CHAPTER 4
Transient Triggers of Local Conflicts

THIS CHAPTER ANALYZES the dynamics of a particular set of stressors that affect the intensity or the duration of conflicts. These conflict triggers are normally restricted to the physical region where the oil or gas is being developed and usually involve the stakeholders in the oil project. If left unattended these stressors may turn into important destabilizing forces. But in important ways they are different from the structural flaws described in chapter 3. These types of subnational triggers of local oil conflicts may be easier to address if tackled promptly, because they are more transitory and less embedded in the system. Sometimes, simple changes in the political or institutional context, or a modified approach to the dispute, may minimize their intensity.

Oil conflicts develop around the presence or absence of a variety of factors that may contribute to aggravating the dispute. Because local conflicts are very specific to the region or to the stakeholders involved, there is no one-size-fits-all solution. But local conflicts do share some common stress elements, which may or may not be all present at the same time but which do not require timely attention in order to reduce their intensity. Sometimes it is the absence of the fundamentals needed to resolve a conflict—such as proper institutional mediation—that prevents the prompt resolution of the dispute and becomes itself a stress factor.

Our research has identified four common local stressors of oil conflicts in the three countries examined: the level of radicalization or cohesion of the organizations involved in the dispute, the extent and nature of civil society involvement, the availability and efficiency of institutional mediation, and the strategies of oil companies for incorporating safeguards or for delivering services to the affected communities. Colombia presents a unique case due to the active guerrilla movement in that country, which is in itself an additional stressor, adding another dimension to oil-related conflict. For that reason, the case of Colombia is analyzed separately at the end of this chapter.

THE LEVEL OF POLARIZATION OR COHESION OF THE ORGANIZATIONS INVOLVED

Our research shows that a unified Indigenous voice usually allows for a faster resolution of oil or gas conflicts. When Indigenous groups embrace a common cause and stand united behind it, they are more likely to be able to use the prevailing sociopolitical climate to their advantage and to engage in fruitful negotiations that result in long-term gains. However, when Indigenous federations or NGOs that represent them in the conflict are internally fragmented, the disputes tend to take much longer to resolve and can drag on for decades. The history of the development of Ecuador’s Indigenous movement and the way in which it has coped with local oil conflicts is a good example of how an organized and unified alliance behind an Indigenous cause can achieve relatively rapid and substantial gains or solutions. By contrast, the lack of a unified Indigenous voice in Peru has led to fragmentation and increased conflict among Indigenous communities when they have been confronted with the threat of hydrocarbons developments in their territories.

Cohesion versus Division

In 1986 Indigenous groups from Ecuador’s three main geographic areas—the coast, the mountains, and the Amazon—came together through the Confederación Kichwa del Ecuador (ECUARUNARI) and the Confederación de las Nacionalidades Indígenas de la Amazonia Ecuatoriana (CONFENIAIE) to create the country’s largest indigenous umbrella organization, the Confederación de Nacionalidades Indígenas del Ecuador (CONAIE) (De la Torre 2006). Some researchers have argued that the single most important factor that led to the expansion of the CONAIE was increased oil development in the Amazon jungle, because many of the struggles the organization was involved in related to the negative externalities of oil exploration and production there (Sawyer 2004, 98–209).

Before the 1990s the environmental and social track record of oil companies went generally unnoticed in Latin America, particularly in remote oil-producing areas, in spite of the fact that major oil disasters in the region had started early on, in the 1970s, when large-scale oil operations began in the Amazon. Texaco drilled the first oil well in the Ecuadorean Amazon in 1967 in Lago Agrio, in the province of Sucumbios. The resulting contamination became a cause célèbre only decades later, mainly due to a lengthy—twenty year—ongoing lawsuit against Chevron (which later acquired Texaco). The company was charged a US$8.6 billion fine by an Ecuadorean court in February 2011 (BBC News 2011). Similarly, Occidental Petroleum started to drill for oil in the Peruvian Amazon province of Loreto in 1972. Evidence of social and environmental contamination in that area was found at the beginning of the 1990s but was not made public until several years later. It was not until 2006, when the Dorissa Accords were signed, that Pluspetrol, the company operating in the area, agreed to some of the demands of the local Indigenous population and to fund social projects for the affected population.

In Ecuador, oil exploration resumed at the end of the 1960s with the arrival of Texaco, after an interval of more than a decade of almost no significant activity. The oil boom that ensued in the 1970s and 1980s in the Amazon coincided with a growing drive, throughout the country and internationally, for recognition of an Indigenous voice and culture. An increasing focus on education and institutional development through capacity-building efforts led by international cooperation agencies, national and international NGOS, the government, and religious organizations produced a well-prepared and more aware Indigenous elite that emerged at the forefront of the active Indigenous movements of the 1990s. It was around that time that Ecuador’s Indigenous Peoples began to acquire a larger presence in national politics by adopting the idea of a renewed pro-Indian movement (neo-indigenismo in Spanish). Rather than push for the integration and assimilation of Indigenous groups in society, this view promoted accepting the distinctiveness of their culture (Lara 2007, 175–206). This approach was largely supported by an international movement for the recognition and preservation of the Indigenous culture promoted by multilateral organizations—such as the World Bank, the Organization of American States, and the United Nations—through the adoption of safeguard policies for the protection of Indigenous populations.

Increased Indigenous activism coincided with the dissemination of public information in Ecuador—and also abroad—about the negative effects of oil developments in that country, particularly in the area developed by Texaco in Lago Agrio.¹ Indigenous groups used this momentum to their advantage and started to mobilize against oil developments. This process set the stage for the subsequent proliferation of oil conflicts, as Indigenous populations challenged oil projects by actively opposing them in their territories. The Indigenous cause was particularly successful in the conflict around oil developments in Block 10, located in the province of Pastaza. There, following a process of Indigenous empowerment, local communities represented by the Organización de los Pueblos Indígenas de Pastaza (OPIP) succeeded in obtaining a moratorium on oil exploration in their territories until land rights were officially recognized for Indigenous groups living in the area.

This unprecedented victory for the Indigenous movement came as a result of intense activism behind a common cause: the acquisition of land rights. Oil had become a tool toward that goal. It was around that time, in March 1990, that the largest Indigenous mobilization so far took place in Ecuador, with repercussions throughout the continent. Nationwide demonstrations supported by the CONAIE succeeded in elevating the Indigenous movement, which managed to make unprecedented gains in Ecuador. Indigenous leaders for the first time acquired national political status and accomplished their goal of turning the country into a multicultural state, an attribute that was enshrined in the 1998 Constitution. Another constitutional amendment that resulted from the 1990 Indigenous mobilization was the requirement that local communities be consulted before the development of any extractive industry activity in their territory. This concept became controversial due to differences in the interpretation of “consultation.” Yet one more victory for the Indigenous movement in Ecuador was the abolition of the Agrarian Reform of 1964. Indigenous groups had opposed the reform for decades because they blamed it for legalizing the arbitrary seizure of their lands and facilitating the arrival of outsiders to their territories (Lara 2007).

This dynamic and organized Indigenous movement achieved unprecedented political activism and strength, so much so that it contributed to the ousting of two presidents, Abdala Bucaram in 1996 and Jamil Mahuad in 2000. The CONAIE was instrumental in the failed coup of 2000 against President Mahuad, in alliance with the military (Martinez Novo 2009). Most important for the Indigenous movement, CONAIE played a fundamental role in the 2002 electoral victory of President Lucio Gutierrez, who for the first time brought in (three) Indigenous ministers to his cabinet. Subsequent disagreements with the government resulted in the prompt dismissal of the Indigenous cabinet members, just months after taking office. The Indigenous movement became again opposi-tional, but this time with less force, as it started to lose its previous cohesiveness.

Unlike in Ecuador, Indigenous groups in Peru failed to come together from an early stage, most likely as a consequence of the political process that country was undergoing in the 1980s and the beginning of the 1990s. At that time Peru was immersed in a violent war against the Shining Path guerrilla movement. The armed conflict made it dangerous for Indigenous Peoples to protest or to gather in organized groups for fear of repression. In Ecuador, by contrast, indigenous protests were met with efforts at solving differences through dialogue rather than repression, which is part of the reason the Indigenous movement there was stronger (De la Torre 2006). It was not until almost a decade later that Amazon Indigenous groups in Peru became more vocal.

The majority of the cases we analyzed in Peru involved fragmented Indigenous organizations, a situation that delayed considerably the resolution of the hydrocarbons disputes that started to multiply after 2000. Our research found only one example in Peru of a relatively united Indigenous front, in relation to the conflict in Block 1AB-8. At one point, this dispute showed positive resolution, with nationwide effects. In Block 1AB-8a the unified northern Achuar Indigenous group achieved something thought unachievable in Peru: they managed to get the oil company Pluspetrol to agree to reinject contaminated waters, even though the law in Peru stipulated the need for such actions only for new oil contracts signed after 2005. The license for Block 1AB-8 had been signed in the 1970s, so Pluspetrol was under no legal obligation to reinject the waters, but the company gave in to unified Indigenous demands, including funding social projects for the affected population (Chiriff 2010).

The rest of the case studies analyzed in Peru showed a fragmented national Indigenous movement that resulted in conflict at the local level, when communities failed to show cohesion when confronted with the arrival of oil companies to their territories. This is best exemplified by the case of Peru’s northern Amazon Block 64, which stretches through Indigenous Achuar communities that live in the Pastaza and Morona river basin. The initial concession for the area was granted to ARCO in 1995 and then transferred to Occidental Petroleum (Oxy). Both companies were forced to declare force majeure due to the hostility of the local Indigenous communities to their operations. Like in Ecuador, communities living around Block 64 were initially united in their opposition to oil operations, so much so that their consistent resistance resulted in Oxy leaving in 2007. The company that acquired Oxy’s operations at that point, the Canadian Talisman, also inherited the conflict. In an effort to reduce the level of hostilities from local communities the new company engaged in the laborious job of meeting with each and every one of the Indigenous families living within its licensed area to negotiate their individual acceptance of its operations.

By the time Talisman arrived, the Indigenous communities of the area had seen their previously united front collapse, and the company’s negotiating technique of acquiring one-on-one family approvals for its operations created new tensions and divisions among them. In the end, Talisman succeeded in getting seven Achuar families on its side, and by 2011 it was in negotiations with another five. The Achuar that approved of the oil operations hoped these would bring jobs that would in time help them improve their living conditions. But there were still some forty more families opposed to the oil project. Also unhappy were communities living downriver, who complained that polluted water from oil operations trickled down to where they lived. This added additional complexity to the conflict. Because of these overwhelming community divisions, Talisman was careful to make sure that new oil developments were located in the areas close to the communities that had agreed to the project.²

The Achuar were now openly divided vis-à-vis oil developments in their territory, and in May 2009 those living in the area of Block 64 nearly came to a confrontation. A group approached Talisman’s headquarters and demanded to speak with a company representative to communicate their desire that the company leave. The group later claimed to have been confronted by other armed Achuars who supported company operations in the area.

