Proposed oil-spill settlement is criticized in Brazil

co mricas

A monthly report on development and the environment in Latin America

Rio de Janeiro, Brazil

ederal prosecutors and Chevron are drawing criticism for a proposal under which the oil giant would pay R$311 million (US$149 million) in environmental compensation and oilfield-safety investments to settle two lawsuits seeking damages of R$40 billion ($19.1 billion) for two offshore oil spills. Chevron proposed the settlement in talks with the watchdog agency that filed the suits, the federal prosecutors office for Rio de Janeiro state. Prosecutors dont rule out the possibility that the settlement amount could be adjusted in final negotiations, which they expect to result in a signed agreement in February. Once the agreement, soon to be finalized, has been signed, the federal prosecutors office

plans to drop the two lawsuits it filed in connection with the spills, which should result in the judges dismissing the case, Federal Prosecutor Gisele Porto said at a Dec. 14 public hearing on the matter. Chevron has offered to pay R$90 million ($43.1 million) to compensate for environmental damages caused by the spillsthree times its own estimates of the damageand to spend R$221 million ($106 million) in safety-related upgrades, including equipment, said Rafael Williamson, head of corporate affairs for Chevron Brazil, at the hearing. We have...pledged to improve all of our procedures and operations, including those involving safety, Williamson
continued on page 94

December 2012
Vol. 15 - No. 2

Inside
Around the region U.S.-Mexican water accord wins praise from green groups After political shift, El Salvador weighs bills to curb mining Safer drilling plans urged with Amazon oil projects on way CENTERPIECE: Beneath the forest canopy in Brazils Par state, illegal loggers taking toll Q&A: Venture formed to certify oil firms labor, environment and social policies

2 3 4 5

Doha climate conference leaves REDD under cloud

fication should occur domestically. Experts say that aside from slowing progress on REDD, the dispute has highlighted difficult issues of sovereignty raised by the forest-protection strategy.
continued on page 104

rotection of forests as a means of mitigating climate change has commanded outsized attention at recent United Nations climate conferences. Not surprisingly, Latin America has applauded. The region, after all, possesses the largest tropical forest area in the world. As such, it ranks as the worlds leading recipient of funds for a forest-conservation mechanism known as REDD, or Reducing Emissions from Deforestation and Forest Degradation, under which developed countries pay rainforest nations to curb destruction of their woodlands. Thats why many Latin American governments felt dismay when a spat arose over REDD at last months UN climate conference in Doha, Qatar. The disagreement, over who should be in charge of verifying the amount of carbon dioxide that forest-conservation projects prevent from entering the atmosphere, has slowed work on integrating REDD into the UN climate system. This has frustrated Latin Americans who hoped that REDD might become part of a UN compliance market sometime soon and, in the process, generate large sums for forest conservation. The quarrel pitted Norway, the worlds biggest contributor to forestry protection, against Brazil, the worlds largest recipient of such funds. Norway insisted an independent board of international experts should be responsible for the verification; Brazil countered that such veri-

12

UN Convention on Climate Change Executive Secretary Christiana Figueres at Doha (AP Images)

Eco EAmricas
Coverage of Latin American environmental developments and trends for academic institutions, businesses, NGOs and public agencies. Editor & Publisher George Hatch Design Marina Tubio Subscriptions Manager Maria Belesis Editorial/Subscriptions Office Fourth Street Press 3 Ellis Square Beverly, MA 01915 Tel: (978) 232-9251 Fax: (978) 232-9351 E-mail: ecoamericas@fspress.com Web site: www.ecoamericas.com

ound th r

EcoAmricas

Costa Rica hones plans to achieve carbon-neutrality

Costa Rica, moving aggressively to meet its goal of becoming carbon-neutral by 2021, has unveiled a plan to increase its use of renewable energy, push a quarter of its taxi and bus fleet to use cleaner fuels, and plant 7 million trees to absorb carbon dioxide. Costa Rica already has taken significant steps to reduce its carbon footprint by increasing its forest cover from 21% in 1987 to 52% today and improving its energy efficiency by 15%. But the plan, announced by Ren Castro, the minister of environment, energy and telecommunications, puts Costa Rica on a path to become the worlds first carbon-neutral nation within a decade. With this plan, we should be able to reduce 2.6 million tons of carbon dioxide, or around 30% [of our emissions], which is enough to meet our goal, Castro told the press at the Nov. 7 launching of the Action Plan for the National Strategy on Climate Change. Environment officials say the strategy is to balance reduced greenhouse-gas emissions with new tree plantings so that net carbon emissions amount to zero. In the process, the government will tighten standards on public transportation. It will negotiate with car makers and banks so taxi and bus owners can cheaply switch to natural-gas-, liquified-petroleum- and natural-gas-powered vehicles. And it will encourage municipalities to establish taxi and bus stands for these alternative-fuel vehicles. Power generation also is slated to evolve. Costa Rica

egio eR n

Fourth

Street

Press

currently produces less than 10% of its electricity from fossil fuels. The rest comes from renewable sourcesmainly hydropower plants, which accounted for 75% of the countrys electricity last year, and from geothermal installations, which accounted for 12%. Under the carbon-neutral plan, wind energy will grow from 4% of the power supply to at least 12% by 2021, and the share of solar energy also will be expanded from its current level of less than 1%. Meanwhile, a new forestry plan will offer easy credit to cattle ranches and coffee farms willing to participate in a national program to plant 7 million trees. Those trees will soak up carbon dioxide as they grow and then be sold to the timber industry before a new cycle of tree planting begins. Costa Rica is not the only nation yearning for carbon neutrality. Norway, one of the worlds top 10 oil exporters, also has committed to being carbon neutral, but by 2030 rather than 2021.

Ecomricas is published monthly by Fourth Street Press, Inc. It is available in print and electronic versions. One-year charter subscription rate is $225, with discounts available for organizations needing multiple subscriptions. Back issues are $20 Copyright 2012 by Fourth Street Press, Inc. All rights reserved. Reproduction in whole or part prohibited except by permission.
ec y on r cled
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Follow-up: Patricia Alpzar, Director, Press Office, Ministry of Environment, Energy and Telecommunications, San Jos, Costa Rica, +(506) 2256-3859, (506) 2233-4533, ext. 172, prensa@ minae.go.cr. National Climate Change Strategy Action Plan available (in Spanish) at: www.cambioclimaticocr.com/
biblioteca-virtual/cat_view/2-public aciones-sobre-cambio-climatico.

