Environment and rights founder in the wake of Chinese funding in Bolivia

For Adamo Diego Cusi, a search for oil in the Bolivian Amazon by the Chinese-backed company BGP Bolivia has been a terrible ordeal. His work as coordinator of environmental and social monitoring for the village of Tacana provided him with direct knowledge of how the company operated. Over the course of a year, it carried out seismic exploration for hydrocarbons in the Nueva Esperanza area, located in the basin of the Madre de Dios River and within Tacanan indigenous territory.

Half-truths, unfulfilled commitments, environmental harm and legal persecution marred the project, its critics say. Adamo faced criminal persecution after being denounced by the company for exposing the effects of the seismic exploration in the La Paz district of the northern Amazon.

“I practically spent two months in hiding,” Adamo said in a telephone conversation with Mongabay Latam, describing his ordeal toward the end of 2016.

He said the company’s operations had had a negative impact on the Bolivian rainforest, and it had failed to fulfill commitments to obtain permission to carry out exploration in indigenous territory.

The Great Bolivian Amazon Project

“In the Amazon, nothing is known about hydrocarbon prospecting. Oil had never crossed our minds,” Adamo said. That changed in 2015, when state-owned energy company Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) appeared before a Tacana village assembly to explain its impending investment project.

At this first meeting, the villagers rejected the proposal. But the government ordered that exploration should go ahead regardless. Following a preliminary consultation process, Adamo said, the company obtained the consent of the Tacana village on condition that it would ensure minimum impact on the forests and biodiversity, as well as protect indigenous villages in voluntary isolation that occupy this territory. “It is very difficult for a village to accept being a part of the forest’s destruction,” Adamo said of the skepticism that greeted this $57 million investment proposal.

Part of a trend in Amazon exploration

In April 2015, YPFB gave the go-ahead for three seismic exploration projects to search for hydrocarbons in the Amazon. One of these was the Nueva Esperanza project, operated by BGP Bolivia, the local subsidiary of Chinese state-owned China National Petroleum Corporation (CNPC).

“The Chinese companies operated with what we refer to as ‘impunity,’” said Marco Antonio Gandarillas, lead investigator of political impact for the NGO Bolivian Documentation and Information Centre (CEDIB). He cited the unfulfilled commitments related to the Nueva Esperanza project and others operated by Chinese-owned companies or firms using Chinese capital.

Gandarillas said Nueva Esperanza was the most ambitious oil exploration project in the Bolivian Amazon, carried out across 1,008 square kilometres (389 square miles). “It’s one of the largest and greatest in magnitude in the Bolivian rainforest, in a well-preserved zone located between two protected areas, the Madidi National Park and the Pilón Lajas Biosphere Reserve,” he said.

With BGP Bolivia involved, the ecological health of the territory has been seriously impaired and the rights of the indigenous people have been violated, according to a report by the International Federation for Human Rights (FIDH) and the Collective on Chinese Funding and Investments, Human Rights and the Environment (CICDHA).

The study, which cites 18 instances of human rights and environmental breaches committed by Chinese companies in Latin America, was presented during a parallel session of the United Nations in Geneva in October 2018, ahead of China’s Universal Periodic Review (UPR) before the U.N. Human Rights Council in November.

Indigenous rights at stake

A few months after the project started, the troubles began. BGP Bolivia said it couldn’t carry out seismic exploration to the environmental standards established within the contract, i.e. without creating explosions that would affect one of the Tacana village’s main resources and its main source of income: chestnuts.

The commitment was intended to avoid harming the chestnut trees and respect a buffer radius around them, as well as to not affect water sources or engage in hunting or fishing within the territory.

The report put before the U.N. indicated that the impacts of the exploration included the presence of 1,500 workers spread across one base camp, eight fixed camps and 200 mobile camps, as well as the installation of 200 helipads to transport staff, equipment and machinery.

This de facto occupation of the territory left the chestnut trees mutilated. Water sources were used, despite the promise they wouldn’t be, and company workers hunted and fished. Mountain animals fled the area, the water flow in rivers and streams slowed, and the fish disappeared, according to the report.

“Just imagine what the presence of all these people meant for the forest,” Adamo said. The installation of camps and holes dug for the placement of explosives caused extensive deforestation in the rainforest, he added.

Complaints from indigenous monitors about what was happening on their land led to confrontations with the company’s workers. The workers reportedly assaulted the monitors, and blocked the community from their food-gathering areas inside the forest.

