Poinbank Exchange|Indigenous Group Asks SEC to Scrutinize Fracking Companies Operating in Argentina

NEW YORK—On a rainy morning in Manhattan’s Financial District,Poinbank Exchange Jorge Nawel arrived at the regional office of the Securities Exchange Commission with a letter. As head of the Mapuche Confederation of Neuquén, an Indigenous organization in Argentina, he was calling on the commission to investigate companies that engage in hydraulic fracturing in his country and are listed on U.S. stock exchanges.

The letter, written in Spanish, addressed to SEC’s Chairman Gary Gensler and reviewed by Inside Climate News, referenced fracking operations underway in Argentina’s northern Patagonia region since the early 2010s. The area, known as Vaca Muerta, is roughly the size of Maryland and home to dozens of Mapuche communities. 

Nawel—accompanied by Gonzalo Vergez, a lawyer with the Argentine Association of Environmental Lawyers, and Sandra Silva, regional director for Latin America and the Caribbean at the nonprofit Thousand Currents—delivered the letter to two SEC staffers on Thursday.

“We want to leave you with this document in your hands, to call attention to the great impact that this technology is having,” Nawel said in Spanish, with Silva interpreting. “Hopefully, this can get to the hands of the commission leaders.”

The Mapuche Confederation asked the securities regulator to “urgently” probe the “consequences of uncontrolled exploitation” of hydrocarbons and produce a publicly available report on the “environmental, social and cultural” situation in Vaca Muerta. The letter also urges the regulator to inform investors about the risks of investing in companies operating in “environmentally unacceptable manners.” 

U.S. securities law is largely focused on transparency through mandatory disclosure rules that require companies to provide investors with truthful information about their operations. In recent years, advocates have pushed for regulators to adopt rules requiring disclosure of environmental and human rights risks. 

The Mapuche organization’s letter alleges that U.S.-listed companies are operating in Vaca Muerta with little oversight. Companies are venting methane gas “without state control” and have not been transparent about how much gas is burned in the field with flares, the letter alleges. The fumes, containing benzene and other toxic substances, can harm human health, the letter says. 

Fracking in Vaca Muerta has induced more than 500 earthquakes and high volumes of waste, posing a threat to people and the environment, the letter alleges. 

“Our culture is threatened, our territories are invaded and contaminated, our flora and fauna are poisoned, our air is affected by chemicals and our soil is shaking at the same time as uncontrolled exploitation,” the letter says. 

The letter, signed by Nawel, says that half of the oil companies operating in Vaca Muerta are regulated by the SEC. The letter does not name individual firms. 

The SEC did not respond to a request for comment. 

In Vaca Muerta, the rights of Mapuche people are violated, Mapuche land defenders are criminalized and there is a double standard maintained by oil companies that adhere to better environmental practices in their home countries while polluting “mercilessly” when operating abroad, the letter alleges. 

In recent decades, the Supreme Court has made it increasingly difficult for non-U.S. citizens to bring claims in U.S. courts for alleged violations of human rights. In March, the SEC adopted climate change risk disclosure rules, but those rules are suspended pending a series of legal challenges filed by companies. 

The SEC has no binding rules in place for risk disclosures about human rights. The nonbinding United Nations Guiding Principles on Business and Human Rights recommend that companies voluntarily issue formal reports disclosing these risks and explaining how they are being addressed. But companies rarely do so.