In Brazil, credits for forest conservation to be traded

The Brazilian state of Rio de Janeiro this month activated a trading system in which landowners in violation of government land-clearing limits can legalize their property by buying credits from those who conserve more than the required minimum. The land-clearing restrictions that guide the new trading system are set down in the For-

ISSN 1532-835X

est Code, a 1965 law that was revised this year. The revised law retains a longstanding requirement that landowners keep a portion of their land uncut80% in the Amazon, 35% in the woodland savannah known as the Cerrado, and 20% elsewhere. (See Ruralistas prevail in Brazils Forest Code battleEcoAmricas, Oct. 12) Using the new electronic trading system, called the Rio de Janeiro Green Exchange (BVRio), landowners who have failed to meet these forestconservation minimums can bring their land into compliance by purchasing environmental credits (CRAs). They can buy the credits from landowners who have preservedand agree to continue to preservea corresponding amount of forest above and beyond the required minimum. As a precondition, both the buyers and sellers landholdings must be geo-referenced and registered with state or federal environmental agencies. CRAs are authorized under the revised Forest Code. They only can be used to legalize property deforested before July 22, 2008, when the government implemented a decree setting tougher rules for the restoration of illegally cut property. Another limitation placed on use of the credits: landowners can only buy CRAs in the same biome and state where their property is located. The BVRio has drawn its first registered buyers, as well as sellers with surplus uncut forest totaling 200,000 hectares (490,000 acres) in six states and three biomesthe Amazon rainforest, the Atlantic rainforest and the Cerrado. BVRio declined to give the current numbers of buyers and sellers, other than to say there were dozens of each. BVRio Executive President Pedro Moura Costa expects trading of CRAs to begin in the continued on page 114 December 2012

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EcoAmricas

Agreement reserves water for Colorado delta

Albuquerque, New Mexico

xperts say a water-sharing agreement that Mexico and the United States struck last month will permit long-delayed upgrading of Mexican water infrastructure, delivery of surplus water to thirsty southwestern U.S. states and environmental restoration in the lower Colorado River watershed. I think it is a good example of collaboration between two countries and, in this case, with the environmental community, says Francisco Zamora, Colorado River Delta program director for the Sonoran Institute, a nongovernmental group active in the United States and Mexico. Especially along the border, all you hear about is bad news. This is good news. The agreement, signed Nov. 20, eleven days before Felipe Caldern turned power over to new Mexican President Enrique Pea Nieto, includes provisions that would: n require Mexico to accept reduced water deliveries in times of drought; n provide US$21 million in U.S. funds to upgrade Mexican water infrastructure damaged in a 2010 earthquake; n permit Mexico to store up to 1.5 million acre-feet of water in Nevadas Lake Mead (continuing a storage arrangement begun on a trial basis after the 2010 earthquake); n prompt steps to address increased water salinity stemming from low reservoir levels; n and release 158,000 acre-feet of water over five years to ensure that water flows the entire length of the Colorado, which has stopped short of the Gulf of California thanks to U.S. dams and burgeoning water demand.

deliveries will be delayed while the country uses Lake Mead for temporary water storage and undertakes water-infrastructure upgrades such as lining water-transport canals and improving irrigation systems. The stakes are high. In Mexico alone, the 1,450-mile (2,330km) river provides drinking water for Tijuana and Mexicali, irrigation for farms in the Mexicali Valley, crucial habitat for wildlife and an economic livelihood to residents of the Colorado River Delta and Upper Gulf of California. Jess Luevano, secretary of the Mexican section of the International Boundary and Water Commission, the binational agency that oversees U.S.-Mexican water agreements, anticipates a steady flow of river water to the Colorado Delta and Gulf of California by 2014-16. Speaking about Minute 319, Pat Mulroy, general manager of the Southern Nevada Water Authority, says: Probably the most compelling benefit is the stabilizing effect it will have on Lake Mead. Were very much driven by what climate change is going to do to this basin [and the need] to buffer against it.

Contacts
Jesus Luevano
Secretary International Boundary and Water Commission Ciudad Juarez, Mexico Tel: +(52 656) 639-7950

Surplus water
The U.S. Bureau of Reclamation has warned that continued declines in the water level of Lake Mead, which supplies 90% of Las Vegas drinking water, could cause water and hydroelectricity shortages in the U.S. city. In return for allowing Mexico to use Lake Mead as a water bank, Arizona and Nevada will be permitted to draw 100,000 acre-feet of the surplus water during the five-year term of Minute 319. The Sonoran Institutes Francisco Zamora credits cross-border projects already underway in the region for helping push Minute 319 forward and for persuading negotiators to prioritize environmental restoration. Working with Mexican partners, the Sonoran Institute has planted 50 acres of cottonwood and willow trees, built a small channel reconnecting the Colorado River to the sea and created an artificial wetland near Mexicali. In the amendment talks, a coalition of green groups agreed to pay for a third of the 158,000 acre-feet of water to be released into the Colorado delta. The coalition, which includes the Sonoran Institute, Pronatura Noreste and the Environmental Defense Fund, is launching a fundraising campaign for the purpose with help from the Nature Conservancy. Says Zamora: I think the United States and Mexico were able to look at the big picture of the Colorado River and how to use it to the benefit of the countries. Environmentalists were able to show that restoration was feasible. Kent Paterson

cilamex@cila.gob.mx Patricia Mulroy

General Manager Southern Nevada Water Authority Las Vegas, Nevada Tel: (702) 258-3104

pat.mulroy@snwa.com Francisco Zamora

Director Colorado River Delta Program Sonoran Institute Tucson, Arizona Tel: (520) 290-0828 x1137

Treaty amendment
The agreement is contained in an amendment, called Minute 319, to the 1944 treaty that governs the two nations use of Colorado River water. Designed to expire in 2017, the amendment was signed in a ceremony in San Diego that included U.S. Interior Secretary Ken Salazar and outgoing Mexican National Water Commission (Conagua) chief Jos Luege. In a joint communiqu, Mexicos Foreign Relations Ministry and National Water Commission stressed that Minute 319 does not alter U.S. or Mexican water distribution obligations under the 1944 agreement or imply the loss of water by one party or the other. Such reassurances garner attention amid the fast-growing border regions ongoing drought and diminishing water supplies. The U.S. Department of the Interiors Bureau of Reclamation says the Colorado River Basins water stores have shrunk 35% in the last 12 years. Minute 319 aims to achieve better use of the river and even water surpluses through efficient usage. In the process, Mexicos water
December 2012

fzamora@sonoraninstitute.org

EcoAmricas

El Salvador weighs legislation to curb mining

Contacts
Rafael Cartagena
Researcher Salvadoran Research Program on Development and Environment (Prisma) San Salvador, El Salvador Tel: +(503) 2298-4303

prisma@prisma.org.sv

n 2006, thousands of demonstrators took to the streets in San Salvador to denounce gold and silver mining projects. The protestors, angered by reports that exploration activity by the Canadian firm Pacific Rim had reduced access to fresh water for farmers along the Lempa River, demanded an end to that project. They also called for a ban on all metallic mining on grounds it could lead to widespread contamination of rivers and streams. Such concern runs deep in El Salvador, where more than 90% of surface water is polluted and which has the least amount of water available per capita of any Central American country, according to studies conducted for the United Nations. But when the National Roundtable on Metallic Mining (Mesa), a coalition of community, environmental and human rights groups, lobbied the National Assembly in 2006 to ban metallic mining permanently, the legislation went nowhere. The Assembly, dominated by the rightwing, pro-business Arena party, had little interest in taking up a bill that would lose the country hundreds of millions of dollars in royalties from U.S. and Canadian mining companies.

communications coordinator. It appears to solve a problem, without actually solving it. Whether Mesa can push through its bill to ban mining permanently in El Salvador is anyones guess. But experts believe that public opposition to mining in the country is strong. The most recent poll on mining, carried out in 2009 by the University of Central America in areas affected by mineral extraction, found that more than 62% of the population was opposed to mining projects. Public sentiment does not appear to have softened since, thanks in part to media reports on the difficulty and cost of regulating mining investment.

