PROTECTING YOUR REPUTATIONAL CAPITAL
Investor's Due Diligence Check List
Mandate for the New Millennium
American countries are hastily moving forward with plans for new oil and
gas projects, many of them in ecologically sensitive areas. Although project
proponents promise lucrative deals for new oil and gas developments in
the Andes/Amazon region, investors should get the full risk assessment
of the highly controversial projects before committing company resources.
the mandate of the United Nations Framework Convention on Climate Change
and the Kyoto Protocol, in order to secure strong industry positioning
for the new millennium, the energy industry must begin planning its transition
to a clean energy future. Considering dwindling public support for fossil
fuel subsidies and rising demand for clean energy alternatives, it no
longer makes sense for the petroleum industry to spend more than $150
billion a year on new oil and gas exploration.
and gas leases in the Andean Amazon region face growing opposition by
local communities and indigenous peoples as well international human rights
and environmental organizations who are determined to halt the devastation
of Amazon’s natural resources. Legal challenges, legislative action,
boycotts, and consumer market campaigns resulting from such opposition
translate into substantial financial risk. South American has huge renewable
energy potential—shift capital there.
information and assistance in researching risks associated with these
and other controversial energy projects in the Amazon region, please contact:
Tel: 310- 455-0617
Make sure you
are fully aware of the potential risks before committing your company’s
resources. Here are some useful questions to ask before investing:
Have the appropriate legislative or regulatory bodies approved these studies?
Has the project passed required environmental review and has it received
proper regulatory approvals? Is the project in compliance with internationally
accepted indigenous and human rights laws?
What are the potential public relations costs of investing in the project?
Will your institution face negative publicity and protests from impacted
populations and environmental organizations?
the environmental and social impacts of the project been fully assessed?
Are associated impacts (upstream, downstream risks) fully taken into account?
Are these impact studies publicly available in appropriate languages in
Does the project impact indigenous reserves or lands for which indigenous
land claims remain unresolved? Does the government face legal challenges
on land rights disputes?
the project impact ecologically sensitive areas? If so, what laws would
potentially be violated and does the project face legal challenges?
of government oversight:
What unknown risks does your project face from lack of proper environmental
oversight and enforcement capacity?
Have local communities impacted by the project been properly consulted?
Have local communities given their consent for moving forward with the
project? Are there legal challenges?
overruns and schedule slippages:
Could environmental or social controversies result in project delays or