Dynasty Metals and Mining Poised for Production in Ecuador

Dynasty Metals and Mining is reporting varying high-grade surface trenching results in the Cola district of the Dynasty Gold Project in Ecuador.

By Katherine Young

Huliq, April 30, 2007

Dynasty Metals and Mining is reporting varying high-grade surface trenching results in the Cola district of the Dynasty Gold Project in Ecuador. Results include up to 634.58 g/t of gold and 297 g/t of silver over 0.5 metres. Two veins are currently the focus of trench and channel sampling in the Cola District - the “Sol” vein and the “Gold” vein. The veins are parallel and 30 metres apart and an additional network of similar veins exist to the north. The average results of sampling in the “Gold” vein along 120 metres, with an average width of 0.52 metres was 102 g/t of gold and 158.59 g/t of silver. Chief Financial Officer Bill McCartney comments: “We have very high-grade surface trenching results. We are currently trying to define the size of the deposit. We hope to commence drilling this year.”

At the company’s Zaruma Project, Dynasty is awaiting approval of its environmental impact study which has been submitted to the Ecuadorian Ministry of Energy and Mines. Bill McCartney told me that this is the final permit they need to start production. Dynasty expects to hear by the end of March and then, says Bill McCartney, “it will be full steam ahead. We are pushing to production for the end of 2007 at the Zaruma Project.”

Despite last year’s environmentally-friendly, anti-mining protests in Ecuador, and the refusal of one Canadian company’s Environmental Impact Study by Ecuadorian officials, Dynasty Metals reports that relations between the Ecuadorian government and the company are amicable and that so far things are progressing without any delay of the company’s projects. Even with Ecuador’s new president, Rafael Correa - a leftist economist and opponent of free trade - taking office in January of this year, Dynasty management appears confident. When asked if he expects to get the final permit, Bill McCartney, CFO of Dynasty Metals, reassures me they do. It’s the only permit left to get. These things just take time. Let’s hope so. Correa’s newly-appointed Minister of Energy and Mining, Alberto Acosta, has worked for environmental NGOs that have opposed mining in other areas of the country. He is also known for his opposition to free trade.

So while some investors may consider the political situation in Ecuador to be enough of an incentive to stay away or wait longer, a USC Resource Consult profile of Dynasty, while acknowledging the risk, also hits reassuring tones in regards to Correa. “Correa…has struck rather moderate notes after he was elected.” The profile points out that there have been ten different presidents in Ecuador during the company’s 14 years there and none have effected any devastation to the mining industry. They also note that, “The good relationship to the ministries remains even if ‘the head at the top is replaced’.”

Dynasty’s technical reports cite the highest standards for environmental practices though. Describing environmental considerations with regards to tailings, Dynasty’s 43-101 of February 2006 and January 2007 says: “Dynasty’s plans will be an opportunity to implement best practice tailings deposition, and in so doing, set a precedent for the industry as a whole.” It also outlines plans for revegetation following environmental impact from open pits, waste dumps and tailings. It sounds pretty environmentally feasible to me, so if USC and Dynasty are right and the permit comes through, it could be another indication that the stock price is poised to rise, as one more risk is crossed off the list.

On the financial side, a search through SEDAR files reveals promising numbers. An Independent Preliminary Assessment conducted by qualified person W.J. Holly dated July 12, 2006 revealed that the Zaruma Gold Project with 1.5 million ounces of gold would enjoy a 14.5-year mine life and a cash flow of US$467 million. The assessment pegged annual gold production at 100,000 ounces and predicted a 116% rate of internal return (IRR). The price of gold used for calculations was US $500/ounce.

The Jerusalem project also looks good with an undiscounted, pretax cash flow of $267 million and a pre-tax IRR of 149%. The Jerusalem 43-101 technical report dated February 27, 2006 and revised in January of 2007 states: “The authors believe that the overall project risk is low and the potential for profitable operations is high”.

The company’s NI 43-101 total resource base is approximately 4.6 million ounces of gold. Here’s the remarkable thing about that: on a total resource basis, including measured, indicated and inferred resources, Dynasty’s market cap per ounce of gold is only US$19/ounce, compared to the average junior explorer which is approximately US$75. Once a junior exploration company goes to production they typically jump to a market cap valuation of US$200/ounce, which for Dynasty would be a jump of 953%. With the Zaruma Project slated to go into production this year, now is clearly the point that the stock chart will begin its climb.

Always reassuring is the news in the USC report that Dynasty Metals management holds 40% of company shares. That should keep them working hard, while at the same time, institutional investors are involved, which shows there is investor confidence in Dynasty.
Dynasty owns 100% of its projects so it is unencumbered by tricky relations that sometimes beleaguer joint venture projects. Dynasty remains in control of exploration projects and financing for them. The USC report also notes that Dynasty currently has C$12 million in the bank, which will allow it to develop its products without diluting stock.

I like to hear that President and CEO Robert Washer has been living, working and negotiating in Ecuador for 14 years. That’s enough time to allow him to gain needed contacts and experience. He leads the company with 29 years of experience in mining including discovering, developing and completing six gold mines. Also important is Washer’s previous experience in the energy industry in Ecuador, where he previously was chairman of the board and held the largest share at Avatar Petroleum Inc.

So, with Zaruma and Jerusalem projects set to begin production later this year or soon after, risk has been reduced compared to earlier stages and Dynasty could be poised near the top of the exploration company heap. Adding to the optimism is the bullish outlook for gold and silver, which has investors scrambling to find companies like this.
Katherine Young writes for Resourcex Investor, an internationally distributed newsletter specializing in identifying as-yet-undiscovered resource companies representing the best in their class. For more information, visit the website www.resourcexinvestor.com.

Above-Ground Risk in Ecuador

Huliq, April 30. 2007

The political or “above-ground” risks that concerned multinational corporations in the past usually involved expropriation and nationalization, currency inconvertibility and war or civil unrest. While it is true that these risks still necessitate concern, relative to other types of above-ground risk they are occurring less frequently.

As resource companies like Ascendant Copper [TSX: ACX] are discovering, the national government is no longer the only heavy on the block. Today, the threat of political risk can also come from local governments, community groups and NGOs.

Ascendant Copper Corporation, a Canadian company, owns a 100% interest in three projects in Ecuador: Junin, Chaucha and Telimbela. Although they haven’t experienced any opposition to the latter two projects, with Junin they’ve inherited a problem brewing some years before they acquired the property.

Local government officials and an NGO known as Defensa y Conservacion Ecologia de Intag (DECOIN) have managed to put enough pressure on the Ecuadorian Ministry of Energy and Mines to cause delays with the approval of Ascendant’s Environmental Impact Study.
Recently, I spoke with John Haigh, Manager of Investor Relations for Ascendant Copper. I asked him if the company’s prior knowledge of the political issues associated with the Junin property were integrated into their initial political risk planning. “Yes,” he said, “we asked are we going to have a problem with active NGOs? And the answer was: Yeah, you probably are.”

As for taking specific action, Ascendant Copper is trying to manage their political risks by dealing directly with the community. In efforts to further minimize potential problems Ascendant has funded social development and environmental programs in the Intag region. These programs have included medical and dental services, education and teacher training, farming, waste disposal and developing nurseries to support reforestation.

