No one is controlling Perenco…..

Sebastián Escalón writes, in PlazaPublica, that the oil company is operating since 2010 without having an approved Environmental Impact Study…..

No one is controlling Perenco and the Office of the Counsel-General is requesting it to stop

The environmental impact study (EIS) is the document in which a company indicates what are the potential effects of its activity on the environment and how it plans to prevent or minimize them. The Law for the Protection and Improvement of the Environment was approved in 1986, and since then every construction or industry must have an EIS approved by the Ministry of Environment and Natural Resources (MARN, for its Spanish initials) before it starts its operations.

The fact that Perenco does not have an approved EIS means it is not complying with this regulation. Thus, it could be fined with up to GTQ 100,000 (~USD 13,000) and if the company fails to regularize its situation, it could be forced to close down. In addition, this breaches the terms of the agreement  signed in 2010 by the company and the Guatemalan Government. What is more, according to the former Minister of Environment, Andreas Lehnhoff, without an EIS the authorities are not able to conduct a rigorous environmental monitoring of the activities carried out by the oil company. “Perenco should not continue to operate; it has to regularize its situation first”, says Lehnhoff, who has recently stepped down in favor of Sidney Samuels.

The Office of the Counsel-General of the Nation [Procuraduría General de la Nación, PGN] shares this view. On Friday, January 29, the entity responsible for safeguarding the interests of the State delivered an opinion in which it recommends that Perenco “refrains from operating on the project” until it holds an environmental instrument approved by MARN. According to Consuelo Álvarez, advisor to the Counsel-General of the Nation, María Eugenia Villagrán, this recommendation is addressed to the Ministry and “they must decide what to do.”

Perenco is a Franco-British multinational company founded in 1975. In Guatemala, it is responsible for 91% of the national oil production, extracting it from the Xan oil field, located in the Laguna del Tigre national park, in Petén. The Xan drilling started in 1985, when the Guatemalan Government entered into a non-extendible, 25-year agreement with the Basic Resources oil company, acquired by Perenco in 2001. In 2010, amidst a bitter controversy, President Álvaro Colom extended the operating permit for an additional 15-year period, despite the terms of the first agreement.

With this extension, Perenco committed to conducting new environmental studies. While the company did submit such studies, the Álvaro Colom and Otto Pérez Molina administrations evaded their responsibility to either validate or reject them.

During the last five years, MARN, the National Council of Protected Areas (Conap, for its Spanish initials), and the Ministry of Energy and Mining (MEM) have managed to tangle a bureaucratic mess that has allowed them to duck out of confronting the oil giant. They have assumed the classic pose of the three wise monkeys who see no evil, hear no evil, and speak no evil.

We wanted to know what happened to water bodies, because one drop of hydrocarbons can contaminate a large amount of cubic meters of water”, says former Minister Lehnhoff.

Today, thanks to the Office of the Counsel-General of the Nation and Andreas Lehnhoff’s brief role as Head of MARN, a series of administrative anomalies is being unveiled, all of which have allowed Perenco to exploit the black gold in the Guatemalan field without any real environmental control from MARN.

Administrative foot-dragging and mysterious vanishing of files

It all started in 2012, with an initiative from the Center for Environmental and Legal Action (CALAS, for its Spanish initials). The environmental organization requested President Otto Pérez Molina to declare that the agreement signed in 2010 by the Colom administration was detrimental to Guatemala. According to Rafael Maldonado, legal advisor to CALAS, this agreement is illegal because the operations are being conducted in an area of maximum environmental protection, where every industrial activity is banned.

Pérez Molina assured the press he was going to study the case. But in fact, his administration put it to bed, as evidenced by the aforementioned opinion delivered by the PGN. Rather than determining whether or not the agreement was detrimental for the State, the Ministry of Energy and Mining retained the file for more than three years. Apparently, it is not by chance that they precisely kept it for three years – according to the law, the State has that window to deliver an opinion. After those three years have passed, an agreement cannot be terminated.

Foot-dragging at MEM spared Perenco from a potential cancellation, but this irregularity was also detected in October 2015 by the Office of Counsel-General of the Nation, headed by María Eugenia Villagrán. In the opinion the PGN delivered, it is stated that due to “the delay in processing the request (…) it is legally viable to file a complaint to the Attorney General’s Office”, which, according to Consuelo Ramírez, the PGN is about to do.

Luis Aroldo Ayala, Director of Hydrocarbons at MEM, said he is not aware of the opinion delivered by the PGN and abstained from commenting on the CALAS’ initiative as well as on the retention of the file at MEM. Attempts were made to contact former Minister of Energy and Mining, Erick Archila, but he did not answer phone calls, nor did he reply to messages.

However, before delivering its opinion, the PGN called representatives of MARN and MEM for a meeting. It asked them to inquire on the status of Perenco in their respective ministries. The most extensive inquiries were carried out by MARN.

During the transition government led by Alejandro Maldonado Aguirre, Andreas Lehnhoff was appointed Minister of Environment. He is a renowned activist in support of nature and the Regional Director of the World Wide Fund for Nature (WWF). His administration represented a genuine break with the preceding Ministers of Environment appointed by the government of the Patriota political party.

In accordance with the instructions of the PGN, Lehnhoff asked his team to search for the files related to Perenco. Little could they imagine what they would find: an ensemble of carelessness and vanishing of files that, according to MARN itself, may well be considered as criminal offenses.

