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Oil companies operate on own terms
Luis Ángel Saavedra*
4/6/2006
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Multinational companies operate with impunity in the country, refusing to respect indigenous communities or the environment.

A series of claims presented by social, environmental and indigenous groups in recent months allege that oil companies operating in Ecuador are ignoring environmental protection measures and damaging the organizational integrity of the indigenous communities living near the oil fields.

The reports singled out the Brazilian state-run Petrobras, putting in doubt plans for South American oil companies to form a consortium to defend regional interests, complying with laws to protect the environment in exploitation zones.

Alejandro Ponce Villacís, an environmental lawyer with the Citizens for Democracy movement, filed a request for a revision of the environmental permit for the constructive phase of the Nenko and Apaika Petrobras oil fields, which the Environmental Ministry granted Petrobras in August 2004.

Ponce Villacís says that the permit allowed Petrobras to operate in an "arbitrary and inconsistent manner" and approved of the construction of a new access road, oil duct and pipelines within the borders of the Yasuni National Park, in the Napo province, are threatening to destroy the ancestral lands of the Huaorani, Tagaeri and Taromenani indigenous peoples.

Brazil’s role

The conflict between Petrobras and the Huaorani people prompted Brazilian President Luiz Inácio Lula da Silva to send a letter to his Ecuadorian counterpart, President Alfredo Palacio, in July 2005, asking for a resolution so that Petrobras could continue operations in the country.

Ponce Villacís wonders whether the Brazilian president understands the gravity of the damage Petrobras has caused, because if he did, the oil company’s actions would constitute "a new system of exploitation, not one of integration between Latin American countries."

The Sarayaku, a Quichua-speaking community, in the province of Pastaza, is at odds with the Compañía General de Combustibles, or CGC, an Argentine subsidiary of the US company ChevronTexaco.

The Sarayaku struggle is a lengthy one. In 1989, the community demanded that the Ecuadorian government respect their lands, and the Sarayaku Agreement was signed, guaranteeing the community’s land rights and protection from oil exploitation. In 1992, the Sarayaku joined a large-scale indigenous march to Quito, denouncing the government’s failure to comply with the agreement, signed just three years earlier. The march was a success as they were given land title rights to their territories.

Despite this success, in 1996, the Ecuadorian government granted CGC exploration and exploitation rights on Sarayaku land. The community was not consulted as is required by the country’s Constitution and, upon seeing the indigenous opposition, the Ecuadorian government provided CGC with political and military support.

Despite the military presence, the Sarayaku continued their resistance. Residents can only leave the community by aircraft now that the rivers are patrolled by soldiers and neighboring communities such as the Jatun Molino, Pacayaku and Canelos, which CGC has convinced to become "beneficiaries" of the oil exploitation.

A continuous struggle

The Huaorani and Quichua-speaking communities have plenty of reasons to continue fighting oil exploitation in their backyards. Texaco — which merged with Chevron in 2001 to form ChevronTexaco — caused significant damage to land belonging to the Cofan indigenous group, and has not been obligated to make repairs.

The region where ChevronTexaco operated for more than 28 years suffered the worst contamination known in the world after 18 billion gallons of toxic water spilled. As a result, the zone has "300 percent higher child leukemia indexes and 150 percent higher incidences of other types of cancer," according to an August 2005 article in International Journal of Epidemiology, published by Oxford University.

Texaco was sued in US courts in 1993 for the pollution it caused in the region, but the company beat the charges and the case returned to Ecuador, where it put more pressure on the judiciary. If the company loses the case, it will be obligated to perform a thorough clean-up of affected areas and pay local residents a monetary compensation to, a process that would equal some US$6 billion, a fifth of the $30 billion the company won in Ecuador.

But the Occidental Petroleum Corporation (OXY) provides one of the most striking examples of this trend.

OXY violated the explicit contract terms granted by the Ecuadorian government when it sold part of its rights to the Canadian firm EnCana in 2000. The company began construction on a secondary oil duct without having the environmental permits necessary. Now its representatives are pressing politically, stating that it is better to negotiate a settlement for the company’s actions than to terminate the contract, something that could endanger future oil investments.

In late March OXY offered to pay the government up to $1 billion an effort to end the dispute, but it is still unclear as to whether the company’s operating license for Ecuador will be revoked.


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