Canada, not China, dominates energy and mining in the Amazon

Canadian companies hold the largest share of foreign investment in energy and mining projects in the Amazon, while Chinese companies control just 10% in the hydroelectric and extractive power sectors, according to Of published by thinking group Inter-American dialogue.

“I don’t think anyone knew exactly how active Canada was in the Amazon,” said Lisa Viscidi, director of the organization’s program on energy, climate change and extractive industries, adding that the low Chinese participation was also surprising.

The collection of hydroelectric, oil and gas and mining data in the Amazon aims to identify companies and banks with projects in priority ecosystems. The Amazon, for example, is a carbon reservoir that is home to millions of species of plants and animals and native groups, according to the report. Energy and mines in the Amazon.

In South America, 197 Canadian mining companies own or operate projects worth an estimated $ 8 billion. In an area that the report defines as “biogeographic Amazonia” – the cradle of its biodiversity, which transcends legal and political borders –, they control actions equivalent to 47 projects, according to the data.

Canadian companies also control 30 oil zones in the Amazon, the largest number among foreign entities, and 24 of them are in Colombia.

Most publicly traded mining companies with projects in Latin America are listed on the Toronto Stock Exchange, Canada, which includes the largest number of publicly traded oil and mining companies in the world.

In addition to the nationalities of the investors, the survey collects data on the progress of projects in sectors with high endemic social and environmental risk, as well as on their novelty or their participation through a merger or development. ‘an acquisition. It also records whether the owners and operators of the projects are public companies or private companies.

State-owned companies, domestic and foreign, dominate energy and mining projects in countries of the world’s largest tropical watershed, as shown to look for. The former invest mainly in oil and gas, while the latter in mining.

China and the Amazon: energy interests

With just under 10%, China holds the largest share of foreign investors in hydroelectric projects in the Amazon.

Major projects include the disturbing Coca-codo Sinclair unit in Ecuador, and the controversial dam by Belo Monte, in Brazil. However, its main interests in oil and gas in South America lie elsewhere.

According to Viscidi, this is largely due to the fact that China’s energy security concerns require control of large proven reserves of oil, which are often found at sea. Oil fields in the Amazon Basin tend to have lower production levels and attract interest from small businesses, Viscidi said.

The exception is the Ishpingo-Tambococha-Tiputini (ITT) field in Ecuador’s mega-biodiverse Yasuní National Park.

Yasuní was the subject of a controversial and unsuccessful attempt by former President Rafael Correa to attract international donations in exchange for do not explore soil oil. The park is also home to isolated indigenous peoples.

The citizens of this country are the most important shareholders

At Andes Petroleum, a joint venture China Petrochemical Corporation (SINOPEC) and China National Petroleum Corporation have invested in three areas of the park, according to the report. Among the blocks operated by the affiliated company PetroOriental SA is block number 14 (called Nantu).

the native Waorani treaty recently Petro Oriental SA, arguing that the impact of flaring and gas release during oil extraction in Block 14 violated their human rights. The lawsuit also indicates that the company violated the natural rights of the people, recognized by the constitution of Ecuador.

China’s environmental standards

Disputes with Amazonian communities in Ecuador have contributed to the perception that Chinese companies have lower environmental standards than other international entities operating abroad.

However, a to study 2017 led by Boston University found no evidence that Chinese companies are doing better or worse than other nationalities with projects in Latin America. Although, according to the report, the track record of Chinese companies varies according to “host countries’ own requirements,” and agreements involving these companies are more opaque.

“When there is a Chinese project, there is a lot more attention, ”said Viscidi, explaining that this could result from the perception that Chinese companies apply fewer social and environmental safeguards and are less averse to environmental, social or governance risks.

With few exceptions, international energy and mining companies have largely stayed away from operations in the Amazon. In addition to difficulties in accessing resources in remote locations, they may face pressure from shareholders to demonstrate that they meet the highest environmental, social and governance (ESG) standards.

more cautious banks

The project’s funders have also come under scrutiny. In the past, multilateral banks such as the World Bank, CAF (Latin American Development Bank) and the Inter-American Development Bank have provided long-term finance for hydroelectric and mining projects in Amazon countries. However, they have only issued two loans since 2015, according to the Inter-American Dialogue survey.

In addition to the long payback period for financing, Amazonian hydropower projects are associated with serious social and environmental impacts, including the resettlement of indigenous peoples and the cash of the course of rivers.

Large-scale deforestation is often a consequence of the creation of reservoirs, releasing carbon stored in trees into the atmosphere.

However, the exit strategy of state and multilateral banks and enterprises could reduce their ability to monitor projects and open the door to lower quality financiers, the report argued.

For Viscidi, we need more awareness and pressure on public companies in terms of the environment. She noted that public and oil companies are responsible for a significant share of countries’ carbon emissions and play a key role in the energy transition.

“It is the citizens of this country who are the most important shareholders. This must come from pressure from the general public and it will only come if there is good information and good awareness, ”explains Viscidi.