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BP Refuses to Compensate Peasants For Pipeline Damage » Colombia Journal

BP Refuses to Compensate Peasants For Pipeline Damage

By · August 13, 2001 · Save & Share

BP’s Colombian oil pipeline companies are refusing to pay compensation claims of $850,000 to three hundred peasants. The peasants, from the region of Zaragoza in northern Antioquia, claim that two oil pipelines passing through their farms have caused extensive environmental damage, forcing them off their land. Meanwhile, BP sells the oil on the U.S. market for $10 million a day.

The following questions about the oil company’s treatment of the Zaragoza peasants were raised at BP Amoco’s Annual General Meeting 2001, which took place in London on April 19:

1. Considering that it ought to be BP’s responsibility to respect the environment and local communities affected by its operations, and given the corporation’s claimed policies of land stewardship and Global Environmental Management, why have not these policies been implemented in the case of the Vasconia-Coveñas and Cusiana-Coveñas pipelines in Colombia?

2. And why has not BP, through its subsidiary OCENSA, settled the ongoing and just claim for compensation for loss of livelihood by a community of 300 peasants from the Zaragoza area due to the environmental damage of these pipelines?

The ODC Pipeline

BP subsidiary Oleoducto de Colombia (ODC) and the state oil corporation Ecopetrol built the first pipeline in 1990. The ODC pipeline is 300 miles long, starting in the middle Magdalena Valley and ending at the Caribbean port of Coveñas.

The pipe was laid along the higher ground of undulating terrain, with the peasant plots directly below. ODC stripped all the trees from along the pipeline corridor, leaving it without vegetation, and exposing it to water and wind erosion. The earth moving operations caused avalanches, blocked springs and diverted streams. Works for the pipeline destroyed 150 water sources along the Zaragoza section. ODC’s restoration work was conducted poorly and topsoil was not replaced. Sacks of earth rotted away within a few months and farm animals that ate the synthetic sacking were poisoned. The peasants lost their fruit trees and other crops.

The OCENSA Pipeline

BP’s Casanare wells are today the most productive in Colombia, extracting some 400,000 barrels a day of high quality crude, nearly half the country’s total output. Drilling is centered on the Cusiana and Cupiaga fields in the remote eastern department of Casanare.

Back in the early 1990′s, getting its Casanare production to the Caribbean was a crucial challenge for BP. In December 1994, BP formed a new company called Oleoducto Central, S.A. (OCENSA), partnered by Ecopetrol, two investment companies, and the oil operators Total and Triton. OCENSA managed the construction of a 435-mile pipeline that crosses the eastern Andes before it meets up with the ODC line, which it runs alongside northward to Coveñas.

BP got directly involved with communities along its new pipeline. David Arce Rojas, the agent of BP Exploration Company (Colombia), signed detailed eight-page contracts with the peasant proprietors. The contracts agreed to compensation for a strip of land just 41 feet wide. The compensation rate was 120 pesos (10 cents) per square foot of this strip, plus any additional damages.

Between June 1995 and March 1996, BP made three payments to each smallholder. In one typical case the peasant family’s total compensation package was for 1,576,250 pesos, about $1,400, or $1.70 per foot of pipeline at 1996 exchange rates.

The Compensation Claims

BP’s Cusiana-Coveñas line came on-stream in 1996, by which time the security situation had deteriorated in the Zaragoza region. Army units enforced a civilian-free corridor for 330 feet on either side of the double pipeline. The army instituted a 6pm to 6am curfew, which curtailed locals’ access to their own land, and for some, to their own homes.

The combined effects of additional erosion from the second pipeline and the curfew meant that instead of losing the use of a narrow corridor, some peasants had lost the use of their entire holdings. Some of the peasants have been forced to abandon their homes and move to the outskirts of Medellín where they have fallen into acute poverty. The peasants sum up their predicament with the saying, “My shirt has no value to you, but for me it has.”

Five families are still seeking compensation from ODC for damages and the loss of ten years of income totaling 525 million pesos ($225,00). A second group of twenty families has claims against OCENSA for $620,00 in damages caused by BP’s Cusiana pipeline. There is ample evidence. A report by two local officials of the Zaragoza court summarizes the damage as “constant erosion, scarce re-vegetation, and fundamentally the total lack of water.”

OCENSA now represents ODC’s interests as well as its own in the dispute with the peasants and has so far refused to make a settlement beyond the original payment. Its spokesman claims that, “No company has shown such environmental responsibility. We’ve done things well.”

BP’s Global Polices

BP’s ‘no damage to the environment’ policy goal sets a high standard that is not being met in Colombia. The company’s land stewardship policy emphasizes prevention: “The best way to leave the land in valuable condition is not to damage it while using it” guidance policy has been ignored by BP’s Colombian subsidiaries.

In June, BP Amoco finally addressed the questions raised during April’s General Meeting regarding the Colombia situation. A company spokesman stated that BP endorses OCENSA’s management of the ongoing situation and is confident a resolution can be reached through the Colombian legal system.

BP’s Colombia operation constitutes about one fifth of its worldwide oil output. How has BP managed to achieve record profits of $1.4 million an hour? The answer, at least in part, is that BP does not properly compensate victims who, like the peasants of Zaragoza, have lost their land and livelihoods as a consequence of its highly profitable operations.

This article originally appeared in Colombia Report, an online journal that was published by the Information Network of the Americas (INOTA).

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