In the course of the financial impact assessment, “it becomes part of the budget, how much money we’ve spent in the area, how much has gone to the communities.” On November 27, 2006 Ascendant made an agreement with local communities and organizations to commit $4,000,000 over four years to support such programs. The funding is scheduled to begin 60 days after commencement of exploration activities on the Junin property.

The hostility between Ascendant Copper and local community groups grew so intense that the government intervened.

On March 20, 2007, Ascendant Copper met with members of government, including the provincial Governor, a representative of the Ministry of Energy and Mines and of the Ministry of Government and Police and with representatives of the Community Development Council. The parties made agreements that will hopefully reduce tensions and respect the rights of all involved. As part of the agreements, Ascendant had to let go of 111 of its 159 local employees and cease some of its public services in the community.

I spoke with Stephen Bailey of Frontier Strategy Group, an expert on above-ground risks in Latin America, concerning the issue. Although Mr. Bailey had no insider knowledge directly pertaining to Ascendant’s case he did offer some valuable insight as to why the company might have incurred forced layoffs. The “untold story” often involves regional elites, for example those with agricultural estates, who see foreign companies as a threat. Mining companies offering employment to locals drives up wage costs and Bailey sees this as a major underlying factor driving local opposition in circumstances such as these.

Such political risk has not cooled Ascendant Copper’s desire to pursue the economic rewards Ecuador’s virgin lands have to offer. “The size of the asset [in Junin] is significant enough to attract us,” Haigh said. “It is a billion tones of one percent copper. It is one of the largest undeveloped copper deposits in the world. We are willing to take those above-ground risks and deal with them on a smart basis.”
Robert Washer, President and CEO of Dynasty Metals and Mining [TSX: V.DMM], reports a rather different experience operating in the politically evolving country. Throughout his fourteen years of living and working in Ecuador he has seen many governments pass through the seemingly revolving door of political power without a severe upset to the mining industry.
When Rafeal Correa won the Ecuadorian presidential election in November of last year many considered his victory the latest triumph for left-leaning candidates in Latin America. This has worried those who fear the effects of Chavez-style nationalization on Ecuadorian resources. Washer thinks this perception exists mainly outside of the country and is a little overdone.

Washer is speaking from the perspective of an experienced insider who has lived through nine other Ecuadorian presidential elections. As in most governments, newly-elected presidents may shift their cabinet around and appoint a new minister and undersecretary of mining along party lines. What generally doesn’t change is the administrative staff. “The same people I’ve dealt with for fourteen years are still there,” Washer says. “So, over the last fourteen years we’ve developed a working relationship with the government.” He believes that “the mining industry will go ahead successfully here in Ecuador. Put it this way - it’s no more difficult for me to work in Ecuador than it was to work in Australia.”
Canadian-based Dynasty Metals, a gold exploration and development company, holds the largest gold concession in southern Ecuador. Dynasty owns 100% of two advanced-stage gold projects nearing production (Jerusalem and Zaruma). A third newly-discovered large-scale property (Dynasty) shows significant potential for containing a large bulk mineable gold resource. Recent estimates indicate resources of over 420,000 ounces of gold, and an additional 427,000 ounces of inferred gold resource. “Right now we’re discovering gold-bearing deposits right on the surface because basically the country has been well under-explored, so it’s like going into Australia 70 years ago,” Washer said.
I asked him if Dynasty Metals has faced political issues similar to those of Ascendant Copper. “No, actually, we’re going ahead full steam. The government has been giving us environmental approvals and we’ve been working with the government just fine. We’re actually looking at building a plant this year in Ecuador.” Dynasty’s location for the new mill is on its Zaruma concession and will actually be the first in the country. The company has obtained permission from the local community to build and run the mill and Dynasty expects permit approval from the government any day. Washer expects about 100,000 ounces per year in Zaruma. When the numbers for the other two projects are considered into the equation, four to five years from now Washer foresees Dynasty producing 500,000 ounces per year.

Stephen Bailey is not at all surprised by the varied experiences of Ascendant Copper and Dynasty Metals in Ecuador. “Different companies are likely going to face really different challenges depending on the region in which they are operating,” he said.

Bailey agrees with Robert Washer’s estimation of the media’s depiction of politics in Ecuador. The general trend in the media seems to group Ecuador politically with other Latin American countries. According to Bailey, it’s important to distinguish between regimes like Venezuela and Bolivia, and that of Ecuador. “I think that there is a lot less in the way of concrete action being taken to impair the interests of foreign investors in a country like Ecuador than in a country like Venezuela. Certainly Correa is not an ideal pick for foreign investors, but I think that he’s taking more of a measured approached,” he said.

Bailey believes the biggest challenge for companies in Ecuador is more at the regional level. Centralized government control is relatively weak in comparison to Venezuela, for example, where Chavez now exercises almost complete control. The best strategy for managing political risk successfully in countries like Ecuador, Bailey suggests, is to establish strong relationships with regional governments while cultivating an understanding for how the political landscape differs from region to region, “rather than looking at the country as one monolithic whole.”

Melissa Pistilli is a contributing writer with the Resourcex Investor, an internationally distributed newsletter specializing in identifying as-yet undiscovered resource companies representing the best in their class. For more information, visit the website www.resourcexinvestor.com. - By Melissa Pistilli

Ecuador's Political Volcano

BBC News, April 28, 2007

By Daniel Schweimler
BBC News, Ecuador

Ecuador is facing a political crisis. The president's plans for social and political reform have been met by violent protests from those opposing them. But now with the country on its eighth president in 10 years, failure could see the situation deteriorate further.

Few have benefited from Ecuador's oil revenues

The Tungurahua volcano in the south of Ecuador is rumbling, frequently spitting molten lava into the air.

Some, in this country with a large indigenous population descended from the Incas, believe the spirit of Pachamama - the feminine spirit which regulates nature - lives there. And she is not happy.

Neither are many of the Ecuadorian people.

They have had to endure more than 10 years of political turmoil. They have had eight presidents in that time. Three of them thrown out of office by angry crowds.

About half of the 13 million population live on or below the poverty line, thousands have no running water and more than a million have migrated, mostly to Spain and the United States, in search of a better life.

And all this in a country which is the world's largest producer of bananas, has ample supplies of oil and a thriving tourist industry.

Public views

People often look away or pretend they are in a hurry when they see a gringo with a microphone lurching towards them. But in the Plaza San Francisco in the heart of Quito's colonial quarter I found them queuing up to give me their views on why Ecuadorian politics have been such a disaster.

President Correa is popular among the poor and disenfranchised

"The same politicians, the same parties," said Carmen, a middle-aged housewife.

"We've seen no improvement for 30 years," added an old man, struggling in his excitement to keep his top false teeth in place.

The crowd attracted more onlookers.

One woman took centre stage, ranting against the Church, the business community, foreign investors, the few wealthy families that had always and still do control Ecuador.

The crowd burst into applause.

It went on.

One angry speaker after another spoke about corrupt politicians, irresponsible businesses, greedy foreign investors. With no room left on my Minidisc, I made my escape.