Legal, environmental concerns

One focus of reports is Pacific Rim, which sued El Salvador for US$77 million under the Central American Free Trade Agreement after the government suspended its environmental license. The suit, alleging arbitrary and discriminatory treatment, was filed in 2009 and is now being heard by a World Bank arbitration panel. It has cost El Salvador millions of dollars in legal fees, according to some estimates. Meanwhile, environmental risks of mining continue to raise hackles. Earlier this year the Ministry of the Environment and Natural Resources released studies showing that gold mining operations from the 1930s through the late 1970s in the San Sebastin River basin had left the river in eastern El Salvador with nine times the permitted cyanide levels and 1,000 times the permitted levels of iron. As a result, ranchers and corn farmers from the area have had to bring in water from other regions. Opposition to mining is not universal in El Salvador. Some mayors in the country, for instance, support foreign mining investment as a means of stimulating economic growth in their communities. At present, there are 26 active exploration permits and 73 mining applications pending before the government. Various studies have shown that those projects could generate billions of dollars in revenue. That income, mining proponents say, could make a huge difference in a country where two-thirds of the population lives on $2 per day. Still, some FMLN legislators vow theyll push for a permanent ban, perhaps fusing elements of the government and Mesa bills. We have made clear we are against mining in El Salvador, says Nery Arely Daz de Rivera, an FMLN member of the National Assembly. We are a small, vulnerable country which does not have the socio-environmental conditions that would allow for mining activity. Steven Ambrus
December 2012

Nery Arely Daz de Rivera

FMLN Deputy to the National Assembly San Salvador, El Salvador Tel: +(503) 2281-9360

New environment
Since then, though, the political equation has changed. The left-wing FMLN has become the most powerful party in the Assembly. And Mauricio Funes, an FMLN member, was elected president of El Salvador in 2009. He opposes metal mining. Yet as Mesa pushes again for enactment of its legislation, it feels a renewed sense of urgency that stems, paradoxically, from advances made by the anti-mining cause. In August, the Funes government presented the Legislative Assembly with its own mining bill. The legislation, which will likely be taken up in the coming year, would suspend mining permits until the governments miningregulation agencies are improved. It would also ban all mining until concession areas are established in line with economic and environmental criteria and old mines are closed in an environmentally sound manner. Mesa believes the government bill does not go far enough. That is because under the proposed law, a commission, whose members would be appointed by the president, would determine when conditions warrant a resumption of mining. That, Mesa asserts, means a future, more business-oriented president might simply appoint a committee eager to certify the fulfillment of improved conditions and invite mining companies back. This bill would temporarily suspend mining in El Salvador, but it is not a prohibition or a moratorium, says Alejandro Labrador, Mesas

nery.diaz@asamblea.gob.sv Alejandro Labrador

Communications Coordinator National Roundtable on Metallic Mining (Mesa) San Salvador, El Salvador Tel: +(503) 2235-4005

esnomineria@gmail.com

EcoAmricas

New standards urged for Amazon oil projects

Lima, Peru

ith 13 Amazonian oil leases out for bid in Ecuador and more slated for auction in Peru, experts are advocating wider use of methods to reduce the environmental impact of what they expect will be a regional surge in oil and gas operations. Others, however, warn that governments must in addition establish and enforce minimum standards to ensure such best practices amount to more than good intentions. Perhaps the most unusual attempt to address oil-drilling concerns is Ecuadors effort to raise US$3.6 billion from international donors in return for not allowing wells in the Ishpingo-Tambococha-Tiputini (ITT) concession area in Yasun National Park, a hotspot of biological diversity near the border with Peru. But the fund only has solid commitments of about $100 million so far, and Ecuadorian President Rafael Correa has said that if the fund falls short, he will open the area for drilling. If that happens, some experts recommend drilling from outside the park, using a technique called extended-reach drilling, which can be done from platforms as far as eight miles (12.8 kms) away from the oil reservoir.

move into formerly pristine forest. Powers suggests new techniques might allow companies to gauge oil-producing potential without having physically to enter the territory to do seismic testing. By taking seismic information from previous testing that did not result in oil production and combining it with additional geomagnetic data gathered from airplanes, he says, it might be possible to decide whether to drill without further seismic tests. Pipeline routes can also be designed to have a lower impact by limiting the right-ofway width to 13 meters, not building a road along the right-of-way and leaving canopy bridgesplaces where the canopies of trees on both sides of the right-of-way touch, allowing tree-dwelling wildlife to cross. Underscoring the tree bridges effectiveness, cameras monitoring animals use of 13 bridges near Camisea from Sept. 19 to Oct. 30, 2012, recorded 11 animal species, from monkeys to porcupines, according to Alonso.

Contacts
Alfonso Alonso
Managing Director for Sustainability & Conservation Programs Smithsonian Conservation Biology Institute Washington, D.C. Tel: (202) 904-0301

alonsoa@si.edu http://nationalzoo.si.edu/scbi/cces/ Bruce Babbitt

Fellow Blue Moon Fund Charlottesville, Virginia Tel: (434) 295-5160

Winnowing well sites

Scientists can also promote improved practices by mapping fragile habitats before companies begin exploring, Alonso says. Scientists studying vegetation, amphibians and birds in a lot leased by Repsol in northern Peru found islands of a particular geologic formation where soil was less fertile. They recommended against drilling in those areas because they would be harder to remediate, he says. Powers, meanwhile, says that for companies, improving drilling practices is not a matter of technology or cost. Its a matter of habit. To improve habits, a venture has been launched to create an international certification system for oil drilling. The voluntary system, called Equitable Origin, would be similar in some ways to the Forest Stewardship Councils timber certification. (See Q&Athis issue.) The scheme has the support of the Coordinating Committee of Indigenous Organizations of the Amazon Basin (Coica), which sees it as a way to influence [companies] to improve their practices in our territories, in Latin America and around the world, says Jhon Wajai, Coicas liaison with Equitable Origin. Some experts argue voluntary efforts are not enough. To have a positive impact, best practices have to become minimum standards, says Carlos Soria, senior policy specialist for the WWF in Peru. There must be regulations. At the conference, former U.S. Interior Secretary Bruce Babbitt said governments and lenders should require certain practices, such as offshore-inland oil and gas development. Barbara Fraser