The problem was exacerbated when the monitors discovered the company was withholding evidence about the presence of an isolated village in the exploration zone, home to the uncontacted Toromona indigenous group. The company was obliged to inform its staff about the possible presence of uncontacted peoples, and in the event that they did venture near such sites, the company’s workers were to move to another area.

Despite this obligation, there were incidents in mid-2016 that demonstrated just how close the work was taking place to where the uncontacted tribe lived. Footprints appeared, provisions were stolen and fires occurred close to the camps. There were even three occasions when workers were surrounded by uncontacted indigenous peoples, according to company reports.

The Tacana people came out in defense of the Toromona, organizing demonstrations and protests that forced the company to suspend its operations. This led to a complaint that Adamo had incited these actions, and a subsequent order for his arrest. The company had effectively wielded the threat of prosecution to silence its critics, keep indigenous monitors out of its site, and shirk its environmental cleanup obligations.

Chinese Presence in the Bolivian Economy

Nueva Esperanza is not the only case that has sounded the alarm over Chinese influence in Bolivia. Gandarillas said that although only 4 percent of companies awarded state contracts were Chinese, they got the biggest contracts. “This is about a highly toxic relationship, because in the majority of cases they directly receive public funds and conduct their operations without respecting human rights,” he said.

Gandarillas said 10 major projects were currently in Chinese hands, amounting to 26 percent of the country’s overall investment pool, and that there had been several cases of contract non-compliance on the part of these companies. “It is difficult to find a Chinese company that hasn’t had a complaint filed against it,” Gandarillas said.

Another project in the pipeline, scheduled to start in 2019, will also see a Chinese company operating in the Amazon: the Bolivian branch of Sinopec International Petroleum Service Ecuador Co. SA, itself a subsidiary of Chinese state-owned oil-and-gas giant Sinopec, will carry out seismic exploration in an area spanning more than 10,000 square kilometres (3,900 square miles) in the Bení River zone.

China is Bolivia’s main trading partner. In 2015 Bolivia already had Chinese investments worth more than $3 billion when President Evo Morales announced the country would also get a loan from China of $7 billion for infrastructure projects.

This strategic relationship was reinforced by Morales’s visit to China in June this year. The signing of a cooperation memorandum covered various commercial and financial agreements, among them the export of Bolivian coffee and quinoa to China and the promise of credit for Bolivia from the Export-Import Bank of China (Eximbank).

Jorge Campanini, environment manager at the NGO CEDIB, said the Chinese government was essentially checking off a list of strategic projects planned for Bolivia and the rest of the region under the South American Council of Infrastructure and Planning (COSIPLAN). The council brings together the countries of the region to plan and implement transport, energy and communications projects. “China wants to strengthen these corridors, and in doing so, the Asian giant is ensuring the supply of natural resources and commodities for its own country,” Campanini said.

He cited other projects in Bolivia funded by China, including the $1.3 billion Rositas hydroelectric power project, which is currently halted, and the Rurrenabaque-Riberalta road project, which received nearly $500 million in Chinese loans.

Beijing’s influence in the region is also colored by its ongoing trade war with the United States, Campanini said. “China is shifting the United States’ influence in South America,” he said, adding that China had managed to establish itself and have an impact on regional geopolitics, thereby playing a significant role in the economies of several Latin American countries.

“Venezuela and Ecuador are already drowning in debt from China,” Campanini said, pointing to the torrent of massive loans for projects that are ultimately awarded to Chinese companies to carry out.

Beyond infrastructure, Campanini said he was concerned that China, already a major buyer of Brazilian soybeans, could be looking further afield to secure greater supplies of the commodity. He warned this could lead to large-scale deforestation in the Bolivian Amazon to make way for soy farms, as it already has in the Brazilian portion of the rainforest. Combined with the problems that have already arisen from Chinese-backed projects in Bolivia, this leaves the fate of Bolivia’s remaining wilderness in the balance.

Note: Mongabay Latam submitted an emailed request for comment to BGP Bolivia, but we have not received a response as of the time this article was published.
 

This article was first published by Mongabay Latam on 30 October 2018.

Article published by Maria Salazar

Conservation, Corporate Responsibility, Deforestation, Energy, Environment, Forests, Indigenous Communities, Indigenous Peoples, Infrastructure, Oil

Bolivia, Latin America

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