricia Caffrey,

produced a report in which she expressed reserves about the insufficient level of

environmental and social norms that had been used in the impact study for the

Camisea Project. A year later, a former environmental adviser of the World Bank,

Robert Goodland, suggested ordering an independent evaluation before proceeding to

co-finance the project. This expert also had the idea of an investment fund for

biodiversity conservation and the improvement of local populations´ quality of life. After

the IADB published a report on social and environmental impacts of the Camisea

Project, the group coordinated by SPDA asked for more information and the bank

would postpone its decision to finance a new loan.

This profusion of expertise, of which we only gave a few examples here, is a

sign of the evolution toward co-governance that the relationships between social

actors, gas companies and the State are following. Nevertheless, indigenous

communities have now to face social problems, political incidence networks are

helpless to resolve. For instance, the incoming of agrarian colonization could

accelerate thanks to the construction of a road that part of the population from the

Echarate district is willing to build in the area of Camisea. As a matter of fact, neither

the concerned communities nor the social organizations or NGOs have come to an

agreement, be it against or in favor of this project which has been considered by local

authorities for a long time. Another threat is the acceleration of social change among

the Matsiguengas and the pervert effect that often come along with uncontrolled or

unregulated development, such as market dependent consumerism, alcoholism and

family dismembering, etc.

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In the short term, the only actor probably able to help indigenous communities

to face these problems is the Lower Urubamba Management Committee for

Sustainable Development (CGBU). This committee is integrated by members of 22

indigenous communities, six settlements of colons, three professional organizations,

two NGOs and five government institutions. Its presidency is assumed alternatively by

the three local indigenous organizations mentioned before (COMARU, CECONAMA

and FECONAYY). In the strategic plan of CGBU for 2001-2005 these preoccupations

were already mentioned, among the four programs that guide its action: enforcement of

the committee and grass root organizations, production marketing and environmental

management, infrastructures and social services improvement. These are the same

items that structured the regional development plan for 2002-2006, with an 8.16 million

provisional budget that was never actually spent.

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CEPAL (Comisión Económica para América Latina y el Caribe) (2008), La inversión extranjera en América Latina y el Caribe 2007. Santiago: Naciones Unidas, 352 p.

OCDE (Organisation pour la Coopération et le Développement Économique) (2008), OECD Investment Policy Reviews: Peru. Paris: OECD, 77 p.

Propuesta Ciudadana, 2008, “Vigilancia de las industrias extractivas”, 13, 17 p. Lima: Grupo Propuesta Ciudadana.

UNCTAD (United Nations Conference on Trade and Development) (2007), World Investment Report: Transnational Corporations, Extractive Industries and Development. New York-Geneva: United Nations290 p.

Wise Carol (2006), “Peru”, in: S. Weintraub, A. Hester, V. R. Prado (Ed.) (2006), Energy Cooperation in the Western Hemisphere: Benefits and Impediments. Washington D.C.: Center for Strategic and International Studies, 302-335.

14

Annexes

Figure 1

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006*

Peru´s Energy Balance(103 TOE)

Primary Energy Production Final Energy Consumption

Elaborated by G. Fontaine. Source: International Energy Agency, Non-OECD Energy Balances, Paris, OECD-IEA. Years 1997-2008.

Figure 2

306 351 435 406 630 572 783 772 907 963 793

7.131 8.361 8.5707.612 7.616 8.069 7.673 7.581 7.969 9.535 9.184

731344 477

647 610 458 501 554 866 1461 16721.146 1.136 1.188

1.250 1.390 1.514 1.551 1.594 1.5071.717 1.848

35 0 0

52 53 54 55 55 5656 564.221 4.324 4.367

2.228 2.234 2.260 2.264 2.244 2.331 2.270 2.363

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006*

Peru´s Primary Energy Production (103 TOE)

Renewable combustibles, biomass, etc.

Geothermic, solar, etc.

