BP has secretly settled the case being brought by more than 50 destitute Colombian farmers rendered homeless by construction of a major oil pipeline through their land (Eye 1142).

The claim switched to the UK from Colombia after one of the farmers, Jhon Morales, was killed by gunmen and their lawyer, Marta Hinestroza, was threatened, her name finding its way on to a paramilitary hit list.

Although the settlement included no admission of liability by BP, the deal – believed to be up to £3m in compensation and legal costs – further undermines the oil giant’s efforts to promote itself as socially and environmentally ethical.

Remember the Baku-Tbilisi-Ceyhan pipeline (Eyes passim)? Or the two criminal grand jury investigations in the US following the Texas City refinery explosion? And the massive Alaskan oil spill from corroded pipe? Last week’s settlement brings the total figure for compensation and fines set aside by BP in the last year to around £500m.

Leigh Day and Co, the London law firm which represented the Colombian fanners, accused the BP-led pipeline consortium of paying paltry or no compensation for the land and livelihoods ruined by the pipeline since 1995. It also claimed BP gained advantage from terror tactics used by the Colombian army and paramilitaries to guard the pipeline.

The Eye has also learnt that Amnesty International wrote to BP chief executive Lord John Browne to express its concern that BP’s security arrangements around the OCENSA pipeline may be exacerbating the human rights crisis in Colombia, Kate Allen, Amnesty’s director, reminded BP of its “duty of care to ensure their activities do not wittingly or unwittingly contribute to the human rights crisis”.

Allen was particularly concerned about the infiltration of supposedly demobilized paramilitary killers into private security firms used by the oil companies to protect installations from guerilla attack and asked BP to check its vetting procedures. “It is not sufficient for BP to claim that it adheres to the Voluntary Principles on Security and Human Rights,” she wrote.

BP maintained throughout that landowners were fairly compensated, and this claim was supported by the Colombian environment ministry. A joint statement issued on behalf of both BP and Leigh Day said: “Colombian farmers are pleased with the outcome of the mediation and are of the view that BP Colombia has acted in a fair, committed and sympathetic manner.”

Well, up to a point. The Colombian Solidarity Campaign, which took up the farmers’ case back in 2001, said: “Whatever spin BP puts on the settlement, this case blows a massive hole through its claims to social responsibility. Why didn’t the corporation listen when the community warned against the environmental risks of the project? Despite compelling evidence to the contrary, still the corporation has not admitted liability. This is not yet justice… it’s a step in the right direction.”

Statement on BP settlement with Colombian farmers 14th July 2006

“The Colombia Solidarity Campaign is pleased that BP has finally responded to the desperate plight of 500 families driven off their land by BP’s OCENSA pipeline. Our congratulations go to the displaced Zaragoza and Segovia farmers, who have lost ten years of their lives because of the arrogant and mean attitude of Britain’s richest multinational.

BP’s wholly owned subsidiary BP Exploration Colombia was the project manager initiating the construction of the pipeline, it was responsible for the environmental impacts caused by the pipeline and negotiated directly with the farmers for the pipeline’s right of way. BP is also a major shareholder of the OCENSA pipeline consortium, and it has profited enormously from sales of the oil being pumped across the farmers’ land. We estimate that BP has made $2 billion gross profits from oil sales over the ten years since the OCENSA pipeline has been in operation.

It has taken a long time for the corporation to even partially acknowledge the environmental and social costs of this mega-project passing through 800km of Colombian countryside.  The farmers have been unable to work their land primarily because of the environmental impacts of the OCENSA pipeline, especially the loss of water supplies or their contamination as a result of landslides created by the pipeline’s construction in 1996-97.

Most of the farmers joined the ranks of Colombia’s three and a half million displaced people. Although BP continues to deny legal liability, there is no doubt that it was the impact of the OCENSA pipeline that drove the peasant farmers off their land and into desperate straits, including eking out an existence on the rubbish tips of Medellin.

We first took up this case in 2001 and have been raising the issue at BP annual meetings and directly with BP Exploration Colombia’s executives and with BP Group chairman Peter Sutherland. In the meantime the peasants’ Colombian lawyer Marta Hinestroza was forced to leave the country in November 2002 because of death threats against her due to her role in the case.

The mediation settlement is the result of ten years of campaigning and legal representations. All this time BP has been in denial. The decision of London law firm Leigh Day and Co. to take up the farmers’ claim for damages and the serious possibility of a well founded civil action against it in the UK courts obliged BP to adopt a more serious attitude.

The threat of a UK court case has brought BP to the negotiating table. Despite compelling evidence to the contrary, still the corporation has not admitted liability. This is not yet justice, but at least it’s a step in the right direction.

Whatever spin the corporation tries to put on the settlement, this case blows a massive hole through BP’s much publicised claims to social responsibility. Why didn’t the corporation listen to the community in the first place when they warned against the environmental risks of the project? Why didn’t BP take adequate steps to or mitigate the risks identified by its own team of experts in 1994? We discovered that in Colombia BP does not apply its own code of conduct concerning land stewardship.

The Campaign calls for permanent, socially engaged monitoring of BP’s activities in Colombia, in Bolivia and elsewhere in the world.”

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