As the Ecuadorean oil company overseeing Yasuní oil extraction stands accused of a major spill elsewhere in the Amazon, the campaign against Chevron could well backfire on Correa’s pro-oil drive.
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This week marks one year since the Ecuadorean government of Rafael Correa decided to formally abandon its landmark Yasuní-ITT Initiative. The initiative sought to protect a section of Yasuní National Park, an extraordinarily biodiverse corner of the western Amazon rainforest, which is home to one of the highest concentrations of plant and animal species in the world as well as several indigenous groups living in voluntary isolation from mainstream society. The ITT block of Yasuní, however, also contains close to one billion barrels of crude oil, which led to a conundrum for a government that had attempted to highlight its apparent green credentials during its early days, but which was also anxious to use the financial bonanza potentially on offer in order to fund its widely popular social programmes aimed at alleviating Ecuador’s historic levels of poverty and inequality.
In 2007 the government decided to try an approach that was without precedent in the country or indeed almost anywhere else in the world. Ecuador would agree to leave the oil underground indefinitely, as long as private and governmental donors from around the world contributed half of the US$7.2bn that the Ecuadorean government believed it stood to gain if it went ahead and exploited the oil fields. This would not only safeguard the future of the park, its indigenous inhabitants and its wildlife, but it would also prevent 400m tons of carbon dioxide from being released into the atmosphere from the burning of the oil, thus helping global efforts to mitigate against runaway climate change.
However, by 2013 barely US$13m out of the target US$3.6bn had been deposited in the UN-coordinated trust fund, with a further US$130m pledged, and on 15th August the Correa administration declared that it had no option but to cancel the initiative, return the deposited funds to donors, and press ahead with plans to extract the oil, by this time valued at up to US$18bn. A subsequent campaign to force a national referendum on the issue was struck down in May, despite activists apparently having collected more than enough signatures to ensure a national vote, with fraud and heavy political interference alleged by opponents of the government’s plans after electoral authorities ruled that more than half of the collected signatures were invalid.
In what was widely seen as an attempt to compensate for this U-turn, shortly after this decision the Ecuadorean government reignited its long-standing campaign against the US oil giant Chevron, with Correa himself leading from the front in a highly personal capacity. Chevron is now the owner of Texaco, which in turn is accused of having dumped billions of gallons of toxic waste and of having spilled millions of gallons of crude oil in the Ecuadorean Amazon region, during its operations in the country between 1964 and 1990.
After a decades-long legal challenge from lawyers representing Ecuadorean villagers – who claim that the widespread pollution has led to disease, increased instances of cancer and birth defects, premature deaths, and countless other health hazards – an Ecuadorean court issued a fine of US$19bn on Chevron for the damages caused. This was later halved to US$9.5bn, but then earlier this year a US court ruled that the Ecuadorean ruling had been reached fraudulently, and that plaintiffs would not be permitted to attempt to collect damages from Chevron within the US – a crucial blow since the company no longer has any assets in Ecuador.
Correa and his sympathisers – who in the case of the Chevron dispute will still include many who were angered by his U-turn on Yasuní – argue that the case is highly important not only in terms of Chevron-Texaco being made to compensate the affected villagers, but also in terms of setting a precedent that oil companies operating in other, often less-economically developed countries cannot and should not get away with environmental and social irresponsibility. It is entirely natural to view Correa’s very personal involvement in the anti-Chevron campaign as a vague attempt to win back the support of environmentally-conscious Ecuadoreans who were alienated by the government’s change of course on Yasuní, but it is also undeniable that the campaign itself is a noble cause and should be fought to the end.
Yet the Ecuadorean government is in danger of undoing its good work on setting environmental standards around oil extraction – work whose quality can already be disputed after its change in policy on Yasuní and on its wider approach to oil and mineral extraction in sensitive environments such as the Amazon. One of Correa’s attempted sweeteners to convince the public of the merits of abandoning the Yasuní-ITT Initiative was to insist that negative impacts on the surrounding environment caused by the eventual exploitation of the ITT block must be kept to a minimum. Extraction would be carried out using the most up-to-date technology ensuring a minimal risk of oil spills and other damages such as those seen in the wake of Chevron-Texaco’s operations, and Correa promised that ‘less than one thousandth’ of the area would be affected by the extraction, leaving the thousands of plant and animal species as well as the isolated indigenous tribes unscathed by the oil works: a win-win situation for all.
