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Indigenous communities inhabit one of the most intact and biodiverse areas on the planet in the Northern Peruvian Amazon, which is crucial for humanity's future. In 1995, the Peruvian government designated and auctioned off oil "Block 64" within these territories and without their free prior and informed consent. Over nearly 30 years, at least five oil drilling companies have been expelled from these lands. But now, again, there are plans for its exploitation.
Last month, a delegation traveled thousands of miles to tell the leadership of Wall Street's biggest banks to stop lending money to Petroperú, the state-owned oil company. The company's relentless pursuit of oil and gas is threatening the lives and livelihoods of local communities and destroying the world's third largest forest carbon sink. These actions are endangering the Amazon rainforest, and edging it closer to an irreversible tipping point.
The delegation to the U.S. petitioned to meet with four of the banks actively financing oil and gas extraction in the Amazon. Citi and Goldman Sachs were the only ones who met face to face to hear their case. JPMorgan Chase (JPMC) had agreed to meet but then canceled just days before it was scheduled to take place. Our group will meet them at their annual shareholder meeting on Tuesday.
JPMC is reportedly considering arranging a new $1 billion bond for Petroperú, but should not be fooled by Petroperú's claims that they only need support to operate existing well sites to sustain their business. The company is deeply in debt to other banks it has received loans from and is facing financial collapse as those loans come due unless it can maximize its oil production and secure new financing.
A few years ago, Petroperú built the Talara Refinery, which has grown to become one of the largest refineries in the south Pacific. The refinery was financed through a syndicated loan and a series of bonds from 10 of the largest and most powerful banks in Europe and the U.S. But that debt needs to be repaid.
Petroperú just announced that it needs an additional $2.2 billion to survive, creating enormous pressure to drill for more oil. The company is again turning to private capital, claiming that "under the current circumstances" it would be "irresponsible and immoral to request further state financing," to get the money it needs to increase its oil production, which it can only do by opening up new oil wells in Block 64 and other areas of the Amazon and the Peruvian coastline. And it can only open up new wells if it secures new financing, usually in the form of new loans and new debt, to pay for new drilling.
This pattern of debt financing by banks has put in motion a vicious cycle: Petroperú is too overleveraged to be profitable unless it can increase production, which requires financing most easily acquired through new lines of credit and dismantling any opposition preventing it from extracting new oil reserves.
Today, Indigenous communities are paying the hidden costs of these oil debts. The announcement of the opening of Block 64 has brought new territorial conflicts, promoted by irresponsible local authorities and groups interested in doing business at the expense of the forest. These conflicts are accompanied by threats to Indigenous leaders trying to silence our organizations. Along the North Peruvian Oil Pipeline, owned by Petroperú, oil spills have contaminated the livelihoods of Indigenous nations. Backing this destructive industry is none other than multi-billion-dollar financial institutions expecting to be paid back, at the expense of our well-being and our right to self-determination.
Last year, the world's biggest banks poured $632 million into gas and oil production across the Amazon rainforest. Thankfully, that's nearly $120 million less than banks spent on extraction in the Amazon biome last year, but every dollar is a threat to one of Earth's most biodiverse ecosystems and our communities that have lived in balance with the forest for centuries.
Bank of America, who never responded to the delegations recent meeting request, led the pack by providing $162 million to companies involved in Amazon-extracted fossil fuel development. JPMorgan Chase came in second, funding fossil exploitation in the Amazon by an estimated $124 million, not including the 1 billion dollar bond they are currently considering arranging for Petroperú.
In total, banks have funneled $6.9 trillion into fossil fuels since the Paris Agreement went into effect in 2016. Most of these same banks promised to ramp up their climate action and align with a 1.5 degrees Celsius pathway at the U.N. climate talks in Glasgow three years ago. We have yet to see banks' highly lauded ESG standards, climate, and Indigenous rights policies, and Task Force on Climate-Related Financial Disclosures (TCFD) reports stop institutions from investing in climate chaos, enabling Amazon destruction, and jeopardizing our lives. As representatives of communities who pay the highest costs of this toxic business, Indigenous Peoples demand banks prohibit new financing of Petroperú, and prevent its clients from pursuing new oil expansion.
Olivia Bisa Tirko is the first female president of the Chapra Nation in Peru.
Senar Irar is president of the Achuar Nation in Peru.
Neil Encinas is leader for the Autonomous Territorial Government of the Wampís Nation in Peru.
The views expressed in this article are the writers' own.
