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Ecuador: New Oil Pipeline Threatens Fragile Ecosystems and Communities from Amazon Rainforest to Pacific Coast

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Ignoring the devastating toll thirty years of reckless oil development has taken on the country of Ecuador- particularly on the Amazon and its people- the government and a consortium of multinational oil companies are poised to make the same irreversible mistake by moving ahead with a controversial new oil pipeline project known as the OCP (Oleoducto de Crudo Pesado).
The Mindo Nambillo cloud forest reserve is threatened by the new pipeline.
Photo: Amazon Watch

Financially backed by Citigroup, J.P. Morgan Chase Bank, and Deutsche Bank, the OCP consortium is comprised of Alberta Energy (Canada), Kerr McGee (USA), Occidental Petroleum (USA), AGIP (Italy), Perez Companc (Argentina), Repsol-YPF (Spain) and Techint (Argentina). The pipeline would transport heavy crude from the country's eastern rainforest region to the Pacific Coast, placing fragile ecosystems and dozens of communities along the 300-mile route in jeopardy.

The pipeline route chosen by the OCP consortium affects 11 protected areas, and cuts through the middle of the Mindo Nambillo Cloudforest Reserve and the surrounding ecologically sensitive forests. This area is home to more than 450 species of birds--46 of which are threatened by extinction --and has been designated the first "Important Bird Area"of South America by Birdlife International. The pipeline also represents a threat to the area's burgeoning ecotourism industry, which is expected to bring in $600 million over the next 20 years.

In order to fill the new pipeline, Ecuador would have to double its current oil production, setting off an unprecedented boom in new oil exploration that could lead to the irreversible loss and destruction of some the country's last remaining old growth rainforest and territories of isolated indigenous peoples. Hundreds of new oil wells and flow lines would be built from existing oil concessions along with facilities necessary to process and refine the heavy crude for transport across the country. These activities threaten protected areas such as Yasuni National Park, Cuyabeno Wildlife Reserve, and the Limoncocha and Panacocha Biological Reserves. This project would also fuel the search for additional oil reserves covering 2.4 million hectares of frontier forest, the majority of which falls on the ancestral territories of Achuar, Shuar, Huaorani, Quichua, Shiwiar, and Zapara indigenous communities. Many of these communities have vowed to never permit oil development on their land.

On April 11, 2001, days before the Environmental Impact Study for the OCP was to be delivered to the Ministry of Energy and Mines, concerned Ecuadorians rallied outside Congress in Quito, waving signs reading: "We want clean water, not dirty money" and "Stop the deceit! Our Mindo is not for sale!" Photo: Amazon Watch

A dramatic increase in oil production of this magnitude also threatens communities who live along side the country's principle oil refineries in the coastal province of Esmeraldas. These communities, the majority of which are Afro-Ecuadorian, have some of the highest rates of cancers, respiratory, skin, and stomach ailments in all of Ecuador as a result of constant air, water, and soil contamination from the adjacent refineries.

Prominent Ecuadorian and international environmental and human rights organizations are calling for the cancellation of the OCP project and a moratorium on all new oil exploration in the country's Amazon region. CONAIE, the powerful national indigenous organization whose nonviolent uprisings have led to the ousting of two presidents in the last five years, is joining environmental groups and local communities in filing for a legal injunction in the coming weeks to void the OCP contract with the government.

The Ecuadorian government, the OCP consortium, and the financiers have failed to fully assess or disclose the long-term impacts of the new OCP pipeline on ecologically and culturally sensitive areas in the Amazon region or the coast. The government is attempting to silence all public debate on these concerns by closing the public review process a mere three weeks after the release of the 1,500-page Environmental Impact Assessment and pushing ahead with the licensing of the project by early June. Construction is set to begin in six weeks.

Ecuador's oil exports are primarily destined for consumption in the United States, particularly in California. Not only does this pipeline threaten fragile areas and local communities, it further increases our reliance on oil - the main fossil fuel responsible for climate change. We must call on the involved financial institutions to stop bankrolling destruction of the Amazon and environmental injustice and urge them to invest in renewable energy alternatives not Amazon crude!

What You Can Do

THE TIME FOR ACTION IS NOW! Reflecting growing public and investor concern over the financing of environmentally and socially destructive projects, corporations, banks, institutional investors and investment funds have begun implementing investment screens and guidelines. The OCP pipeline is exemplary of the type of unsound project that would be excluded in most environmental and social investment screens. Let's use our voice in defense of environmental and social justice and demand that all financial supporters of the OCP project:

1) Stop disbursement of further loans to the OCP Ltd. consortium; and;

2) Stop any further financing for oil exploration and production activities in the Ecuadorian Amazon.

PLEASE CALL, EMAIL OR WRITE TODAY! Contact information is listed below this sample letter. We also recommend Cc-ing the President of Ecuador and the involved oil companies in your home country.