bruce.babbitt@ raintreeventures.com www.bluemoonfund.org Bill Powers

Fewer platforms
Using the technique to drill in different directions from a single platform, companies can shrink their footprint without increasing costs, says Bill Powers of E-Tech International, a U.S.-based engineering firm. While drilling a longer well might be more expensive, the cost is offset by the need for fewer platforms, he says. Powers spoke at a conference on Amazon oil and gas drilling sponsored by the U.S. Interior Department, the U.S. Agency for International Developments Initiative for Conservation in the Andean Amazon and the Peruvian Environment Ministry in Lima on Nov. 29 and 30. By designing each drilling platform as an island and ferrying construction equipment, materials and workers by helicopter from camps built along rivers, he says, companies can forgo construction of roadsand, as a result, avoid fragmenting wildlife habitat and attracting settlers to the area. That offshoreinland technique was used for the Camisea natural gas project in southern Peru. Companies exploring for gas and oil use seismic testingsetting off explosive charges and mapping how sound waves travel through the groundto determine the boundaries of the deposit. Studies show the impact on wildlife is minimal, says Alfonso Alonso, managing director of sustainability and conservation for the Smithsonian Conservation Biology Institute. But critics assert paths created to lay the explosive charges can also allow settlers to
December 2012

Chief Engineer E-Tech International San Diego, California Tel: (619) 295-2072

bpowers@powersengineering.com www.etechinternational.org/ Juan Ignacio Ramrez

Amazon Civil Society & Inter-ministerial Relations Analyst Office of the President of Ecuador Quito, Ecuador Tel: +(593) 9982-7521

juan.ramirez@presidencia.gob.ec www.yasuni-itt.gob.ec Carlos Soria

Senior policy specialist WWF-Peru Lima, Peru Tel: +(51 991) 686-088

carlos.soria@wwfperu.org http://peru.panda.org Jhon Wajai

Inter-institutional Coordinator Coica-Equitable Origin Quito, Ecuador Tel: +(59 32) 322-6744 etsakujancham1@gmail.com

www.coica.org.ec

EcoAmricas

Centerpiece

Under Brazils radar, illegal logging abounds

Anapu, Par state, Brazil

utside this rainforest town in the Brazilian state of Par, 180 families engaged in a sustainable-development project called Virola-Jatob have been doing their best to stop loggers from destroying their settlements forest. Taking turns to man a sentry box day and night, residents monitor the dirt track that links Virola-Jatob to the Transamazon Highway. The challenge, though, is daunting. Their settlement occupies 32,345 hectares (125 square miles)a vast expanse that is almost entirely forestand illegal loggers have clandestinely cleared their own track to gain access. At the end of September some families began to hear the unmistakable roar of skidders and tree-harvesting equipment at the back of their settlement. They discovered loggers were beginning to fell valuable timberparticularly ip, or Brazilian walnut (Tabebuia spp.), a highly prized hardwoodwith the idea of carrying it off by barge along a tributary of the Amazon River.

workers in slave-like conditions. Settlers drove some of the logging equipment out to the road leading to the settlement and hid them in the forest not far from their houses so that the logging company could not come back and reclaim them, as has happened elsewhere in the Amazon. (Ibama has impounded the vehicles.) The episode underscores the difficulty of curbing illegal logging in Brazils Amazon region. With distances vast and regulatory personnel spread painfully thin, even forest dwellers committed to conservation often find that the only way to save their woodlands is to play a dangerous, de-facto enforcement role. We have to have people, men and women, guarding the entrance to our settlement day and night, another of the community members says. Its the only way we can stop the logging companies from invading our settlement and stealing our timber. Its dangerous work and we shouldnt have to do it. Its the governments responsibility. But if we dont stop the timber companies, there will be nothing left in ten years time and our children wont have a future. Virola-Jatob and its sister sustainable-development-project settlement, Esperana, were set up at the initiative of Sister Dorothy Stang, a U.S.-born nun who was gunned down in the eastern-Amazon state of Par in 2005. Stang, 73 at the time of her death, allegedly was killed for opposing logging and ranching interests as she advocated for settlers engaged in sustainable use of the rainforest. (See Factoring people into Amazon conservationEcoAmricas, March 05.) Sister Dorothy saw that logging companies were beginning to take over the region, so she had the idea of setting up a series of sustainable-development projects right in the heart of the forest to stop them, says Father Amaro Lopes, the Catholic priest in Anapu. Her idea was to settle small farmers on 100-hectare plots. They would be able to clear one fifth of their land [as Brazilian law allows] while the rest would become a forest reserve. Virola-Jatob and Esperana were created on public land, destined for agrarian reform. However, Illegally felled timber at the Virola-Jatob sustainable-development-project settlement some landowners were claiming part of the land, and A small group of the settlers decided to act. Seven of them, one of them was convicted of paying a gunman to kill Stang while accompanied by three officials from Brazils federal land-reform she was visiting Esperana in 2005. agency, the National Colonization and Agrarian Reform Institute Although the idea was not taken up elsewhere in the Ama(Incra), confronted the loggers. zon as Stang had hoped, the first two settlements are firmly estabWe drove by jeep as close as we could, and then we walked lished. Both have internal divisions, with some families keen to all day through the forest, guided by the sound of the machines, accept payments offered by logging companies in exchange for says one of the men, a farmer who, like other residents, did not allowing illegal cutting on their land. Other families, however, want to give his name for fear of reprisals. We slept in the forest, are more committed than ever to the course Stang charted. Fbio and then early the next morning we confronted them. We were Loureno de Souza, a settler in Esperana who is building a new all scared, as we thought they might have armed guards protect- house for himself and his family, is one of these. We need to keep ing them. the loggers off our land because they wreck the forest, he says. As it turned out, there was no violence. There were only We can earn enough to sustain our families by planting cacao, workers, not bosses or armed guards, and they seemed even more which brings in a good price, and keep our forest reserve intact. frightened than we were, he said. They shouted Dont shoot! The conflict with big landowners and logging companies and immediately handed over the keys to their machines. They continues to simmer. Just like Virola-Jatob, Esperana has a seneven shared their lunch with us. try box, but residents fear that loggers will resort to violence to The next day, an official from Ibama, the enforcement arm of get their way. Says Father Amaro: Ive heard several times that big the Brazilian environment ministry, arrived and fined the logging landowners have offered gunmen R$25,000 (US$12,000) to kill company for cutting without government permission and holding me and even more to kill some of the community leaders. They
December 2012