We are all Achuar, we are all brothers, but we are not well among each other now, we are restless, we don’t talk well to each other. Before, we were happy people. Today some of our brothers don’t welcome us because we are against the company. … What happened to us? We need to come back together again.³

The Peruvian ombudsman had to intervene and succeeded in getting a commitment from Indigenous representatives from the different factions to resolve their differences with Talisman through direct dialogue, rather than confrontation (La República 2009b). After that incident, the Achuar from the Pastaza and Morona river basins, with support from international NGOS, sent common representatives to a Talisman shareholder meeting in Canada in May 2010 to demand that the company abandon their territory. Talisman responded that it had restricted its operations to the areas upriver where local families had agreed to the oil project.

Local conflict is bound to continue in Block 64 and may expand beyond the project’s borders, given its significance for Peru’s economy. Block 64 is particularly important for Peru because it is one of the few areas where the intensive exploratory efforts of the past years showed considerable positive results. For Talisman, Block 64 represented the best oil find of the five oil concessions the company held in Peru. Adjacent Block 101, also operated by Talisman, was also conflictive for similar reasons. The company set up its operations headquarters there between two communities—Soplin and Sabaloyacu—which until then shared the same territory. A conflict similar to that of Block 64 developed: Sabaloyacu agreed to allow Talisman in its territory, so the company set camp closer to this community, but members of Soplin were not happy. The two communities were now physically separated by company installations and philosophically opposed with regard to oil operations in their territory (Indigenous Peoples 2010). Talisman withdrew its operations from Peru at the end of 2012, after eight years (Reuters 2012).

Links with Umbrella Organizations

Communities affected by hydrocarbons developments are generally represented by grassroots organizations that operate in the remote territories where they live, close to the oil project. Sometimes, the communication channels between these grassroots organizations and their national counterparts are not very fluid, perhaps simply because of the distance between them. The end result is that often deals are made locally, without the knowledge or support of the umbrella organizations, whose leaders at the time may be more focused on building political alliances in the capital city or on raising international funds to support the Indigenous cause.

Local community leaders tend to understand the day-to-day problems of their members who live close to the oil or gas project. For that reason they are better placed for making concrete demands at the negotiating table with companies or governments, such as improving basic services or building much-needed infrastructure. The more grandiose goals of achieving political Indigenous participation at the national level or institutionalizing the rights of communities through legislation are normally sought by the more politicized national umbrella organizations.

When local and national organizations work in tandem, the results can be very positive. At the start of the conflict in Ecuador’s Block 10, the Indigenous movement showed a high level of organization and professionalism in putting their demands forward and in keeping open communication channels with a large network of grassroots community organizations. It was to a large extent due to that outstanding structural organization that the historical Sarayaku Agreements were signed in 1989 between the Indigenous federations and the oil company. Following the agreements, and after some Block 10 communities succeeded in legalizing their territories in 1992, the regional Indigenous organization OPIP presented the government with an Integral Development Plan that included specific economic development goals for the area. The plan was the result of coordinated work between grassroots and umbrella organizations that showed a high level of cohesion throughout the Indigenous network. This process showed unprecedented nationwide gains for the Indigenous movement, including passage of new regulations on oil activities. The local population of Villano also benefited tremendously by receiving direct attention to their grievances, as well as a number of titles to their lands.

Unfortunately, in Ecuador the Indigenous cohesion that had been so strong at the start of the 1990s died down toward the end of that decade, partly due to disagreements between local and umbrella organizations regarding representation. By 1998 the Indigenous movement radicalized its actions, occupying oil installations and kidnapping company officials. This switch from peaceful camaraderie to radical action was sparked by frustration among local groups that felt their umbrella organizations failed to defend the rights of those directly affected by oil operations in the field. The era of organized negotiations led by national Indigenous associations had given way to less organized, isolated, and violent actions sponsored by community organizations at the grassroots level. These actions, which were not always supported by umbrella organizations, evidenced division and a struggle for control within the Indigenous movement and ultimately doomed their efforts. The adoption of violent practices incorporated a new level of complexity to the original oil dispute by introducing a new actor, the military, which began to take an active role in imposing oil operations by force.

Fractures or differences of opinion within the Indigenous movement with regard to oil operations are today the rule rather than the exception. One of the most common internal community conflicts concerns community leaders, who represent them in negotiations with companies, governments, and civil organizations. Many times these leaders do not seem to adequately reflect the wishes of the community, or sometimes they are perceived as pursuing their own personal goals instead of those of the majority. Often, leaders are removed by the communities they represent for this reason and are accused of corruption. Some leaders have been accused of living comfortable lives in the capital cities, disconnected from the daily reality of those for whom they are supposed to speak.

Our analysis shows repeated instances of differences among Indigenous fed erations that represent local communities from a specific area. Where there is a strong presence of international NGOS, it is common for Indigenous federations to compete with one another for funds. Differences among federations make it difficult for oil companies or the government to find credible representative leaders to negotiate with. When this occurs, companies tend to bypass the federations or the Indigenous leaders and adopt the more laborious family-by-family negotiating method, as happened in Peru’s Blocks 64 and 101. This less sophisticated negotiating mechanism is very controversial, because it creates conflicts within the community, as some families adopt a favorable position toward the company, while others take the opposite view. Indigenous leaders tend to blame companies for divisions within their organizations or communities. But in truth, it is difficult to measure the extent of cohesion the Indigenous movement had prior to the oil project, and the extent to which divisions came after. What is obvious is that communities unified behind a cause tend to achieve more positive results and experience less conflict than those with a divided front. New conflict stressors are bound to appear when communities lack cohesion or show fractures.

History of Previous Grievances and Noncompliance

Evidence of a previous history of oil grievances or instances when commitments by the parties in a conflict were not honored usually contribute to promoting a united front among Indigenous groups against hydrocarbons development. These two stressors were common to most oil-related conflicts analyzed in this book. Past unresolved or traumatic oil conflicts contribute to building a negative perception of natural resource development. These perceptions in turn set the stage for future disputes when a new oil project materializes. When Indigenous communities are involved, natural resource conflicts may frequently be a consequence of future perceptions. That is, communities may be concerned about the potential threats an oil or gas project may entail rather than with current concrete issues.

In many cases a community may reject a new natural resource project because of memories of past contamination or unfulfilled promises in its territory. Growing communication and solidarity among Indigenous groups throughout the region in the past decades have enabled an exchange of information about past negative externalities linked to oil elsewhere. Indigenous Peoples in Peru know about the seemingly unending legal disputes their counterparts in Ecuador have had with Chevron-Texaco over contamination in the Pastaza province of that country.

This knowledge of past problems, either at home or elsewhere, imprints negative memories and becomes a primary stressor. Communities reject the mere idea of future oil projects in their territory even before they begin or make tougher demands for safeguards and compensation, for fear they may suffer the same fate as others. Sometimes communities may resort to protests or violent actions against a planned oil project as a preventive measure, to avert similar negative environmental or social externalities as in the past. In these cases the perception of future danger, rather than actual dangers, trigger conflicts again. But in these instances that perception is based on empirical data.

Perceptions of threats from an oil or gas project are likely to be influenced by the cultural, historical, or social characteristics of the affected community. A specific tree may have particular healing values for one community; a waterfall may represent evil to another. An Indigenous community will most likely oppose an oil or gas development, even before it starts, if they perceive it could become a threat to the symbolic significance those natural elements have for them.

In Peru the Indigenous group Machiguenga strongly opposed, and eventually blocked, construction of a gas pipeline through the Megantoni National Sanctuary, located in the Cusco department of the province of La Convención in the Echarate district (Martel 2010). The Amazonian sanctuary is symbolically important for the Machiguenga. The best-known area of the sanctuary is the Pongo de Mainiquie (Gorge of the Bears, in the Indigenous Quechua language), a canyon that encompasses various waterfalls that flow into the Urubamba River. The Pongo de Mainiquie represents the origins of their culture and hence has extraordinary significance for them. The magical meaning the Pongo de Mainiquie has for the Machiguengas is magnificently depicted by Peruvian writer Mario Vargas Llosa:

The bottom of the river in the Gran Pongo is strewn with our corpses. There must be a very great number of them. There they were breathed forth and there they no doubt return to die. That’s where they must be, far below the surface, hearing the water moan as it crashes against the stones and dashes against the sharp rocks. That’s why there are no turtles above the Pongo, in the mountain reaches. They’re good swimmers, but even so, not one of them has ever been able to swim against the current in those waters. The ones that tried drowned. They, too, must be at the bottom now, hearing the shudders of the world above. That’s where we Machiguengas started and that’s where we’ll end it seems. In the Gran Pongo. (1989, 26)

Once oil work starts in a territory, affected communities experience change: they are confronted with new noises; local rivers carry increased traffic when company boats bring materials and workers in and out; different faces, usually foreigners, walk around the area; and their drinking water from the river sometimes becomes contaminated. Indigenous communities factor in these changes to their lifestyle as costs during compensation negotiations, even before the hydrocarbons project starts in their territory. Nowadays they increasingly include in those costs evidence of historical contamination in locations nearby or in neighboring countries. The closer the community is, either geographically or emotionally, to areas where there is past evidence of oil contamination, the more they will factor in that knowledge in their cost-benefit analyses of potential future oil effects where they live. Indigenous communities will also put a price on possible broken commitments, based on their own experience or on that of Indigenous groups elsewhere.

Many times, unfulfilled agreements or promises lead to conflict or to a delayed resolution of a dispute, as the cases analyzed in this book exemplify. One instance is in relation to the 2006 Dorissa Accords to solve the conflict in Block 1AB, in Peru’s northern Amazon province of Loreto. The Dorissa Accords were signed between Pluspetrol, the federal and regional government, the affected Indigenous groups, and the ombudsman. The agreements called for the creation of a multisector commission, with all stakeholders represented, to study, analyze, and propose mechanisms to improve the social and environmental effects of oil operations in the Corrientes River. This initial positive step was later overshadowed by an additional stressor inadvertently brought about by the Dorissa Accords themselves: the lack of compliance to commitments on the part of the regional government. When the government repeatedly failed to comply with its part of the agreements, various protests and violent actions by the Achuar followed, and the intensity of the conflict escalated.

Oil company Pluspetrol complied with its share of the Dorissa Accords: to provide funds for community-development programs and environmental remediation, particularly the reinjection of contaminated waters discharged in the local Corrientes River. But the regional government failed to administer the funds correctly, and the conflict resumed when the Dorissa Accords were not fulfilled.

The Corrientes River area, site of Block 1AB, is not only home to Peru’s oldest and most productive oil operation but also the center of the longest existing conflict related to oil on Peruvian soil. As such, Block 1AB has become the main referent for social actions against hydrocarbons development in general throughout the country. Many violent protests against oil operations around the country mirrored the steps followed in Block 1AB, some with high casualties. It was in the Corrientes River that the first contaminated sites were found in the 1990s, the first health problems were detected, the first organized social opposition and violent clashes were reported, and the first attempts to find long-term solutions were made. The main grievances expressed by Indigenous communities in this area were related to the health and environmental impacts of oil extraction and the changes to their social and cultural lifestyle. Today, whenever Indigenous communities oppose oil or gas development in any other part of Peru, the main case in point supporting their opposition or demands is the contamination and life disruption that oil operations brought to their brothers and sisters in the Corrientes River.