Failed promises

A brief biography of two of Ecuador's recent presidents might help to explain some of the people's anger.

At the top of the list must be Abdala Bucaram who governed for six turbulent months in the mid-1990s.

The former Olympic sprinter called himself "El Loco - the Madman," releasing a CD when he took office called "A Crazy Man who Loves."

He called one ex-president a burro or donkey, then apologised - for insulting the good name of donkeys.

The man, also called Crazy Abdala, was accused of embezzling millions of dollars of state funds. But it took Congress a while to cotton on, finally dismissing him on the grounds of mental incapacity.

Lucio Gutierrez came to office on a tide of popular support. "Either I change this country or I die doing it," he promised an expectant nation.

He failed to fulfil one promise after another and first the indigenous people, then the workers who had backed him took to the streets.

With his popularity plummeting, he slunk out of office.

Radical changes

Disillusionment with their politicians is rampant on the streets of Ecuador. But many believe they have finally found a saviour in the 44-year-old, left-wing economist, Rafael Correa.

He won a landslide victory and took office in January promising radical change. The people of Ecuador have heard that one before.

But Mr Correa has taken a first important step in actually implementing that promise.

The voters turned out recently for a referendum asking whether people wanted a constituent assembly that would radically rewrite the constitution.

The new laws, he promises, will give a greater voice to the poor, indigenous groups and women, overhaul the Congress and judiciary and limit the power and influence of the established political parties.

Mr Correa's proposals received a resounding "yes."

He makes no secret of his friendship with the radical president of Venezuela, Hugo Chavez.

He has told the World Bank representative he can get out of Quito and he has warned the United States that he will not renew the lease on their military base in the western city of Manta.

Mr Correa also sacked 57 congressmen and women he accused of failing to do their jobs properly.

'Last chance'

Not surprisingly, the opposition in Ecuador does not like him, accusing him of acting illegally, concentrating too much power in his own hands and being Hugo Chavez's puppet.

The radical changes being proposed by this government were Ecuador's last chance Fernando Bustamante chief adviser to the Ecuadorian president

Mr Correa's chief adviser, Fernando Bustamante, with his silver hair and dark, austere eyebrows, looks and dresses like a professor at a top English university. He speaks English like one too.

As a journalist you grow accustomed to politicians talking a lot and saying very little. But Mr Bustamante said plenty.

"The radical changes being proposed by this government were Ecuador's last chance," he said. "If they failed, society would fragment," he warned, "leaving a failed state."

The people of this beautiful country of imposing mountains, tropical coastline and a large tract of Amazon jungle now find themselves at a crossroads where they are either going to choose the unknown and possible salvation, or continue on the same road to further political turmoil, or worse.

Tungurahua has spoken.

Asylum seeking lawmaker returns to Ecuador

Peoples' Daily Online

April 27, 2007

Ecuadorian legislator Gloria Gallardo who fled to Colombia this week to seek political asylum returned to Ecuador Friday.

Upon her arrival at the airport of Guayaquil, her hometown, Gallardo said that during her stay in Colombia she had denounced the political situation in Ecuador, the CRE radio network reported.

Gallardo and five other legislators fled to Colombia's Bogota Tuesday, saying they were escaping "political persecution."

Earlier this month, Ecuadorian prosecutors charged 24 congress deputies with threatening national security and put them on the wanted list.

Ecuador's Interior Minister Gustavo Larrea said Thursday that the judicial process was not influenced by President Rafael Correa's government and that those deputies were not being persecuted by the government.

Source: Xinhua

Ecuadorian troops win more power to end protests

QUITO (Reuters) April 27, 2007- Ecuador will increase the powers of security forces to break up demonstrations which can shut down output from oil facilities in the Amazon rainforest, leftist President Rafael Correa said on Friday.

Last month, protesting villagers, seeking a greater share of profits from companies drilling in their jungle region, blocked production of Brazil's Petrobras for about four weeks.

"We will not allow any more invasions of oil installations or the blockage of roads," said Correa while visiting the Amazon, home to an array of unique species.

The U.S.-educated economist added he understood the plight of poor jungle residents but that the rule of law had to be respected to safeguard the main revenue source of South America's No 5 oil producer.

He said he would sign a decree to increase the military and police presence around oil facilities and allow those forces to shift protesters by force, Correa said.

Thousands of contract workers employed by state oil company Petroecuador have threatened to strike in May if the government does not improve working conditions.

Correa has vowed to renegotiate oil contracts with foreign companies working in the Andean nation.

Although his government does not predict a more radical approach to oil policy, some powerful Indian groups want Correa to consider oil nationalization.

Spain's Repsol also operates in Ecuador, which produces around 530,000 barrels of oil per day.

Chevron says Petroecuador to blame for Amazon contamination

QUITO (MarketWatch) April 27, 2007
-- Chevron Corp. said late Thursday that environmental damage in the Amazon is the sole responsibility of state-owned oil company Petroecuador, and expressed concern over getting fair treatment in the Andean nation.

"In the last 15 years, Petroecuador hasn't fulfilled its environmental obligations...and its history of environmental neglect and poor quality operations is very well documented," Chevron said in a press statement released Thursday night.

The company's comments come after a visit by Ecuadorean President Rafael Correa to oil-producing zones in Orellana and Sucumbios provinces, including sites where Texaco Petroleum Co. operated for almost 30 years. Texaco operated under its own brand in Ecuador before exiting the country in 1992. It merged with Chevron in 2001.

During his visit, Correa said damage to the Amazon must not go unpunished and accused Chevron of contamination that he said was 30 times worse than the Exxon-Valdez oil spill in Alaska in 1989.

Correa called for "the whole world to observe the barbarism committed by Texaco...in a zone where there are more than a thousand pools of residual crude that are the fruit of savage capitalism and the damages for which Texaco allocated $40 million for clean-up, exactly the same amount that the president of the company earned as salary last year."

Chevron is facing a lawsuit in Ecuador for allegedly contaminating zones in the Amazon region of Lago Agrio. The company is accused of using out-of-date technology that led to environmental damage.

"We are absolutely convinced that we all have the right to an impartial ruling and to be judged under the law and following due process, in an environment where judges guarantee impartiality, justice and transparency," Texaco said in its statement.

The oil company added that it's concerned about "actions recently taken by the plaintiff's lawyers, who - apparently because the evidence does not support their case - have decided to resort to pressure on the court and the government in an effort to disturb due process and deny Chevron its access to an impartial ruling."

The complaint against Texaco started in 1993 with a lawsuit in New York courts, which ruled that the case should be tried in Ecuador. In May 2003, several indigenous groups filed a lawsuit against the company in Lago Agrio.

The company denies the allegations and says it has met all requirements for environmental clean-up that were agreed upon with Petroecuador, spending about $40 million. Chevron has also said that in 1998, Petroecuador released the U.S.-based company from any liabilities regarding clean-up efforts.

Ecuador: pay us not to develop oil reserves in the Amazon

mongabay.com
April 27, 2007
Ecuador says it will wait a year to see whether the international community takes its offer to forsake development of a giant oil field in the Amazon rainforest in exchange for compensation, reports the Environmental News Service (ENS).

