Major banks support rainforest oil project despite problems



In the Putumayo area of the Colombian Amazon, Segundo Meneses’ each day routine took him to the Chufiya river, its banks verdant and waters alive with catfish and piranha. On one morning seven years in the past, he seen a darkish movie lapping the shore. Where the river turned a bend, it turned to black. It was an oil slick that he says went on to sicken his younger household and poison their cows and pigs.

The British regulation agency Leigh Day is now suing Amerisur, the oil firm working within the area, on behalf of 171 Putumayo farmers, together with Meneses. That spill was not the one complication with this specific oil operation. Nearby Siona Indigenous folks say they reject the oil pumping and can struggle it. This area can be awash in coca manufacturing and former insurgent teams dispute drug territory, generally disrupting the circulate of oil. Then there are stories by United Nations rapporteurs and an interfaith non-profit group that say the oil firm, Amerisur Resources PLC, could have labored with rebels to strain the Siona and native farmers to stop their opposition to be able to maintain oil flowing.

Yet none of this appeared to discourage a US$800 million oil and fuel agency primarily based in Chile named GeoPark Ltd. from shopping for Amerisur two years in the past. GeoPark efficiently lined up banks to assist it receive the Putumayo oilfields, indicating that even with local weather modifications hitting huge areas of the globe, backing for the actions that trigger it’s nonetheless accessible. Demand for crude oil continues to rise, not fall, underscoring the lure for oil firms and banks to maintain working as they’ve for many years.

“If banks assist finance an organization like GeoPark, it appears there’s nothing they’ll refuse to the touch,” stated Maaike Beenes, banks and local weather lead on the non-profit BankObserve, an environmental advocacy group primarily based within the Netherlands. This deal, she stated, raises quite a few crimson flags due to Amerisur’s legacy, “from doing enterprise in a battle zone to fossil gas growth in delicate ecosystems of the Amazon, to a historical past of violations of Indigenous peoples’ rights.”

The method GeoPark purchased all of British-based Amerisur in January 2020, absorbing the corporate and maintaining its model, is a window into how some banks support fossil gas initiatives even once they seem to go in opposition to their very own insurance policies.

Citibank and Itau Unibanco provided GeoPark a bridge mortgage. The firm then appeared to banks for assist issuing $350 million value of bonds to pay for the acquisition, Bloomberg information and public statements present. Brazilian Itau Unibanco and Citibank served as “bookrunners” on the bonds, and the Bank of New York Mellon agreed to facilitate funds on them. Bookrunners promote bonds, coordinate orders and customarily use their popularity to lend confidence on bond gives.

The deal enabled GeoPark to acquire Amerisur’s fundamental asset: 11 oilfields strung throughout the extremely biodiverse Putumayo basin. They now comprise nearly a 3rd of GeoPark’s hydrocarbon fields, the remaining dotted throughout Ecuador, Argentina, Brazil, Chile and Peru.

The subsequent yr, in 2021, U.S. and European monetary establishments helped GeoPark restructure its debt, making more cash accessible to the corporate. Bank of America, Credit Suisse and JPMorgan suggested on issuing one other $150 million in bonds, GeoPark press releases present.

Even being the consumer of such necessary banks lent GeoPark credibility, stated former bond dealer Jo Richardson of the Anthropocene Fixed Income Institute, who analyzed information and paperwork from the deal.


In a submitting with the British High Court, Segundo Meneses referred to as the Chufiya river “an necessary supply of meals for my household and the entire group.”

But the river was modified by occasions that day. According to courtroom paperwork, an armed group attacked 5 Amerisur oil tanker vans and compelled the drivers to empty their a great deal of crude oil right into a wetland, the place it flowed into the Agua Negra tributary, and from there into the Chufiya and past.

For the Colombian oil trade, insurgent assaults on oil infrastructure have been a plague for many years. But the farmers argue this assault was foreseeable, given ongoing battle within the space.ΓÇ» For a very long time afterwards, the cassava and plantain farmers say, their water was contaminated.

Fishing turned unimaginable, stated Meneses, the edible fish gone.

“I caught a 15-kilo fish (33 lbs.) and it tasted like oil, and I could not eat it,” he stated in an affidavit.

In the dry season, the household had no selection however to drink from and wash within the river, which gave them diarrhea, rashes and abdomen aches, he stated.

“For us water is life,” Meneses continued. “Maybe I’ll die tomorrow however my youngsters will nonetheless stay right here and I are not looking for them to stay in an space with such polluted water.”

