State of the World's Minorities and Indigenous Peoples 2012 - Ecuador

In early October 2011 in the Andean highlands of southern Ecuador, Canadian company Iamgold's Quimsacocha extraction project was voted down by a community referendum. It overwhelmingly rejected mining, with 92 per cent of people voting against.

According to the government, however, the referendum is invalid because it was not authorized by state institutions. In contrast, CONAIE (the Confederation of Indigenous Nationalities of Ecuador) – the country's most powerful and influential indigenous umbrella organization – not only actively supported the referendum, but also strongly advocated it should be replicated wherever communities are affected by mining. During 2011, other local governments also called for a total ban of mining activities in jurisdictions where such projects are located.

The Andean community referendum – the first of its kind in Ecuador – raised basic constitutional questions regarding autonomy, the extent of state powers and the rights of local governments to control land use and regulate industries.

Since 2008, indigenous organizations in Ecuador have become increasingly critical of government policies on water rights and exploitation of natural resources. They complain that the government has been attempting to divide the indigenous movement over these issues. According to the CONAIE, there are currently 189 indigenous Ecuadoreans charged with terrorism, sabotage and other public safety-related crimes and for protesting against the privatization of natural resources. These include the president of the CONAIE and three other prominent indigenous leaders who have been protesting against state control of access to water. Meanwhile, President Rafael Correa has accused protesters of 'standing in the way of development' and argues that resource extraction revenues can be used to develop other economic sectors such as agriculture.

Words or deeds?

The conflict is all the more pertinent given that, after his 2009 second term re-election, President Correa has spoken out vigorously on environmental justice. As in Bolivia, his administration pioneered the granting of special rights to 'Mother Nature' in the 2008 Constitution and has made public gestures towards ending the extraction economy. Ecuador is South America's second largest oil exporter to the United States. Oil revenues account for more than half of the national budget; there are an estimated 1 billion barrels of heavy crude in the Amazon bordering Peru. At the UN in May 2007, President Correa made an innovative offer to leave Ecuador's largest oil reserves underground in the Amazon. The country was willing to forego an estimated US$ 9.2 billion in revenues in exchange for international community compensation and debt cancellation for conserving the biosphere. However, by early 2011 there were plenty of promises but very little real cash. Some countries, such as Germany, that initially made financial commitments to the fund had actually withdrawn their offers.

At the end of 2011, this seems to have left the government little choice but to proceed with exploration plans in an area of pristine Amazon rainforest which is home to the nomadic Tagaeri and Taromenane – indigenous groups who voluntarily reject contact with the outside world. This will not only elevate the risk to indigenous communities of more environmental disasters like the Chevron-Texaco oil spills in the Amazon but also increase chances of the extended litigation that seems to be required in trying to obtain redress.

Chevron

In February 2011 – after nearly two decades of litigation – an Ecuadorean court found the American oil giant Chevron liable for US$ 18 billion in damages stemming from contamination caused by Texaco. Between 1964 and 1990, Texaco – which merged with Chevron in 2001 – drilled roughly 350 wells across 7,000 square km of Amazon rainforest. The company made some US$ 30 billion in profits.

In 1993, Texaco was accused by Amazon indigenous communities of dumping 68 billion litres of toxic materials into Amazon streams and rivers that people used for fishing, bathing, swimming and drinking water.

The lawsuit was filed on behalf of 30,000 indigenous and mestizo (mixed) members of some 80 rainforest communities who demanded the company clean up the pollution and pay reparations for the health damages. The trial opened in November 1993 in the US Federal Court, but after nine years of hearings was then moved to Ecuador in October 2003 – at Chevron's request. During the trial, Chevron admitted that Texaco had deliberately discharged 68 billion litres of toxic 'production water' directly into the environment. Texaco also created and abandoned more than 900 unlined waste pits that seeped pollution into the earth, spilled more than 17 million gallons of pure crude oil into the rivers and streams and continually 'flared' contaminants without any environmental controls. However, Chevron argued that Texaco spent US$ 40 million cleaning up the area during the 1990s and also signed an agreement with Ecuador in 1998 absolving it of any further responsibility. Nonetheless, environmental activists visiting the Amazon site in 2009 wrote about finding a tangled jungle landscape with oil slicks, festering sludge and rusted pipelines.

The plaintiffs accused Chevron of trying to hide the extent of its environmental crimes and cited ailments such as leukaemia, cancers, liver failure and respiratory and skin problems. Eventually, in February 2011, after nearly 18 years of legal struggle they won the historic US$ 8.6 billion verdict, which was more than doubled after the company failed to make a public apology. The judgment was also enforceable in the US, based on the 2003 trial relocation agreement.

The Ecuadorean court also found that Chevron repeatedly tried to delay the proceedings as well as threatened judges in efforts to evade liability. Chevron appealed the sentence, and then sued the indigenous plaintiffs in the US, citing Ecuador's violations of the US-Ecuador Bilateral Investment Treaty and international law. The oil giant also took its case to the International Permanent Court of Arbitration in The Hague, which, in February 2011, ordered Ecuador 'to suspend any judgment against' Chevron. In September 2011, a US appeals court overturned a decision to block the fine collection and at the end of 2011, an Ecuadorean appeals court upheld the 14 February 2011 ruling in all its parts.

The Amazon petroleum contamination by Texaco is considered by many to be the worst oil-related disaster on record, surpassing the 1989 Exxon Valdez oil tanker spill on the coast of Alaska as well as the 2010 BP deepwater rig explosion oil spill in the Gulf of Mexico. However, in a further example of the long uphill battle indigenous litigants can face against powerful resource extraction companies, Chevron challenged the fine, arguing that lawyers and supporters of the indigenous groups conspired to fabricate evidence.