FOR IMMEDIATE RELEASE
May 11, 2021
Contact: Lisa Viscidi
Program Director, Energy, Climate Change & Extractive Industries
Washington, DC – The Amazon rainforest, one of the world’s most important ecosystems, faces environmental impacts from hydroelectric dams, oil and gas drilling sites, and mining projects producing gold, copper and other substances. A new database and analysis by the Inter-American Dialogue reveals that state-owned enterprises, as well as small and mid-sized international companies from a handful of countries, operate the largest share of such projects in the Amazon region, meaning these companies have a substantial influence over the implementation of environmental and social safeguards.
“This unique data set and analysis provide the first-ever comprehensive look at the corporate and financial interests behind energy and extractives in the Amazon biome,” says report co-author and program director Lisa Viscidi. “Our analysis provides evidence for many long-held assumptions but also reveals some unexpected conclusions, such as the relatively small representation of Chinese companies in the extractives sectors in the Amazon, compared to Canada’s much larger presence,” she notes.
The new database and report provide a snapshot of the entities that own, operate, and finance hydroelectric, oil and gas, and mining projects in the Amazon region, including the countries where companies are headquartered, the types of companies present, the major financial backers, and the deals made within the three sectors.
“Ensuring the long-term ecological integrity and climatic function of the Amazon Basin is a shared priority of governments, civil society, and the private sector. That requires a sophisticated understanding of current resource use across sectors and at the pan-Amazon scale,” says Kristina McNeff, program officer at the Gordon and Betty Moore Foundation, which provided support for the project. “To that end, this report and database shed new light on Basin-wide trends in the energy and mining sectors. We believe this information is critically important for future planning efforts that prioritize the natural freshwater and terrestrial connectivity in this vital ecosystem,” added McNeff.
Viscidi and her co-author Sarah Phillips conclude that:
- State-owned enterprises own and operate the majority of projects in the oil and power sectors in the Amazon region. Major international companies have very limited presence in all three sectors in the Amazon region, possibly due in part to the potential environmental and social liabilities and reputational risks. If projects continue to operate in this sensitive ecosystem, this may represent a negative development since these large companies are believed to have higher environmental and social standards than smaller, less accountable companies.
- Foreign companies from a wide variety of countries own and operate oil, mining, and hydropower projects in the Amazon region, but the majority of foreign firms are headquartered in a small group of countries. Chinese companies are the largest foreign investor in Amazon hydropower but their overall footprint in energy and mining in the Amazon is small: Chinese companies own less than 10 percent of total project equity in the Amazon in each of this study’s three sectors.
- The companies that own and operate energy and mining projects in the Amazon region have remained mostly consistent over the life of the projects. In all three sectors there were relatively few deals, such as mergers and acquisitions, full asset sales, or partial equity sales, despite major international shifts in commodity prices and interruptions to operations in recent years. Given the long life of such projects, this means that the entities that initially acquire the rights to develop them will likely influence their environmental impacts for many decades.
- Financial backers, which mainly include multilateral and national development banks, commercial and investment banks, and private equity funds, could also have substantial influence over these companies’ practices. Multilateral and national development banks, particularly CAF – Development Bank of Latin America, the Inter-American Development Bank, and the Brazilian Development Bank, have made loans to many hydropower projects but been almost entirely absent from the mining sector. Commercial and investment banks have also loaned to both the hydro and mining sectors.
About the Inter-American Dialogue
The Inter-American Dialogue engages our network of global leaders to foster democratic governance, prosperity, and social equity in Latin America and the Caribbean. Together, we work to shape policy debate, devise solutions, and enhance cooperation within the Western Hemisphere.