Highlights: public hearing on current situation of oil and gas financing in the Amazon

By Lays Ushirobira, communications manager of Stand.earth’s Amazonia campaigns
Photo credit: Nicolás Bustamante / Parliamentarians for Fossil-Free Future

On Monday March 31, Stand.earth joined parliamentarians, Indigenous partners, and civil society organizations from different countries in the Congress of Peru for a public hearing on the current situation of oil and gas financing in the Amazon. The initiative is part of a series of hearings being organized by the global network Parliamentarians for a Fossil-Free Future. The conclusions will contribute to the final report of a parliamentary inquiry, which will be presented at the UN Climate Change Conference (COP30) in Brazil in November.

“There are no [safety] guarantees to continue with the expansion of oil activities in the Amazon. Despite having international obligations or even international judicial mandates, States do not comply with prevention, protection, remediation and non-repetition. Our extractivist and mercantilist model, which is protected under an international legal architecture, favors the rights of corporations over the rights of communities,” highlighted Hon. Sigrid Bazán (Peru), member of the Parliamentarians for a Fossil-Free Future, in her opening remarks. “What we need is not to lose the opportunity to protect our Amazon.”

Watch the video recording:

Oil and gas financing accelerating the tipping point in the Amazon

Behind oil and gas projects and corporations destroying the Amazon is at least $23 billion dollars in direct financing, as revealed by Stand.earth’s report Greenwashing the Amazon. There is much more, as this sum represents only 5% of the total recorded by the Amazon Banks Database: the remaining 95%—equivalent to $535 billion dollars—corresponds to financing companies with operations in the region, but without specific traceability due to lack of transparency. 

“We have mapped the environmental and social risk management frameworks of major banks financing oil and gas in the Amazon, and the results are alarming: on average, 71% of the Amazon is not effectively protected by the policies of the five top financiers – Citibank, JPMorgan Chase, Itaú Unibanco, Santander, and Bank of America,” said Martyna Dominiak, senior climate finance campaigner at Stand.earth, in presentation during the hearing.

To help avert an irreversible tipping point, Stand.earth has been calling on banks to adopt a geographic exclusion covering all transactions that directly or indirectly involve the oil and gas sector in the Amazon. This is a similar, but more encompassing, approach to the Arctic exclusions adopted by banks in 2020 to protect the globally significant environmental and social values of that region. 

“Advocacy with banks can be more successful if they listen to local voices. Banks often tell us that they continue to finance fossil fuels because countries need it and their clients are moving towards energy transition. We know this is not true, and it’s important that parliamentarians join our efforts to provide that local perspective. This could be very impactful,” Dominiak highlighted.

Fossil fuels deepen the climate crisis and existing inequalities

The participants presented evidence that investing in more fossil fuels in order to finance the energy transition—as is widely advocated by the oil industry and some governments—would only deepen the climate crisis, existing inequalities, and violence against environmental defenders. Robinson Sandy, president of OPIKAFPE (Organización de Pueblos Indígenas Kichwas Amazónicos de la Frontera Perú-Ecuador), is witness to the negative impacts of fossil exploitation. 

Representing communities whose territory overlaps one of the largest oil blocks in the Peruvian Amazon (Block 192), Sandy said extractivism has never brought them benefits. “Throughout these 50 years [of oil activity in our territory], we have not been able to see any development. We can see the diseases due to contamination. In our territory, the plants no longer produce,” he said. “Let us live. We want to live as our ancestors: in peace, freedom, and tranquility.” 

Vladimir Pinto, field coordinator at Amazon Watch, highlighted that financing of the oil industry is directly connected to the violation of the rights of Indigenous Peoples and other affected communities, and only generates more dependence on fossil fuels. “The idea that energy transition passes through the expansion of the oil supply is unrealistic,” he said.

Pinto presented a case study involving the oil state company Petroperú. The Peruvian state has invested $2.7 billion dollars to expand the operating capacity of Petroperú’s Talara Refinery to produce 90,000 barrels of refined oil per day. Beyond all the socio-environmental impacts, which include at least 1,500 spills up to 2024, this has meant an enormous debt forcing the Peruvian government and the company to continue producing more oil, even with lower standards and with more urgency than before. “Far from being an instrument that allows us to reduce our carbon footprint, it became an instrument of pressure to demand more and more oil.”

Extractivism, debt and climate crisis: a vicious circle

There is a vicious circle between extractivism, debt and climate crisis, and Indigenous Peoples and marginalized groups are at the center of its impacts, according to Carola Mejía, climate justice, transitions and Amazon coordinator at Latindadd. 

A Latindadd study shows that, by 2023, public debt in Latin America reached $5.8 trillion dollars. After the COVID-19 pandemic, the region has had the highest increase in external debt: of the 60 most indebted countries in the world, 10 are in the region. “Having high debts means having fewer public resources to address the climate crisis and the 2030 Agenda for sustainable development. Besides, having debts with entities such as the IMF implies austerity measures, and the first thing to be cut is environmental and social spending—because for them the most important is to pay the debt,” she said.

Peru, for example, allocates 33% of the national budget to debt and only 0.5% to environmental issues, the study shows. Similar dynamics are observed in countries like Surinam, who directs 18% of its budget for debt and only 1.7% for the environment, and Bolivia, where resources to pay debt are 2.6 times higher than what the country invests to tackle the climate crisis. “With high debts, countries are under more pressure to continue exploiting their natural resources to generate income to repay the debt. The more debt, the more extractivism,” she explained. 

The main countries aggravating the climate crisis are those to whom Amazonian countries owe debts and to whom they export their resources. “In the end, debt is a neocolonial instrument to continue controlling us. The Global North is the main responsible for the climate crisis—accounting for 92% of global emissions—while the South is more vulnerable,” Mejía said. “We have to call on our governments to bring to COP30 proposals that make visible the need to stop extractivism, especially in crucial regions like the Amazon. We need an energy transition that is just, popular, inclusive, and that does not deepen extractivism.”

Road to COP30

“The public hearing was an important step in the road to COP30 to transition away from fossil fuels,” said Gisela Hurtado, senior Amazonia campaigner at Stand.earth who leads the policy work of the organization’s campaigns related to the Amazon. Moving forward, the Stand.earth team will join the 4th Amazonian Assembly, which will take place from April 2 to 4, in Tarapoto, Peru, and Acampamento Terra Livre, the largest Indigenous mobilization in Brazil, from April 7 to 11.