ramaribo

ri

offered R$50,000 ($24,000) for a gunman to assassinate Sister Dorothy and someone did it. In 2009 a plaque was nailed to a tree close to where Stang was murdered, paying homage to the martyrs who have died in the struggle for the preservation of the forest and agrarian reform in the Amazon. Within a few days, the plaque was riddled with bullets. Further to the west, in the settlement of Rio Trairo, families are trying to take Stangs idea a step further by avoiding logging even on a legal, sustainable basis, and living on the sale of products such as nuts and oils that they collect from the forest. They, too, are facing serious conflicts with loggers. The settlement was not officially created until the late 1990s, and by then logging companies were terrorizing the region. The loggers arrived in 1994, explains Derisvaldo Moreira, known as Dedel, the leader of this settlement. We were already there but Incra Encampment used by workers in an illegal logging operation in Irm Dorothy settlement hadnt yet made the settlement. The loggers wanted almost all of us to leave, but we said we wouldnt go. In the end This is how their project Sementes da Floresta (Seeds of the an accommodation was reached, with the loggers agreeing that Forest) was born. All the families come from the northeast of Brathe settlers could take over a band of land, three kilometers (two zil, and until then they had conducted slash-and-burn agriculture, miles) wide, beside the Trairo River. in which they clear forest, burn it and plant subsistence crops on For many years there was an uneasy truce, but in 2007 the the temporarily enriched soil. It was not easy for them to start settlers, most of whom are Catholics, began to discuss the Cath- thinking of the forest as a resource they should protect. They olic Churchs theme for that yearFraternity and the Amazon. received visits from members of traditional river communities, With the encouragement of a Catholic nun, Sister ngela Sauzen, called ribeirinhos, who have made sustainable use of the forest they decided that they should start changing the way they farmed. for many decades, and some of them visited nearby towns to take As one of the settlers, Miguel Padre, put it: It fell into our heads technical courses on the subject. that we should be planting trees, not destroying them. Today they walk confidently through the forest, identifying trees. Thats the copaba tree [Copaifera paupera], says Dedel. A common sight: truck without license plate, and loaded with contraband timber Weve learned how to make a small slash in the trunk, collect the oil and then fill in the hole so the tree recovers. They are collecting the oil for medicinal and cosmetic uses. They also make oil from Brazil nuts and from the seeds of various tree species. They have had difficulty meeting the quality standards of beauty-product makers, their main customers, and are struggling with the bureaucracy of setting up a community-owned company through which they hope to manage their venture. Their most serious concern, however, is the hostility of illegal loggers. The settlers want to annex a large area of forest near their settlement for the Seeds of the Forest project, but the loggers see this as a direct challenge. Dedel and others have been approached by groups of men while working in the woods and have BRAZIL been told to halt the Seeds of the Forest initiative or take the consequences. In October, loggers felled timber with an export value of at least US$60,000 in Miguel Padres plot while he was away doing a course in sustainable forest management. EcoAmricas saw the area that had been cut shortly afterwards, On the front lines and stopped Miguel Padre as he was driving back to his plot on a motorbike with his wife and two of his six children, to give him BRAZIL To help curb illegal logging, two sustainablethe bad news. development settlementsEsperana and The logging companies are keen to maintain control in the Virola-Jatobwere set up in Par state at region because they are making huge amounts of money. Indeed, the urging of Dorothy Stang, a U.S.-born nun illegal logging is so common that even loggers in the town of Virola-Jatob who was later gunned down. Uruar said off the record that they did not know a single logging way h company that was not skirting the law. Hig nian Signs of illegal activity abound. Traveling in the region, one azo Anapu sam routinely sees trucks loaded with valuable timber and displaying ran T no number plates as they leave indigenous reserves or protected areas. At night these trucks arrive at the timber yards in Uruar Esperana and unload their cargo. During the day trucks with number plates

Cayenne

FRENCH GUIANA

Camopi

Serro Do Navio

Macapa

Belem

Rio

Xin gu

continued on page 84

December 2012

EcoAmricas
continued from page 7
carrying sawn planks of timber, each with an identification tag as required by law, leave the yards. How does the transformation happen? The scam is simple. To get Ibamas permission to extract timber, landowners must present the agency with a Plan for Sustainable Forest Management that includes an inventory of tree species on the property as well as a sustainablelogging plan. Once the plan has been approved, which generally occurs without the inventory being checked by authorities, the landowner receives what are popularly known as logging credits. Loggers prize these credits, which they use to make illegal timber look legala process known as heating the timber. Many settlers in the region report that loggers bully them to draft sustainable-forestso the damage being done is not captured by the governments satellite monitoring systems. Juan Doblas, who analyzes digital geographic data for the Socio-Environmental Institute (ISA), a leading Brazilian environmental organization, used the GPS coordinates EcoAmricas had taken at the site and carried out a detailed analysis on the basis of satellite images from August 2012. He detected nine areas, totaling 3,500 hectares (8,600 acres), that showed serious degradation. This damage is not included in the Brazilian governments annual Amazon deforestation figures, however, because none of the clearings exceeded 6.25-hectare minimum reported in the governments monitoring system. Though not as damaging in some ways as slash-and-burn clear cutting, selective loggingparticularly the illegal variety, which often is not followed by the reforestation required under Brazilian lawhas worrisome consequences. Gregory Asner, a Stanford University professor of environmental earth system science, and other scientists conducted a study to gauge the impacts of selective logging operations in the Brazilian Amazon from 1994 to 2004. In a 2006 paper published in the U.S. journal Proceedings of the National Academy of Sciences, his team concluded that at least 76% of all harvest practices resulted in high levels of canopy damage sufficient to leave forests susceptible to drought and fire. On-the-ground observation such as that carried out by EcoAmricas in Par state suggests that in areas along the Transamazon Highway, a great deal of such damage is being done to the rainforest, much of which will not be reflected in figures generated by Brazils satellite monitoring systems. Those systems tell a story of recent success. According to the governments latest annual report, 4,655 square kilometers (1,798 sq. miles) of rainforest was felled during the 12 months that ended on July 31. Though thats an area the size of Rhode Island, its a far cry from the 27,700 square kilometers (10,700 sq. miles) of forest loss reported during the same period in 2003-04. In Par state, settlers say illegal loggers have moved steadily west along the Transamazon Highway and doing great harm to the forest. Says Dedel: The teams the loggers send in dont care how much damage they do. If we dont stop the loggers, they will kill the forest. Dedels mother worries that her sons outspokenness will cost him his life. Says his mother: I cant sleep at night for fear that Dedel, the oldest of my children, will be killed. Susan Branford and Maurcio Torres
December 2012

Contacts
Gregory Asner
Department of Global Ecology Carnegie Institution for Science Stanford, California Tel: (650) 223-6902

