AMAZON WATCH - FRIENDS OF THE EARTH - INSTITUTE FOR POLICY STUDIES

For Immediate Release: November 14, 2002

Media Contacts:
Derrick Hindery, Amazon Watch: 310-456-9158 Nadia Martínez, Institute for Policy Studies 202 234-9382 ext 209 Jon Sohn, Friends of the Earth 720-308-7482 Jorge Cortes, CEADES - (Bolivia) 011 591 33 366236

Enviros Criticize Bolivian President's DC Visit to Help
Enron and Shell Win $125 Million Public Funds from Development Bank

Available through AP-TN: Video Footage of Bolivia Pipeline Impacts
Pipeline Damage Report and Video Released Today Available Upon Request

Washington, D.C. --- The U.S. taxpayer-supported Inter-American Development Bank (IDB) is preparing to vote on $125 million in loans to Enron and Shell for the new controversial Yabog gas pipeline project in Bolivia. Amazon Watch, Friends of the Earth, and Institute for Policy Studies are outraged that more U.S. tax dollars would be allocated Enron and Shell given their egregious social and environmental track record in Bolivia, and considering ongoing investigations of Enron's shady practices here and abroad. These groups call on the U.S. Government --which controls 30 percent of the IDB ---to reject Enron's bid for more public funds.

"U.S. tax dollars should not be used for the destruction of pristine tropical forests," said Atossa Soltani, Executive Director of Amazon Watch. "IDB's rejection of this loan will send an important signal to Enron and others that they can no longer count on public coffers to underwrite the devastation of globally treasured ecosystems."

Today, the groups released a report and video detailing the ongoing impacts of the Enron's Cuiaba and Bolivia-Brazil Pipelines. As the groups' report and video demonstrates, Enron and Shell's Cuiaba pipeline gained international notoriety for degrading the last most intact dry tropical forest in the world.

The upcoming vote by the IDB comes after the U.S. government's Overseas Private Investment Corporation (OPIC) cancelled a $200 million loan for Enron and Shell's Bolivia-Cuiaba pipeline, and asked the Department of Justice to investigate Enron for violations of the Foreign Corrupt Practices Act. Ironically, Enron was OPIC's largest client.

Groups point to the companies' bad decision to build the pipeline through the Chiquitano Forest and Pantanal wetlands and then to implement a botched conservation program. The companies also failed to "mitigate" impacts such as illegal hunting and logging along the pipeline route. These activities are accelerating deforestation. The report asserts that Enron, Shell and OPIC must now ensure that affected indigenous communities acquire land titles and receive long-term compensation for impacts they have endured and will continue to suffer as a result of the pipeline.

One of the most serious problems with the pipeline relates to Bolivian President Gonzalo Sanchez de Lozada's Don Mario Gold Mine, located in the middle of the Chiquitano Forest. "Prior to construction of the Cuiaba pipeline three years ago, OPIC, Enron and Shell pledged that pipeline out-take valves would not be built in the Chiquitano Forest", says Jon Sohn, Policy Analyst with Friends of the Earth-US. "We warned that new extensions of the pipeline through the Chiquitano would be disastrous as they would allow a number of industrial projects to pop up in a sensitive ecological area". Footage obtained from in September shows that the gold mine is starting to tap the pipeline. A representative from the mining company stated on camera that Enron and Shell's consortium had constructed gas out-takes, a serious breach of the companies' agreement with OPIC to safeguard the Chiquitano against industrial sprawl.

This week, President Gonzalo Sanchez of Lozada, who brokered the partial sale of the Bolivian state oil and gas company to Enron and Shell, is in Washington meeting with President Bush and representatives of the Inter-American Development Bank to win support for the Yabog pipeline, for plans to exploit Bolivia's gas reserves, and a proposal to export vast quantities of gas from Bolivia to California. Meanwhile, the communities affected by the pipelines have asked that the companies and financiers address the unresolved problems before allocating any additional funds to Enron and Shell in Bolivia. Enron continues to operate Bolivia's network of oil and gas pipelines in partnership with Shell. Despite its bankruptcy, Enron has not yet sold its Bolivian operations.

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