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Q & A with Occidental

Following are excerpts from an Aug. 23 telephone interview conducted by Paul Jeffrey with Larry Meriage, Occidental vice president for communications and public affairs, based in Los Angeles:

NCR: When will you be able to begin drilling, and is this just an exploratory well?

Meriage: Certainly before the end of this year. There has been no well exploration or development in this part of Colombia before this time. This is what we call in our industry a wildcat well. You heard that terminology? Despite all the seismic work and analysis, the only way you ultimately determine whether there’s a commercial deposit of hydrocarbons is you have to drill the well. The track record in the industry in these cases on what we talk about a fully risk basis is somewhere between one in 10 and one in 12. Your chances of success ... if we were baseball players we’d be out of a job.

A couple of weeks ago you declared force majeur at Caño Limón. What does this mean and what are the implications?

There has been a rash … of guerrilla attacks against the pipeline that transports oil from the Caño Limón field that we operate for the Colombian government. What the force majeur declaration does is basically allow the contractors to suspend their contractual obligations when they are no longer able to fulfill their delivery commitments because of circumstances beyond their control. So it’s basically a legal term that allows for the temporary suspension of contractual obligations.

Is oil flowing through the pipeline today?

No, the pipeline is down. The pipeline has been a target for attacks, since it went into operation in the late ’80s, by Colombia’s two largest guerrilla groups. Most of the attacks in the early days were at the hands of the ELN. Over the last three years the FARC has become increasingly active, and really both of these groups are vying with one another for territorial control. The most recent round of attacks has been attributed to the ELN, and the experts tell us that this is related to maneuverings going on in the peace process in Colombia. The ELN began negotiations for the first time with the government and civil society in Geneva approximately a month ago. The negotiations did not go well. The talks were suspended. And these attacks have been interpreted as an effort by the ELN to improve its bargaining position with the government. The issue with the oil flow at Caño Limón is that out of every dollar of revenue that is generated, 85 cents goes to the Colombian government in various forms. All the natural resources belong to the Colombian government, and companies like us really act as contractors for the government, and we are paid essentially for our work with a percentage of the oil production. The attacks against the pipeline and the oil infrastructure over the years are really designed to weaken the government from an economic standpoint, since approximately 25 percent of the revenue generated by the government comes from oil exports.

Why so many problems with the U’wa?

The biggest issue there is that the area where the U’wa live is controlled largely by the ELN and to a lesser degree by the FARC. The ELN have made it part of their policy over the years to attack the oil infrastructure within the country. Some of the activists who’ve been involved in this have conveniently ignored this fundamental reality of that part of Colombia, and that you have guys with guns running around. We deal with indigenous communities in other areas of Latin America, but Colombia is unique because of the armed insurgency that’s right in the middle. [It] puts us right in the middle of the conflict. And it’s significant that there are other constituents, other stakeholders in the region who are not members of the U’wa community who have no problem with the project. These are mayors, communities, other elected representatives. We had no problems, for example, when we were doing work on the project in preparation of the well site, in hiring local people. We hired some 250 local people to work on the project. And despite the fact that the guerrillas attempted to intimidate people with all sorts of dire threats if they worked on this project, [that] there would be consequences for them, this is a very poverty-stricken region, and you know people are looking for economic alternatives. The other problem with the region in general is that there has been an explosive growth of both coca and heroin poppy production over the last two years, and since there is very little government control in this region, in the area near the well site, the town of Cubará, where the U’wa maintain their offices, in December of ’99 the ELN attacked and obliterated the local police barracks, killed a number of police officers, and that was basically the only vestige of civil authority you had in the area.

So are you claiming that the U’wa have been manipulated in this process?

It’s not a question that the influence of the bad guys in the region is very, very strong. We hear this from the people that we have on the ground in the region, the intimidation, and no one in that part of Colombia can move about with impunity, do what they want without taking into consideration what the policies are of the guerrillas in the region. Let’s say that there has certainly been evidence, there have been barricades go up on the highways, people walking around participating in these work stoppages and road blocks that have occurred, where you’ve had U’wa there and also people wearing the insignias and armbands of the ELN, this was very apparent. These things have been reported by other reporters, you know, in Colombia, in the Colombian media.

Do you think the press in the United States has given you fair treatment?

The press has been extremely unfair and really biased. It really deals with stereotypical images, the sort of big oil company running roughshod over the rights of small indigenous people. It’s sort of David and Goliath. But the reality on the ground is quite different. The reality in Colombia is different. It’s a very different perception that’s been created in the U.S. press from what’s been covered in the Colombian media. Very different perspective that you see here versus there.

What about the mass suicide threat?

There were some representations made to that effect. If anything, it was a magnificent public relations ploy, because it certainly got the attention of some segments of public opinion and the international activist community. But you know they keep repeating this, but the U’wa have long since backed away from that, even making reference to this.

Most observers say companies can’t operate in the Colombian countryside without paying war tax. ... What’s the situation between Oxy and the FARC in order for you to work in the region?

I made a statement in Congressional testimony that employees of the company had gotten shaken down routinely by the guerrillas. The activists have characterized this as evidence that Oxy is paying off the guerrillas. What I had said, and I have said this publicly in many parts, is that you have individual workers who live in the area, the guerrillas know who works where, and they come up to these people and put a gun to their head and essentially say we want 10 percent of your wages or there will be consequences for you and your family. Would you say that that’s tantamount to Occidental paying off the guerrillas? Which is what the activists have maintained. There’s a word for this, and it’s called extortion. … The Roman Catholic archbishop of Bogotá was saying the same thing about individual priests and parishes in his jurisdiction who were repeatedly and regularly approached by the guys with guns and forced to pay a war tax. Or the church would be blown up or the parishioners or priests hurt or kidnapped. This is unfortunately what life has become like in Colombia. ... We can’t operate in the areas where our operations are located without the protection of the Colombian armed forces and the Colombian police. Our Cano Limón operation is literally like an island surrounded by these guerrillas. … We have no internal security forces of our own. We have to rely on the authorities there to provide protection for our personnel and for the assets. Since the government basically owns the resource, they own the oil reserves. They get 50 percent of the tax base. They certainly have a vested interest in maintaining the operations.

Beyond local workers being shaken down, has Oxy made payments ...?

No. Once you start down that road there is no coming back. And the ripple effect would be for any private company to engage in the payment of extortion simply opens you up to crackpots no matter where you’re operating.

National Catholic Reporter, September 8, 2000