Bullet-riddled memorial to slain forest-preservation activists

ry plans, even if they have no timber on their land, so the loggers can buy the resulting credits. Others say that loggers have come to their settlement and promised to build bridges, maintain roads and erect schools if the community gave them credits. As the state often fails to provide these basic public services, such offers can be tempting. The harm caused by illegal logging often is not detected by the governments satellitebased deforestation monitoring systems, the most finely focused of which captures cleared areas of 6.25 hectares (15 acres) or bigger. Thats because rather than clear cutting, illegal loggers often fell only the most valuable treesa form of selective cutting with a strong emphasis on economic value and very little concern for environmental stewardship. The forest, while not devastated, can be seriously degraded as a result. A visit to the Irm Dorothy settlement, an area awaiting designation as a sustainable-development project, underscores how illegal logging of this kind is occurring on a huge scale. Dozens of tracks branch off a road built unlawfully by the loggers, with scores of further tracks leading off the feeder roads, each with a so-called esplanadea level piece of ground where timber is collected before it is transported out. The logging area resembles a secret town, yet the bulk of it is nevertheless screened by forest canopy,

gpa@carnegiescience.edu Juan Doblas

Analyst Socio-Environmental Institute Altamira, Brazil Tel: +(55 93) 3515-5749

isaterradomeio@ socioambiental.org

EcoAmricas
Spill settlement continued from page 1
said, pointing out that the accord calls for investments in improved capability to monitor seafloor areas and collect spilled oil. In the first Chevron spill, which occurred in November 2011, 3,700 barrels escaped from seven ocean-floor fissures, each roughly 250-meters (820 feet) long, near a Chevron exploratory well. In the second spill, in March 2012, small amounts of oil seeped from a halfmile sea-floor fissure near the first spill site. Chevron took responsibility for both spills, the first of which was caused by an underground blowout that fractured the ocean bottom, according to the National Oil Agency (ANP). A small amount of oil is escaping from the two sets of fissuresa total of about 40 liters a day, the ANP saysand Chevron is collecting it in underwater receptacles. Raphael Moura, the ANPs head of operational safety and the environment, said at the hearing that his agency is now reviewing new safety and operating procedures proposed by Chevron for its offshore oil operations. Transocean, Chevrons drilling operator and a defendant in the two lawsuits, must sign the agreement, even though the ANP absolved it of any responsibility in the spill because it was executing Chevrons drilling plans when the leakage occurred, Moura said. The agreement also must be endorsed by the ANP and Ibama, the Environment Ministrys enforcement arm. Ibama has yet to send federal prosecutors its final impact assessment. set the R$40 billion damage figure (R$20 billion for each suit), disputes that view. Chevrons R$311 million proposal is its attempt to minimize the environmental harm it did, especially its having fractured the sea floor and damaged its geological structure, Santos de Oliveira says. If federal prosecutors accept this small settlement offer, it will send other companies a message that they will only be lightly punished for the offshore spills they cause. This could result in their not taking the safety precautions needed to avoid spills. Santos de Oliveira says a Jan. 2012 federal ruling transferred the case from his office, in Campos de Goytacazes, the city closest to the spill, to the state capital of Rio de Janeiro. The judges ruling removing me from the case was based on his understanding of one law saying that when an accident has a regional impact, a civil lawsuit in connection to it must be filed in the capital of the state where it occurred, he says. I filed the two lawsuits based on my understanding of another law which said that a lawsuit must be filed in the city closest to where the accident occurred.

Contacts
Ricardo Baitelo
Energy Campaigner Greenpeace Brazil So Paulo, Brazil Tel: +(55 11) 3035-1184

rbaitelo@greenpeace.org Richard Charter

Senior Fellow The Ocean Foundation Bodega Bay, California Tel: (707) 875-2345

waterway@monitor.net

Renato de Freitas Machado

Federal Prosecutor Rio de Janeiro, Brazil Tel: +(55 21) 2753-7917

renatomachado@prrj.mpf.gov.br Raphael Moura

Chief of operational safety and the environment National Oil Agency (ANP) Rio de Janeiro, Brazil Tel: +(55 21) 2112-8333

Damages faulted
Fbio Scliar, director of the environmental division of the Federal Police in Rio de Janeiro state, whose initial investigation of the spill was used by Santos de Oliveira to file the first lawsuit, says that the R$40 billion in damages initially sought by the federal prosecutor involved was likely a negotiating strategy, [but] not one meant to result in the R$311 million settlement offer by Chevron, an amount I feel is too low if you consider the environmental damages of the spillcracked sea floor, several thousand barrels of oil likely covering it, and oil still leaking from the fissures. Says Richard Charter, a senior fellow at the U.S.-based Ocean Foundation: The huge monetary discrepancy between the R$40 billion in damages sought by prosecutors and the R$311 million that Chevron offered to settle the case indicates that it will likely get a financial slap on the wrist for a major spill. This wont likely caution Chevron or other oil companies in Brazil to be more serious about safety. The proposed settlement has no bearing on a criminal lawsuit filed in March by federal prosecutors charging 17 Chevron and Transocean executives and engineers with environmental crimes and harm to public patrimony in connection with the November 2011 spill, prosecutor Porto said at the hearing. A federal court judge has not yet heard the case, whose penalties carry prison terms of up to 31 years. Michael Kepp

rmoura@anp.gov.br Gisele Porto

Fines unaffected
Ibama and ANP have fined Chevron R$60 million (US$29.7 million) and R$35.15 million ($17.4 million), respectively, for the November spill. (See Agency moves to close book on Chevron spill,EcoAmricas, Sept. 12). The settlement will not affect the fines, officials say. Chevron is seeking a reduction of the Ibama fine, and has resolved the ANP fine by putting up R$24.6 million ($12.1 million), thanks to an early-payment discount. Rio de Janeiro state federal prosecutor Renato de Freitas Machado says that while prosecutors could make a counter-proposal, Chevrons settlement offer is a serious one, and should help us soon reach a settlement. On the discrepancy between the R$40 billion in damages prosecutors sought and the R$311 million Chevron offered, de Freitas Machado says: The R$40 billion was an excessive amount not based on facts, and was set by a federal prosecutor no longer involved in the case, even before the ANP and Ibama had done investigations and filed reports on the accident. Eduardo Santos de Oliveira, the federal prosecutor who filed the original lawsuits and
December 2012

Federal Prosecutor Rio de Janeiro, Brazil Tel: +(55 21) 3971-9330

giseleporto@prrj.mpf.gov.br Eduardo Santos de Oliveira

Federal Prosecutor Federal Prosecutors Office Campos de Goytacazes, Rio de Janeiro state, Brazil Tel: +(55 22) 2731-5546

eduardobenones@gmail.com Fbio Scliar

Director Environment Division Federal Police in Rio de Janeiro state Rio de Janeiro, Brazil Tel: +(55 21) 2203-4465

fscliar@ig.com.br

Rafael Williamson
Chief of Corporate Affairs Chevron Brazil Rio de Janeiro, Brazil Tel +(55 21) 2510-5983

gisele.oliveira@impresspni.com.br

EcoAmricas
Climate talks continued from page 1
No developing country will have international verification of its actions, especially if theyre national policies, Luiz Alberto Figueiredo, an environmental specialist with Brazils foreign ministry, said at the meeting. Well have a system to check the accuracy of our data, done domestically. The disagreement over REDD was not the only disappointment for Latin America at the climate summit. Doha conferees gave another eight years of life to the Kyoto Protocol, which otherwise would have expired at the end of this year. But the proposal to create a new mechanism that would compensate island nations and other vulnerable countries for loss and damage from storms, typhoons and other extreme weather events related to climate change failed to gain traction. The United States strongly resisted, fearing such a mechanism would expose it to liability claims. A negotiator from Barbados reportedly walked out of a meeting on the issue with tears in his eyes. The parties to the summit finally agreed to take up the issue again in 2013, with no decision on how such a mechanism might be funded. of commitment to climate action by the United States and China in particular. Still, inaction on REDD ranked as a major disappointment for Latin America. Amid earlier optimism, the region in recent years has received hundreds of millions of dollars from the UN, the World Bank and donor nations for projects and institution-building in connection with the forest-conservation strategy. Those investments have appeared to pay off. Brazil, which created an Amazon Fund in 2009 to receive donor money, has reported decreases in its deforestation rate as a result of economic factors, stronger enforcement andin part, some experts sayREDD programs.

