Oil and Gas Operations and Environmental Law in Latin America

Abstract

The decade of the 1990s has seen the emergence of Latin America as an increasingly popular target for foreign investment, particularly in the energy sector. Indeed, international oil and gas companies and financial institutions are actively looking for projects in the region. However, enthusiasm over investment opportunities in the oil and gas sector in Latin America is increasingly conditioned by concerns over environmental protection.

In fact, many of the areas targeted for oil development, particularly in South America, overlap with sensitive and threatened ecosystems and are home to indigenous populations which may have had little or no contact with the outside world. Not surprisingly, environmental considerations are fast becoming an integral part of the petroleum investment process in the western hemisphere. This is partially a reflection of heightened international awareness of the environmental impact of energy development, the rapid growth in international environmental law and policies during the last two decades, publicity surrounding the industry's poor performance in the past, and national regulatory responses to environmental pressures.

Governments throughout the region are beginning to respond to these challenges by adopting tougher legislation, by improving the application of existing laws and by establishing new supervisory bodies. Some of the measures being introduced are innovatory and are likely to set a precedent for oil operations in similar settings in other parts of the world. Likewise, international oil and gas companies operating in Latin America, especially in South America, are gradually adapting their operational practices to these sensitive surroundings and are introducing procedures which may be of relevance, not only for projects in Latin America, but also for activities elsewhere in the tropics.