Already, this has proven to be too good to be true, and recent developments appear to show that with a year or two to go until the first drop of Yasuní-ITT oil is produced, initial operations are taking their toll on the surrounding rainforest. Some of the area’s isolated indigenous peoples have been spotted near the proposed oil wells, despite official assurance from the government that their territories did not coincide with the oil fields. Campaigners have called for works to be halted immediately due to the apparent presence of uncontacted indigenous groups, as per the guidelines agreed on by the government when it authorised oil extraction in Yasuní-ITT, but so far these attempts have been unsuccessful.
Meanwhile, after environmental impact assessments (EIAs) were rushed through in order to allow the government to award permits to oil contractors – with whom secret meetings to plan oil extraction were revealed to have been taking place long before the government officially called off the Yasuní-ITT Initiative – satellite pictures appeared to show that highways spanning up to 60 metres across and easily surpassing the 15-metre maximum stipulated by the government’s EIAs had been carved out of the jungle, providing access for the heavy vehicles and machinery that will drill and transport the oil below Yasuní. This has occurred in spite of pledges by the government to use ‘off-shore’ technology and carry out transport by helicopter and rivers, in order to reduce the need to clear forest for new roads, and continues a worrying trend of increased deforestation within Yasuní National Park in the last few years.
However, perhaps the most alarming development – and the one that most rings hollow with regard to the government’s crusade against Chevron – came in July as news broke of a major oil spill in and around the same parts of the Amazon that were so badly affected by the Texaco pollution. However, this time the perpetrator was none other than Petroamazonas, a subsidiary of the Ecuadorean state oil company Petroecuador, which has been awarded the permits to drill for oil in Yasuní – both in the ITT block and in existing oil blocks in other parts of Yasuní National Park. While Petroamazonas claimed that the spill resulting from the rupture of one of its pipelines amounted to 2,000 barrels of crude, a confidential source at Petroamazonas revealed that the true extent of the spill was in fact closer to 15,000 barrels – or 660,000 gallons – making it one of the worst oil spills in Ecuador for many years.
Pressure from civil society groups, both in Ecuador and abroad, led to the Environment Minister Lorena Tapia announcing an inquiry into the spill, which has left numerous environmental and health hazards for many indigenous communities along the Aguarico and Parahuaico rivers. However, many are calling for further action to be taken: Petroamazonas has consistently shown itself to be incapable of carrying out responsible oil extraction, they allege, and it should be stripped of its permits to develop the Yasuní oil fields.
This may be too high a hope for defenders of Yasuní: not only is the state-owned Petroamazonas likely to enjoy more leeway than a foreign-owned oil company such as Chevron-Texaco, but even if Petroamazonas were to have its licenses revoked there would almost certainly be a horde of other oil companies – notably Chinese state-owned firms which have already consolidated their presence within Ecuador – lining up to earn the right to exploit the Yasuní oil fields.
However, this latest spill has served as a timely reminder that it is not only “big bad” foreign oil companies such as Chevron who wreak environmental and social havoc as they blaze a trail across oil fields hidden deep in rainforests or under the ocean. Barring some kind of miracle whereby Petroamazonas can overturn decades of hazardous environmental records, both on its own half and on those of oil companies in general, the Ecuadorean government’s promise that Yasuní-ITT can be responsibly exploited with minimal environmental and social damage seems almost certain to be broken. And after a high-profile campaign against Chevron highlighting the dangers of oil extraction and the need for irresponsible oil companies to be held to account for allowing spills to take place, any slip-up from Petroamazonas would run the risk of Correa’s anti-Chevron message coming back to haunt him.