Global market needed

Nonetheless, with no international market system in place to implement REDD, most Latin American nations are being frustrated in their efforts to save forests on a large scale, experts say. Thus far, REDD markets have been forming at the national and sub-national level. Australia, for example, will initiate a national compliance market for emissions reductions in 2015, and is expected to include funding of foreign REDD projects as one of the ways polluters can acquire carbon credits. California also foresees importing REDD credits to its state cap-and-trade program, which begins to operate in 2013. But neither of those markets compares in size to the European Union Emissions Trading Scheme, which accounts for the bulk of trading in emissions allowances worldwide and does not allow REDD programs. The California market is really important as an initial example of how a market might work, but the quantities are very small and my impression is that thats going to be the case for Australia too, says Doug Boucher, director of Climate Research and Analysis at the nonprofit Union of Concerned Scientists. That leaves voluntary markets, in which individuals, firms and organizations voluntarily offset their emissions, often to garner good publicity. Voluntary markets have generated tens of millions of dollars in recent years for forest-conservation in Latin America, which reports the greatest number of such projects of any region. That said, though, Latin America last year saw a 52% decline in the volume of forestry-related carbon credits it contracted to sell compared to the year before, says Forest Trends, a Washington D.C. nonprofit. Experts doubt that the market downturn, related partly to the lack of an international compliance regime into which voluntary credits could be incorporated, is likely to reverse itself soon. Steven Ambrus
December 2012

Contacts
Doug Boucher
Director of Climate Research and Analysis Union of Concerned Scientists Washington, D.C. Tel: (202) 223-6162

Help not on way

The lack of action on a loss-and-damage mechanism did not just disappoint Barbados and other Caribbean island countries. It also was a blow to Central American nations such as Honduras and Nicaraguathe worlds first and third most vulnerable countries to climate change, respectively, according to the Global Climate Risk Index 2012. Myanmar ranks second according to the index, which is compiled by the German nonprofit group Germanwatch based on deaths and damage resulting from extreme weather events over the past 20 years. Setbacks for the Green Climate Fund were another disappointment. Created as a conduit for donations to vulnerable nations, the Fund was supposed to deliver US$100 billion annually by 2020 for climate goals including adaptation to climate change. After outlays of $30 billion from 2010 to 2012 under a fasttrack scheme, the fund is essentially empty. Moreover, new commitments of $6 billion from European countries at Doha will be insufficient, experts say, to help nations in Latin America and the Caribbean gird their coasts, reforest watersheds and take other actions. The worlds major emitting countries are really leaving Latin America and other climatevulnerable regions without anything close to the support they need to address climate change and protect themselves from its impacts, says Glenn Hurowitz, a forestry expert at the nonprofit Center for International Policy in Washington, D.C. It is a symptom of the deeper lack

dboucher@uscusa.org Glenn Hurowitz

Senior Fellow on Forest Policy Center for International Policy Washington, D.C. Tel: (202) 232-3317

glenn@ciponline.org

10

EcoAmricas
Around the Region continued from page 2
first half of 2013. He believes that simultaneously, the system will initiate trading of CRA futures contractslegal guarantees that a landowner with registered property will sell CRAs at a price set in the contract once he or she receives the credits. Purchase of CRAs is not the only means the Forest Code provides for normalizing illegally cleared land. The law also allows owners of such property to legalize their landholding by registering it and agreeing to replant it with trees over a 20-year period. But Walter De Simoni, superintendent of green economy at the Rio de Janeiro State Environmental Secretariat, considers the CRAs an easier way out for farmers who have cleared more forestland than is legally allowed. Says De Simoni: [Its] an attractive alternative to ripping out his crops and losing his earnings from them, and then replanting trees on that cut land, an expensive and time-consuming means of legalizing it. A study cited by BVRio estimates four million properties have been cleared in excess of Forest Code limits to the tune of 30 to 60 million hectares (75 to 150 million acres). Because of the huge number of landowners who have illegally cut their property and because buying CRAs will likely be much cheaper than replanting trees on that land, especially crop land, there should be a big demand for CRAs and CRA futures contracts, says Patrick Funaro, head of South American commodities with Natixis, a French investment bank. This should make their prices attractive enough to encourage landowners with surplus uncut property to sell CRAs.

Green Economy, Rio de Janeiro, Brazil, +(55 21) 2332-5791, wdesimoni@ gmail.com. Patrick Funaro, head of South American Commodities, Natixis, So Paulo, Brazil, +(55 11) 3027-5926, patrick.funaro@br.natixis.com.

Buenos Aires pledges major trash reduction

In early 2004, the stateowned company that handles solid-waste disposal for the Argentine capital concluded that the landfill in the surrounding province of Buenos Aires where it dumped the citys trash was just a few years shy of reaching capacity. So the company, Ceamse, solicited private bids for the construction of a new landfill elsewhere in the province. Ceamse soon learned the hard way how public concern about the environmental impacts of waste disposal had grown strong in Argentina. The request for proposals flopped: not one bid was presented because none of the private companies interested in building a landfill could find a community willing to host the project. Now we need to think about alternatives, said Carlos Hurst, Ceamses president at the time. We know that these wont appear in the short term, and the system, unfortunately, will continue in crisis. But theres no magic to this. We have to do something with the trash. There are times when this problem is not understood. Hursts analysis still holds true. In 2005, the Buenos Aires city legislature approved a Zero Waste law that established ambitious refuse-reduction targets aimed at reducing the citys solid-waste-disposal needs. Since then, though, a near total lack of follow-up and a period of economic growth have driven the citys trash generation up, not down. Government figures show

