Banks support oil project in the Colombian Amazon

LONDON (HPD) — In the Putumayo region of the Colombian Amazon, Segundo Meneses’ daily routine took him to the Chufiya River, its green banks and waters teeming with catfish and piranhas. One morning seven years ago, he noticed a dark film lapping at the shore. At a bend, the river turned black. According to him, it was an oil stain that made his young family sick and poisoned their cows and pigs.

The British law firm Leigh Day is now suing Amerisur, the oil company operating in the region, on behalf of 171 Putumayo farmers, including Meneses. That spill wasn’t the only complication with this particular oil operation. The indigenous Siona people who live in the area reject the oil pumping and have said they will oppose it. This region is also known for coca production and former rebel groups vie for drug turf, sometimes disrupting the flow of oil. Then there are reports from United Nations rapporteurs and an interfaith nonprofit group that the oil company, Amerisur Resources PLC, may have worked with the rebels to pressure the Siona and local farmers to stop opposing keeping the flow of oil.

None of this, however, seemed to deter an $800 million Chile-based oil and gas company called GeoPark Ltd. from buying Amerisur two years ago. GeoPark secured bank support for the Putumayo oil fields, indicating that even with climate change affecting large areas of the world, support for the activities that cause it is still available. Crude demand continues to rise, underscoring the attractiveness of oil companies and banks to continue operating as they have for decades.

“If banks help finance a company like GeoPark, there seems to be nothing they refuse to touch,” said Maaike Beenes, head of banks and climate at BankTrack, a Dutch environmental NGO. This agreement, Beenes points out, raises numerous red flags due to Amerisur’s legacy, “from doing business in a conflict zone to the expansion of fossil fuels in sensitive ecosystems in the Amazon, and a history of violations of the rights of indigenous peoples. ”.

The way GeoPark bought the whole of Britain-based Amerisur in January 2020, absorbing the company and keeping its brand, is an example of how some banks support fossil fuel projects even when they seem to go against their interests. own policies.

Citibank and Itaú Unibanco offered GeoPark a bridge loan. The company then sought help from banks to issue $350 million in bonds to pay for the purchase, according to Bloomberg data and public filings. Brazil’s Itaú Unibanco and Citibank acted as “bookmakers” for the bonds, and the Bank of New York Mellon agreed to facilitate payments on the bonds. Bookmakers advertise bonuses, coordinate orders, and generally use their reputations to build trust in bonus offers.

The agreement allowed GeoPark to obtain Amerisur’s main asset: 11 oil fields distributed in the highly biodiverse Putumayo basin. They now comprise nearly a third of GeoPark’s hydrocarbon fields, the rest spread across Ecuador, Argentina, Brazil, Chile and Peru.

The following year, in 2021, US and European financial institutions helped GeoPark restructure its debt, making more money available to the company. Bank of America, Credit Suisse and JPMorgan advised on the issuance of another $150 million in bonds, GeoPark news releases show.

Even being a client of such major banks gave GeoPark credibility, said former bond broker Jo Richardson of the Anthropocene Fixed Income Institute, who analyzed data and documents from the deal.


In a filing with the British High Court, Meneses stated that the Chufiya River was an important source of food for his family and the entire community.

But the river was changed by the events of that day. According to court documents, an armed group attacked five Amerisur tanker trucks and forced the drivers to empty their loads of crude oil into a wetland, and these reached the Agua Negra tributary, and from there to the Chufiya and beyond.

For the Colombian oil industry, rebel attacks on oil infrastructure have been a plague for decades. But the farmers argue that this attack was predictable, given the ongoing conflict in the area. A long time later, the cassava and plantain farmers say, the water was still contaminated.

Fishing became impossible, Meneses said, the edible fish were gone.

“I caught a 15-kilogram (33-pound) fish and it tasted like oil, and I couldn’t eat it,” he said in an affidavit.

In the dry season, the family had no choice but to drink and wash in the river, which caused diarrhea, skin rashes and stomach pains, Meneses added.

“For us, water is life,” continued Meneses. “Maybe I’ll die tomorrow, but my children will still be living here and I don’t want them to live in an area with such polluted water.”

