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Pollution - Justice

Indigenous Peruvians say 'Dutch' oil firm polluted Amazon while avoiding taxes

An aerial view of the Mipaya gas exploration camp, run by Pluspetrol, which is part of the Camisea project in the Amazon jungle near Cuzco, 470 kilometers east of Lima, on May 18, 2011.
An aerial view of the Mipaya gas exploration camp, run by Pluspetrol, which is part of the Camisea project in the Amazon jungle near Cuzco, 470 kilometers east of Lima, on May 18, 2011. AFP/CRIS BOURONCLE

Indigenous Peruvians whose home has been contaminated by decades of oil extraction in the Amazon are appealing to Dutch authorities to hold accountable a company they say caused devastating pollution in the rainforest while using legal loopholes to avoid paying taxes to the Peruvian state.

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A delegation of four local communities, supported by NGOs, on Wednesday filed a complaint in The Hague against the oil multinational Pluspetrol, which was founded in Argentina but is now based in the Netherlands via a “letterbox” office with one employee.

Lodged with the OECD’s National Contact Point in the Netherlands, the complaint alleges that Pluspetrol violated the global trade body’s guidelines on human rights, the environment, transparency and the fair payment of tax.

It asks that Pluspetrol agree to clean up the pollution caused by billions of barrels of dumped toxic waste and oil spills that have contaminated a remote corner of the jungle, and that the company – whose contract ended in 2015 – pay its taxes.

“The company has a long history of failing to comply with environmental standards and of contesting sanctions and corrective measures ordered by Peruvian environment agencies,” says Yaizha Campanario of non-profit Peru Equidad, one of eight organisations behind the complaint.

Oil contamination in Peruvian Amazon

“These indigenous communities have had to seek justice in the Netherlands, outside of a court of law, because the Peruvian state has been unable to guarantee that Pluspetrol will meet its obligations to the Peruvian people.”

Between 2000 and 2015, Pluspetrol operated a concession called Lot 1AB (since renamed Lot 192). Over those 15 years, they are alleged to have polluted and destroyed almost 2,000 different sites through at least 116 oil spills – due to poorly maintained pipeline infrastructure – and the dumping of production waters.

With contaminated rivers, lagoons and soils, Campanario told RFI the impacts of Pluspetrol’s activities on the local Achuar, Quechua, Kukama and Kichwa communities have been devastating, with land titles rights blocked and children’s futures destroyed.

“A toxicological study in 2016 showed that a lot of the population had high levels of heavy metals in their blood: arsenic, lead, cadmium,” she says, adding their exposure to the chemicals had been elevated because of their cultural closeness to the land.

Interview: Yaizha Campanario, Peru Equidad

“Indigenous communities in the Amazon forest are hunters and gatherers and they have small-scale agriculture…now there are no more fish in the lagoons, fish in the rivers are contaminated and so are the animals.”

The case cites a 2017 study that found Pluspetrol’s dumping practices had caused widespread contamination of natural water courses and high downstream concentrations of heavy metals affecting a population of 25,000 people.

While environmental and human rights abuses are at the heart of the complaint, another main thrust centres on the allegation that Pluspetrol has avoided paying taxes by weaving a complex network of “letterbox” holding companies set up in tax havens.

“They only have one registered employee in the Netherlands but no further economic activity,” explains Joseph Wilde, who specialises in corporate responsibility issues at the independent NGO the Centre for Research on Multinational Corporations, which is also supporting the complaint.

“[They also have] a whole range of empty letterbox companies in Luxembourg and Cayman Islands and secrecy and tax paradises around the world…set up in constructions that are very frequently used to avoid paying taxes in the countries in which the actual economic activity is happening.”

Interview: Joseph Wilde, Centre for Research on Multinational Corporations

While tax avoidance – using legal tricks to reduce a company’s tax base – is not against the law, Wilde says it is a breach of OECD guidelines for multinational enterprises, the global standard of responsible business conduct.

“The Dutch government, because it is a signatory to these guidelines, expects companies headquartered in the Netherlands not to engage in unethical or immoral tax avoidance practices,” Wilde says.

If the Dutch National Contact Point accepts the complaint is valid, it may act as a mediator between Pluspetrol and the Peruvian communities. If a resolution is not found, the body is expected to issue a public statement determining whether Pluspetrol is guilty of violating OECD guidelines.

For its part, Pluspetrol says it has worked to reduce the risk of pollution through waste management" and cleaning programs to "minimise the environmental impacts" of its operations in Peru.

RFI has contacted Pluspetrol’s office in the Netherlands for reaction to the allegation of tax avoidance.

 

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