Follow-up: Pedro Moura Costa, Executive President, BVRio, Rio de Janeiro, Brazil, +(55 21) 3596-4006, pedro.mou racosta@bvrio.org; Walter De Simoni, Rio de Janeiro state Superintendent of
December 2012

that in 2010, for example, the city disposed of 2.1 billion metric tons of solid waste double the target set for that year in the Zero Waste law. This year, the law calls for the city to send no more than 750 million tons of trash to the landfill, a quantity the city surpassed in April. Tired of the citys broken promises and concerned that the current landfill will become so bloated it might collapse, Buenos Aires Province Governor Daniel Scioli vowed publicly to prohibit the entry of trash shipments from the capital into his province. My patience has a limit, and the landfill does, too, Scioli told reporters last month. On Dec. 12, the city and province signed an agreement in which the federal capital pledged to cut the solid waste by 78% in a year and a half. The accord has won applause from green advocates, but the approval has been accompanied by doubts about the citys ability to meet its terms. Aside from making a dramatic trash-reduction pledge, the city agreed that the provincial government could validly refuse entry to trash trucks from the capital if the capital doesnt meet its trash-reduction goals. The timeline established in the agreement calls for the city of Buenos Aires to reduce the monthly tonnage it sends to the landfill from 6,000 currently to 5,400 in January 2013; 4,280 in March; 4,150 in July; 3,350 in November of next year; and 1,350 by June 2014. The first step, city officials say, will be next months start-up at the landfill site of a mechanical biological treatment plant (MBT). The plant is slated to receive 1,000 tons of refuse a day, separating out and treating the reusable organic materialabout 600 tons dailyto produce compost. Some of the compost will

be used to cover the landfills daily layers of deposited trash, replacing the dirt that currently serves that purpose. Environmental groups complain the citys plan lacks detail, and some of them say they suspect municipal officials might be planning to move to incineration, which the city has prohibited as a means of solid-waste disposal for over two decades. The MBT plans tend to be the initial step toward incineration, says Juan Carlos Villalonga of The Greens foundation, an Argentine environmental organization that signed a joint statement on the subject with other green groups here. This is not a viable option since it generates emissions with toxic substances that affect the environment, and it involves a waste of resources. The Buenos Aires municipal government also announced that in 2013 it will start up two plants that together will process 1,800 tons of construction debris daily for reuse in other forms. The city also plans to open two plants in 2014 that will boost processing of organic waste by 2,000 tons daily. Though details on these plants are scant, officials say they will produce compost and biogas. City officials insist that the processing plants, coupled with the removal of 250 tons of recyclable materials a day from the solid-waste streamthanks to a new trash-separation programwill cut Buenos Airess volume of landfill-bound trash to 1,350 tons daily by mid-2014.

Follow-up: Carolina Diotti, Press officer, the Greens Foundation, Buenos Aires, Argentina, +(54 911) 5891 9632, prensa@ losverdes.org.ar; Federico Sangalli, Press officer, Environment and Natural Resources Foundation (Farn), Buenos Aires, +(54 11) 4312-0788, fsangalli@farn. org.ar, Karina Serafino, Communications Director, City of Buenos Aires Ministry of Environment and Public Spaces, Buenos Aires, +(54 11) 4342-6003, ext. 209, kserafino@buenosaires.gov.ar.

11

Q&A: Venture offers certification standards for oil industry

While serving in the 1990s as indigenouscommunities liaison for a legal team suing Texaco over pollution in the Ecuadorian Amazon, Manuel Pallares got to know David Poritz, a U.S. high school student who studied the case in the United States. A few years later, Poritz and Pallares crossed paths again and hit on an idea: why not create a voluntary social-, labor- and environmental-certification system for oil companies? In 2009, they cofounded Equitable Origin, a certification company with offices in Ecuador and the United States. Poritz is president, and Pallares is vice president for stakeholder engagement. Pallares, a biologist with a masters degree in geographic information systems from the University of San Francisco in Quito, hopes the companys EO100 Standard will spur oil firms to improve practices and shrink their footprint. That, he says, could lead to further innovation, such as the trading of certification credits. Barbara Fraser spoke with Pallares recently in Lima, Peru.
lose the certification.

EcoAmricas

How did you design the standard?

We organized many workshops in Ecuador with all kinds of communitiesSecoya, Shuar, Huaoranismall farmers and NGOs. We also held workshops in Colombia and Brazil and received input from Peru and Bolivia [through indigenous groups]. We signed a memo of understanding with Coica [Coordinating Committee of Indigenous Organizations of the Amazon Basin]. We received ideas from all Coica countries and some companies, and together we developed a standard. We basically followed the Forest Stewardship Councils methodology.

How have companies responded?

Some companies prefer to follow the curve, while others want to be in the vanguard. Were now working with one company, Pacific Manuel Pallares Rubiales Energy [of Colombia], and talking with How did this idea grow out of the rainforest-pollution case? Ecopetrol [Colombias state-owned oil company]. Many [oil] There comes a time when you want to see results. The companies in Latin America are either small, and dont have Texaco case [which has focused on Chevron since it acquired capacity [to implement certification], or are transnational, with Texaco in 2001] forced companies to think more, to be more complicated decision-making. Wed like to have other pilot projresponsible, because they know they could be prosecuted. The ects in Peru and Bolivia, and also in the United States and Canconcept of peoples rights is also advancing. We started devel- ada, because the idea is for the standard to become universal. oping a [certification] standard in Ecuador based on indigenous peoples experience with companies that have done things very What is Equitable Origins role in the process? We are working with the companies to help them implebadly and companies that have been innovative. We believe this ment the standard. We will work very closely with the first standard allows companies to put themselves in the vanguard. auditors to bolster the standard. But once weve gotten enough What are the main criteria for certification? input from those groups, we wont work directly with compaThere are several principles. One involves transparency, nies. Well shift the qualification of auditors to an accreditation governance and corporate responsibility. Another has to do with agency. They will do the accreditation and will just inform us. how companies respect human rights and the role they play in development in the region where they work. Another is indig- How are you financing the initiative? Equitable Origin started with $30,000 of David Poritzs enous rights, under the International Labor Organization and UN treaties, which are rights specific to indigenous peoples. savings when he was 22, followed by a $250,000 contribution We include climate change, biodiversity and environment. And from Paul Sorensen, a retired software entrepreneur. Income finally, the [project] life cycle, how strategic planning [is done] will come from the fee paid by companies for each field cerfrom beginning to end, with provisions for when operations tified, an administrative fee for each company that has certiend, [considering] capacity for environmental restoration and fied fields, a percentage of each EO certificate traded on the maintaining social order. Each area is divided into more specific EO certificate exchange, fees for use of products derived from criteria. For example, the indigenous rights [area includes] prior an amount equivalent to EO-certified petroleum or gas, and a fee paid by auditors for using the EO logo. Companies pay for consultation [with communities about proposed oil projects]. certification. [So that companies cant exert undue pressure on How does the process work? EO], the company must contract an accredited auditor to audit Theres a performance standard for each area. Thats the the EO standard. Auditors will be accredited by an accreditaminimum, the level now defined as best practice. The company tion body independent of EO. EO only regulates the conditions can attain a higher level, better than the best practice, which or technical requirements for accreditation. EO doesnt decide [demonstrates] leadership. And finally, theres a level of innova- who can audit the standard. tion. The idea is for the standard to be implemented by the company and audited independently by outside auditors, not by us. When do you expect the certification to be up and running? Well do an initial evaluation of Pacific Rubiales against Do the requirements become more demanding over time? the standard. The next step is to make plans for the company Yes. An oil company with huge financial and human capac- to close the gaps between its current practices and compliance. ity not only must do things well, it must constantly do better. That will be followed by the first audit and the first certification. Thats what separates leaders from the rest. After three years, We expect that to occur within a year. Our plan is to have the their rating must improve. If they dont attain higher levels, they first auditor accredited by March 2013.

12

December 2012