Explosive matter

For some time, Bolivia has been considering exploiting natural gas and oil not just from traditional extraction areas but also from previously un­exploited ones. In April, the Bolivian government raised the number of areas from which it plans to extract gas and oil from 56 to 98. In many cases, this policy will affect protected areas and land that belongs to indigenous people. The government is also issuing permits for the extraction of gas and oil in some natural reserves.

The state-owned oil and gas company Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) is promoting the current drive to expand extraction. Its role was strengthened by the renationalisation of the natural gas sector in 2006. The Morales administration used this policy to nearly triple state revenues in the na­t­ural gas sector.

There are three reasons for this increase. First of all, considerably higher tax rates now apply to private companies operating in Bolivia. Second, prices for fossil fuels have risen substantially since 2004. Finally, absolute numbers for natural gas production have also gone up significantly. The share of natural gas in the country’s total export revenue rose from 13 % in the year 2000 to 40 % in 2010. One drawback is that the Bolivian economy now depends heavily on the export of energy resources.

Current budgetary pressures explain the government’s interest in the energy sector. Just like other progressive leftist governments in the Andean region, the Morales administration must live up to social-reform promises. It needs funds for ambitious social programmes and development schemes. Indeed, Bolivia’s government managed to reduce extreme poverty substantially in recent years.

To bolster this trend, Bolivia’s public sector will need to keep growing in the future. The government policy is to accept some serious problems, including inflation and massive environmental damage, in order to benefit from the profitable resources sector. Investments in renewable energy have been relatively low so far because the short-term economic and political gains would be fairly limited in view of high world market prices for natural gas and oil.

In general, the Bolivian government is implementing a new natural resources policy, which is similar to the policies of other progressive governments in the region. Compared with the neoliberal resource policies of previous governments, this “new extractivism” is evident in the high share of the stateholdings in the natural resource sector as well as in the use of the revenues to fight poverty and promote social development.

Dispute over natural reserve

Protection of the environment and of the livelihoods of indigenous communities are centrepieces of Bolivia’s new constitution (see box below). The question today is whether – and if so, to what extent – that approach can be reconciled with a development model based on the exploitation of natural resources.

The ongoing controversy over the construction of a highway that would cut through a natural reserve illustrates the complexity of the matter. The Territorio Indígena y Parque Nacional Isiboro Sécure (TIPNIS) is located between the eastern foothills of the Andes and the edge of the Amazon rainforest. TIPNIS was declared a natural reserve in 1965. This area is rich in biodiversity and also serves as a reservation for indigenous peoples of the Yuracaré, Chimán and Moxeño Trinitarios communities.

Following protests in 1990, TIPNIS was officially proclaimed indigenous territory. In recent years, however, a growing number of internal migrants have moved to the area. The newly arrived families primarily make their living from coca production in the south of TIPNIS. Many belong to the indigenous Quechua and Aymara communities from the Andes, and they tend to back the highway project. This issue shows that Bolivia is not only experiencing a dispute over state-led and indigenous ideas of development. There is also disagreement among the various indigenous communities.

The conflict reached a high point in autumn 2011. The highway project was stayed. Before, the Plurinational Legislative Assembly of Bolivia, the national parliament, had approved a line of credit from Brazil’s development bank BNDES (Banco Nacional de Desenvolvimento Econômico e Social), and equipment to build the road was already in place. However, no one had consulted with the inhabitants of the national park – even though the new constitution guarantees such consultation on all matters that directly affect indigenous people. Moreover, the laws require an environmental impact assessment, but no such assessment was carried out.

The link between future resource exploitation and the highway project is not immediately obvious. The road plan is part of IIRSA, a set of infrastructure projects designed to serve regional integration in South America. The idea is to link the Amazon lowlands to the Andes. Furthermore, the government issued natural gas concessions in 2007 and 2008 in TIPNIS. One of them was for a joint venture of Bolivia’s YPFB and Petrobras, Brazil’s oil giant.

In September 2011, security forces repressed protests very harshly. As a response, a law was passed that declared TIPNIS off limits. Nonetheless, the government has recently started a consultation process with local indigenous communities, presumably in the hope of restarting the construction project – and, ultimately, exploiting oil and gas too.

Prior consultation

The indigenous peoples’ right to consultation is not implemented in a universal manner in Andean nations. The International Labour Organisation’s (ILO) Indigenous and Tribal Peoples Convention 169 spells out those rights. For implementation, however, more specific national legislation could be helpful, but has not been passed in most Latin American countries.

Peru was the first Latin American country to publicly proclaim a consultation law. Bolivia has yet to pass such national legislation. As is the case for other Latin American countries such as Colombia and Mexico, Bolivia’s legislature is still drafting its own law on prior consultation. However, the government introduced a decree on consultation procedures in the hydrocarbon sector in 2007.

Since then, 27 consultation processes have been completed in Bolivia. In many cases, they led to additional measures to improve environmental protection and more stringent monitoring of the ecological consequences of existing schemes.

Nonetheless, the consultations were often deficient. Information tended to be incomplete and time spans too short for serious dialogue. Moreover, there were no provisos for far-reaching changes to projects, let alone some kind of veto right for the local people. It would make sense to consider stronger regulations, especially relating to projects that are likely to have significant socio-cultural impacts that might undermine the cultural integrity of indigenous communities.

The question of whether wide-scale exploitation of natural resources can be made compatible with both the practical and constitutional requirements that are summarised in the term “vivir bien” (“living well”) will remain at the centre of social and political debates and conflicts in Bolivia in the future.