Ecuadorian President Rafael Correa says that if the country is compensated with half of the forecasted lost revenues, it will not exploit oil in Yasuni National Park, setting aside the area for wildlife and indigenous people. Correa said the cost would be about $350 million per year.

"The first option is to leave that oil in the ground, but the international community would have to compensate us for immense sacrifice that a poor country like Ecuador would have to make," ENS reports Correa as saying in a recent radio address. "Ecuador doesn't ask for charity, but does ask that the international community share in the sacrifice and compensates us with at least half of what our country would receive, in recognition of the environmental benefits that would be generated by keeping this oil underground."

Between the 1967 and the 1990s, the Oriente rainforest of Ecuador suffered serious degradation and deforestation from Texaco's oil extraction and production activities. Originally it appeared that Texaco (now Chevron) might pull out of the Oriente without reparations, but widespread protests by indigenous peoples, environmentalists, and human rights organizations forced Texaco into negotiations. Texaco projected its clean up costs at a moderate US$5-10 million. Suggested reading: Savages, a book by Joe Kane, tells the story of the Huaorani, a tribe living in the deepest part of the Amazonian rain forest in Ecuador, and their struggles with Texaco.

The Ishpingo-Tiputini-Tambococha oil fields are believed to hold 900 million to one billion barrels of oil equivalent, or about one quarter of Ecuador's known reserves

Oil operations in the Ecuadorian rainforest have been controversial since American oil giant Texaco (now a subsidiary of Chevron) entered the region in 1958. Environmental groups and indigenous rights' organizations said Texaco's oil exploitation caused widespread pollution and environmental damage and blames the firm for high rates of cancer among local populations. Chevron is currently facing a $6 billion lawsuit on behalf of more than 30,000 affected people.

Correa's offer is seen as an "unprecedented opportunity" by some environmentalists reports ENS.

"This presents a landmark opportunity to sequester up to half a billion tons of CO2 while conserving Yasuní's astounding biodiversity and cultural heritage," Max Christian of the Sustainable Development and Conservation Biology program at the University of Maryland told ENS. "If the international community is serious about mitigating climate change and impacts to ecosystems, structuring a debt-for-carbon swap here offers a very real financing possibility."

U.N.: Mercenary Industry Poses Problems for Latin America

Written by Cyril Mychalejko

Thursday, 26 April 2007

From UpsideDownWorld The United Nations quietly released a report in March exposing an array of human rights abuses associated with a growing mercenary industry that is recruiting large numbers from Latin American countries. "We have observed that in some cases the employees of private military and security companies enjoy an immunity which can easily become impunity, implying that some States may contract these companies in order to avoid direct legal responsibilities," said Jose Luis Gomez del Prado, Chairperson-Rapporteur of the U.N. Working Group on the Use of Mercenaries in a statement before the Human Rights Council. The alleged human rights abuses are not just against civilians from the countries in which they operate, but also against there own employees. These "soldiers of misfortune" are often recruited from vulnerable populations in developing countries, such as Honduras and Ecuador, countries the U.N. group visited last year to conduct investigations. The massive unemployment, low wages, fragile governments and the history of violent conflicts in these countries make their populations an ideal labor pool. In addition, the report expresses worry about the "phenomenon" of Latin American government outsourcing domestic security and military functions to the private sector and the use of such operations to "protect" oil and mining companies. "There needs to be international regulations as well as domestic regulations in these countries," said Sanho Tree, a fellow at the Institute for Policy Studies. Tree, who has been monitoring this"out of control" industry for years in its role in the "War on Drugs" in Latin America, said that the lack of regulations and oversight is due to the fact that that it’s been under the radar for years and just coming to light because of the Iraq War. It’s estimated that there may be as many as 50,000 mercenaries working in Iraq—making it the second largest force in the so-called "coalition of the willing." Many of them may end up fighting alongside U.S. soldiers in combat situations. "The number of personal security specialists we utilize in Iraq alone is more than all the Diplomatic Security agents we have globally", said Gregg Starr, a State Department official in testimony before Congress in June of 2006. Although there has been some reporting on high profile companies, the issue still may not be garnering the attention it deserves as no media outlets have reported on the U.N. report. According to the Working Group, there may be as many as 280 private security companies operating illegally in Honduras. A number of Honduran nationals working in Iraq for a subsidiary of the Illinois-based Your Solutions Inc., are believed to have suffered "irregularities in contracts, harsh working conditions, wages partially paid or unpaid, ill-treatment and isolation, and lack of basic necessities such as medical treatment and sanitation." Some former employees have filed labor and criminal claims against the company with Honduran authorities. Another scandal unearthed against the company in the Working Group’s report involves illegally training Chilean recruits for Iraq in Honduras. The report states that in September 2005 the company brought 105 Chileans, some ex-soldiers, into the country under tourist visas. The Chileans, alongside their Honduran counterparts, were then sent to a former army base in the municipality of Lepaterique to receive training. The former base, now a development center of the Honduras Forestry Development Corporation, was once used by Washington in the 1980’s to train mercenaries of a maybe not-so-different sort—namely Contras, Honduras’s infamous death squad Battalion 316, and Argentina’s 601st Intelligence Battalion, a "counter-terrorist" unit initiated under Operation Condor. The possibility for industry changes in Honduras may be slight as the Working Group pointed out a "campaign of harassment, death threats and slander against the [human rights organization] Associacion para una Sociedad Mas Justa (Association for a More Just Society)." On Dec. 4, 2006 Dionisio Díaz García, a lawyer and journalist with the Tegucigalpa-based AJS, was shot in the head while driving in his car to court where he was scheduled to represent a group of security guards who had their labor rights violated. In a statement, the AJS wrote: "These companies have resorted to intimidation, smear campaigns, and open hostility toward AJS workers. On Monday, December 11, a board member and staff of CRWRC-Honduras partner group Genesis received a text message stating, 'You are the next.'" In Ecuador conditions are more of the same: immunity, impunity, exploitation and human and labor rights violations. The report expressed concern that private security companies were using the U.S. military base in Manta to recruit employees for foreign operations (Iraq and Afghanistan) and to conduct aerial spraying and other counter-narcotics operations under "Plan Colombia". "A transnational private security company was performing counter-insurgency and counter-narcotics tasks from the military base in Manta," said the U.N.’s Gomez del Prado, adding that these functions should be carried out exclusively by U.S. military personnel. Manta has become a political lightning rod as Ecuadorian President Rafael Correa has threatened to not renew the "Agreement of Cooperation" with the U.S. (which expires in 2009) that allows Washington to use the Air Force base. The agreement also grants immunity to U.S. military personnel and civilian contractors—a clause which the Working Group views as problematic. The report and its documentation of abuses of the use of the base along with public opinion firmly on the side of Correa may make it even easier for him to kick Washington out when the agreement expires. Jeffrey Shippey, a former DynCorp International employee at Manta created a ghost company, Epi Security and Investigations, and recruited more than 1,000 Colombians and Ecuadorians to work in Iraq. The report noted that the company wasn’t registered in Quito nor with local provisional authorities. NGO’s told the Working Group that the company allegedly was using Chilean instructors and former Colombian military personnel. Shippey wrote in an advertisement promoting his company at the Iraq Job Center Web Site (www.iraqjobcenter.com) that, "These forces have been fighting terrorists for 41 years and…have been trained by the U.S. Navy Seals and the U.S. DEA to conduct counter-drug/counter-terror ops in the jungles and rivers of Colombia." Another virtue of his mercenaries is that they get paid considerably less than their U.S. counterparts. In July 2005 Shippey told The Los Angeles Times, "The U.S. State Department is very interested in saving money on security now. Because they're driving the prices down, we're seeking Third World people to fill the positions." Adam Isacson, Director of Programs at the Center for International Policy, worries about the stories that haven’t come to light yet. He mentioned a report translated on his website (http://www.ciponline.org/colombia/blog/archives/000299.htm) about Colombians working in Iraq for a subsidiary of Blackwater USA who had their return tickets taken away from them when they complained that they would only get paid $1,000 a month after being promised $4,000. They were essentially held hostage. "It was almost slavery," said Isacson. "Lord knows how many more cases there are." Tree, of the Institute for Policy Studies, said that there are other consequences that we might not see for years. One of the most worrying is that these people may take this training and use it for violent criminal activities. An example of this is the story of the "Zetas", a group of Mexican paramilitary commandoes trained by U.S. special-forces to fight drug gangs. Many members of this group now work for the notorious Gulf Cartel, which is believed to supply large amounts of cocaine to the U.S. "Don’t train people if you don’t know what side they are going to fight for at the end of the day," said Tree. Cyril Mychalejko is an editor at www.UpsideDownWorld.org. He can be reached at Cyril(at)upsidedownworld.org. To read the UN Working Group on the Use of Mercenaries report: http://www.ohchr.org/english/issues/mercenaries/index.htm