Perhaps the main legacy of the Corrientes River conflict, which has yet to be fully resolved, is that it established protest as an effective mechanism for obtaining responses to old grievances, particularly in remote areas. Protest actions by the Achuar Indigenous groups of the Corrientes River made history because they led to the unprecedented Dorissa Accords.

Practically all the cases analyzed in this book show a history of lack of compliance with past or present agreements at some point during the development of the conflict. This is true even in the case of comprehensive, well-publicized agreements that involve the participation of the central government and sometimes a well-known mediator, such as the Dorissa Accords in Peru or the Sarayaku Agreements in Ecuador’s Block 10. Also within this category are agreements to expand the legal boundaries of the territory of the U’wa Indigenous community in Colombia. Resolution 56 passed by the Instituto Colombiano de la Reforma Agraria on August 6, 1999, increased the U’wa protected area from 151,000 to 220,275 hectares. However, the new borders excluded areas that the U’wa claimed as theirs and that were devoted to oil developments, particularly the site of the Gibraltar field. This led to violent protests in the decades-long conflict.

Noncompliance is particularly high in the hundreds of smaller agreements between companies and communities. The conflict in Block 10 in Ecuador is full of instances of noncompliance by the different parties in the various agreements signed during its long history. In this case, the threat of noncompliance even was used at different times as a bargaining tool during negotiations.

Sometimes, the existence of numerous agreements through the duration of a conflict makes an assessment of overall compliance difficult, if not impossible. There is always bound to be a clause in one accord, or a promise in another, that was not fully fulfilled, and this failure leads to conflict. In many cases, smaller agreements are verbal, which makes it even more difficult to resolve differences, and the dispute then becomes a competition to make the most convincing accusation about the other’s failure to meet nonwritten promises. A large backlog of unfulfilled agreements eventually has a cumulative effect on the local population, which feels cheated and may resort to action to express its anger. Our analysis shows that from 2000 to 2010, the arguments used by Indigenous communities for taking action against oil projects increasingly included references to past unfulfilled promises that they either suffered directly or knew about from elsewhere.

THE EXTENT AND NATURE OF CIVIL SOCIETY INVOLVEMENT

We have discussed the evolution of the Indigenous movement in the countries under consideration and how the alliances and interactions among grassroots Indigenous organizations and their umbrella federations may either contribute to conflict resolution or extend disputes. Similarly, as Indigenous activism expands, the nature of the alliances with various national and international NGOS and other organizations has a direct influence on how conflicts develop.

The mapping of civil society in relation to hydrocarbons development in Peru, Ecuador, and Colombia is very complex. Usually, grassroots organizations that represent communities at the local level are affiliated with larger umbrella groups that have a broader, national scope and agenda. Both the local and national organizations may in turn partner with other domestic and international NGOS that provide them with advocacy and technical and financial support. Local Indigenous communities seek partnerships with NGOS to help them present their demands in a structured and educated manner, to disseminate knowledge of their conflict, or to assist as a source of funding. Our analysis identifies several stress elements that can be caused by the complexities of the interrelations among civil society organizations involved in oil conflicts. These elements may get in the way of efforts to resolve hydrocarbons-related disputes.

Difficult Liaisons

Our research found at least three stress elements in relation to the involvement of NGOS in oil conflicts. These stressors sometimes turned efforts at conflict resolution into a more complex enterprise. The first stress element is related to the existence of two opposed positions within the civil society and community-based participation with regard to oil conflicts. One is the total rejection of oil or gas projects; the other is their acceptance, provided civil society is given a green light to lead capacity-building efforts with affected communities to prepare them to negotiate with oil companies. These two types of NGO approaches—combative versus conciliatory, which Fontaine (2007c, 103) characterized as “radical and progressive”—are important in understanding the dynamics of the conflicts, which may develop between two opposed organizations, or between an NGO and local communities or companies.

NGOS that fall within the more radical, combative category are often environmental organizations that reject oil or gas activities due to their negative social and environmental effects. These more extremist NGOS maintain that Indigenous communities are the best guardians of the Amazon because they are most interested in preserving it, as its conservation guarantees their own subsistence. They argue that Indigenous Peoples depend on natural resources to live, which serves to preserve not only the environment but also their collective identity. This view can explain the alliance between Indigenous and environmental NGOS. Indigenous communities hope their alliance with these NGOS will help them gain territorial recognition and increased autonomy, which environmental NGOS assume will contribute to preserving the environment.

Within the more conciliatory NGO approach to the oil industry, there usually is no outright rejection of the extractive development, provided it is environmentally and socially sustainable, and it respects the culture and customs of the communities living in the area. In this approach, NGOS recognize the important economic contribution of extractive industries in general, and oil and gas in particular, and support the adoption of an environmentally and socially sustainable agenda for these industries. The expectation among communities is that NGOS will help them negotiate with oil companies for generating much-needed jobs and guaranteeing long-deferred basic services.

Radical NGOS usually have a different modus operandi from conciliatory ones. More combative NGOS transmit their message through actions or campaigns, while conciliatory groups expand their cause through technical assistance to communities. These differences in approaches among NGOS and the mechanisms they use for expanding their actions converged in Ecuador between the mid-1990s and 2010 in one organization: Frente de Defensa de la Amazonia (FDA). This group succeeded for the first time in bringing together Ecuador’s environmental, Indigenous, union, and farmers’ movements. It provided assistance to both groups: the ones that wanted to negotiate with companies and needed technical support and those that needed guidance on how to oppose to the oil industry outright (Fontaine 2007c, 104). The most effective action of this convergence of points of view was seen in 1994 during the campaign known as Amazonía por la Vida, in opposition to Ecuador’s Seventh Oil Bidding Round, which resulted in the licensing of six blocks in the Amazon jungle. Later, differences within the Frente de Defensa about oil developments in Yasuni National Park led to its fragmentation.

When the more radical NGOS are involved, conflicts tend to be noisy. These organizations are rarely community based; rather, they typically pursue a national or sometimes an international agenda. Very often these NGOS, particularly those that have a conservationist agenda and act internationally, are not entirely representative of the viewpoint of local communities, which contributes to tension around their activities (Chapin 2004). Some authors argue that mutual mistrust with local Indigenous organizations is largely born from differences in cultural approaches, priorities, and even timing (Ross 2008, 221).

A second level of stress is linked to the scope of the NGOS involved in the dispute: whether they are national or have international influence. National and international NGOS do not always share goals or agendas. Sometimes an oil conflict may become a tool for a particular NGO to achieve a specific goal that is not necessarily related to the dispute in question. For example, a local NGO may use the conflict to acquire national or political notoriety or to gain a position abroad that may eventually open doors to international organizations or to donors. International NGOS are instrumental in attracting overseas attention to local conflicts around oil and gas developments that would otherwise go unnoticed. In Peru much of the international attention around the Camisea natural gas project came from the actions of international NGOS, which were active in scrutinizing the project from the start. The Nature Conservancy, the World Wildlife Fund for Nature, the Smithsonian Institution, and Conservation International joined Peruvian civil society during the early stages of Camisea to voice their concerns in a letter to the financing institutions of the Inter-American Development Bank and U.S. EximBank (Conservation International 2006). This gave the Camisea conflict international and national visibility from early on. By contrast, oil contamination in Peru’s northern Amazon jungle (Block 1AB-8) was made public initially by Peruvian NGOS and Indigenous federations. But these organizations lacked the muscle to expand the case both at home and abroad. It was not until many years later, when international NGOS became involved, that the Corrientes River conflict acquired national and international attention.

It is difficult to conclude whether the internationalization of a conflict contributes to solving it. The examples of Camisea in Peru, Sarayaku (Block 10) in Ecuador, and the U’wa (Block Samore) in Colombia show that early mobilization of vocal international NGOS creates incentives for governments and companies to internalize the negative externalities and attend to the grievances and demands of local communities. Furthermore, several case studies demonstrate that the contribution of civil society to ensure early involvement of the affected population—such as through the monitoring of oil activities for assessing the degree and type of effect they have on communities’ lives—may prove to be an effective conflict mitigation tool down the line. Scholars have warned, however, against building too many expectations of civil society, which is required to monitor government and company compliance alike and also to set checks on the discretionary power of elites (Carbonnier, Brugger, and Krause 2011, 247–64).

Finally, a third element adding stress to the role of NGOS in oil-related conflicts is the difficulty in finding truly representative voices among Indigenous organizations. This constitutes a major risk for NGOS, particularly the large international ones, who put much of their reputation at times in the hands of those local leaders. As mentioned earlier, Indigenous groups are often divided or suspicious of one another when confronted with oil projects. Within one region there may be a variety of points of view with regard to a particular development or to extractive industries in general. Even within one community, there are contradictory and evolving views on whether to welcome the oil project or not and on the compensation to demand in exchange. These divisions are reflected in the political or national alliances communities make, as is the case with the two grassroots federations that represent communities from the Corrientes River: Federación de Pueblos Indígenas del Bajo y Alto Corrientes (FEPIBAC) and Federación de Comunidades Nativas del Río Corrientes (FECONACO). Each of these federations is affiliated with one of two conflicting national organizations: the more conciliatory Confederación de Nacionalidades de la Amazonía Peruana (CONAP) and the combative Asociación Interétnica de Desarrollo de la Selva Peruana (AIDESEP). The inability of Indigenous groups to come to an agreement on a single local or national representative voice was a major stumbling block in solving the Corrientes River conflict throughout the history of the dispute.

Community differences may be exacerbated by the presence of NGOS with diverse agendas, which in turn contributes to aggravating the conflict. In Ecuador’s Block 24 the Sarayaku Indigenous group maintained a relatively homogenous opposition to oil developments in their territories for decades, but they were sometimes also confronted with detractors within the group. In 1999 Indigenous community members from Taisha, in the province of Morona-Santiago, attempted to reach agreements with the oil company, but they were soon reprimanded by the majority population that had been apparently rallied by radical NGOS to reject extractive activities altogether. These new divisions among local communities added a new layer to the conflict that needed to be resolved first, before tackling the underlying dispute related to the presence of oil operations in their territory.

This confusing landscape of divided communities and NGOS with different agendas makes it difficult to develop a structured and well-coordinated civil society strategy that adequately represents the interests of affected communities. Our case studies in the three countries show that the lack of a united front, not only among local communities but also within civil society, exacerbates oil-related conflicts. Companies, and sometimes governments, use these different views and disagreements among Indigenous organizations and NGOS to their own advantage, by trying to tilt the balance one way or the other.

