Thursday, August 13, 2020

Oil and The Amazon

Indigenous people living at the headwaters of the Amazon have called on European banks to stop financing oil development in the region, as it poses a threat to them and damages a fragile ecosystem, after a new report found $10bn in previously undisclosed funding for oil in the region.
The headwaters of the Amazon in Ecuador and Peru are home to more than 500,000 indigenous people, including some who choose to live in voluntary isolation. The area, covering about 30m hectares (74m acres), hosts a diverse rainforest ecosystem, but it is threatened by the expansion of oil drilling. An oil spill in April in Ecuador contaminated hundreds of miles of two major rivers and affected 35,000 people in river communities, and there have been ongoing oil spills in Peru. Previous oil exploration in the region resulted in about 17m gallons of crude oil being spilled. About 40% of the oil is exported to refineries in California.
Many banks have pledged to halt or limit the finance they provide to fossil fuel projects, particularly in delicate ecosystems, but the new report focuses on a grey area of bank lending: instead of project finance, the authors looked at trade finance. Project finance is used to start and develop oil wells, fossil fuel extraction, refineries and pipelines, but trade finance is used to move the oil and gas from production to refineries. Banks make loans to companies seeking trade finance, sometimes through intermediaries, but these loans often do not fall under their standard sustainability goals. In a new report, Research Group and Amazon Watch traced $10bn (£7.6bn) of trade finance since 2009 from 19 European banks covering oil in the headwaters of the Amazon. Several of the banks named in the report have confirmed that trade finance – unlike project finance for fossil fuels – did not fall under their standard pledges on sustainable lending.
Marlon Vargas, the president of the Confederation of Indigenous Nationalities of the Ecuadorian Amazon, said: “I wonder if the executives of banks in Europe know the real cost of their financing. How can they possibly sleep peacefully knowing their money leaves thousands of indigenous peoples and communities without water, without food and in devastating health conditions due to the pollution of the Coca and Napo rivers? It is time for the banks, companies and consumers of the oil extracted in the Ecuadorian Amazon to acknowledge how their businesses affect our territories and way of life.”
Tyson Miller, the forest programmes director at, told the Guardian: “The Amazon sacred headwaters region is a cultural and ecological gem. It is considered to be the most biodiverse terrestrial ecosystem on the planet, maintaining the hydrological cycle for all of the Americas, and helping to regulate Earth’s climate. New and ongoing oil extraction in the region is a gateway to deforestation and increased agricultural and industrial activity, which is why indigenous leaders in the region have repeatedly voiced their opposition to the expansion of the oil industry, and other industrial activities in their territories.”

No comments: