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Communiqué on the situation created by the multinational Repsol YPF SA in its negotiation with the Assembly of the Guaraní People of Itika Guasu (APG IG).
Equipo Nizkor has had access to the documentation concerning the unproductive negotation between the APGIG and Repsol YPF S.A. (Repsol) and following a review of this information, we have decided to publish the following STATEMENT:
The Spanish corporation Repsol YPF S.A. was not in direct negotiations with the APGIG. Instead, in the course of the discussions, it reduced its legal exposure such that, by the end of the negotiation, a) it refused to give a parent company guarantee and b) the overall company risk was limited to 37.5% given that its participation as counterparty would be through Repsol YPF E&P Bolivia S.A., one of the "operators" pursuant to the Contract of Operation signed on 28th October 2006 with the Bolivian Government. The foregoing is part of a legal strategy which the APGIG has been forced to reject in order to protect its legal interests, and it has demanded that the legal counterparty to any contract be Repsol, i.e. Repsol Spain.
1) Repsol YPF E&P Bolivia S.A., a subsidiary of the Spanish-Argentinian multinational according to filings made with the U.S. Securities and Exchange Commission (SEC) for the year 2006, has submitted a proposal with certain terms which are unacceptable and which put in some doubt the existence of good faith, without which there can be no negotiation between the parties.
2) The first verifiable issue is that the Spanish-Argentinian company´s proposal is not based on the principle of equality between the parties; in fact, the proposal imposes draconian conditions which deny the rights of the APGIG not only as an indigenous people but also as individuals with rights under the Constitution of the Republic of Bolivia and under applicable international law.
3) If the APGIG were to accept the terms offered by Repsol YPF E&P Bolivia S.A., it would be unable to make any public protest for the duration of the contract, 20 years, which could affect the interests of the company, without the risk of economic sanction or criminal complaint.
4) If the APG IG were to accept the terms offered by Repsol YPF E&P Bolivia S.A, it would have to surrender the right to any and all indemnification for past and future damages, including for contamination, also for the 20 year duration of the contract.
5) The proposal submitted by Repsol YPF E&P Bolivia S.A. arbitrarily fails to acknowledge international law and even the Manual on Corporate Social Responsibility of its parent company Repsol YPF S.A.; although this is not legally binding, it is a self-imposed code accepted by the board of the parent company and therefore presumably obligatory for all its connected or subsidiary companies.
6) The proposal submitted by Repsol YPF E&P Bolivia S.A. fails to acknowledge the Agrarian Law in effect in Bolivia and effectively disputes the property rights of the Guaraní people to the Original Community Territories (TCO) ; therefore, it is true to say that the proposal denies indigenous rights to land ownership.
7) The proposal submitted by Repsol YPF E&P Bolivia S.A. contains no provision for actualising the amounts payable, notwithstanding that this is a customary provision for any contract covering a period of 20 years; nor does it address the US dollar exchange rate risk which the APGIG would then be expected to assume. It should be mentioned that Repsol YPF S.A. consolidates its accounts in euros and could use euros as the contract currency in its agreement with APGIG, thereby diminishing the rate risk; it should also provide a formula for actualising this risk, as is customary in financial markets.
8) If the APGIG were to accept the terms offered by Repsol YPF E&P Bolivia S.A., it would have no right to administer the funds paid under the agreement (which, on the basis of the negotiation, would be paid into the Guaraní Development Plan). Thus, the APGIG could not choose its own suppliers, or have any control over the implementation of any of the projects as, in all cases, these would remain the rights of Repsol YPF E&P Bolivia S.A. and of the companies which it appointed.
9) If the APG IG were to accept the terms offered by Repsol YPF E&P Bolivia S.A. it would not be covered by the third party risk insurance policy held by Repsol YPF S.A. - notwithstanding that this is customary practice in the petrol industry and obligatory in many countries - and declared (as required) to the SEC in 2006, given that the exploitation and production of the largest gas reserve in Bolivia is in Guaraní community territory. [See: United States Securities and Exchage Commision, Form 20-F, Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, For the fiscal year ended: December 31, 2006, Commission file number: 1-10220, p. 61]
9) We believe we must show solidarity with the Guaraní indigenous communities represented by the APG IG in rejecting the contract proposed by Repsol YPF E&P Bolivia S.A., and support them in the negative situation in which they are now placed, with no justification whatsoever, as a result of this company policy.
Presumably the long term profit expectations for the petrol company can be guaranteed given the rise in prices resulting from the scarcity of gas and crude oil. Presumably the Spanish company should be seeking to consolidate the stability which would naturally result from negotiation and agreement with the indigenous communities who have title to the land where those natural resources (in this case, gas reserves) are located and which are being exploited by the Spanish-Argentinian company.
This conduct by the management of the multinational does not appear to be particularly intelligent and could eventually only lead to a decision such as that taken by the Algerian state company Sonatrach.
10) We believe that the minimum requirements published by the APG IG in the communiqué which we are disseminating today should be unconditionally accepted by the Spanish company and should give rise to a negotiation between Repsol (Spain) and APG IG directly and not via intermediary companies, so that it can guarantee a long term agreement which is compatible with indigenous rights, civil liberties, racial equality, human rights, the internal laws of the Republic of Bolivia, international law and the ordinary commercial practices of international financial markets.
Madrid, Brussels and San Francisco, 03 October 2007
DDHH en Bolivia
|This document has been published on 24Apr09 by the Equipo Nizkor and Derechos Human Rights. In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.|