Consultation and Participation: One Voice

For all the differences that prevent Indigenous communities and civil society organizations from coming together with a unified voice with respect to hydrocarbons developments, there is one topic they all agree on and they all invariably raise: the need to consult with local communities prior to an oil development. This is one of the most controversial issues and a major stress element in most oil-related conflicts in Latin America.

The right of Indigenous Peoples to be consulted is stated in the ILO Convention 169 that Peru signed in 1993, Colombia in 1991, and Ecuador in 1998, and by the UN Declaration on the Rights of Indigenous Peoples, of which the three countries are also signatories.⁴ Each country has developed the concept of consultation further through various legal instruments and institutional initiatives.⁵ Ecuador went as far as to include the concept of free prior informed consultation with Indigenous communities in article 57 of its National Constitution. In 2008 Colombia created, through Resolution 3598, a special working group within the Ministry of the Interior and Justice to oversee the implementation of prior consultation with Indigenous and Afro-Colombian groups in various projects. Also, the country’s Constitutional Tribunal ratified the right to consultation in several rulings throughout the years and declared itself opposed to legislation that fails to respect it. Peru’s Congress approved the Law of Previous Consultation in 2011, after a tedious consensus-building process, as stated in chapter 3.

However, in spite of these efforts, the matter of consultation in oil and gas projects continues to be controversial and the source of many conflicts. The quality and extent of the process is the subject of vehement conflict in the three countries under study in this book. All three countries implement some kind of consultation, but it is usually deemed incomplete by Indigenous Peoples and the civil society that supports them. In Ecuador a national debate on the mechanism of prior consultation when applied to water (Univision.com 2010) and mining (El Tiempo 2010) laws resulted in violent clashes in 2010. That year, the Law of Citizen Participation passed by Congress did not meet the expectations of civil society because it failed to make the process of free prior and informed consent legally binding (Diario Hoy 2010b). In Colombia there are many complaints that in spite of the existence of several legal instruments that call for prior consultation, in practice local Indigenous communities are consulted after an oil contract has already been signed.

The main sources of contention are differences in the interpretation of consultation. For Indigenous communities, consulting gives them the right to decide if an extractive project may or may not be implemented in their territory. However, the ILO Convention 169 that defines the mechanisms for consultation falls short of granting communities veto power over an extractive project. The legally binding convention encourages consent from Indigenous Peoples as a guiding principle throughout the document but does not stipulate the obligation to obtain it as a prerequisite for implementing a particular project in their territories. The UN Declaration on the Rights of Indigenous Peoples, by contrast, not only stresses the need for states to consult with Indigenous communities on issues that affect them but also emphasizes in various parts of the document that getting free, prior, and informed consent should be a requisite in certain matters.⁶ But the declaration is not binding.

Perhaps the fuzzy wording of article 6.1(a) in ILO Convention 169, which calls for the consultation process to be carried out “through appropriate procedures,” is what makes its implementation difficult, confusing, and less than satisfying for Indigenous Peoples. The vague wording likely reflects the long-term controversy around this issue, which became apparent during the process of debating the convention. Governments gradually increased their awareness and modified their approach toward Indigenous issues, although with limitations when it came to granting self-government and territorial rights.

In addition to the controversies created by the process of consultation, communities and NGOS often complain about poor participatory mechanisms. In practice, participatory activities and community-relations programs, including the process of consultation, are usually organized around the Environmental Impact Assessment (EIA), the ultimate document that guarantees a project will be environmentally and socially sound. The laws of the three countries require EIAS of oil and gas projects.⁷

The EIA has been much criticized in the three countries. Communities claim it does not truly represent their points of view and that it is biased because the responsibility for preparing the document usually rests on the company itself, which is an interested party (Gil 2009). A major grudge among communities is that they are often consulted for the first time about a particular hydrocarbons project only when the EIA is being prepared, which is after the oil or gas license has been granted.

An analysis of how the participatory mechanisms and the consultation process is implemented in Peru for the development of oil and gas projects serves to show how complex and difficult this issue can become. Of a total of 288 social conflicts reported by the Office of the Ombudsman in September 2009, 44 percent—or 126—were related to problems with the consultation process (Fundación 2010, 46). In the case of hydrocarbons activities, there are specific legal steps that need to be followed to ensure citizen participation.⁸ There are an initial participatory event (Evento Presencial) and three subsequent workshops facilitated by the Ministry of Energy and Mines and organized during the design of the EIA. These events become an exchange of information by which the local population learns from the government about plans to give out oil or gas licenses in their territory, and at the same time the local population communicates their fears and doubts.

For the government, these four participatory events fulfill the requirements of the citizen participation regulations and of the prior consultation demanded by international law (essentially the ILO 169 Convention) in the case of Indigenous communities.⁹ Local communities and the civil society, however, have a different take. They see the process as not participatory enough and argue that it merely informs them of an oil project that will be developed in their territories without giving them the option to veto it, because in most cases the license has already been granted before these workshops take place. It is common to hear from community members that by the time the company and the central government ask them what they think of the project, it is too late because the license has already been given to the company.

The circumstances that led to the bloody events in Peru’s northwestern Amazon province of Bagua in 2009 provide a good case study for analyzing the main factors that contribute to conflicts around the issue of consultation. After two months of protests by Indigenous Peoples, deadly clashes with the police resulted in dozens of dead and wounded. The motivation for the Bagua protests was a series of new presidential decrees the Indigenous population believed infringed on their rights.

The protests followed an Amazonian strike by Indigenous communities from throughout the Peruvian Amazon that unified to oppose the government decrees (Servindi 2009a). The protesters had two demands: amendments to the constitution to restore territorial rights they had lost in 1993 and the proper use of free, prior, and informed consent, as expressed by the ILO Convention 169. For them, this consent meant the ability to accept or reject an oil project in their territory, although the ILO Convention 169 does not specifically grant this right.

The bloodshed of the Bagua events served to open up a national debate about the consultation process that ended in an initial consultation bill passed in May 2010. Designed after months of negotiations between opposed parties, with the mediation of the ombudsman, the bill called for mandatory consultation with communities about development projects that affect them (Lizarzaburu 2010). But the bill was revised by President Alan García, who argued that if no consensus was reached during the consultation process, the state—and not local Indigenous communities—would have the final word. This move effectively took away from Indigenous communities the power to veto hydrocarbons projects in their territories. The Law of Previous Consultation was finally approved by Congress in 2011 but is still widely opposed by Indigenous groups.

Continued opposition to the Law of Previous Consultation will most likely impede its successful application; for the law to be effective it needs approval by popular consensus lest it be voided by the same imperfections it is trying to correct. The debate on the law placed Peru in a tight spot: opposition to the law could lead to outright opposition to extractive industries in general in the future, which could in turn jeopardize the country’s economic growth potential.

This example shows the tensions that prevail around this issue, mainly born from different opinions on the extent of the consultation process. In short, there are extreme and opposing views of the meaning of consultation, and legal interpretations that could help to shed some light on the controversy are often vague. In the view of Indigenous communities and civil society, the process of consultation should introduce the notion of free and prior informed consent. By this they understand that the following three conditions should be met: consultations should take place prior to the signing of an oil contract, or before even considering signing one; the Indigenous communities should be provided with all the details of the project in a timely manner; and, most important, communities should have a right to veto the project. This position has been greatly championed by the UN Permanent Forum on Indigenous Issues but highly contested by governments.

In some cases, governments see a consultation law that grants the power of veto to a minority group as detrimental to the country’s sovereignty. According to this view, such a law would be a major breach of the nation-state principle, which maintains that the wealth and natural resources of a country should benefit all citizens and thus cannot be claimed by a minority group within the population. This argument was expressed in the observations to the consultation law that the government of Peru presented in 2010:

It is necessary for the bill to explicitly establish that the result of the consultation process does not limit, suspend or prohibit the State from adopting decisions aimed at protecting and guaranteeing the general interest of the Nation, which should be on top of any other interest. This is in view of the fact that the [ILO] Convention 169 does not grant Indigenous Populations any privilege over other members of the Nation. (Government Observations 2010)

Tensions and controversy about the nature and quality of the consultation process exist in practically every case study analyzed in this book. Our analysis shows that taking minor steps to improve the consultation mechanism, such as reinforcing transparency and participation before the start of the hydrocarbons project, can go a long way in mitigating the risk of conflicts down the line. This is true even when governments do not recognize communities’ power of veto. But a permanent solution to the controversy surrounding consultation in relation to oil projects will most likely not happen any time soon in Latin America, because regardless of whether the local community may or may not have veto power over a project, as explained in chapter 3, it is the state that holds the ultimate constitutional prerogative on when, how, and if to develop subsoil resources.

AVAILABILITY AND EFFICIENCY OF INSTITUTIONAL MEDIATION

Well-designed and effectively applied mediation by the central government is key to reducing conflicts. When a conflict arises between an Indigenous community and a company, both sides normally try to find solutions between themselves first, without involving third parties. If these efforts fail, the community often demands the intervention of the government. In fact, even when the bilateral negotiations do end up in an agreement, Indigenous communities many times demand some kind of government validation, as a way of guaranteeing that the parties will commit to their promises. If there is no such government response, the process is usually seen as lacking institutional grounding, and the risk of open conflict is intensified. In most cases of successful resolution, the institutionalization of the conflict contributes to reducing its intensity, at least for some time, while the actors involved negotiate or reframe their demands and actions.

The Negative Example of Ecuador’s Block 10

The long history of conflict in Ecuador’s Block 10 illustrates how the absence of a solid and well-thought-out central government mediation strategy during the initial phases of the project resulted in the loss of trust in the authorities and in more conflict. Block 10 spreads over a roughly five-hundred-thousand-acre zone inhabited by seventeen Indigenous communities. State presence in the area has been historically minimal, which created an institutional vacuum that was partially filled by the oil operators (Torres Dávila 2005, 31–38). Disputes in Block 10 continued for more than two decades and went through various stages of confrontation, negotiation, agreements, and disagreements, but with little solid government involvement.

The initial phase of the conflict in Block 10—between 1992 and 1998—was marked by an important mobilization of the Indigenous movement. During this first part of the conflict, blanket opposition to oil developments in the area by OPIP resulted in direct clashes with oil company ARCO. An alliance between local Indigenous organizations and international NGOS that acted as mediators led to the signing of agreements in Plano, Texas, to reduce tensions. The agreements involved all the main stakeholders: the oil company, local organizations, and the government. But the initial equilibrium eventually failed because the agreements were never implemented, and conflict erupted again. The involvement of the government in this phase of the conflict was limited to being a mere signatory to the Plano Agreements.

The second phase of the conflict—1998–2002—was marked by the departure of ARCO, whose operations were taken over in 2000 by its partner in the consortium, AGIP, amid a serious political and economic crisis in the country. At this time, the conflict was marked by a series of individual agreements between AGIP and the communities directly affected by its oil operations, with little government participation. There started to be divisions among Indigenous organizations and between the communities they represented. These divisions, in turn, generated an overall uneasiness that was further exacerbated by AGIP’s failure to assume its share of responsibility for the effect of its activities in the area. In 2002 the Indigenous federations presented an integral regional development plan that was to be funded by AGIP at one million U.S. dollars per year (Torres Dávila 2005, 31–38).

