Peru is in the midst of an ambitious campaign to promote hydrocarbon development and is providing generous incentives to attract multinational petroleum corporations to the country. These efforts have been quite successful as revealed by the 18% increase in Peru’s production of hydrocarbon liquids in 2005. In January 2006, Minister Glodomiro Sánchez Mejía proudly stated that the Ministry of Energy and Mines signed 15 contracts during the past year and hopes to increase this number in 2006.

Most of Peru’s unexploited petroleum reserves are in the Amazon portion of the country, beneath expanses of rain forest still inhabited by indigenous peoples. These native inhabitants have had little say in decisions to develop petroleum deposits beneath their traditional lands. As a result, heated and sometimes violent conflicts have been commonplace in relationships between petroleum companies and indigenous peoples. The Peruvian government has sought to avert conflicts by increasing consultations with indigenous peoples, but these consultations often fail due to flaws in the process.

To help identify and address shortcomings in the existing consultation process, GLOWS sponsored a study by Emily Greenspan, of Harvard University, who spent more than a month in the country researching the issues and interviewing key stakeholders from indigenous federations, national government, regional government, petroleum companies, and non-governmental organizations. Her efforts were focused in the Pastaza region where GLOWS maintains project activities. Five specific problems were identified with the existing consultation process.

• The Peruvian government consults with indigenous communities only after having signed contracts with petroleum companies, which does not allow for discussion of alternative land uses.
• Stakeholders possess widely ranging views regarding the appropriate timing, content, and implementation of consultations.
• The Ministry of Energy and Mines, which oversees consultations, has clearly vested interests in promoting hydrocarbon development in the country, inhibiting its ability to facilitate impartial consultations with indigenous peoples.
• Indigenous communities lack sufficient information and resources to prepare for and fully engage in consultations.
• In the case of the Achuar people in the Pastaza region, disparate stakeholder understandings of the meaning of “consultation” and lack of clarity regarding indigenous representation have increased tension between the Achuar and Occidental Petroleum, creating a major barrier to future dialogue and/or negotiation.

To address these problems, the study suggested that the Peruvian government should 1) begin consulting prior to launching bidding processes, 2) work with indigenous leaders and non-governmental representatives to legislate consultation conduct, 3) increase the involvement of INDEPA (Ministry-level institute for indigenous peoples) in conducting consultations, 4) improve information provision prior to consultations, 5) allocate funding to support technical and legal assistance for indigenous peoples, 6) more fully engage decision-makers in consultations, and 7) allow more time for consultations.

The results of the study were presented to a joint meeting of stakeholders representing native communities, the government, and the oil company. Reactions to the report were positive, and GLOWS will continue to support its local partner, WWF-Peru, to facilitate the process of implementing the recommendations of the study. The entire report can be downloaded from the GLOWS website [Download >> Here].