Lifted sanctions on gold, oil could slow conservation efforts in Venezuela

  • Last month, the U.S. agreed to lift some sanctions on Venezuela’s oil and gas and gold, some of the country’s largest industries, but also its most environmentally hazardous.
  • Eased restrictions could allow neighboring countries with illegal mining, such as Suriname, Brazil, Guyana and Colombia, to launder gold through Venezuela’s new legal channels.
  • Spills from oil and gas fields may continue as before given the government’s disregard for infrastructure maintenance, such as fixing pipes and replacing worn-down tanks.

Last month, the U.S. agreed to lift some sanctions on Venezuela in exchange for a roadmap to presidential elections, tentatively scheduled for the second half of next year. The deal required months of secret negotiations with the Nicolás Maduro regime, and involved easing restrictions on some of Venezuela’s largest industries, including oil and gas and gold.

The goal is to give the country a chance at free and fair elections after years of corruption and economic mismanagement. But beyond those wide-ranging political implications, there are environmental impacts worth considering, as well. Venezuela’s dilapidated oil and gas sector is a constant source of pollution along the Caribbean coast. Illegal gold mining is tearing apart the rainforest and destroying ancestral lands for Indigenous communities. As eased restrictions give way to new business opportunities, will the damage only worsen?

The U.S. granted a six-month license to Venezuela authorizing “transactions involving the oil and gas sector,” to be renewed only if the Maduro regime meets its commitments to the electoral roadmap. It authorized a similar license to its state-owned mining company, Minerven. Both the gold and oil and gas industries are free to sell to any country willing to buy.

Most of Venezuela’s mining happens in the Orinoco Mining Arc, a belt of land stretching across the middle of the country, much of it protected rainforest and Indigenous territory. The mining arc opened in 2016 by presidential decree — an illegal one, many experts have said — and has since fallen under the control of the armed forces, gangs and guerilla groups. Thousands of campsites and pieces of heavy machinery have been documented in satellite images tracking deforestation.

An oil refinery in Venezuela. (Photo courtesy of PDVSA)

Using small, criminal networks instead of formal companies allows the government, often strapped for cash due to corruption, inflation and sanctions, to funnel gold through back channels with countries that don’t respect western trade restrictions, such as Turkey, Iran and the United Arab Emirates. The lifted sanctions won’t necessarily change that business model or even the number of miners working in the area, but it could make it easier to sell to new refineries, said SOS Orinoco, an investigative group.

That means deforestation from illegal mining probably won’t change in the short-term — at least not in Venezuela. But neighboring countries with similar illegal mining problems, such as Suriname, Brazil, Guyana and Colombia, could start laundering their gold through the country’s new legal channels. Lifting the sanctions could have a long-term ripple effect through the region, changing criminal groups’ operations and how illegal gold moves internationally.

“By lifting the sanction on Venezuelan gold, the United States becomes a co-participant in the looting of the Venezuelan Amazon and chooses to ignore an ecocide that now becomes unstoppable, will be exploited by all transnational criminal groups in the region and will be impossible to hide,” SOS Orinoco said in a statement.

An offshore oil rig in Venezuela. (Photo courtesy of Repsol/Flickr)

With the oil and natural gas industry, the environmental impacts are harder to predict. Spills — of which there were at least 86 last year — have become more frequent as state-owned oil and gas company Petróleos de Venezuela (PDVSA) abandons basic maintenance of its infrastructure. It’s not only the amount of production that will determine the frequency of future spills, but also government mismanagement, according to the Observatory of Political Ecology of Venezuela (OEP).

“Eliminating sanctions wouldn’t necessarily improve PDVSA’s environmental performance,” OEP’s Emiliano Teran explained, saying that corruption and negligence need to be addressed regardless of the economic context.

Lifting sanctions might boost Venezuela’s oil and gas output and help Venezuela’s economy, but that doesn’t mean that PDVSA will do a better job of fixing pipes and replacing worn-down tanks. It also doesn’t mean it will release oil spill data and studies of the spills’ ecological impact, which would allow scientists to assess next steps for conservation efforts. That data has been hidden by the government for years.

The Maduro regime has developed a reputation for reneging on promises it’s made at the international negotiation table. Two weeks ago, its supreme court suspended the results of the opposition party’s primary, putting the longevity of the lifted sanctions at risk. More discussion was expected at a meeting between Latin American leaders and Joe Biden’s administration this month during the Americas Partnership for Economic Prosperity summit. However, nothing specific was said about it in the official summit declaration.

Banner image: Canaima National Park in Venezuela. Photo courtesy of Wikimedia.

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