But by 2005 AGIP’s failure to shoulder its financial commitments marked the third phase of the conflict—2005–9. At that point, the umbrella Indigenous organization Asociación de Desarrollo Indígena Región Amazonica (ASODIRA) called for the intervention of the Ministry of Energy and Mines (MEM). The ministry failed to respond, and so the Indigenous groups took action. They first banned flights that brought AGIP contractors to the oil site and threatened to seize the oil wells. They called for a strike, receiving the support of Indigenous federations from several provinces. In Pastaza enraged Indigenous groups took over AGIP oil installations and burned a company building. The military intervened, and there were reports of fifty-six persons injured, both civilians and military personnel.

Block 10 illustrates the failure to mitigate the conflict primarily due to lack of solid institutional mediation. A tense political situation in Ecuador also had a major impact and certainly contributed to the failure to implement the Plano Agreements during the first phase of the conflict. In the second half of the third phase of the conflict, the intervention of representatives from the National Congress and local government mediators was key to mitigating the disputes.

Graph 11 shows the upward tendency in conflict intensity in Block 10, as attempts by Indigenous communities to engage the government failed between 2005 and 2006. By contrast, graph 12 shows the reverse trend, as conflict intensity diminished following the signing of a financial agreement between the umbrella Indigenous organization ASODIRA and the company in February 2007 (Galvez 2007). The agreement had the active involvement of representatives from the National Congress Committee on Amazonian Issues, and local government representatives acted as mediators (El Comercio.com 2007).

The Positive Example of the Peruvian Ombudsman

A positive example of government intervention in socioenvironmental conflicts is in Peru, particularly the role that the Office of the Ombudsman has been playing in solving these disputes. The Peruvian ombudsman has become the only figure capable of effective conflict prevention and management, in a way that brings opposed parties to some kind of understanding and agreement. Unlike Colombia and Ecuador, where the Office of the Ombudsman typically lacks the moral recognition needed for that institution to fulfill its mandate properly, in Peru the institution has grown in stature and popular respect ever since its creation in 1996. The intervention of the Peruvian ombudsman does not necessarily solve conflicts; however, its presence has been key in helping to reduce the intensity of disputes and in opening avenues for dialogue.

Since its creation, the Peruvian Office of the Ombudsman has enjoyed an exceptionally high level of public approval and a unique degree of legitimacy among government organizations in Latin America. The role of the ombudsman is to protect the constitutional and fundamental rights of persons and communities, to supervise state acts and responsibilities, and to make sure public services are provided. The office is an autonomous organization with a mandate given by articles 161 and 162 of the 1993 National Constitution and an operating structure defined by its Organic Law (no. 26520), passed on August 8, 1995.

The Peruvian ombudsman has from the outset gone beyond its constitutional mandate when addressing some of the issues that are the underlying causes of conflict in relation to oil and gas developments.¹⁰ As part of its task, the office gives particular emphasis to addressing some of Peru’s most pressing social fractures, aiming at excluding racism and all forms of discrimination (Office of the Ombudsman 2009a, 5). These social fractures are usually at the center of energy conflicts common in areas inhabited by poor populations or by Indigenous Peoples who have lived through decades of economic, political, and social marginalization and a chronic lack of basic services.

Although mediation is not specifically listed in its constitutional mandate, the description of the ombudsman’s tasks is broad enough to allow it to take the role of mediator in conflicts (Pegram 2008, 57). Of the total 347 social conflicts in which the Ombudsman Office intervened during 2009, almost half were social or environmental in nature—that is, related to the control of, use of, or access to natural resources (Office of the Ombudsman 2009a, 247). Some complaints were presented by Indigenous communities that claimed not to have been consulted prior to the arrival of an oil exploration project in their territory. A few complaints denounced plans for developing oil in one reserved zone, Güeppi, and two soon-to-be-reserved areas—Napo Tigre and Napo Curaray in the Department of Loreto.¹¹ Other hydrocarbons complaints received by the ombudsman that year included one related to gas leaks, from a community living close to a natural gas plant.¹² There were others related to fear of future environmental contamination from planned oil exploration activities.

The structure of the Office of the Ombudsman makes it more agile and able to intervene in such cases than the regular judicial channels. It has offices dispersed around the country and a system of mobile units that travel to remote regions where there is little or no institutional presence (Office of the Ombudsman 2009a). Citizens may present claims for free, or may even transmit them verbally, which makes the whole process very approachable, requiring no prior knowledge of how the judicial system works. For affected Indigenous communities living in remote areas, knowing there is an ombudsman station close to them where they can easily express their complaints without needing prior legal assistance acts as an incentive for bringing in their cases. The ombudsman may present cases directly to the highest court of the country, the Constitutional Court, or to the Inter-American Human Rights Tribunal with no need to go through domestic legal procedures, which may be long and convoluted and sometimes corrupt. This ease of action gives the ombudsman considerable power.

The Office of the Ombudsman enjoys a high degree of legitimacy among the population, especially within the most vulnerable groups, thanks in part to this ease of access to the institution. Most likely it began to build that popular trust after its supervisory work and subsequent open criticism of procedural flaws during the run-up to the controversial 2000 presidential elections (Office of the Ombudsman 2002). At that time, the office stood in contrast to the generalized corruption and semiauthoritarianism that characterized the last term of President Alberto Fujimori. An opinion poll in 2010 gave the office the highest rating—53 percent—among government institutions considered to be most trustworthy for fighting corruption. This confidence in the ombudsman exists in a country where people see corruption as the number one problem to be resolved, according to the same poll (Transparency International 2010b).

The role of the ombudsman in mitigating energy conflicts has been pivotal. In half of the hydrocarbons conflicts studied in Peru during our investigation, the intervention of the ombudsman was instrumental in diffusing disputes. The actions taken by the ombudsman varied according to the nature of each conflict, but in general they can be grouped in three categories: those aimed at forging dialogue between the actors, preventive actions prior to the actual development of a conflict, and mediation in active conflicts to reduce their intensity. Table 5 summarizes the role of the Peruvian ombudsman in some of the case studies analyzed.

In all cases, the presence of the ombudsman was key to mitigating the intensity of the conflict by opening alternative options to violence. However, it is clear that the ombudsman does not independently resolve conflicts. Rather, it succeeds in bringing the parties together to a negotiating table, which in turn may reduce the intensity of the dispute by creating a negotiating space. Its mediating action may even fail at times, but in the end it is the only entity that seems to possess the necessary power to convene the parties and help them to reconsider their actions. In the case of Blocks z-1, 22, and 23, for example, the initial mediation of the ombudsman on November 11 led to dialogue. However, the dialogue broke six days later in spite of the participation of the ombudsman, leading to a protest and the blocking of the north Pan-American highway for several days. The opposed parties were finally brought back to the negotiating table three days later; this time the ombudsman and the regional government acted as mediators.

The main tool at the Peruvian ombudsman’s disposal for successful intervention in hydrocarbons conflicts is probably its high esteem among all actors in the conflict, which contributes to making the ombudsman’s voice heard during the usually confusing initial dispute period. Unlike a government prosecutor, the ombudsman lacks coercive authority. Instead, it emits nonbinding resolutions and reports based on citizens’ complaints. It relies on the media to disseminate its findings through daily, weekly, and monthly reports of conflicts. It also has important allies, such as local NGOS, international donors, and the church, to ensure its message is delivered and to guarantee independence from the government. This support from different sectors of society ensures the integrity of the Office of the Ombudsman in case of political attacks (Pegram 2008, 66).

Two other key elements that contribute to the high regard of the Office of the Ombudsman in Peru are its total independence to perform its tasks and the fact that it enjoys similar immunity from prosecution, as do members of Congress. This immunity, its unrestricted powers of investigation, and the obligation of public bodies to cooperate put the institution in a powerful position to research issues, convince opposed parties to pursue a dialogue, and even in some cases to provide new impetus for negotiations. Normally, by the time the ombudsman is called on to intervene, the conflict has escalated to critical levels, as when dialogue has been suspended between contending parties or when there are violent protests or the seizing of oil infrastructure.

In Peru the cases we analyzed showed a distinctive pattern of conflict escalation, then subsequent decline when the ombudsman was summoned to intervene. Our case studies, and the Peruvian experience more generally, show that effective and timely mediation can be key for reducing conflicts and for leading opposed parties to negotiation. Interestingly, even where government actions are often ineffective in mediating conflicts, communities tend to demand the intervention of the state when conflicts reach unmanageable levels. This is not necessarily because they trust a specific ministry or government, but because they perceive that conflict mediation is a fundamental and legitimate role the government should play. The case of the ombudsman of Peru shows how independent state structures that hold a high degree of legitimacy can be instrumental in reducing tensions and bringing stakeholders to negotiate.

STRATEGIES FOR THE ADOPTION OF SAFEGUARDS AND SERVICE DELIVERY

Over the past decade large oil companies have become more conscious of negative effects on their general image and among stakeholders when they do not pursue sound social and environmental policies in the countries where they operate. For that reason, they have increasingly engaged in voluntary schemes, such as Corporate Social Responsibility, the United Nations Global Compact, and the World Bank Extractive Industry Transparency Initiative, as a guarantee of their high social and environmental standards. Their performance abroad is increasingly being scrutinized by regulators in their countries of origin as a way of monitoring their social and environmental behavior. This socially and environmentally conscious modus operandi is built around international efforts to mitigate the negative externalities of the oil industry, including environmental pollution, social disruptions, corruption, and mismanagement of oil revenues.

Within this context, most large oil corporations (known as “majors” in the industry) now have special departments with trained professionals devoted to ensuring the implementation of Corporate Social Responsibility.¹³ Throughout the years this notion has been expanded from its original focus on workers’ rights and the environment. Today, it includes the need to ensure transparent corporate accounting methods and the understanding that business can be a tool for reducing poverty and ensuring sustainable economic growth in the developing world.

Still, there is a great deal of controversy around the potential for Corporate Social Responsibility to effectively meet its rather ambitious goal of making significant social, environmental, and economic contributions to the countries where large corporations operate. Back in the 1970s Nobel Laureate economist Milton Friedman rejected the idea of having businesses involved in social welfare for fear it would distract them from their main goal of maximizing profits for shareholders (Friedman 1970). This view was challenged as shareholders and activists in the developed world became increasingly aware of the environmental and social impacts of large corporations around the world. Large European and American oil multinationals, and a growing number of middle-sized businesses, are willing to spend increasing amounts of capital to improve the economic well-being of the local communities in the areas where they operate. These companies are increasingly committed to adopting more stringent social and environmental standards abroad, in response to demands from shareholders and NGOS at home. Graph 13 shows the upward tendency of social investment by the largest world oil-producing companies from an average total of $450 million in 2003 to $1 billion in 2010.