Their first observation was that the Environmental Impact Study submitted by Perenco had vanished from Conap offices. The current Council authorities led by Enma Díaz assure they did their best and searched everywhere – without success.

The study was submitted to MARN by Perenco in 2011. Since oil activities are being conducted in a national park, the Ministry forwarded the file to Conap so it would issue an advisory opinion. This is where the trace of the study is lost. According to documents accessed by Plaza Pública, the file apparently vanished in 2012, when Erick Cabrera was the Head of Conap. This fact was later confirmed by former employees of the Council who asked not to be identified. The vanishing of this document prevented MARN as well as Conap from approving or disapproving the study. According to the documents, both institutions forgot about this matter and stopped requesting or providing information thereon. Nevertheless, oil kept flowing along the 477 km (296 mi) of Perenco oil pipelines, contrary to the requirements of the Environmental Law.

“It is unknown who might have hidden it; we do not have the means to find out”, stated Andreas Lehnhoff. To find out, both MARN and Conap filed a complaint to the Attorney General’s Office (MP) in November 2015, for the vanishing of the file.

There was one more surprise awaiting for MARN officials inquiring on Perenco. In 2011, six months before submitting the EIS, Perenco had submitted an Environmental Impact Analysis. This type of analysis seeks to assess the environmental damages caused by the company’s past activities. Therein lies the difference with an EIS, which tries to foresee the environmental impacts of future projects. For some reason however, in the analysis Perenco added some considerations on the impact of oil wells it intended to drill. The analysis also presented other deficiencies, for example, the number of operating wells varies throughout the report. It was for these reasons that in 2011 Conap recommended that MARN should not approve it. In accordance to the advisory opinion from Conap, MARN in turn should have rejected it. But that is not what happened.

Rather than issuing the expected resolution, and according to evidence, MARN authorities in office in 2011 sent the file to the deepest part of the “dead archive” – as it is known within the institution – where documents that no one needs pile up. This is how MARN failed to issue a resolution for the document submitted by Perenco.

The risk of sliding into unlawfulness would be too high. And apparently, rather than issuing a resolution that would contradict the interests of Perenco, the authorities chose to archive the files unresolved.

According to the documents, MARN should have issued a resolution for said analysis during the administration of Luis Ferraté. Asked about it, the former Minister of Environment said he did not remember such document and denied ordering for the file to be archived that way. “There are some tasks one delegates to directors or vice-ministers. I am not the one who reviews such documents, nor am I the one who issues their resolutions. The Minister is only responsible for the guiding and regulatory policy of the Ministry”, Ferraté justifies himself.

Indeed, resolutions to environmental impact analyses are not issued by the Minister, but by the Director of Environmental Management. At that time, it was Eugenia Castro Modenessi (RIP) who held office. Luis Ferraté and the then Minister of the Interior, Carlos Menocal, were the strongest opponents to President Colom’s entering into an oil agreement, for which Ferraté claims to have received threats.

After Andreas Lehnhoff’s team brought Perenco’s environmental analysis back to light, they did two things. The first was to file another criminal complaint for the anomalous action of archiving it without a resolution, and the second was to issue a resolution in relation to this document (doc 4). And such resolution was “not to approve it” due to its “deficiencies and inconsistencies.”

Perenco expressed its disagreement with the resolution and filed an appeal on January 4, 2016. Now it is the new Minister of Environment, Sidney Samuels, who shall definitely decide whether or not to approve Perenco’s environmental documentation. Attempts were made to contact him, but without success. Questions were sent to him, asking about the decision he would make, but they had not been answered at the time we posted this report.

One of the doubts arising from this administrative entanglement is: why did the environmental institutions fail to issue a resolution for Perenco’s files? A former employee of MARN, who asked not to be identified, provides an explanation: according to him, there is no MARN or Conap authority who would risk approving an environmental study that would validate or legalize the introduction of extractive industry operations within a protected area. The risk of sliding into unlawfulness would be too high. And apparently, rather than issuing a resolution that would contradict the interests of Perenco, the authorities chose to archive the files unresolved.

It could be argued that Perenco, in fact, fell victim to the idleness of MARN, Conap, and MEM. The missing official resolution therefore prevents Perenco from having total certainty about the lawfulness of its operations and huge investments. But according to environmental expert Fred Batlle, in such a case, after five years of administrative silence, the company should have forced the State to respond, using the judicial system. Perenco however never complained about the lack of response. On the contrary, it continued its oil drilling operations without having an approved environmental impact study.

A concern also arises in relation to the environmental condition of the Laguna del Tigre national park, after 30 years of oil exploration and the unlawful establishment of several communities. That is the reason why Andreas Lehnhoff ordered a field visit to Perenco’s facilities. “Anywhere in the world, oil exploitation generates waste and drilling muds are produced. The visit aimed at learning how such muds are being treated, how they are being converted into innocuous matter, and how heavy metals, if any, are being removed from them. We wanted to know what happened to water bodies, because one drop of hydrocarbons can contaminate a large amount of cubic meters of water”, says former Minister Lehnhoff.  The report of the field visit has not been published and not even Lehnhoff himself has been able to see it, since he left office before it was completed. 

Several attempts were also made to contact Perenco representatives. We made telephone calls and repeatedly wrote to the company’s legal advisor, Fredy Gudiel Samayoa, as well as to the Social Communications Officer, Zoraida Jordan. However, no reply was ever received from the multinational.

Translated by: Andrea Maldonado San Martín


You can read the full piece, with all the links, here and the Spanish version here.

Categories: Environment, Guatemala, Resource Extraction


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