Ecuador: World Bank booted, legislators flee, Chevron upbraided

From WorldWar4Report, 04/27/2007

Ecuador has expelled World Bank representative to Quito, Eduardo Somensatto, on the order of President Rafael Correa. Though Ecuador did not give an official reason for the expulsion, but Correa had protested the Work Bank's withholding of a $100 million loan in 2005, when he was the country's economic minister. Correa charges it was because of the country's moves to nationalize the oil sector. The bank contends the loan was suspended because Ecuador violated terms by dissolving an oil fund set aside to pay off foreign debt. Ecuador last week paid off the balance of its debt to the International Monetary Fund, but Correa has threatened to default on the remaining foreign debt. The country owes the World Bank an estimated $748 million. (UPI, April 26)

Six ousted Ecuadoran opposition lawmakers fled to Colombia April 26 after a prosecutor requested that they and their colleagues be arrested for sedition. Prosecutor Elsa Moreno accused the two dozen legislators of disregarding authority after they declared themselves legitimate office-holders based on a Constitutional Tribunal ruling. Correa had disregarded the ruling, and surrounded Congress with police to prevent the lawmakers from returning. The legislators had opposed the calling of a constitutional assembly, approved by 82% of Ecuador's voters. Exiled legislator Gloria Gallardo said the lawmakers feared for their lives and were considering filing for political asylum in Colombia. (AP, April 27)

Correa upbraided Chevron Corp. April 27 for dumping billions of gallons of toxic wastewater in Ecuador's Amazon rainforest. Leading reporters on a tour of a jungle area near the Colombian border, Correa lifted a fistful of greasy dirt from a small farm and said: "Soil with oil, friends." Correa said that damage to the site, once an oil pit operated by Texaco—which merged with Chevron in 2001—has prevented peasants such as 76-year-old Manuel Salinas from cultivating his land. Salinas also told the president and reporters that he and his family suffer from stomach and skin ailments. Correa said the damage from Texaco's drilling was 30 times worse than that of the 11-million gallon (42 million-liter) Exxon Valdez spill off Alaska in 1989. "But it would seem that what happens in the Third World doesn't matter," he said.

A pending lawsuit, opened in Ecuador in October 2003, alleges that Texaco dumped more than 18 billion gallons of oily wastewater from three decades of drilling. The plaintiffs—30,000 indigenous inhabitants and settlers—are seeking $6 billion in damages. The plaintiffs tried for a decade fruitlessly to bring the case before a US federal court. Chevron says Texaco followed Ecuadoran laws and spent $40 million on a cleanup launched in 1995. The Ecuadoran government's 1998 certification of the cleanup is assialed by Correa as a "fraud for the country." (AP, April 27)

Ecuador president rails against Chevron for alleged environmental damage

IHT, April 26, 2007

LA VICTORIA, Ecuador: Leftist President Rafael Correa went deep into Ecuador's Amazon jungle to show his disdain for Chevron Corp., which is on trial here for allegedly failing to clean up billions of gallons (liters) of toxic wastewater.

"Soil with oil, friends," Correa said Thursday as he lifted a fistful of greasy dirt from a small farm in the rain forest where Texaco Petroleum Co. spent three decades extracting oil before it merged with Chevron in 2001.

Correa, a U.S.-trained economist in power since January, is the first Ecuadorean president to support the estimated 30,000 Amazon Indians and settlers who are suing the U.S. oil giant.

He accused the company of causing 30 times more damage than the 11-million gallon (42 million-liter) Exxon Valdez spill off the Alaskan coast in 1989. "But it would seem that what happens in the Third World doesn't matter," the president said.

Farmers say the oily muck keeps them from cultivating their land and has caused stomach and skin ailments among the area's residents.

The plaintiffs are seeking US$6 billion (€4.4 billion) in damages, alleging that Texaco dumped more than 18 billion gallons (68 billion liters) of oily wastewater into the verdant rain forest, and failed to properly clean it up. The Indians' lawyers have presented studies showing elevated cancer rates in the area.

San Ramon, Calif.-based Chevron, which on Friday reported another quarter of record earnings, US$4.7 billion (€3.44 billion), says there is no proof oil contamination caused the cancers. It also says that Texaco, which ended its operations in 1992, followed Ecuadorean environmental laws in a US$40 million (€29 million) cleanup that began in 1995.

Just three years later, Ecuador's government certified the cleanup as complete.

Correa called that a "fraud for the country."

"There was no cleanup here," he said — the damage was simply covered up with dirt dumped over contaminated soil and wastewater ponds.

The Indians tried for a decade to have their case heard in U.S. federal court before shifting their battle to a makeshift courtroom in the ramshackle jungle town of Lago Agrio, which means "sour lake," where an Ecuadorean judge is hearing evidence.

Pablo Fajardo, a former farmer who became the plaintiffs' lead attorney, said they welcome Correa's support for the suffering people, but aren't looking for him to intervene in the judicial process.

A Chevron lawyer, Rodrigo Perez, told The Associated Press he is "sorry the president has taken sides."

"The trial must continue according to the evidence," Perez said, "based on the proceedings, not on statements by the executive branch or the press."

Chevron, which said it won't settle the case out of court, also expressed concern that political pressure might threaten its chances for an impartial trial in Ecuador. The judge's decision isn't expected until at least next year, and an appeals process could take another three years.

The trouble in Ecuador hasn't harmed Chevron's bottom line. Chevron has earned US$45 billion (€32.98 billion) during the past three years, its profit growing progressively higher each year.