One of the main complaints put forth by Indigenous communities living in oil areas is the lack of government presence, particularly the central government, especially in relation to service delivery, the provision of justice, and sometimes even security. The void left by the state in these areas is often filled by oil companies. The downside of giving companies a more prominent role in alleviating poverty is that it may conceal a very serious underlying problem: the weakness, or sometimes the lack of political will, on the part of host governments to take that role by implementing a national agenda that supports effective social inclusion, particularly in remote oil areas.

In their role as providers of basic needs, companies make short-term decisions: to build a much-needed school or a hospital, for example. This modus operandi, with the private company taking center stage in the provision of social welfare, indicates a fundamental flaw: the absence of well-planned social development policies designed with the participation of local communities. With no such policies in place to use as guidance, the generalized perception is that the authorities apply quick one-time solutions to local grievances, and companies impose their own community programs. Tensions in this situation build around a general feeling of mistrust among the communities that briefly become the center of government and corporate attention but that have been historically forgotten by the state and society as a whole.

Historically, the most common recipient of the grievances of these isolated communities has been the church, followed by NGOS working in the area. When oil companies suddenly take center stage, then, communities react defensively, knowing that had it not been for interest in oil or gas reserves in their territory, they would still be unnoticed by the authorities and the world in general. They wonder if the companies are really interested in improving their living conditions, or if they just want to extract revenues from the hydrocarbons reserves in their territories, regardless of any benefits for the communities. These concerns denote a high degree of uncertainty and much skepticism. These feelings may be further emphasized by information circulated by NGOS and church organizations about cases elsewhere of oil developments that failed to improve the economic and social conditions of the local population.

Social Support in the Hands of Oil Companies

Companies engage in a process of quasi-continual negotiations with the local Indigenous communities affected by an oil project. These exchanges are aimed at establishing the right of way for the company to access the oil or gas reserves it wants to develop in the Indigenous lands. The price the company pays to access the oil and gas is often in the form of the provision of basic needs and services, such as drinking water, a hospital, a school, or transportation in and out of remote areas. The government typically becomes a mere observer, or at best a facilitator of the negotiations, in what locals often see as a relinquishment of its responsibilities.

The advantages obtained from negotiations with companies are often the most tangible benefits local communities obtain from the oil project. This is particularly true when structural flaws of the kind discussed in chapter 3 prevent oil revenues from flowing from the central government to the provincial or local coffers or when the funds are not invested for the benefit of the local population. Given the absence of sound government-sponsored local development programs and the limited state presence in the remote areas where oil and gas projects are developed, social and investment decisions for local communities usually result primarily from these bilateral negotiations between companies and community leaders.

Defining the local development agenda through bilateral negotiations becomes a function of the power relations between the company and the local groups. The company’s strategy is to convince the local population to agree to its oil project. This, they argue, is important to ensure minimal costly disturbances throughout the life of the project, although in practice there is no clear-cut guarantee. For the communities these negotiations are usually the only opportunity they have for improving their living standards, through obtaining from companies access to the basic needs they lack. Often, there is not just one agreement with the company, but several, signed with a variety of communities at different times during the oil or gas project. Each agreement responds to different community needs, aspirations, and positions on economic development. Sometimes negotiations within one community vary from family to family, so the company may make individual agreements with each. Often, the agreements are verbal.

A development plan designed this way, in response to the needs of each microsituation, usually lacks a coherent overall goal for the region and for the population as a whole, resulting in a circular pattern by which conflicts grow as the number of new microagreements increase. This is what happened in Ecuador’s Block 10, where failed attempts at adopting a comprehensive development plan led to this kind of micromanagement style after the Sarayaku Agreements were signed in 1989. One of the main achievements of the Sarayaku Agreements had been the passage of a series of national laws regarding hydrocarbons activities, including rules for environmental and social remediation, for example, that were expected to ultimately benefit local Indigenous communities living close to the oil projects. But without previously identified local development priorities and an integral plan to put them in practice, implementation of the new laws was weak at the local level, and communities failed to see much improvement to their livelihood. It was to make up for that legal sluggishness that the communities engaged in individual negotiations with the oil company to obtain direct solutions to their grievances. This set the stage for the micromanagement style that ensued, which resulted in three separate community agreements between the company and local communities signed in 1991: two for providing general assistance to the Moretecocha, Pandanuque, and Santa Cecilia communities (Fontaine 2004; Crespo Plaza 2007, 207–27) and, third, a labor agreement to help community members from Santa Cecilia and Moretecocha.

The process of signing individual agreements in Block 10 resulted in three levels of conflict: among families of the same community, between communities and their umbrella organizations, and among communities in the same area. In the first case, the multiplicity of microaccords among various families belonging to a specific community created competition among them for obtaining more from the company. Second, arrangements between particular communities or families and the company left the umbrella Indigenous organization out, which created friction. Third, communities came into conflict with regard to their stance on the oil project or potential benefits from it, such as jobs. This was further exacerbated by the tendency among oil companies to give higher benefits to those living closer to the project, generating one of the most common sources of tension among communities.

In the medium to long term, the lack of permanent answers to people’s problems resulted in renewed grievances, more one-on-one company-community solutions, and more conflict. A circular pattern has thus been established by which a microagreement is reached, creating conflicts when communities are not happy with the results or when they demand more, which in turn leads to another microagreement that results in another layer of conflicts, and so on.

One-on-one development agreements between companies and communities, without an overall development plan, have obvious negative consequences: they build dependence on the company and they contribute to creating perverse competition and eventually conflict among the actors supposed to benefit from the accords. Dependence on the company presents several downsides. For example, it breeds a permanent state of dissatisfaction that in turn fuels latent conflict when communities feel increasingly dependent. It also fosters paternalistic attitudes and raises questions about the future sustainability and quality of the services once the oil or gas license ends. This concern is being addressed in a few exceptional cases, such as Ecuador’s Block 16, where Spanish oil company Repsol has a contract until 2018 and devotes one million U.S. dollars per year in compensation and training programs for the local Waorani Indigenous community. The company was considering the creation of a trust fund that would continue to finance part of those expenses once its license ends.¹⁴ But in general, these postlicense sustainability mechanisms are still rare.

High oil prices make investing in high-risk environmentally and socially sensitive areas, such as the Amazon, more cost effective for companies. Fewer available conventional oil reserves elsewhere turn these areas into valuable options, so companies are willing to go further in their negotiations with communities to access the reserves in their territories. Local communities try to use this yearning for their territories to their advantage, by increasing their demands or by threatening to take action if demands are not met. In the end, the quality, quantity, and sophistication of the development projects are defined by the market value of the oil areas rather than by local needs, because it represents how much the company is willing to give in exchange for accessing the oil sites.

When large multinational companies take the lead in providing services in an area, the historical absence and inefficiency of the state is underscored. How this cycle of events affects concerned Indigenous communities’ feelings of citizenship and belonging to the broader nation remains unclear. Certainly the lack of government involvement for overseeing the design and long-term sustainability of a development plan that responds to the needs of the community does not help the situation. Ultimately, having companies as the sole interlocutors of communities in relation to the development of local services does not reduce tensions and conflicts. If anything, our case studies show that it contributes to generating more conflictive situations.

The piecemeal approach to local development is one reason many conflicts do not disappear and remain latent. The situation becomes more complex with increases in the number of oil projects that exist, the amount of social funding involved, and the differences in the quality of social development provided by the various companies. In the long run, the main concern is whether a piecemeal approach can generate sustainable long-term answers to social issues, without generating stubborn conflicts that lead to negative dynamics among the stakeholders involved.

Different Approaches to Safeguards: Majors versus Juniors

It would be wrong to judge the social and environmental performance of all oil companies in the same way, because each oil corporation has its own unique operating style. Companies differ greatly in the way they incorporate environmental and social safeguards and on the degree of significance they grant to these. In negotiations with local communities, large oil companies normally devote large teams of professionals that are part of specially created community-relations departments. Their relatively comfortable financial situation allows large corporations to be much more generous in their programs to compensate affected communities and more thorough when it comes to monitoring the social and environmental impacts of their operations.

By contrast, smaller, or “junior,” oil companies normally lack the financial muscle of their larger partners for investing in efficient Corporate Social Responsibility policies. Perhaps most important, oil juniors, which are sometimes privately owned, are generally less concerned about their image, because they do not have to respond to shareholder scrutiny. In the same vein, national oil companies are typically governed by social and environmental rules of their country of origin that may not be the most rigorous in the market. Chinese national oil companies, which are increasingly making their way into Latin America, have built a reputation of being rather lax when it comes to incorporating the latest internationally acceptable social, environmental, and labor standards (Shankleman 2009).

To better grasp the differences between majors and juniors it is important to understand how the oil industry works. Juniors tend to be primarily focused on the initial exploration phase of oil projects before actual reserves are found. These smaller companies have shorter time horizons than their larger counterparts, as they expect to be bought by the big players once they discover reserves. So juniors tend to devote fewer resources and effort to the development of long-term environmental and social policies or long-lasting community relations, because they do not expect to spend long periods of time in the area. Their goal is to get quick profits. The comparative advantage of juniors is their capacity to enter and leave an oil area relatively easily and their willingness to operate in high-risk areas such as the Amazon jungle, in the hope of finding large reserve pools that they can then sell to the majors at a profit. This touch-and-go operating style allows juniors to take more social and environmental risks than their larger counterparts.

The way large and small oil companies operate is not exclusive to this industry, and it is probably more frequent in other extractive industries such as mining. The world became aware of this differentiated operating style in the case of the thirty-three miners who were trapped for seventy days in a mine in Chile in 2010 as a result of safety negligence by the small-scale company operating the mine (MacNamara and Webber 2010). The different operating styles of majors and juniors becomes even more important in countries like Peru, Ecuador, and Colombia, where exploration projects are multiplying and at the beginning most new oil operators are juniors, particularly in high risk areas like the Amazon. A considerable number of conflicts originate during the initial exploration phase, and once juniors leave and larger companies come into the picture to start out the production phase, frustration among the community has likely already developed. This is a consequence of juniors largely overlooking the adoption of effective community-relations policies to minimize the negative effects of their operations. Addressing differences from early on, rather than letting them build up, would greatly reduce the potential for disputes and large-scale conflicts down the line. Luckily, as image-conscious corporations become more engaged in expanding their social and environmental practices and in cleaning up their previous record in this respect, in the past few years they have started to scrutinize more closely the behavior of juniors when assessing the long-term risk of buying oil reserves from them. As of 2012 a large number of the oil developments in the three countries were in the exploration phase, the prerogative of juniors willing to take larger risks.

Majors have become rare in the upstream of the countries being analyzed. The only large corporation operating by 2010 in the Amazon jungle was ConocoPhillips, and it was not immune to the junior company syndrome. Conoco entered the area by buying concessions in 2006—five in Peru and two in Ecuador—from a junior company, Burlington Resources, which left a controversial social and environmental record. Conoco inherited a history of conflicts, including accusations that Burlington had manipulated local Indigenous communities and violated their human rights. When Conoco came into the picture, the disputes were well advanced, particularly in Ecuador’s two blocks—23 and 24—where the new company was forced to put oil developments on hold in response to the continued opposition of local Indigenous communities. Subsequently, Conoco was accused by NGOS and shareholders of lacking a specific Indigenous policy and of failing to provide mechanisms for implementing the human rights principles it endorsed publicly (Anderson et al. 2009).