Sample Letter to Citigroup, JP Morgan Chase, and Deutsche Bank

Dear Sirs,

I am writing to urge you to take immediate steps in preventing a tragedy in the making--one that your companies have the power to avert. Currently, the government and a consortium of seven international oil companies are moving ahead with a controversial new oil pipeline project known as the OCP (Oleoducto de Crudos Pesados), financed and brokered in part by JP Morgan Chase, Citigroup, and Deutsche Bank. This pipeline project places fragile ecosystems, countless endangered and threatened species, and hundreds of communities in jeopardy and could lead to irreversible destruction of Ecuador's national parks and frontier forests.

The pipeline route chosen affects eleven protected areas, and cuts through the middle of Mindo Nambillo Cloudforest Reserve and surrounding ecologically sensitive forests, an area designated as the first "Important Bird Area" of South America which contains over 450 species of birds. The pipeline will also lead to the doubling of oil production in the Ecuadorian Amazon, threatening the country's protected areas and last remaining old growth rainforest, much of which falls on the territories of several isolated indigenous communities.

Your immediate action on this issue is critical given that the Ecuadorian government closed its public review period just 27 days after the release of the 1,500-page Environmental Impact Assessment. Furthermore, neither the government nor the OCP Ltd. consortium are evaluating or disclosing the serious long-term impacts of the projects on the Ecuadorian Amazon and its people.

Ecuador is experiencing the highest rate of deforestation in the Amazon Basin and indigenous communities are suffering from the devastating environmental and social impacts of thirty years of irresponsible oil development. What steps are your banks taking to ensure that loans to the OCP Consortium don' t end up financing the permanent loss of critical rainforest ecosystems and threatening the survival of indigenous peoples?

I urge you to end all loan disbursement to the OCP project and stop financing oil exploration and production in the Ecuadorian Amazon.


[your name and address]

Send your letters to:


Sandy Weill
Citigroup Center
153 East 53rd St. New York, NY 10043
Phone: 1-800-950-5114
Fax: 605-357-2073 (customer service)
Email: chris.beale@citicorp.com
(Global Head of Project Finance)
General Switchboard
Citigroup 1-800-756-7047

Investor relations is 1-888-250-3985 then dial 0 to get a human

Mark Rogers
Director of Public Affairs

Investor Relations
153 East 53rd Street
New York, NY 10043
Phone: (212) 559-1000
Fax: (212) 816-8913
Email: investorrelations@citi.com

JP Morgan Chase
William B. Harrison, Jr.
Chairman and Chief Executive Officer
270 Park Avenue
New York, NY 10017-2070
Phone: 212-270-6000
Fax: 212-270-6522
Email: todd.maclin@chase.com
(Oil & Gas), brian.oneill@chase.com (Latin America)

Deutsche Bank (Germany)
Rolf-E Breuer
Spokesman, Board of Managing Directors
Email: Rolf-E.Breuer@DB.com
Phone: 49 69 910 33012
Fax: 49 69 910 35512
Bettina Klump-Bickert
Head of Environmental Coordination
Taunusanlage 12
60325 Frankfurt
Phone: 069 / 910 - 35893
Email: bettina.klump-bickert@db.com

Deutsche Bank (New York)
Phone: 212-469-8000
Sr. Gustavo Noboa
Sr. Presidente de la República del Ecuador
fax 593 2 580735
Email despresi@ec-gov.net

OCP Consortium Members:

Occidental Petroleum Corporation
Dr. Ray R. Irani
Chairman and Chief Executive Officer
10889 Wilshire Boulevard
Los Angeles, California 90024-4201
Tel: 310-208-8800
Email: +Los_Angeles-Communications@oxy.com

Alberta Energy Company Ltd.
Gwyn Morgan
President & Chief Executive Officer
#3900, 421 - 7 Avenue S.W.
Calgary, Alberta
Canada T2P 4K9
Phone: (403) 266-8111
Fax: (403) 266-8154
Email: BrianFerguson@aec.ca (Corporate Relations)

Kerr-McGee Corporation
Luke R. Corbett
Chairman of the Board and Chief Executive
P.O. Box 25861
Oklahoma City, OK 73125
Phone: (405) 270-3125
Fax: (405) 270-3609
Email: webmaster@kmg.com

OCP Ltd.
Hernan Lara
Avenida Amazonas y Naciones Unidas
Edificio Banco la Previsora, Torre A
Oficina 602 Quito, Ecuador

Alfonso Cortina
Presidente Ejecutivo
Paseo de la Castellana
278-28046, Madrid
Phone: 900 100 100 - Información al Accionista
Jbaezal@repsol-ypf.com (Calidad & Ambiente)

Organización Techint
Roberto Rocca
Avenida Leandro N. Alem 1067, P° 30
1001 Buenos Aires
Fax: 43182292 (Fax de Direccion Central de Calidad, Ambiente y Tecnologia)
Email: jlt@tearg.com.ar (Calidad, Ambiente & Tecnologia)

Agip Petroluem
Gian Maria Gros-Pietro
Piazzale Enrico Mattei
1-00144 Roma Italy
Phone: 0039-6-59821
Email: agippetroli@agippetroli.eni.it

Perez Companc S.A.
Oscar A. Vicente
Chief Executive Officer
Maipú 1, piso 22
1599 - Buenos Aires

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