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Weekly Report - 31 July 2014 (WR-14-30)

TRACKING TRENDS

PERU | Oil spill prompts reshuffle of Petroperú’s board. On 24 July the Peruvian government led by President Ollanta Humala fulfilled its pledge to restructure the board of directors of the state-controlled oil company, Petroperú, following an oil spill in the northern-eastern Loreto department. The spill took place on 30 June after a corroded tract of Petroperú’s north Peruvian oil pipeline began leaking crude oil into the ground near the locality of Cuninico, Urarinas district. An unknown quantity of crude (it is estimated that some 10,000 barrels) was spilled, affecting over two hectares of lowland Amazonian jungle and 549 local inhabitants who consumed contaminated water and fish. The incident became a scandal after the local TV show Panorama revealed that in an apparent bid to reduce local discontent, Petroperú hired members of the local indigenous communities – including minors – to help clean up the spill but without providing them with adequate safety equipment. Panorama also alleged that the nearby Cuninico and Marañón Rivers had also been contaminated by the leak – which Petroperú vehemently denies. However, on 22 July Manuel Pulgar Vidal, Peru’s environment minister, announced that his ministry would launch a full investigation and that Petroperú would face the highest possible fines if found to be in anyway responsible for the environmental damage caused. Soon after Pulgar Vidal’s announcement, Energy & Mines Minister Eleodoro Mayorga announced the reshuffle of Petroperú’s five-member board. Mayorga said the decision owed to the fact that the board was “not complying with the objectives set out for the firm” and that the government felt that greater “transparency” and “experience” were needed to handle the firms future projects – remarks that were taken to be a reference to the handling of the Cuninico spill. The main head to roll was that of board president Héctor Reyes Cruz, appointed in January 2013, who was replaced by Pedro Touzett, a former Petroperú board president (1997-2000). Vice-president Luis Baba Nakao and another board member, Jorge Luis Parodi Quesada, were also replaced.

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