Note: This paper is intended for an audience with Ecuador’s Ministry of the Environment in order to advocate for a change in the treatment of indigenous rights throughout Ecuador’s Amazon region.
Oil extraction in the Yasuní-ITT section of Ecuador’s Amazon rainforest has wrought social and environmental destruction since its rapid expansion in the 2010s. The biodiversity of this section of the Amazon and the cultural patrimony to which it is home are threatened by the prospect of increased petroleum extraction activities by both state-led and external private companies. While eliminating subsidies on fossil fuels can help to more efficiently price fossil fuels and make them less competitive in a free market, a failed 2019 austerity package in Ecuador that included the rapid removal of these subsidies resulted in hazardous inequity that led to two weeks of protests and an ultimate abandonment of the decree. This paper recommends that Ecuador must follow the example set in the Pastaza Province and expand indigenous land rights in the Amazon to empower the communities with the agency necessary to determine whether or not extractive activities will take place on their lands; in the Pastaza Province, a 2019 legal victory halted current and future petroleum extraction projects and acknowledged that national and international laws granting indigenous people the right to self-govern had been violated. Since indigenous spokespersons have been outspoken about their strong stance against all extractive activities, by codifying indigenous land rights definitively in the Amazon and affirming indigenous autonomy, this policy will ensure that indigenous communities and their jungle environments are protected.
East of the central Andes, the Ecuadorian portion of the Amazon comprises almost half of the small country’s entire land area, most of it under the protection of national parks and bioreserves. While the South American rainforest as a whole is quantifiably the most biodiverse terrestrial environment on the planet, environmental researchers posit that the Yasuní National Park is home to the most biodiversity on the planet, due to its ideal geographical trifecta at the foot of the Andes, on the equator, and in the tropical rainforest – the optimal environment for speciation. The Yasuní is Ecuador’s largest continental protected area, comprising over one million hectares.
The Ishpingo-Tambococha-Tiputini (ITT) portion of the Yasuní alone is home to more species per acre than all of North America. It is also home to indigenous communities like the Waorani, whose land rights and home are consistently threatened by industrialization. Among the biggest threats of industrialization is the region’s wealth in oil: The petroleum reserves of the Yasuní were first identified in the mid-20th century and small extraction operations have existed in the park since the 1970s.
A Missed Opportunity
Over the past decade, petroleum extraction in the Ecuadorian Amazon has aggressively expanded, led by the publicly held company Petroamazonas. This was not the predestined fate of this part of the rainforest. In 2007, in light of the potential windfall that this hydrocarbon megafield promised Ecuador, then president Rafael Correa, leader of the progressive Alianza País party, proposed an economic alternative to oil extraction in this region: If the global community could raise enough money (US$3.6B) to offset the money Ecuador would receive by extracting the petroleum, then exploitation of these oil-rich fields would not be allowed, and the petroleum would stay underground. The proposal was purely economic – oil extraction has devastating externalities borne most heavily by local communities affected by the process of extraction but also by the whole world in lost natural resources of the rainforest, including carbon sequestration in a warming world; but these negative externalities could only be avoided if the international community could recognize their potential cost and replace the promised revenue from oil extraction, the profits of which would be used to fuel the country’s developing infrastructure and social programs combatting poverty. By 2013, the international community had failed to raise even a fraction of the target funds to prevent extraction, and oil exploitation in the Yasuní-ITT (dubbed “Block 43” by the oil sector) was consequently given the greenlight by the Correa administration.
Consequences of Oil Extraction
The most conspicuous consequences of oil extraction in rainforest environments are deforestation and contamination. In 2018, satellite imaging studies conducted by Monitoring of the Andean Amazon (MAAP) by Amazon Conservation Association and ACCA Conservación Amazónica showed a direct loss of 169 hectares for petroleum infrastructure and an indirect loss of 248 hectares related to the construction of roads for machinery and crude oil transportation vehicles, constituting a total that exceeds the established parameters by 117 hectares. The wildlife in a single hectare is also invaluable and unquantifiable – with some estimates summing over 100,000 species, many of which are endemic to the area. The damage done by deforesting these hundreds of hectares could take almost a century to fully calculate due to how intricately these hundreds of thousands of plant, animal, and insect species interact with each other.
The social impacts of this industry are hazardous to the lifestyles of those indigenous communities of the area that are voluntarily isolated. As roads are developed further and further into the jungle, their cultures are more and more exposed to industrialization and their customs, traditions, and livelihoods based on coexisting with a healthy forest are increasingly threatened. The “untouchable zone” designated to protect these isolated communities and the large buffer zone around the untouchable zone has been a political football as extractive operations continue to build platforms deeper into the jungle. In 2020, this prompted an additional concern of spreading the coronavirus to these indigenous communities as well. In defense of their roadway development, Petroamazonas released a statement that they were not constructing highways or roads, but rather “access routes” to their internal platforms, – an ambiguous distinction.