Shannon: “Ecuador is looking for a way to perfect its democracy”

MercoPress, April 26, 2007

United States Assistant Secretary of State for Western Hemisphere Affairs Thomas A. Shannon spoke on a wide range of Latin American issues Wednesday during a round-table discussion with journalists at the U.S. Embassy in Santiago.

Shannon, the top American diplomat for inter-American affairs, is in Chile for three days to attend the World Economic Forum on Latin America being held in Santiago.

Venezuela’s relationship with regional neighbours dominated the discussion, especially because of the recent approval in Ecuador of a Chavezesque citizens’ assembly.

The measure, approved by 82% of voters, has caused many to speculate on the future of Ecuador’s democracy and its relationship with the U.S. and other regional neighbours.

“We (the U.S.) have a great relationship with Ecuador,” said Shannon. “In this moment, Ecuador is looking for a way to perfect its democracy and make sure that it can respond to social demands.”

When asked about the closeness of Ecuador’s President Rafael Correa and Venezuela’s Hugo Chavez, Shannon said every nation was Latin American was sovereign and free to conduct their own relations. “This is an issue for the people of Ecuador. We are always looking for ways to improve our relationship with Ecuador.”

When asked about former Chilean President Ricardo Lagos, who recently slammed Chavez by saying the only thing behind his “Bolivarian Revolution” was classical caudillo charisma and a lot of oil money, Shannon said he had nothing but respect for Lagos.

“Lagos is a man with a lot of experience,” said Shannon. “He understands the region, and whenever he speaks, I listen. Without a doubt, though, “Chavismo” (as a political ideology) certainly exists in Venezuela.”

Shannon addressed broader trends in Latin America, and argued that strengthening the region’s democratic institutions was his primary concern. “The region is on the right path,” said Shannon. “This is a region that is open to democracy, but we must now try and see how we can strengthen democratic institutions so that Latin Americans are not just political citizens, but also citizens in a social and economic sense”.

“We have to show that democracy is worth the effort,” Shannon continued. “And we have to make sure that governments in the region can create jobs.”

When asked about the strong anti-Americanism that stretches from Canadian artic to the Chilean Patagonia, Shannon said the best way to improve the perception of the U.S. was to maintain involvement in the region. “There is a lot of discomfort with the war in Iraq. This is an obvious truth,” Shannon said. “Our experience, however, is that our image improves whenever we are in a country and working. The U.S. has to be present in the region.”

As the conversation shifted to Chile’s relationship with the U.S., Shannon had nothing but praise. “We have a great relationship with Chile, and since President Michelle Bachelet came to power, we have taken steps to enhance our relationship,” said Shannon. “Bachelet has been very helpful in helping us understand the social climate in Latin America.”
“Our country has a common understanding of how democracy works, and how economic policy can be used to enhance democratic participation,” the diplomat continued.

Shannon also praised Bachelet’s recent effort to crack down on piracy. Chile has been placed on a U.S. Department of State watch list for poorly enforcing intellectual property laws, and Bachelet announced several measures to combat movie and music piracy this week.
“Bachelet’s new measures are a positive step,” said Shannon, although the diplomat did not enter a broader discussion on the topic.

Movie piracy is rampant in Chile, but the real dispute centres on the many Chilean pharmaceutical companies that have followed the Brazilian model of knocking off cheap generics, arguing that patients, including HIV/AIDS patients, suffer if forced to pay full price.

“We are very focused on intellectual property because it promotes innovation,” said Shannon.

A career diplomat, Shannon has a Ph.D. and M.A. in political science from Oxford. He also received a B.A. in government and philosophy from the University of William and Mary. Shannon was appointed to his most recent post in 2005. He previously served in the White House as an advisor to the President and director of Western Hemisphere Affairs for the National Security Council.

By Nathan Crooks The Santiago Times

Ecuador 'expels World Bank envoy'

Rafael Correa has threatened to default on Ecuador's debts

BBC News, April 26, 2007
Ecuador's President Rafael Correa has ordered the expulsion of the World Bank's representative in the country, sources say.

"We have received a letter in which our country manager is expelled," an unnamed bank official told Reuters.

"We are analysing the situation and looking to open up a dialogue."

Mr Correa had demanded that the World Bank explain why it suspended a $100m (£50m) loan in 2005 while he was economy minister.

He says it was in retaliation for his reforms of the country's oil sector.

The bank says Ecuador violated the terms of the loan by dissolving an oil fund earmarked to pay foreign debt.

There was no official confirmation of Eduardo Somensatto's expulsion, but a senior economy ministry official told AFP news agency the letter would be made public soon.

Threat to default

Mr Correa, who was elected in November, is an economist who trained in the US.

The leftist president has paid off Ecuador's debt to the International Monetary Fund and wants to minimise the country's dependence on foreign credit.

He has threatened to default on the country's other debts.

Ecuador still owes the World Bank $748m, the economy ministry says.

Mr Correa last week won a referendum on his call to rewrite Ecuador's constitution.

The president has said he wants to depoliticise the courts and decentralise the state.

But his critics say the project is designed to put more power in the president's hands.

Ecuador returns envoy to Colombia after spray row

QUITO, April 25 (Reuters) - Ecuador will send its ambassador back to Colombia after recalling the envoy in December after a row over its neighbor's fumigation of drug crops along their border, the government said on Wednesday. Ecuador decided to return the ambassador after Colombia halted fumigation and created a joint commission to investigate the effects of chemical spraying on border communities, the government said in a statement. Ecuador says Colombia's U.S.-backed spraying of herbicides to destroy coca leaf that makes cocaine hurts the environment and residents on its side. But Bogota defends the spraying as safe and key to its effort to crackdown on the drug trade. President Rafael Correa, a left-leaning friend of Venezuela's President Hugo Chavez, is a staunch opponent of Colombia's U.S.-funded, anti-drug campaign and what his government sees as its negative fallout on Ecuador. Ecuador's decision comes a day after a group of Ecuadorean opposition lawmakers fled to Colombia to seek protection from what they say is political persecution by Correa's government. In December, Colombia resumed spraying along part of the 366-mile (586-km) border after an 11-month pause. Washington has provided Colombia with around $4 billion in mostly military aid since 2000 to fight armed groups and drug trafficking.

Correa Presents Ecuador Plan

Quito, Apr 25 (Prensa Latina) Ecuadorian President Rafael Correa affirmed that "through the Ecuador Plan, we will counter war with peace" and will boost development and security in northern border towns.

During the presentation on Tuesday of the so-called "Ecuador Plan" at the Carondelet Palace (the house of government), Correa noted that he is betting on a proud, sovereign and generous nation where human beings will be the focus and will benefit from all programs.

The border project, he added, is a response of peace, justice and equity along the northern strip of the country, comprised of the provinces of Esmeraldas, Carchi, Imbabura, Sucumbios and Orellana.

He noted the need to change the situation of 1.97 million people (9 percent of Ecuador's population) who have been abandoned for years in a land marked by social violence.

Correa announced an investment of 135 million dollars in social and productive programs to build a positive border. He added that this amount will double soon with contributions from the international community.

