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IDB holds third public consultation on Camisea project

Civil society organizations, Peruvian government officials, specialists of the Inter-American Development Bank and private sector leaders have held their third semiannual public consultation to exchange views and information on issues and concerns regarding the Camisea natural gas project.

About 50 persons from diverse organizations gathered at Bank headquarters in Washington, D.C, on Feb. 27 to debate, ask for clarifications and give differing opinions on such issues as natural gas liquids pipeline spills, proposals for a pipeline audit and a social and environmental audit, a proposal for a strategic environmental assessment of the area of gas development, future drilling for natural gas in Peruvian forested areas and the feasibility of an independent monitoring system.

“This series of public meetings is unprecedented in Bank operations and demonstrates the commitment of all stakeholders to continually work to improve the sustainability of the Camisea Project,” commented Robert Montgomery, head of the IDB Private Sector Department’s Environmental and Social Unit.

The IDB is committed to holding semiannual public consultations with diverse stakeholders. The present schedule calls for one meeting a year in Lima, Peru, and another in Washington.

A fuller account of the Feb. 27 meeting will appear in the near future on the IDB’s Camisea Website.
The event was inaugurated by the manager of the IDB Private Sector Department, Hiroshi Toyoda,  and Alicia Ritchie, manager of the Bank’s Regional Operations Department for Andean countries and the Caribbean. IDB Executive Vice President Ciro de Falco also addressed the meeting.

The IDB provided a $75 million loan disbursed in late 2004 to the Camisea pipeline company, Transportadora de Gas del Perú (TGP), and also loaned the Peruvian government $5 million to strengthen its social and environmental systems. The project is the largest in the energy sector in Peruvian history, providing significant economic gains as well as social and environmental challenges.

The issue of four spills on a natural gas liquids pipeline, which runs parallel to the Camisea natural gas pipeline from the Urubamba Valley to the coast, was addressed by TGP President Ricardo Markus and the firm’s technical consultant, Gonzalo Morante, who said the causes of three of the spills have been identified while a fourth is still under investigation. Markus said the company is conducting further extensive studies and testing on the pipeline and taking measures to help prevent future accidents, including building a tunnel to bypass unstable terrain that resulted in one spill. It is also investing an additional $25 million in the project during 2006 to increase pipeline security and safety systems. He rejected allegations in a report presented by a nonprofit consulting organization during the meeting alleging pipeline irregularities and offered to provide data to refute these assertions. Representatives of the IDB, said they would review the allegations, which had not been brought to the Bank’s attention before the public meeting.

Peru’s Vice Minister of Energy and Mines Juan Miguel Cayo described the economic benefits of the Camisea Project and efforts of the government to constantly update and improve its environmental and social sustainability. Noting the extensive level of public consultation on the project, he said “Never has a project come under such intense national and international scrutiny.” He said the Peruvian government was working on mechanisms to ensure that the royalties earned by the project benefit ordinary citizens and the poor.

Manuel Pulgar-Vidal, Executive Director of the Peruvian Society of Environmental Law, said the Camisea Project had created “many expectations that were not fulfilled.” In addition to the pipeline spills, he said there were concerns about the lack of capacity for project preparation in regions in the area of influence of the pipeline and the ability of the government to enforce its laws and regulations, as well as to establish mechanisms to ensure proper distribution of the benefits of the project. He urged greater technical assistance to enable communities to utilize revenue from Camisea royalties to improve their lives.

Bill Powers of E-Tech International presented a report critical of the Camisea pipeline as a system, while Michael Valqui of the World Wildlife Fund Peru delivered a critique of the environmental and social components of the project and its measures intended to safeguard indigenous peoples. Amazon Watch presented two videos.

Alfredo Dammert, president of OSINERG, the Peruvian government regulator of energy investment, described his agency’s efforts to enforce pipeline security measures and regulations. Elizabeth Brito, an IDB social and environmental specialist, discussed the challenges of building a consensus on the possible design of an independent monitoring system to serve civil society.

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