Ecuador invites world to save its forest
President Rafael Correa launches a proposal Tuesday for the international community to compensate Ecuador if the country prohibits oil drilling within its rain forest.
from the June 5, 2007 edition
Page 2 of 3
Indigenous groups also at risk
Cultural heritage is at stake along with biodiversity. Indigenous communities live in isolation deep within the Yasuni region and oil exploration could put them at risk by damaging their habitat and exposing them to disease.
In April 2007, the government published a national policy promising "to put forth its greatest efforts to overcome all threats of extermination and guarantee the defense of the individual and collective rights ... of the peoples involuntary isolation." In May, the Council for the Development of Indigenous Peoples and Nationalities in Ecuador lobbied at the UN in New York for keeping the ITT's oil in the ground, arguing that protection of the Yasuni is critical to the indigenous groups' survival.
As the country gears up for elections for its constituent assembly – a body that will rewrite Ecuador's constitution – it is to Correa's advantage to demonstrate his commitments to the indigenous and to the Amazon, say analysts. "The area of greatest political risk for Correa is the Amazon region," says political analyst Marco Ordoñez. "That's the territory of [former President Lucio Gutierrez]," he says. Mr. Gutierrez was forced out of office by civil protests in April 2005, but remains popular in the Amazon, his native region, and is a contender in the upcoming battle for control of the constituent assembly.
The government estimates that the revenue from the ITT block would be $700 million per year for ten years, putting the original compensation figure proposed at $350 million per year for ten years. While the government speaks of "sacrificing" the other 50 percent, the reality is that if the oil were to be extracted, it would be in conjunction with foreign oil companies, which would take home a hefty chunk of the revenue.
A memo of understanding was recently signed between the state-owned oil company, Petroecuador, and the state oil companies of China, Chile, and Brazil, putting onto paper the interests of the latter three in developing and exploiting the ITT's oil reserves. Companies from many other countries have also expressed interest.
A financing plan for Correa's proposal to not allow drilling has not yet been detailed, but Ecuador's minister for energy, Alberto Acosta, envisions a combination of "bilateral and multilateral debt-for-conservation swaps, bilateral donations, individual contributions, contributions from environmental and human rights NGOs, and the placement of certificates for non-exploited crude on international markets." Foreign governments are expressing interest. Spain has stated that it is open to the possibility of a debt-for-conservation swap, while Norway has indicated the possibility of a bilateral donation.
"The money would be held in a trust fund outside of Ecuador," Mr. Acosta says. "An international watchdog group would keep an eye out to ensure not only that the Yasuni is not being exploited, but that the compensating funds go to development-related activities as promised, and not, say, to purchase arms," he says. If a future administration were tempted to allow drilling in the Yasuni, Ecuador would risk losing its cash flow from the trust fund.
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