The State will increase its presence along the northern border strip and will implement a policy of equitable and solidary international relations, and the defense of the country will be based on the protection of the people, the natural resources and the heritage.

He added that the Ecuador Plan will implement hundreds of social projects, including credits and microcredits to involve the local people in productive activities, thus preventing illegalities.

Lawmakers flee Ecuador as political crisis hits

Raw Story, 25 April 2007

Ecuador sank into political crisis Tuesday in a power struggle over its president's reform program, as demonstrators hit the streets and dissenting opposition deputies fled abroad from charges of treason.

In a conflict dividing both the legislature and the judiciary, a prosecutor ordered the arrest of 24 deputies, nearly half of the 50 who the Constitutional Tribunal, the country's highest court, had ordered reinstated to Congress.

Outside the Congress, some 400 pro-government protestors rallied against the expelled legislators, with police firing tear gas in sporadic confrontations.

"The entire country is near war," said leftist party leader Gustavo Ramirez.

The right-wing opposition deputies were sacked in March over their refusal to go along with far-reaching constitutional reforms promoted by President Rafael Correa.

The 24 lawmakers are accused of plotting against the state.

Eleven of them fled to Bogota late Tuesday and asked for political asylum, Ecuadoran opposition congresswoman Gloria Gallardo said, adding that four more of them were on the way to the Colombian capital.

"We have come to Colombia, which is a sister-country, to ask for protection and political asylum," said Gallardo, who arrived on a flight from Quito together with 10 other deputies from the right-wing PRIAN party.

According to prosecutor Elsa Moreno, the deputies were suspected of sedition for "rising against the government, refusing to recognize the constitution, and impeding a meeting of the Congress."

The accusation followed Congress's dismissal of another group of officials, the country's nine Constitutional Tribunal justices, after these judges reinstated the 50 lawmakers who had opposed Correa's constitutional reforms.

The 50 were dismissed on March 7 for rejecting a court decision backing a national referendum in favor of rewriting the country's charter.

With the political opposition out of the way, voters then this month approved the convention by a five-to-one margin, giving Correa the go-ahead in his effort to revamp the legislature and other government structures to pursue his nationalist, socialist agenda.

But the battle opened a new political crisis for Ecuador, a chronically unstable country that has had eight presidents in a decade.

The crisis has set Correa on a collision course with the high court over its move to reinstate the deputies. Correa also backed Congress's vote Tuesday to oust the judges.

While he insisted the removal of the opposition lawmakers remain in force, he said late Tuesday however that he opposed the arrest order for the 24 accused of sedition.

He said that "as the one responsible for the peace of the people," he would tell the authorities to rescind the arrest order.

Opponents of the president claim he is following in the footsteps of Venezuela's firebrand leftist President Hugo Chavez, who successfully pushed for the election of a constituent assembly packed with his supporters in 1999.

Following the April 16 referendum, Ecuadorans will later this year be called to elect a national assembly to be tasked with writing a new constitution.

Ecuador to hold Constituent Assembly elections on Sept. 30

People's Daily Online, April 24, 2007

Ecuador will hold elections for the Constituent Assembly on Sept. 30, the president of the Supreme Electoral Tribunal (TSE) announced Tuesday.

TSE President Jorge Acosta said the electoral body will oversee the election of 130 assembly members, who will have full powers to reform the national institutions and write a new Constitution.

The candidates will register on May 4, and the electoral campaign will last from Aug. 14 to Sept. 27.

According to the statute, 100 representatives will be elected in provinces, 24 at national level and six among overseas Ecuadorians, including two from Europe, two from the United StatesCanada and two for those living in Latin America. and

The Constituent Assembly will be installed in November or December of this year. According to the functionary statute, it will have 180 days, with a possible 60-day extension, to write a new Constitution and reform the country's institutions.

The draft of the new constitution will be submitted to a national referendum in 2008.

The results of the referendum held on April 15 showed a landslide for the government-backed reform, proposed by President Rafael Correa, who came into power in January. He advocates drafting a new constitution to replace the 1998 version.

Ecuador's Correa Asks Court to Scrap Order to Arrest Lawmakers

By Matthew Walter

April 24 (Bloomberg) -- Ecuadorean President Rafael Correa asked a penal court to scrap a request for an arrest warrant for a group of suspended lawmakers, saying there needs to be peace amid escalating conflicts between congress and the courts.

The arrest warrant accuses the lawmakers of sedition, according to the government's Web site. The congressmen were suspended last month by the country's top elections court for allegedly interfering with Correa's plan to rewrite the constitution to limit the influence of political parties on institutions, including the courts.

``We're looking at a sensitive situation, politically speaking,'' Correa said today in a press conference in Quito. ``These events have not been backed by the government.''

Correa was elected in November without the backing of any political party. He's popular with the public for pledging to take on political parties that many Ecuadoreans blame for instability that's led to eight presidents in 10 years.

Correa said he's preparing a proposal for a new constitution that does away with ``neo-liberal'' economic policies and creates more ``participatory democracy.'' The president's plan to call an assembly to rewrite the constitution won the support of 82 percent of voters this month in a national referendum.

Tension between the courts and congressmen mounted yesterday, when Ecuador's constitutional court decided to reinstate the suspended lawmakers, prompting the congressmen still in office to vote to fire that court's judges. Today, the penal court with the arrest warrant ordered the suspended lawmakers detained.

Correa also said today the government will wait eight months to decide what to do with the Ishpingo Tamococha Tiputini oil field. Correa is seeking international compensation for not drilling in the area, which is located in the Amazon.

To contact the reporter on this story: Matthew Walter in Santiago at mwalter4@bloomberg.net

Ecuador's Congress sacks judges

Chaos has ensued since Mr Correa became president in January

BBC News, April 24, 2007
Ecuador's Congress has sacked nine top judges after they voted to reinstate 50 lawmakers fired last month for opposing a referendum on constitutional reform.

President Rafael Correa insisted the lawmakers were sacked for incompetence, and did not deserve their jobs back.

On Monday the Supreme Court ruled the dismissals were unconstitutional. The Congress now led by supporters of Mr Correa responded by sacking the judges.

The Congressmen are opposed to radical reforms being implemented by Mr Correa.

Rafael Correa took over as president in January promising radical change to the way the country is governed, hoping to end 10 years of political turmoil, but it has been a chaotic few months, says the BBC's South America correspondent, Daniel Schweimler.

Mr Correa had condemned Monday's Supreme Court ruling to reinstate the lawmakers as shameless, and criticised the move as a violation of legal procedures.

'Slipping power'

On Tuesday the president sent extra police to the Congress building in the capital, Quito, to prevent the reinstated politicians from attending the vote.

The referendum was backed by the majority of Ecuadoran people

He warned that they could be sent to prison for causing a disturbance.

Fifty-seven congressmen were originally removed from office, but the constitutional court verdict applied only to the 50 who had signed a legal petition to be reinstated.

The Congressmen and women are opposed to radical reforms being implemented by Mr Correa - reforms he says will give a greater voice to the people and bypass a Congress he accuses of corruption and mismanagement.

Earlier this month his proposals received the overwhelming backing of the Ecuadoran people in a referendum.