GeoPark’s spokesman said the company has caused no pollution, maintains the highest standards to protect the environment and is committed to compensating for any negative impacts. Amerisur, now Amerisur Resources Ltd, cleaned up the spilled oil, the spokesman said, and will defend itself in court. As for responsibility for past events, he pointed out, they are “questions of law and fact on a case-by-case basis.”


For critics, Amerisur’s assets should never have found a buyer or financing. They say there were numerous red flags for the banks to be hesitant to help with this oil deal. Months before the first bond issue, the Siona indigenous people in the Buenavista reserve told GeoPark in a public statement that they would not allow oil production or extractive operations on their territory. They pointed out that Amerisur had already tried to take their natural resources through “illegal and rigged actions.” The tribe said it would protect its territory from “serious risks due to toxic waste” and “impacts on our spiritual practices.”

The Constitutional Court of Colombia recognizes the Siona at risk of extermination. Also before the bond deal, a 2019 ruling found that Amerisur left explosives on Siona land during seismic surveys. The company was ordered to cease this activity. In a third ongoing case, the Buenavista Siona say their land overlaps with two GeoPark oil fields, seeking 52,000 hectares (128,000 acres) of disputed territory to add to their reservation.

GeoPark denied in an email that it is working on the Siona reservation or the additional land they seek. Relations with indigenous people are based on “dialogue, respect and the generation of trust,” the company said. The company says that in 2021 it has asked Colombia to cancel the concession of the oil field that the Siona say overlaps their land, and is waiting for this to happen.


The Putumayo region is also a hotbed for coca crops and cocaine trafficking. Splinter groups of the FARC guerrillas fight each other for control of trade. One faction, the Border Command, is listed by the US Treasury Department as a terrorist organization. In December 2020, before the second bond deal, a report from a respected Colombian human rights NGO made a strong claim. The Inter-Church Justice and Peace Commission alleged that the Border Command was collaborating with Amerisur to protect its oil operations.

Displaced farmers told the commission that the rebels had ordered them not to oppose Amerisur’s exploration, and one rebel reportedly said that they had negotiated with the company and would secure the operation.

Five United Nations special rapporteurs for human rights also wrote to the head of the United Nations Development Program, Achim Steiner, warning: “There are alleged links between the company (Amerisur) and the paramilitaries present in the area, which have been denounced. by the Siona People before the Constitutional Court.”

The UN rapporteurs wrote: “Economic actors have allied themselves with irregular armed actors to generate, within indigenous communities, acts of violence that… displace indigenous peoples from their ancestral territories, thus paving the way for for… these projects.”

Colombian investigative news outlet Cuestión Pública, which works with the Mongabay news organization, reported that two independent sources said paramilitaries forced a farming community to attend meetings in which they were ordered not to obstruct Amerisur and that they should accept any offer made to them. Two other independent sources confirmed an alliance between Amerisur and the rebel group, according to the local media.

For its part, the Colombian Ombudsman, the country’s human rights agency, published a risk alert on its website saying that complaints have been received from the community about the pressure exerted by “illegal armed actors” to allow the oil extraction. Amerisur was not named in that alert. But the report did note that Amerisur is one of the two largest operators in the Putumayo area.

GeoPark assures that any accusation of collaboration with the Border Command is “100% false.” “GeoPark has never had any relationship with illegal armed groups and demands the same from its employees and the entire supply chain,” a spokesperson said.


Bank backing propelled GeoPark. In April 2021, James F. Park, then CEO, said in a press release that the deal “demonstrates the support and credibility we have earned in the international capital markets.” This puts the company in a “stronger, more flexible, less risky and less expensive position,” he said.

Citibank, Itaú Unibanco and the Bank of New York Mellon said that environmental issues were of great importance to them. Citibank and Itaú also emphasized that they take social risks seriously and perform due diligence. Citi said it is strengthening these policies. JPMorgan said it reviews all sensitive customer deals.

Bank of America and Credit Suisse declined to comment.

Meanwhile, in the rain forest, the oil pumping continues. Meneses and his fellow farmers await a trial before Christmas; British courts have ordered GeoPark to set aside 3.2 million pounds ($3.8 million) to pay out if the farmers win.


The climate and environment coverage of The Associated Press is supported by several private foundations. The HPD is solely responsible for all content.

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