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Companies belonging to Enron, Shell under
scrutiny
By Franz Chávez
La Paz, Bolivia, May 19 (IPS) — Bolivia is investigating
companies belonging to US corporate giant Enron and the Dutch-British
Shell for illegal maneuvers involving the commercialization and transportation
of natural gas and unauthorized exports to the Brazilian city of Cuiabá.
If found guilty, the companies would be subject to hefty fines, and
their offences would provide grounds for revoking the concessions under
which they operate in Bolivia.
Transredes, Gas TransBoliviano (GTB) and Gas Oriente Boliviano (GOB),
which belong to the multinational oil companies, pumped natural gas
from Río Grande, in the eastern Bolivian department of Santa
Cruz, to the town of San Matías, on the Brazilian border, on
the request of Southern Cone Gas and Transborder Gas Service, firms
that also belong to Enron and Shell.
Across the border, in Cuiabá, Brazil, Enron has been operating
a gas-fired power plant since obtaining the concession in 1997.
Bolivia’s Superintendency of Hydrocarbons is studying the case
to determine whether it involves an infringement of the Law on Hydrocarbons,
which prohibits companies from simultaneously transporting, distributing,
buying or selling, and generating electricity.
GTB, a consortium made up of Transredes, Enron, Shell and Petrobras
(Brazil’s oil company), filed a plea with the Supreme Court, arguing
that it is legally distinct from its Enron and Shell shareholders.
Brett Wiggs, the president of Transredes, a consortium in which Enron
and Shell hold a majority stake, denied that the company had anything
to do with the buying and selling of natural gas, and said the accusation
was motivated by “political interests.”
An investigation by local newspaper La Prensa also revealed that Southern
Cone, a company that is not registered to operate in Bolivia, paid the
National Tax Service $6.3 million to export gas to Cuiabá.
The unauthorized activity was detected when the Andina oil company demanded
the right to pump natural gas through the pipeline administered by GTB.
After Andina filed its complaint, the General Superintendency of the
System of Sectorial Regulation discovered that other companies were
involved in the commercialization of fuel without being registered to
do so.
A government source told IPS that the public prosecutor’s office
in the central Bolivian city of Santa Cruz found out about the unauthorized
exports of natural gas to Cuiabá and asked the national customs
office for a report on possible tax fraud by Andina.
Customs is now preparing an accusation against Andina, which declared
that it sold 13.3 million British thermal units (BTUs) of gas to Southern
Cone at a price of $14 million.
The charges would be smuggling and “clandestine operation,”
and if they are found guilty, the companies would be subject to a fine
equivalent to the value of the illegally exported gas.
A spokesman for the Superintendency of Hydrocarbons told IPS that there
would be no official information available on the investigation headed
by the General Superintendency until it is completed.
Through agreements with Brazil, Bolivia legally exports 2.2 million
cubic meters of natural gas to Cuiabá daily.
Bolivia, which has Latin America’s second-largest gas reserves
after Venezuela, exports a total of 13 million cubic meters of gas a
day to Brazil, South America’s giant.
According to a statement issued by Andina, the unauthorized exports
of natural gas to Cuiabá took place from November 2001 to November
2002, and failed to pay the 18 percent tax on earnings to the Bolivian
state, as stipulated by the Law on Hydrocarbons.
The scandal has further compounded the problems facing the natural gas
industry, which was a central focus of the protests that forced president
Gonzalo Sánchez de Lozada to resign last October.
The unrest was triggered by protests over the government’s plans
to export natural gas to Mexico and the United States through a pipeline
that would run to a port in Chile, with which Bolivia has a longstanding
territorial dispute over the loss of its access to the Pacific Ocean
in the late 19th century.
The protesters were also demanding reforms of the Law on Hydrocarbons
in order to increase the state’s share of earnings on the natural
gas exported by corporate oil giants from the current 18 percent.
Some sectors of society, especially the Central Obrera Boliviana (COB)
central trade union, want to re-nationalize the country’s natural
gas.
But the government of President Carlos Mesa, who succeeded Sánchez
de Lozada, has rejected demands for nationalization on the argument
that it would have to pay around $8 billion to indemnify the transnational
oil companies, which have invested some $3.5 billion since the privatization
of the industry in 1997.
COB accuses Mesa of betraying the promises he made when he became president,
because of an agreement he recently signed to export four million cubic
meters of natural gas a day to Argentina, a country in the midst of
an energy crisis.
The scandal over Enron’s supposed links to unauthorized activities
involving natural gas sales coincided with the start of an investigation
promoted by parliamentary Deputy Wilson Magne, of the New Republican
Force, into how the company gained access to a $150 million package
of shares without allegedly investing any money.
Enron began to operate in Bolivia in July 1994, while sales of natural
gas to Brazil were under negotiation, and the government of Gonzalo
Sánchez de Lozada, in its first term, alleged that the country
was in need of a “strategic ally’’ to help set prices
and export volumes.
The US-based transnational — which went bankrupt in late 2001 amidst
an enormous financial scandal — claims that it invested in the
construction of the pipeline to export gas to Brazil.
Until November 2001, when a new pipeline running to Cuiabá began
to operate, the only means of pumping natural gas to Brazil was a pipeline
running to the southern Brazilian state of Rio Grande do Sul.
The new pipeline cut through the Chiquitano forest, the world’s
largest remaining dry tropical jungle, which is home to a number of
indigenous groups.
The project drew protests from environmental groups like the World Wildlife
Fund, which urged Washington to cancel a $200 million loan.
Enron erroneously reported that the forest in question was not a primary
forest, apparently in order to obtain the loan from the US Overseas
Private Investment Corporation (OPIC), which is prohibited from granting
loans to infrastructure projects in “primary tropical forests.”