GeoPark’s spokesperson stated the corporate has induced no contamination, maintains the very best requirements to guard the setting, and is dedicated to compensation for any detrimental impacts. Amerisur, now Amerisur Resources Ltd, cleaned up the spilled oil, the spokesperson stated, and would defend itself within the courts. Regarding legal responsibility for previous acts, she stated, they’re “questions of regulation and truth on a case-by-case foundation.”


For critics, the Amerisur property ought to by no means have discovered a purchaser, or financing. There have been quite a few crimson flags for banks contemplating serving to with this oil deal, they are saying. Months earlier than the primary bond issuance, the Siona of the Buenavista reservation instructed GeoPark in a public assertion they might not enable oil manufacturing or “extractive operations in our territory.” They stated Amerisur had already tried to take their pure assets by way of “unlawful and rigged motion.” The tribe stated it might shield its territory from “grave dangers as a result of toxic wastes,” and “impacts on our non secular practices.”

Colombia’s Constitutional Court acknowledges the Siona as susceptible to extermination. Also earlier than the bond deal, a 2019 ruling discovered Amerisur left explosives on Siona land throughout seismic research. The firm was ordered to stop this exercise. In a 3rd, ongoing case, the Buenavista Siona, who say their lands are overlapped by two GeoPark oilfields, are looking for 52,000 hectares (128,000 acres) of disputed territory there to be added to their reservation.

GeoPark denied in an electronic mail it’s working within the Siona reservation or the extra land sought by them. Relationships with Indigenous persons are primarily based on “dialogue, respect and constructing belief,” the corporate stated. The firm says in 2021 it requested Colombia to cancel the concession to the oilfield the Siona say overlaps their land, and is ready for this to occur.


The Putumayo area can be a hotbed of coca cultivation and cocaine trafficking. Splinter teams of former FARC rebels struggle one another for management of the commerce. One faction, the Border Command, is listed with the U.S. Treasury Department as a terrorist group. In December 2020, earlier than the second bond deal, a revered Colombian human rights NGO’s report made a robust declare. The Interfaith Justice and Peace Commission alleged the Border Command was collaborating with Amerisur to guard its oil operations.

Displaced farmers had instructed the fee they have been ordered by the rebels to not oppose Amerisur’s exploration, one insurgent reportedly saying, “We have negotiated with the corporate and can guarantee the operation.”

Five United Nations particular rapporteurs for human rights additionally wrote to the chief of the U.N. Development Programme, Achim Steiner, warning: “Alleged hyperlinks exist between the corporate (Amerisur) and the paramilitaries current within the space, which have been denounced by the Siona Peoples earlier than the Constitutional Court.”

The UN rapporteurs wrote: “Economic actors have allied with irregular armed actors to generate, throughout the Indigenous communities, acts of violence that … displace the Indigenous folks from their ancestral territories, thus clearing the best way for … these initiatives.”

Colombian investigative information outlet Cuestion Publica, working with the information group Mongabay, stated two unbiased sources stated paramilitaries had compelled a farming group to attend conferences the place they have been ordered to not impede Amerisur and may settle for any gives it makes. Two different unbiased sources confirmed an alliance between Amerisur and the insurgent group, their report stated.

And the Ombudsman’s Office of Colombia, the nation’s human rights company, revealed a threat alert on its web site saying group complaints have been obtained about strain exerted by “unlawful armed actors” to permit oil extraction. Amerisur was not named in that alert. But the report did observe Amerisur is the one of many two largest operators within the space of Putumayo.

GeoPark rejected any allegation of collaboration with Border Command as “100% false.”

“GeoPark has by no means had any relationship with unlawful armed teams and calls for the identical of its staff and the complete provide chain,” a spokesperson stated.


The backing by the banks buoyed GeoPark. In April 2021, James F. Park, then CEO, stated in a press launch the deal “demonstrates the support and credibility we have now earned in worldwide capital markets.” This places the corporate in a “stronger, extra versatile, much less dangerous and more cost effective place,” he stated.

Citibank, Itau Unibanco, and the Bank of New York Mellon all stated environmental points have been of nice significance to them. Citibank and Itau additionally emphasised they significantly think about social dangers and conduct due diligence. Citi stated it’s strengthening these insurance policies. JPMorgan stated it evaluations all delicate offers with shoppers.

Bank of America and Credit Suisse declined to remark.

Meanwhile, within the rainforest, oil pumping continues. Meneses and his fellow farmers hope for a judgement earlier than Christmas; British courts have ordered GeoPark to put aside 3.2 million kilos (U.S. $3.8 million) to pay if the farmers win.


Associated Press local weather and environmental protection receives support from a number of personal foundations. See extra about AP’s local weather initiative right here. The AP is solely liable for all content material


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