In addition to the destructive environmental & social consequences of the process of extraction, the Ecuadorian government and Petroamazonas have received heavy criticism for their secretive management of the project and evasive answers to inquiries; furthermore, the area’s protection by the country’s armed forces makes accessing and evaluating the site by external parties next to impossible, further driving suspicion that the extractive practices are causing greater damage than publicly acknowledged. Even indigenous legislators from the country’s Commission on Biodiversity have faced red tape that has prevented them from inspecting the site to make sure it complies with the Declaration of National Interest of Blocks 43 & 31 (the decree that allows for conditional extraction in these protected areas).
The prospect of increased exploitation of this region is an enticing economic opportunity for the presidential candidates who will be squaring off in an April runoff of the January 2021 election: Socialist economist Andres Arauz, a disciple of former president Rafael Correa, won the plurality of votes in the January election, followed closely by a razor-thin margin between indigenous rights activist Yaku Perez and conservative right-wing banker Guillermo Lasso, whose eligibility for a runoff will be determined by a vote recount. Perez has defined himself as the only frontrunning candidate who is wholly opposed to mining and extractive industry; on the other hand, Arauz and Lasso have both expressed interest in petroleum development as an economic avenue, in which Lasso is in favor of opening the region up to further strategic investments from external private companies and Arauz is more invested in state-controlled extractive activities.
In a country whose economy depends largely on three industries – agriculture, fossil fuels, and tourism – the crushing decrease in tourism and agriculture due to the COVID-19 pandemic pushed Ecuador’s fossil fuel exports to center stage as their primary economic salvation in 2020, a fact that the presidential hopefuls are well aware of as they look to build out their own economic plans. Nevertheless, in October 2020, the Constitutional Court of Ecuador permitted the consideration of a previously twice-rejected Extraordinary Protective Action from an environmental activist group known as Yasunidos – the goal of this request from Yasunidos is to bring the issue of extraction to a referendum, allowing the Ecuadorian people to decide whether or not oil extraction will continue in Block 43 (ITT). Environmental, indigenous, and economic groups fear that the lucrative short-term returns on oil exportation to China and other countries could propel a pandemic resilience strategy rooted in the expansion of Ecuador’s extractive operations.
MODEL PROJECT: Pastaza Province, Ecuador
While the Yasuní is the largest oil concession in Ecuador and the one that garners the greatest attention from industrialists, investors, and politicians, it is not the only point of contention in Ecuador’s Amazon – in 2019, the Waorani Community of the Pastaza Province (which borders Yasuní National Park immediately to the south) took the State to court and won, alleging that their community had not been properly consulted before their ancestral lands were auctioned to oil companies. Thus, the communities had not made informed decisions, nor was legitimate consent given for the extraction process to begin. Reuters notes that Ecuador’s “constitution gives the government the right to develop energy projects and extract minerals on any land, regardless of who owns it, but requires that communities are first consulted and properly informed about any projects and their impact”. This contradicts international law that suggests that a proper consultation process should result in a consensus from all stakeholders. The ruling in this case in support of the Waorani officially protects 500,000 acres, placing it firmly under the stewardship of the Waorani, who are committed to its sanctity against extraction.
Throughout the lawsuit, it was revealed that the government had not followed an appropriate process in order to fulfill its commitment to consult with the indigenous communities prior to selling their ancestral lands. The (intentionally) flawed process was found to be more “checking a box” than determining the Waorani’s openness to oil extraction on their land. One indigenous family anecdotally reported that they were not consulted because they were out hunting (a common activity in indigenous tribes) when the consultants visited their village. Supplemental investigations surrounding the lawsuit uncovered the (often life-threatening) dangers that activists face from corporations when protesting exploitation of their lands. The proceedings identified cultural, communicational, and bureaucratic failures, including:
“wide-ranging failings with its design and implementation, including bad faith and false reporting on compliance, unintelligible communications, grossly insufficient time allocation, unaddressed complexities of translation, and poorly crafted informatic materials. But importantly, the ruling also exposed deeper underlying failings, declaring that the government disregarded the Waorani’s traditional governance and decision-making practices, omitted the inclusion of the Waorani’s legitimate traditional elder leaders pikenani in any significant way, broadly failed to guarantee that the Waorani fully understood the implications of the government’s plans for oil drilling in their territory, and did not ensure that they were given the opportunity to make a collective decision regarding those plans.”
At the heart of the lawsuit, filed by indigenous Waorani leader Nemonte Nenquimo, was the stake that the government had not followed a proper consultation process when their territory was put up for “concession in an international oil auction” and therefore the results of the auction and any proceeding auctions in the territory were void. Of particular relevance, the lawsuit determined that violations in the consultation process were inextricably linked to consequent violations of the indigenous right to self-determination. The practical outcome of this legal victory is the suspension of ongoing and prospective oil extraction in this province. This landmark precedent must be upheld in Ecuador’s Amazonian territories beyond the Pastaza Province.