Redlisted.com, an advisory web site for potential investors in international
development projects that provides a compilation of the most environmentally
controversial and financially risky projects in Latin America, reports
that the pipeline and the power plant run by Enron in Cuiabá,
in Brazil’s Mato Grosso region, have caused irreparable damage
to the Chiquitano forest.
More rehabilitated wetlands in South
Africa, more water supply
By Moyiga Nduru
Johannesburg, South Africa, May 15 (IPS) — As South Africa’s
new government braces itself for the task of extending clean water supplies
to more people, environmentalists are warning there may soon be little
water to distribute if conservation efforts are not stepped up.
They believe the country will run out of water by 2030 unless current
water resources are better maintained. A key part of this challenge
involves reclaiming areas known as wetlands.
Wetlands act as sponges in preventing the evaporation and flow of water
especially during summer. Since vegetation covers wetlands, there is
little fear about the loss of water through evaporation. Wetlands also
play the crucial role of natural filters, purifying water by trapping
pollutants, bacteria and viruses which cause diseases like diarrhea
and dysentery.
According to John Dini of the National Botanical Institute of South
Africa, between 35 and 60 percent of South Africa’s wetlands —
which include springs, marshes, and swamps — have been destroyed
over the past 40 years.
“Historically wetlands were perceived as [having] no value. They
were drained for agriculture, housing development or building dams,”
he told IPS.
The provinces of KwaZulu-Natal, the Eastern Cape, Mpumulanga and Limpopo
were especially hard hit by this ill-informed approach to development
as a result of agricultural activities and siltation caused by erosion
of overgrazed lands. These provinces are now receiving attention from
government and environmental groups.
“Since 2000, we have recovered 50,000 hectares — the size
of about 100,000 soccer [fields] — of wetlands,” says Dini.
Between 2000 and 2004, the government allocated around $16 million to
rehabilitate the wetlands under a poverty alleviation initiative.
“Under the program, we employ 1,000 people per annum. Of the total,
60 percent must be women, 20 percent young people, one percent disabled
people, and so forth. The program targets disadvantaged people,”
says Dini.
The rehabilitation work includes the blocking of canals that were originally
dug to dry out the wetlands, so the water can spread into previously
dried-out wetlands. Once done, the vegetation grows back.
According to the World Wide Fund for Nature (WWF), a Swiss-based non-governmental
organization (NGO) that is helping to reclaim the wetlands, some 65
percent of South Africa receives an average of less than 500 mm of rain
a year — making it a water-scarce country.
By 2025 the country’s water requirements will outstrip supply unless
urgent steps are taken to manage this resource in a more sustainable
manner, the WWF adds.
According to the NGO, there are already problems of supply and quality
regarding water provision, with an estimated eight million South Africans
currently having no access to potable water.
A comparable figure was given by South African President Thabo Mbeki
during an address to parliament in February. “After the demise
of Apartheid in 1994, 16 million people had no access to clean water.
By 2004 nine million additional people now have access to clean water,”
he told legislators.
Decades of racial segregation in South Africa ensured that most of the
country’s majority blacks did not benefit from the provision of
basic services like water and electricity. The problem is especially
severe in rural areas where many blacks live -- most of them very poor.
About half the country’s 45 million citizens live below the national
poverty line of 52 dollars a month, John Ohiorhenuan, the United Nations
Development Program’s (UNDP) representative in South Africa, said
at the May 5 launch of the “South Africa Human Development Report
2003.”
There are also fears that global warming will add to the problems affecting
wetlands.
“If global warming intensifies, South Africa is going to be dry,”
Geoff Cowan, deputy director of the Department of Environmental Affairs
and Tourism, said in a telephone interview.
South Africa’s annual population growth rate of 1.35 percent is
also a matter of concern. “There will be many people and not enough
water for everyone,” Cowan notes.
South Africa is a signatory to the Ramsar Convention, an international
treaty which provides a framework for cooperation on the conservation
of wetlands. Pretoria ratified the treaty in 1975, two years after signing
it in the Iranian city of the same name.
The convention encompasses over 1,000 wetland sites around the globe,
or about 78 million hectares of territory.
Some 16 sites in South Africa have, in terms of the convention, been
designated as wetlands of international importance. These wetlands are
considered important because of their ecological and hydrological values,
and their importance for conserving biological diversity.
One of the wetlands, De Mond State Forest -- which was designated in
1986 -- is situated in the Western Cape Province, at the estuary of
the Heuningnes River. The river extends around 12 kilometres across
the flat coastal plain of the Zoetendals Vallei farm area before breaking
out to sea through a double dune ridge, according to a South African
briefing document “The Ramsar Convention” on wetlands.
The wetlands, designated a Ramsar site, is one of the few confirmed
South African breeding sites of the Damara tern. This species is endemic
to southern Africa, is listed as rare and vulnerable and is possibly
the rarest resident sea bird in South Africa, said the document.
“Other breeding birds include [the] African black oystercatcher,
blue crane, Kittlitz’s plover and Egyptian goose. As the most southerly
estuary in Africa, the site is scientifically important for species
distribution extremities, including the southernmost records of tropical
species like the ginger prawn, giant mud crab and a gastropod,”
according to the document.
South Africa’s obligations under Ramsar include the promotion of
the wise use of all wetlands.
Local people benefit directly from wetlands products such as fish, rice,
and timber, or indirectly from their functions such as flood control,
erosion control, and groundwater recharge. Wetlands are also useful
for recreational activities such as game viewing and fishing.
Environmentalists say more money is needed for rehabilitating the wetlands,
but the government only gives a paltry $7 million per annum for this
purpose.
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