BP pays out millions to Colombian farmers

A group of Colombian farmers has won a multimillion pound settlement from BP after the British oil and gas company was accused of benefiting from a regime of terror carried out by Colombian government paramilitaries to protect a 450-mile pipeline.

Many of the 1,000 farmers and their family members who worked on 52 farms affected by the development, say they have been since been forced to live in destitution in the surrounding towns.

They alleged that BP benefited from harassment and intimidation meted out by Colombian paramilitaries employed by the government to guard the pipeline. It was never alleged that BP had any involvement in any of the paramilitaries' activities.

Last year, the farmers instructed British lawyers to bring a human rights challenge in the High Court in London to support their claim for compensation of £15m. In settlement of the dispute, BP Exploration Company (Colombia) has agreed to set up a trust fund to pay compensation. BP will also pay for workshops to help the farmers cope with environmental management, business development and the company will also supply other support requested.

The total package is not believed to be as much as the £15m first claimed, but is a substantial multimillion pound payout.

The mutually agreed deal means that BP does not have to admit any liability and has avoided a costly and potentially embarrassing court case in London.

Colombian lawyers who tried to help the farmers claimed they faced intimidation by local paramilitary groups. Marta Hinestroza, one of the farmers' lawyers, fled Colombia for Britain when she discovered that her name was on a paramilitary hit list. In November 2002, the Home Office granted Ms Hinestroza political asylum after she told of the threats she faced while working in the region.

Last year, a team of solicitors from British firm Leigh Day & Co flew out to meet the farmers. Martyn Day, the lead partner, said after the meeting that it was clear that the families were once respected and well-off members of the local community who had been financially ruined.

But BP insisted throughout that it has acted responsibly and that landowners were fairly compensated during the construction of the pipeline.

BP Exploration was the driving force behind the consortium that owns the Ocensa oil pipeline, which runs 500 miles from the Cusiana-Cupiagua oilfields in the region of Casanare to the port of Covenas, and has a pumping capacity of 620000 barrels per day.

As soon as the construction work began more than 10 years ago, the farmers said they noticed an impact on the local water table. Natural springs that local people had relied on for hundreds of years began to dry up, while other farmers complained of flooding. Crops failed, fishponds became unsustainable and livestock perishedin the fields. Colombia's oil pipelines have also become targets for insurgent groups. To stem the attacks, government-aligned paramilitaries have been deployed close to the pipelines. The soldiers have killed farmers' livestock for food and, when the farmers objected, soldiers claim they were threatened.

A joint statement, issued by BP Exploration Company (Colombia) Limited and the British lawyers acting for the farmers, said: "The Colombian farmers group are pleased to say that after a mediation process which took place in Bogotá in June 2006 at the joint initiative of the parties, an amicable settlement of the dispute in relation to the Ocensa pipeline has been reached, with no admissions of liability."

It added: "The precise terms of the amicable settlement are based on the establishment of an environmental and social improvement trust fund by BP Colombia for the benefit of the farmers, in conjunction with a programme of workshops for the farmers dealing with issues such as environmental management, business development and other topics requested by the farmers.

"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 in dealing with their situation during the course of the mediation."