Oil reserves that are still undeveloped and high oil prices that offset the risks of exploring for them in sensitive environmental and social areas like the Amazon are an attractive combination for smaller companies. Some of them decide to stay for the long term after the exploration phase. Some juniors operating in the Amazon have shown impressive growth, although output remains low in comparative terms. Two of the most successful juniors in the region are Pacific Rubiales Energy Corporation and Petrominerales Limited, both with operations in Peru and Colombia. Between 2007 and 2009 Rubiales saw output jump from a mere 21,200 to 83,000 barrels of oil equivalent per day in just two years (Pacific Rubiales 2009); it became Colombia’s second largest oil producer through its subsidiary, Meta Petroleum. Likewise, Petrominerales increased its annual oil output exponentially between 2005 and 2009 and saw its production grow from 1,031 to 22,400 barrels per day. This performance may not be notable in absolute terms, but the companies’ annual steady growth is significant.

Of the four main oil-producing companies operating in Peru, judging by production and reserves, only one, Petrobras, has enough weight to compare its global production volumes with the world majors: Petrobras reported 2.6 million barrels of oil equivalent per day in 2010, compared with 2.75 million for Chevron and 4.45 million for ExxonMobil. Petrobras is slated to become one of the world majors in the medium term in light of its rapid growth, which will likely also mean acquiring the social and environmental standards characteristic of companies within that league. But for the moment, Petrobras’s presence in Peru remains concealed behind much smaller contenders. The company occupies only second place after Pluspetrol in terms of output, acreage, and reserve ratios in that country. Pluspetrol may relinquish Block 1AB before the expiration of its contract in 2015. At that point, state-owned oil company Perupetro may become a partner in the development of Peru’s largest oil area (Gestion.pe 2012).

Pluspetrol is an Argentine oil producer with global output of around 350,000 barrels of oil equivalent per day, which makes it a medium-sized company. It is roughly seven and a half times smaller than Petrobras. Privately owned Pluspetrol has more freedom to maneuver than partly state-owned Petrobras when it comes to deciding what social and environmental policies to apply and how much to invest in these, a factor that has contributed to lower costs and increased operational flexibility. In Peru, Pluspetrol has enormous weight as not only the number one oil producer but also as the upstream operator of the country’s flagship natural gas project Camisea, which turned the Andean nation into Latin America’s first liquefied natural gas exporter in 2010.

Perhaps an obvious example of the differences in corporate standards between oil majors and smaller, often privately owned corporations such as Pluspetrol is that in spite of its operational significance—not just in Peru but in the whole region—the Argentine company had until 2009 only one manager in the whole corporation in charge of its overall corporate social responsibility program. This remained the case even after the company had been exposed to conflict in its operations in the northern Peruvian Amazon Block 1AB/8.¹⁵ Starting in 2009, after conflicts in Block 1AB/8 worsened and as Camisea fell under increasing international scrutiny, Pluspetrol decided to create various corporate social responsibility management units, amid resistance from older management that considered the additional investment to be of little worth to the company.¹⁶ Camisea is perhaps the best example in the region of the importance that small- and medium-sized companies are acquiring. Most of the companies that run the huge Camisea development fit, at least in part, the junior company profile: U.S. company Hunt Oil, which leads the liquefied natural gas export segment of Camisea, is a (family-owned) private corporation, as are Pluspetrol and Tecpetrol in the upstream consortium.

The way the oil industry is structured around juniors and majors creates perverse incentives because juniors actually need the high risk of conflicts to justify their presence. For juniors, the more risk, the higher their value, since they have built a niche around their performance in high risk, difficult areas. The survival of juniors is normally linked to a particular project. Very often these companies are created to develop a specific area.¹⁷ Sometimes, they will disappear once a major buys the oil or gas field. So it becomes essential for them that their concession be successful, and with that in mind there is always the temptation to take unacceptable shortcuts such as providing bribes, corrupting officials, or neglecting to invest in social programs—even when required by law—to ensure the highest possible rate of return on the project, so that it will become attractive to possible buyers (Bray 2003, 299).

This perverse incentive framework may change soon, as majors become more scrupulous in assessing the behavior of juniors they may be interested in acquiring. Large oil corporations typically engage in constant image checkups in relation to social, political, and environmental problems, and this practice may also extend to the juniors they acquire. For many, an example of this image cleanup is the Angola Partnership Initiative that Chevron launched in 2002 to help the African country’s postconflict economic development and peace-building plans, after twenty-seven years of a bloody civil war that left an estimated half a million dead. Chevron is an oil pioneer in Angola, where it drilled the country’s first onshore well more than fifty years ago and discovered its first offshore oil and gas field. Chevron’s Angola philanthropic efforts were seen by many as an attempt to clean up its image after headaches in Ecuador, where it has been accused of polluting the Amazon during oil operations there in the 1970s.

Another example of corporate image laundering is Royal Dutch Shell, which discovered the giant Camisea natural gas reserves in Peru in the 1980s, in partnership with then Mobile Corporation. When Shell came to Peru it was an image-battered company after two catastrophes in Nigeria (Sunday Times 1995) and in the North Sea (Agence France Press 1991). For Shell, Camisea became its redeeming project. The company made a public commitment to adopt the highest environmental and social standards and the principle of social net benefit, by which areas affected by a project should be better off once the project is finished. Even the company’s strongest critics said Shell showed an unprecedented level of social and environmental commitment (Ross 2008, 226). Shell’s desire to drastically improve its image produced an exemplary social and environmental design for developing Camisea that continued to be implemented by the companies that took over the project after Shell left in 1998. However, once Shell was gone, Camisea was not devoid of conflict.

The Contract of the Century

Given the importance of Camisea for Peru and the region as a whole, the project’s conflict performance deserves attention. The project was portrayed as the key to Peru’s future energy and economic growth, so much so that it became known as the Contract of the Century. The year 2004 marked a turning point in Peru’s energy history. In September of that year, the giant Camisea natural gas field started production for supplying the domestic market. Later, exports of liquefied natural gas by 2010 turned Peru into Latin America’s first exporter of that product, switching the status of the country from a gas importer to a net exporter. The Camisea reserves are located deep in the Amazon jungle, in the Lower Urubamba region. According to some estimates, Camisea’s contribution to Peru’s gross domestic product exceeded US$4 billion in the period 2000–2006 and is expected to be higher than US$11 billion between 2007 and 2033 (Zavala, Guadalupe Gómez, and Carrillo Hidalgo 2007).

With Shell at its helm, the original consortium had spent some US$250 million to develop the gas field before leaving Peru in July 1998 due to disagreements with the government (New York Times 1998). Camisea was not developed until the beginning of the twenty-first century. Shell had sown the seeds of what could turn into a model social and environmental project not only for Peru but also for the world. The Camisea project was to be the example of solid social and environmental policies that were to be followed by future oil and gas projects in Peru’s Amazon and in Latin America as a whole. At least, that is how it was presented at the time.

After Shell left, its followers had the opportunity to become known for implementing Shell’s commendable model, or, on the contrary, they could stand out for not being able to follow the high standards set by the Dutch company. The private consortium that took over from Shell kept some of the company’s environmental and social standards, such as burying the pipelines underground, replanting the surface with native seedlings, and treating the upstream development as “offshore” so that no access roads were built. Unfortunately, however, Camisea suffered five spills in less than a year, which tarnished the project’s performance and created considerable resentment among the population (La República 2006). In addition to the spills, uncertain projections about the future availability of natural gas for domestic consumption led to opposition to gas exports for fear of future domestic shortages.

The Camisea project is a good example of how large corporations, such as Shell, can be effective in reducing or preventing conflict by establishing effective company policies. Camisea also shows that pressure from environmentally and socially sensitive consumers in the developed world can be key for ensuring compliance in remote areas. Fundamentally, Camisea highlights the vital role of multilateral lending institutions in ensuring that environmental and social concerns are addressed by oil investors (see box 2). These institutions have adopted increasingly stringent standards in the past fifteen years as a condition for granting loans, although many argue the standards are not high enough (Gamboa, 2008). However, in spite of the critical voices, having social and environmental demands scrutinized by outsiders is better than nothing.

A large number of the national and smaller companies entering the Latin American oil industry remain outside the international lending network. They are not subject to scrutiny by civil society organizations, so the social and environmental rules they adopt may not be the most advanced. Shareholder pressure also contributes to more stringent standards, as shareholders around the world become more conscious of the social and environmental performance of the companies they invest in, as a way of monitoring the risk of their investments. This increased interest in company performance has resulted in the development of private social and environmental rating systems such as the FTSE4 Good Socially Responsible Investment Index, which ranks companies according to environmental and social criteria. However, many of the junior or state-owned oil companies currently operating in Latin America are not publicly traded, so they are sheltered from shareholder demands for transparency.

For the junior oil companies increasingly active in Latin America, gaps in the system allow them to get away with social and environmental standards that are not high enough. Pressure from larger corporations and the international lending community are slowly starting to change this reality, but it will take some time before positive results are seen. In the meantime, conflicts keep multiplying from the initial, usually junior-managed exploration phase, and become increasingly intractable as the oil or gas development moves forward.

The final section addresses a stressor of oil conflicts unique to Colombia: four decades of armed confrontation with illegal armed groups. Colombia’s armed struggle and the effect it has on hydrocarbons-related conflicts may not be extrapolated to the other two countries studied in this book. For that reason, it deserves special attention.

The Unique Stressor of Colombia’s Armed Struggle

Colombia is a special case. Four decades of armed confrontation had direct effects on its oil industry, playing a major role in triggering and extending the duration of oil-related conflicts with peasant, Indigenous, and Afro-Colombian communities. Oil developments have expanded in the past decade to areas characterized by the presence of active illegal armed groups. Overall, attacks against oil infrastructure and violence in general have been reduced during that time but not totally eliminated, so they remain a source of conflict.

Oil-related conflicts in Colombia maybe seen as an offshoot of the prolonged armed conflict, which goes back to the 1960s and has shown very high levels of violence. The nature of the conflict around oil in Colombia has changed with time and may be analyzed in two distinct periods. The initial phase, from the 1960s to the late 1980s, was characterized by an attempt by armed rebel groups to fill the void left within the society by an inefficient state that failed to attend to the demands of the population, especially in rural areas (Fontaine 2007c, 124–42). During this period rebels were guided by a leftist ideology, seeking power to resolve those historical grievances. The 1960s success of the Cuban Revolution was influential in expanding that ideology, and rebels found followers particularly in areas where land grabs by the well-off and their paramilitary supporters were common.