POLICY RECOMMENDATION: Expansion of Indigenous Land Rights in the Ecuadorian Amazon
A successful policy that addresses current and historic petroleum extraction in the Ecuadorian Amazon must simultaneously de-incentivize exploitative industries while empowering the indigenous communities on whose lands the oil extraction is taking place. This can be accomplished by giving indigenous communities more agency over their lands.
The groundbreaking legal victory for the Waorani of the Pastaza Province set an important precedent for how ancestral lands are managed throughout the rest of the Amazon where indigenous communities live, most importantly in the Yasuní-ITT block of the rainforest where petroleum extraction is poised to expand. This paper recommends expanding and solidifying indigenous land rights throughout Ecuador’s Amazon to ensure that any industrial operations on ancestral lands follow a stringent and exhaustive process that considers the full opinion of the indigenous people. In accordance with Decree 1247, consultation processes must conducted through varied mechanisms of information dissemination and include concrete information regarding the implications about social protection measures, health, education, and water, sanitation & habitat; however, because Decree 1247 falls short of requiring community consent following consultation, all current and future extractive practices must also comply with the stringency demanded by International Labour Organization Convention 169, which “requires that these peoples are able to engage in free, prior and informed participation in policy and development processes that affect them”. When exploration studies are being performed, the committees responsible for executing them must be conscious of the cultural norms of the people they are surveying so as not to make the same pitfall as they did in Pastaza.
The precedent set in the 2019 Waorani win must be used as the standard for future policies regarding indigenous rights in Ecuador’s Amazon, especially the Yasuní. As demonstrated by the Sarayaku v. Ecuador case of 2015 challenging a similar consultation process in Ecuador with similar results in favor of indigenous rights, precedent is a fickle motivator when prospective profits are lucrative, which is why there must be a policy that codifies the legal precedent. To determine compliance with the national and international laws regarding a proper consultation process, the Blocks that have been auctioned in the Yasuní for future drilling should be scrutinized and reevaluated to determine conclusively if the process followed was legitimate, ensuring that the indigenous stakeholders were informed (in their native language) not just of the economic benefits that oil extraction could provide but also of the environmental impacts and negative cultural repercussions that drilling would bring.
In addition to the scrutiny that all previous land auctions of rainforest oil concessions must face, the principles of gubernatorial autonomy must also be acknowledged in the Yasuní. In response to the results of the Waorani case, the Ecuadorian government has voiced opposition to this self-determination, claiming that indigenous self-governance should not interfere with the economic best interest of the country; in a country with a fragile democratic republic that has persistent shadows of leftist authoritarianism, it is essential that a clear policy prohibits the pursuit of economic stimulus at the cost of indigenous autonomy. To point, just one week after the 2019 Waorani victory in the Pastaza province, President Lenin Moreno auctioned two more blocks of indigenous territory in the Yasuní, demonstrating that despite the legal victory, the precedent would not be universally applied to all provinces with indigenous territory.
Although petroleum companies promise enticing short-term benefits to the communities they exploit, indigenous rights groups and advocates for indigenous communities throughout Ecuador’s Amazon have made it clear that if they are given full control and self-governance over their ancestral, indigenous lands, then extractive activities that are harmful to the environment and their cultural patrimony will come to an end.
- Subsidies: The International Monetary Fund calculates a global fiscal gain of over $3 trillion that would result from the removal of energy subsidies for fossil fuels, and although doing so is often a political quagmire, setting efficient and proper prices on non-renewable energy will help de-incentivize this as a legitimate means of economic growth. In Ecuador, a 2019 executive action by Lenin Moreno’s administration to cut these subsidies that resulted in two weeks of riots and protests demonstrated why this is not a politically feasible policy option for Ecuador – many rural-dwelling indigenous people who depend on the low cost of gas & diesel for transportation suffered dire economic straits when fuel prices rose as a result of Moreno’s austerity measures (which would have resulted in approximate savings of $1.3 billion; to add insult to injury, many of those who were most hurt by the decree were the same people whose ancestral lands have been exploited for petroleum. While cutting subsidies for fossil fuels is a good long-term policy prospect, in the short-term it would only increase inequity.
- Accountability & Corruption: Transparency and oversight are paramount to guarantee that these processes are being followed and not just rubber stamped in a historically corrupt region.
- Economic stimulus: In the wake of the economic calamity brought on by COVID-19, oil is an enticing, easy way for Ecuador to generate a lot of money quickly; although it is not sustainable and the social and environmental impacts are incalculable, the urgency for the country to recover economically may cause consumer behavior to shift in favor of fossil fuel extraction in the short term.
- Alternative Energy: Because the region is so petroleum-rich, it would be hard to sell investors on the development of cleaner energy options. Of note, Ecuador does rely heavily on hydroelectric power generation for their electricity, and they are expanding major solar grids in coastal towns, but inter-province commerce and transportation implores a tenacious dependence on petroleum.
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