Hydropower

Gas

Crude Oil

Carbon


Figure 3

215 313 387 361 448 398 488 469 534 603 450

6.601 6.628 6.484

7.193 6.868 6.454 6.441 6.179 7.029 6.466 6.680

54 3 4

1 1 0 5 18 43 136 2940 0 0

52 53 54 55 55 56 55 56

3.983 4.070 4.1202.097 2.096 2.119 2.116 2.093 2.197 2.069 2.163

1.231 1.272 1.368 1.418 1.490 1.569 1.663 1.738 1.852 1.955 2.097

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006*

Peru´s Final Energy Consumption (103 TOE)

Electricity



Gas

Oil products

Carbon


15

Figure 4

Carbon2%

Crude Oil54%

Gas5%Hydropower

8%


1%


30%

Peru´s Primary Energy Production Structure (1996)

Carbon6% Crude Oil

50%

Gas12%

Hydropower14%


0%


18%

Peru´s Primary Energy Production Structure (2006)


Figure 5

Carbon1,78%

Crude Oil0,00%

Oil products54,63%

Gas0,45%

Hydropower0,00%

Geothermic, solar, etc.0,00%

Renewable combustibles, biomass, etc.32,96%

Electricity10,19%

Peru s Final Energy Consumption Structure (1996)

Carbon3,83% Crude Oil

0,00%

Oil products56,90%

Gas2,50%

Hydropower0,00%

Geothermic, solar, etc.0,48%

Renewable combustibles, biomass, etc.18,42%

Electricity17,86%

Peru s Final Energy Consumption Structure (2006)


Figure 6

4450 5 0

1.521

3.900

1.045

215

277

0

17

0

2

0

2.161

0

1.113

0984

00

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

4.500

Industries Transportation Other sectors Non‐energetic use

Peru´s Final Energy Consumption Structure in 2006 (103 TOE)

Electricity

Renewable

Gas

Oil products

Carbon


16

Figure 7

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

4.500

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006*

Peru´s Oil Products Consumption (103 TOE)

Industries Transportation Other sectors Non‐energetic use


Figure 8

‐2.000,00

0,00

2.000,00

4.000,00

6.000,00

8.000,00

10.000,00

12.000,00

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007*

FDI inflows (106 USD)

Bolivia Colombia Ecuador Peru Venezuela


17

Figure 9

Bolivia8%

Colombia25%

Ecuador8%

Peru 15%

Venezuela44%

National share in Andean FDI (1998)

Bolivia1%

Colombia57%

Ecuador4%

Peru 34%

Venezuela‐4%

National share in Andean FDI (2007)


Figure 10

0,00

10.000,00

20.000,00

30.000,00

40.000,00

50.000,00

60.000,00

0,00

20.000,00

40.000,00

60.000,00

80.000,00

100.000,00

120.000,00

140.000,00

160.000,00

180.000,00

200.000,00

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Million US do

llars

Million ne

w soles

GDP in nationl currency (Million new soles of 1994) GDP in international currency (Million dollars US)


18

Figure 11

12,22

3,04

10,73

0,49

6,83

90,44

24,91

56,06

8,27

50,76

11,04

6,64

4,58

6,02

8,97

143,28

17,41

48,06

36,05

59,81

0,00 20,00 40,00 60,00 80,00 100,00 120,00 140,00 160,00

Venezuela

Colombia

Ecuador

Peru

Bolivia

%

Macro economic indicators for Andean countries (2007)

Share of external public debt in GDP (%)

Share of public sector in GDP (%)

Share of crude oil and oil products in exports (%)

Share of crude oil and oil products in GDP (%)


Figure 12

0,26

0,72

0,43

0,27

0,69

1,87

0,22

0,370,24

1,16

0,00

0,20

0,40

0,60

0,80

1,00

1,20

1,40

1,60

1,80

2,00

Venezuela Colombia Ecuador Peru Bolivia

Energy intensity

1996 2006


19

Map 1: Carbon Fuel Fossil Land Registry from Peru

Source: Pluspetrol, 2008.

20

Map 2: Carbon Fuel Fossil Land Registry from Peru

Source: Energy and Mining Ministry from (01/2009).

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