The second phase of the conflict started at the end of the Cold War, in the 1990s, when rebel groups began to see oil-producing areas with a more utilitarian objective: as a source of funds to support their war. After the Cold War most rebel movements in the region disappeared, and those that remained, particularly in Colombia, had to reinvent themselves. They no longer hoped to install a “government of the people.” They now fought for their own survival, and in so doing, oil became an instrument of economic subsistence. It is not surprising, then, that following the discovery of oil in the 1980s, Colombian rebel groups strengthened and started to expand again, by using illegal practices—such as the economic extortion of foreign oil companies, and clientelistic arrangements—for capturing government oil revenues (Echandia Castilla 1998, 35–65). The practices of this second phase, guided by an economic rather than an ideological goal, support the theory of greed as a major reason for conflicts.

Both the still active Ejército de Liberación Nacional (ELN) and the largest guerrilla group, Fuerzas Armadas Revolucionarias de Colombia (FARC), have repeatedly attacked oil infrastructure and used kidnapping and extortion tactics such as the charging of “war taxes” on oil companies to finance their activities. Rebels have also been known for reaping oil royalty revenues from municipalities. In response to the guerrilla attacks, the government increased funding to military and paramilitary groups, and private security forces proliferated in the 1980s and 1990s to defend the oil infrastructure.

These parallel forces, with a mandate to protect oil infrastructure, have been known to commit illegal actions similar to the rebels’. The paramilitary has long been accused of being at the forefront of Colombia’s illegal commercialization of gasoline, which they allegedly use as a source of financing (Semana.com 2002). In the northern gas-producing province of Guajira, on the border with Venezuela, paramilitary forces are said to be in control. They have been accused of illegally managing imports of gasoline from Venezuela, through brutal extortions and killings at the expense of the local population, which is dominated by the Wayuu, Colombia’s largest native tribe (Kraul, 2008). Paramilitary groups often try to push guerrillas away from lucrative oil-producing areas, seeking to prevent them from extracting an oil tax from companies, which they and the military allegedly charge instead (Wirpsa and Dunning 2004). This dynamic has led to increasing violence and often abuses against the local population, as paramilitary groups in particular have been accused of committing atrocious human rights abuses against irregular armed forces, in the name of military protection. In the words of Scott Pearce (2002, 9), the paramilitary “were effectively mercenaries used to silence political opponents and preserve the economic position of their patrons.” Paramilitary groups are believed to be unscrupulous in their actions. In some oil-producing areas, such as the province of Arauca, the army and paramilitary groups even joined forces with the ELN in opposition to their common enemy, the FARC (Semana.com 2009).

Violent attacks on oil infrastructure have social and environmental consequences that contribute to an extremely high toll on the population living in the oil-producing provinces. Not surprisingly, violence indicators are higher than the national average in oil-producing regions, because wherever there are oil reserves there are armed groups fighting for control, and the local civilian population is caught in between (Pearce 2002, 17). Violence has led to the massive expulsion of peasant communities from oil-producing areas, adding to the country’s overall enormous numbers of displaced populations from the armed conflict. Official figures set the number of displaced persons throughout the country at a little more than three million in 2009, while civil society estimated them to be closer to four million. Back then, Colombia had the world’s second-largest displaced person crisis, after Sudan (McDougall 2010, 6).

Sometimes, civilians are co-opted or forced to contribute to the cause of one group or the other. Given the daily dangers they confront, populations living in oil-producing areas often harbor deep hatred toward oil activities, which they blame for bringing violence to their lands. It is common for local populations to believe that the government and oil companies are allied in trying to take their oil-rich lands away from them and develop the resources to their advantage. In addition, rebel groups are thought to have lost much of their initial appeal among local populations that have been directly affected by their violent actions.

La Flauta

The Caño Limón oil pipeline stretches for 477 miles across eight departments, from Colombia’s Caño Limón field in the northeastern department of Arauca to the Caribbean port of Coveñas. The 900,000-barrel-per-day capacity conduit is the factual emblem of Colombia’s oil potential. In 1986 Colombia started exporting oil through the Caño Limón pipeline, and it was that year that the South American country entered the map of world oil-exporting nations.

Not only is Caño Limón an oil icon in Colombia, it also bears unfortunate political weight in the country’s forty-year armed conflict. The pipeline became a strategic target for guerrilla groups since it first started operating almost three decades ago. In fact, Colombians call it la flauta (the flute) for the number of holes it withstood during various attacks throughout the years. Other pipelines have also been attacked, though less frequently (MiPutumayo.com 2011). The Colombian ombudsman reported a total of 4,101 attacks to the country’s main oil transport lines between 1986 and 2001. During the same period Caño Limón was attacked 714 times, which resulted in a loss of 2.116 million barrels of oil and cost roughly US$130 million to repair (Office of the Ombudsman 2008a, 5–7). Attacks on oil infrastructure, particularly the Caño Limón, have become so frequent that state-owned oil company Ecopetrol devotes a special section of its yearly reports to information about them.

Attacks on oil infrastructure were not uncommon during the early stages of the guerrilla movement when Colombia was not yet an important producer. At the start of the guerrilla movement, in the 1960s and 1970s, the state structure was very weak and government actions were to a large extent monopolized by the two major political parties—Conservative and Liberal—that shared the power. The guerrilla movements of the time tried to capitalize on the lower echelons of the society that fell between the cracks of this unspoken power-sharing agreement among the elites. Many scholars attribute the spread of Colombia’s guerrilla movement to the power dynamic between the ruling elite and the majority of poor or low middle-class origin who were excluded (Leal Buitrago 1991).

Later, in the 1980s, the rebels changed strategies and abandoned their initial goal of achieving territorial control. Instead, the insurgent groups aimed now for the control of strategic areas to ensure their economic survival (Echandia Castilla and Bechara Gómez 2006). The new discoveries of very promising oil reservoirs toward the end of the 1980s and beginning of the 1990s, and the infrastructure built around them, provided a new potential for income. As a consequence, guerrilla groups in the 1990s increased their presence in departments of strategic oil value, and violent actions started to multiply around oil installations. The ELN was especially active in the Arauca department, home to the Caño Limón field, until the end of the 1990s, when the FARC took a more active role (Vicepresidencia 2002). Tactics employed for accessing revenues included kidnappings, intimidation, attacks on infrastructure, and oil theft.

The departments of Casanare, Arauca, and Meta were the three main oil producing areas in the country between 2007 and 2009. During those years the last two departments were centers of major armed confrontation. Even in 2009, when the armed conflict in Colombia in general showed signs of winding down, Arauca and Meta still experienced intense fighting. The Cusiana-Cupiagua fields, one of the largest oil- and gas-producing areas in Colombia, are located in the department of Casanare, where armed confrontations have been less intense than in the other two departments.

The U.S. government devoted US$99 million to fund equipment and provide training to Colombian military personnel as part of an infrastructure security strategy in the department of Arauca (U.S. Government 2005). Ecopetrol and U.S. oil company Occidental Petroleum contributed another US$8.65 million and participated in the design of community-development programs in that department. Occidental is the operator of the Caño Limón field and one of the partners in the pipeline—together with Ecopetrol and Repsol.

To protect Caño Limón from attacks, Occidental engaged the protection of the Colombian Army through the U.S.-funded program to enhance infrastructure security (U.S. Government 2005). Special army units were created and funded solely to protect oil infrastructure. The Eighteenth Army Brigade, whose coat of arms includes an armed military man and an oil well, was charged with looking after Caño Limón. While the security plan helped to reduce attacks on the Caño Limón pipeline, it also derailed when the brigade was linked to abuses in cooperation with paramilitary groups, including kidnapping and killing suspected guerrilla followers. Occidental became particularly vulnerable after news reports linked the company with a violent attack on a village close to its operations in Caño Limón, where eleven adults and seven children were reported dead (Miller 2002).

Eighteenth Army Brigade coat of arms. Courtesy of Wikimedia Commons (2013), Creative Commons License 3.0.

The provision of oil infrastructure security has by some accounts contributed to reducing the number of guerrilla attacks on oil pipelines in general, and particularly on Caño Limón, which experienced 13 incidents in 2010, down from 170 in 2001 (Kraul 2011). On the other hand, the new infrastructure security scheme caused a shift in the type and geography of the attacks, and, most important, it opened up a whole new range of conflicts that added to Colombia’s already complex armed confrontation. Increased security in the Arauca portion of the Caño Limón pipeline caused attacks to shift to the section of the line that crosses the department of Norte de Santander. In addition, there has been a change in the modality of the attacks, with more strikes on the electrical grid that feeds the pipeline, as opposed to the pipe itself (U.S. Government 2005).

One of the mechanisms for improving the security of oil infrastructure is the payment of what is known as a “war tax” or “security quotas” by companies to illegal groups to avoid attacks. This practice started a sort of witch hunt among the population in search of those linked to the groups, which soon resulted in a considerable increase of homicides, massacres, death threats, and other violent activities (United Nations General Assembly 2008). Other security mechanisms were organized around private security groups that in Colombia may include right-wing paramilitary organizations, which have historically described themselves as opposing the country’s leftist guerrilla movements. At the local level hydrocarbons conflicts in Colombia show similar triggering elements as in Peru and Ecuador, such as weak consultation processes, governance inefficiencies, and legal limitations. But in practice, the armed confrontation is the main stressor of oil conflicts.

SUMMARY

The existence of stress elements mainly related to the behavior of the stakeholders involved in hydrocarbons projects may contribute to fomenting conflict. Sometimes, when these stressors are not resolved in a timely manner, the disputes tend to become violent or to drag out over time. All actors involved in oil and gas conflicts have a responsibility to try to solve disputes, because each one usually contributes, directly or indirectly, to the buildup of the circumstances that lead to the conflict.

Sometimes, divisions within Indigenous communities, or between communities and their umbrella organization, prevent the development of a united front with respect to an oil project, resulting in conflictive relations. Similarly, differences among members of the civil society active in a specific oil-producing area or agendas of NGOS that do not quite reflect local needs may end up exacerbating the conflict. Likewise, when oil companies fail to adopt sound social and environmental safeguards, local communities react and their frustrations may lead to conflict. In the same vein, in the absence of development projects designed in a participatory way for the benefit of the communities affected by the oil project, oil or gas revenues may be misspent, which in turn may lead to conflict.

What differentiates the conflict stressors described in this chapter from the structural flaws analyzed in chapter 3 is that in the case of the former solutions can be more readily available and easier to apply if the parties involved in the conflict are willing to do so. Conflict mitigation may be achieved more rapidly than in the presence of structural flaws, which call for more complex and deeper institutional changes. The presence of credible institutional mediation goes a long way in mitigating the conflict stressors described in this chapter in a relatively short period. Assertive government involvement in every stage of the oil project from the beginning can contribute to conflict prevention by granting a sense of legitimacy to the project while reducing the feeling of isolation among the community. Having an in-depth knowledge of the context in which the conflict developed is a must for trying to solve or prevent disputes. But in the end, finding a permanent solution to a dispute typically depends on the readiness of the stakeholders involved to take the necessary steps in that direction.