Block 31, Yasuni National Park Ecuador

Ecuador's Yasuni National Park is threatened by planned oil development by the Brazilian oil company Petrobras. The oil development will take place in Block 31, two thirds of which is located in Yasuni National Park, one of the most biodiverse areas on earth and the crown jewel of Ecuador’s mainland national parks.

Currently the project will see the construction of two oil platforms inside the park, an oil processing facility near an ecologically sensitive river that forms the northern boundary of the park, flow lines from the oil platforms in the park to the processing facility, and the expansion of a supply camp on the Napo River 12.8 kilometres north of the processing facility. The area is of such biological significance it has been declared a UNESCO Biosphere Reserve.

The development will unleash cumulative impacts (including deforestation) on adjacent areas that will threaten vulnerable indigenous people living in voluntary isolation. Clashes between indigenous groups and Petrobras are considered likely, with local communities formally calling for a moratorium of oil development in the area.

30 September 2006, 43 scientists from Ecuador, the USA and Europe write to Ecuador’s president informing that no drilling should take place in Yasuni National Park. The scientists emphasize that if the government insists on proceeding with drilling, as a bare minimum several changes should be made to the existing plan using technically and financially feasible mitigation measures.

24 November 2006, the Ministry for the Environment in rejects any proposed changes suggested by the scientists to mitigate social and environmental impacts of the oil development.

8 January 2007, NGOs write the Ecuadorian government, citing examples and studies from leading oil companies BP, Statoil, Schlumberger and K&M Technologies, demonstrating that changes proposed by the scientists are both economically feasible and practical.

15 January 2007, a new government comes to power in Ecuador, headed by President Rafael Correa.

3 February 2007, President Correa announces in nation-wide radio broadcast that the government would suspend the contracts of oil companies that needlessly damage Ecuador's environment.

22 March 2007, 45 scientists and NGOs from 13 countries send letters, accompanied by a detailed dossier ("Investors' Brief”) to President Correa and the Ministers of Energy, Environment and Finance, reiterating their concerns of environmental and human rights violations in the plan of Petrobras for Block 31.

23 March 2007, scientists and NGOs send letters to Citigroup, HSBC, Baillie Gifford, BBVA, Banco Santander and Deutsche Bank, accompanied by the dossier, "Investors' Brief," detailing violations of international good practice and the Equator Principles in Petrobras plans for Block 31.

20 April 2007, the Minister of Energy sends a letter to scientists and NGOs, responding that he will review the information sent to him in the letter and dossier of March 22, 2007.

1 May 2007, scientists and NGOs send a response letter to the Minister of Energy, urging him to work with the Environment Ministry to review the Investors' Brief and to urge the Environment Ministry to delay any granting of the Petrobras operating permit for Block 31, until this review is completed, and actions are identified to address the concerns in the Investors' Brief.

In October 2007 the Ecuadorian Environment Ministry granted Petrobras a controversial Environmental License to begin operations within Yasuni National Park. The granting of this license triggered two lawsuits from indigenous organizations, challenging the Constitutionality of the license. However, both claims were rejected in 2008 by Ecuadorean courts.

The Ecuadorian government should not permit oil drilling and development in Yasuni National Park, including Block 31. To avoid needless ecological destruction and potentially tragic social conflict with vulnerable indigenous groups, the current proposal for Block 31 requires independent evaluation of feasible alternatives and major design changes, including the free, prior informed consent of affected indigenous populations, and a strategic, regional Environmental Assessment that would examine cumulative impacts and their mitigation.

Until the social and environmental risks outlined in the Investors’ Brief are addressed, no responsible financial institution should provide support for the project in its current form.

Petrobras’ Block 31 project will be constructed in an area identified by Conservation International as one of the largest contiguous tracts of the most biodiverse intact wilderness in the world. Further research has concluded that the forests of Yasuni are probably the most diverse in the world. Yasuni has been declared by WWF Scientists as among the most important ecoregions globally to protect.

The development’s environmental assessment states “the possibility of a catastrophic [oil] spill cannot be ruled out” at the processing plant, and that there is “probable” risk that indigenous communities affected by the project will engage in physical protests and interventions that could lead to work stoppages and violence.

Introducing the two oil platforms, associated infrastructure and personnel into the region will cause such broad and direct secondary environmental and social impacts that 43 concerned scientists from Ecuador, the United States and Europe wrote to the President of and its Environment Minister concerning the most recent development proposal (plans have been altered and long delays have occurred) recommending that no new drilling be undertaken in Yasuni. The letter informs that regardless of the drilling method used impacts of the existing plan, the lack of full consultation and informed consent of significant elements of the indigenous population affected outweigh all indications that the project should proceed.

The inadequate environmental assessment and likely risks have lead to apparent violations of the Equator Principles, including Principle 3, Applicable Social and Environmental Standards; Principle 5, Consultation and Disclosure; Principle 6, Grievance Mechanism; Principle 7, Independent Review. An elaboration of these violations can be found in the Investors’ Briefing.