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When oil companies race to the bottom: Environmental enforcement in theory and corporate impunity in practice in the Peruvian Amazon

Abstract:

Over the past two decades, Latin American States have adopted laws and created institutions to oversee the activities of transnational extractive companies. Despite these efforts, scholars argue that companies routinely breach environmental regulations and face little consequences. This study employs a case study of oil blocks 1AB/192 and 8 to examine how environmental enforcement operates in practice. Drawing on data from the Peruvian Environmental Assessment and Enforcement Agency (OEFA) and a locally-run indigenous participatory monitoring system, we find that only 34 % of 1184 identified impacts were inspected, with sanctions applied in 17 % of cases. Even then, corrective measures were poorly implemented, and fines were often unpaid. We show how corporate actors exploit appeals and liquidation strategies to evade accountability. These findings highlight the structural weaknesses of Peru's enforcement system and underscore the need for multi-scalar response involving stronger institutional capacity, integration of Indigenous monitoring, and international legal reforms that address structural conditions enabling corporate impunity.