The planned changes face strong opposition from a political establishment that sees power and influence slipping from its grasp, our correspondent says.

Political Showdown in Ecuador

By JEANNETH VALDIVIESO
via Lexington Dispatch

April 24, 2007

Ecuador's popular president tightened his hold over all branches of government Tuesday, sending police to prevent the return of opposition lawmakers as his tentative majority in Congress dismissed all nine members of the nation's highest court.

The Constitutional Tribunal on Monday ordered the reinstatement of opposition lawmakers who had tried to block a constitutional referendum.

An overwhelming 82 percent of voters last week approved the election of a special assembly to write a new constitution that leftist President Rafael Correa hopes will reduce the power of political parties.

Correa scorned the tribunal's authority, surrounding Congress with police officers Tuesday to prevent the ousted lawmakers from returning, and some of their replacements were among the 52 sitting members of the 100-member body who voted to fire the judges, arguing that their terms had expired in January.

If the ousted lawmakers retake their seats, Congress will return to opposition hands. They were meeting to plot their next move. But given that Correa now controls the courts, the legislature and the executive branch, that appears increasingly unlikely.

Tuesday's developments were a stunning advance for a political outsider who took office on Jan. 15 without a single member of his own party in Congress.

"We are living in a magical moment in Ecuador's history with the awakening of a people who have said 'enough,'" Correa said at the presidential palace Tuesday night in a speech marking his 100th day in office.

With "so much popular support, we're certain that we can have a very important presence in the assembly," Correa said.

Many Ecuadoreans are fed up with political corruption and incompetence, and share Correa's view that the current political structure is designed to benefit parties rather than people. Correa has nearly 70 percent support in the polls, and several smaller parties have allied with him since he took office.

Ecuador's constitution gives Congress the power to name the tribunal's judges, and their dismissal appears to consolidate Correa's control over the last remaining branches of government that checked his power.

Some 300 police and dozens of demonstrators surrounded Congress to keep the reinstated legislators from entering, and Correa warned that if any of the dismissed lawmakers tried to enter by force, "it will be necessary to send them to prison."

One of the opposition congressmen, Alfredo Serrano, said they decided not to enter Congress Tuesday, fearing for their safety.

Correa's position also is supported by Ecuador's top electoral court, which fired the lawmakers in March and says that it - not the Constitutional Tribunal - has the final say on electoral matters. That court's president warned that the six constitutional tribunal judges who voted to reinstate the ousted congressmen could be charged with abusing their authority.

"It is not a matter of disrespecting their decision but they should respect ... the constitution and the laws," said the electoral court's president, Jorge Acosta. "Just because they are the highest constitutional authority does not mean they can disregard the mandates of the constitution and the law."

Amid the chaos Tuesday, the electoral court announced that the 130 constituent assembly members will be elected Sept. 30. Candidates will begin a six-week campaign in mid-August.

Ecuador's congress fires judges

Al Jazeera, April 24, 2007
Ecuador's congress has fired judges from the country's highest court for reinstating 51 politicians who were sacked for opposing constitutional changes.

Byron Pacheco, the congressional vice president, said: "Nine members of the constitutional court have been dismissed," insisting their removal predated the court ruling on the politicians.

Opposition politicians have clashed with Rafael Correa, Ecuador's president, over his plans to rewrite the constitution and curb the influence of traditional political parties who many blame for years of instability.

Pacheco said the judges had overstayed their congressional terms.

The 51 politicians were fired in March for opposing Correa's proposal for a referendum on whether to rewrite the constitution through a special assembly.

They were replaced by substitutes who gave Correa a majority in the legislature.

Silvia Salgado, a socialist politician and Correa ally who sponsored a bill to dismiss the judges, said: "The court showed its true political intentions yesterday."

"They just can't violate the constitution."

The reinstated politicians demanded their seats back in the congress on Tuesday, but said they would not block the assembly, which Ecuadoreans approved in a referendum earlier this month.

Ecuadoreans overwhelmingly supported the government-backed plan to set up the assembly that Correa hopes will curtail traditional elites, whom many voters blame for helping to topple three elected presidents in 10 years.

Political Showdown in Ecuador

By JEANNETH VALDIVIESO

The Associated Press via Washington Post
Tuesday, April 24, 2007; 10:38 PM

QUITO, Ecuador -- Ecuador's popular president tightened his hold over all branches of government Tuesday, sending police to prevent the return of opposition lawmakers as his tentative majority in Congress dismissed all nine members of the nation's highest court.

The Constitutional Tribunal on Monday ordered the reinstatement of opposition lawmakers who had tried to block a constitutional referendum.

Ecuador's congressmen, who were dismissed last month by the country's top electoral court and reinstated Monday by the Constitutional Tribunal, speak prior to a press conference in Quito, Tuesday, April 24, 2007. (AP Photo/Eduardo Valenzuela) (Eduardo Valenzuela - AP)

An overwhelming 82 percent of voters last week approved the election of a special assembly to write a new constitution that leftist President Rafael Correa hopes will reduce the power of political parties.

Correa scorned the tribunal's authority, surrounding Congress with police officers Tuesday to prevent the ousted lawmakers from returning, and some of their replacements were among the 52 sitting members of the 100-member body who voted to fire the judges, arguing that their terms had expired in January.

If the ousted lawmakers retake their seats, Congress will return to opposition hands. They were meeting to plot their next move. But given that Correa now controls the courts, the legislature and the executive branch, that appears increasingly unlikely.

Tuesday's developments were a stunning advance for a political outsider who took office on Jan. 15 without a single member of his own party in Congress.

"We are living in a magical moment in Ecuador's history with the awakening of a people who have said 'enough,'" Correa said at the presidential palace Tuesday night in a speech marking his 100th day in office.

With "so much popular support, we're certain that we can have a very important presence in the assembly," Correa said.

Many Ecuadoreans are fed up with political corruption and incompetence, and share Correa's view that the current political structure is designed to benefit parties rather than people. Correa has nearly 70 percent support in the polls, and several smaller parties have allied with him since he took office.

Ecuador's constitution gives Congress the power to name the tribunal's judges, and their dismissal appears to consolidate Correa's control over the last remaining branches of government that checked his power.

Some 300 police and dozens of demonstrators surrounded Congress to keep the reinstated legislators from entering, and Correa warned that if any of the dismissed lawmakers tried to enter by force, "it will be necessary to send them to prison."

One of the opposition congressmen, Alfredo Serrano, said they decided not to enter Congress Tuesday, fearing for their safety.

Correa's position also is supported by Ecuador's top electoral court, which fired the lawmakers in March and says that it _ not the Constitutional Tribunal _ has the final say on electoral matters. That court's president warned that the six constitutional tribunal judges who voted to reinstate the ousted congressmen could be charged with abusing their authority.

"It is not a matter of disrespecting their decision but they should respect ... the constitution and the laws," said the electoral court's president, Jorge Acosta. "Just because they are the highest constitutional authority does not mean they can disregard the mandates of the constitution and the law."

Amid the chaos Tuesday, the electoral court announced that the 130 constituent assembly members will be elected Sept. 30. Candidates will begin a six-week campaign in mid-August.