Ecuador: Mining, debt and indigenous struggles

Duroyan Fertl

Green Left Weekly, 22 November 2008


On November 17, thousands of indigenous and environmental activists rallied across Ecuador in protest against the introduction of a new mining law by the government of President Rafael Correa.

The protests, organised largely by the Confederation of Indigenous Nationalities of Ecuador (CONAIE — Ecuador’s largest indigenous federation), marked the beginning of a week of protests by social, environmental and indigenous movements against the potentially environmentally destructive consequences of a number of proposed new laws — including laws relating to mining, water and the introduction of large-scale shrimp farming.

Ecuador’s weak economy is heavily dependent upon mineral extraction — especially oil — and this has had a catastrophic effect on the environment and communities in affected areas.

A large part of the Ecuadorian Amazon is now being described as an “Amazonian chernobyl” after 18 billion gallons of polluted water were released into the water system by oil-giant Chevron Texaco. This has resulted in thousands of deaths, cancer, birth defects and massive environmental collapse.

Affected communities are currently pursuing Chevron in court.

Mining companies are also known to frequently employ tactics of intimidation and violence to silence local protest, including the hiring of armed thugs and occasionally killing people.

While Correa has condemned the action of the mining companies, he has also been critical of anti-mining groups that employ direct action tactics, attempting to shut down mining operations.

Correa, elected in 2006 on a promise to spend more on social need, has pledged to use money from mining on improving the well-being of the 50% of the country’s population living in poverty.

Nonetheless there is, however, a strong sentiment in Ecuador to have the country declared “mining-free”.

Alberto Acosta, who has been one of Correa’s closest advisors, has advocated a total ban on open-cut mining, and CONAIE have demanded that indigenous and other affected communities have a power of total veto over mining operations in their areas.

Correa, however, has opposed both a mining ban and the inclusion of a veto in the country’s recently adopted new constitution. He has declared that Ecuador will pursue only “sustainable” mining.

The new mining law increases government control over the sector, requiring companies to negotiate payment of royalties of at least 5% to the government, as well as placing stricter environmental safeguards on all mining operations, including regular site inspections.

However, CONAIE president Marlon Santi rejected the new law on the basis that social sectors did not participate in its design.

Jose Cueva, a community leader from Intag — a region heavily affected by mining — called for a delay in the mining law.

“The president needs to first pass a food sovereignty law, a water law and a biodiversity law. Then we can have a national dialogue over what to do about mining”, said Cueva.

On November 19, CONAIE led a further 10,000 people in a march from Ecuador’s northern highlands in protest against the draft water law, which they are worried could lead to privatisation and pollution by mining companies.

Activists invoked the country’s new constitution — approved by nearly 70% of the vote in September — in defence of water rights for communities. The new constitution specifically grants legal rights to the environment and protection from being spoiled.

The protests are already being seen as a resurgence of Ecuador’s social movements, which had fallen into disarray over the past few years.

While they have offered more or less critical support to Correa, especially in getting the new constitution passed, many social movements — especially CONAIE — are sceptical about getting too close to government.

However, the victory over the right-wing opposition in the constitutional referendum has emboldened the social movements to reorganise and demand more of the government.

Meanwhile, Ecuador, which relies on oil exports for almost half of its foreign exchange income, is already suffering from the recent fall in global oil prices as well as aging infrastructure in urgent need of replacement.

After a recent review into its foreign debt found that a significant portion is “illegal”, Correa delayed a US$30 million interest repayment on the country’s debt.

Ecuador’s total foreign debt is $10.3 billion, equal to 21% of Ecuador’s gross domestic product. This was all accumulated under previous administrations — when Ecuador was renowned for its systemic corruption.

Both Correa and finance minister Maria Elsa Viteri have refused to rule out a complete default on all debts. Only one fifth of them were taken out for development projects, with the rest used for debt refinancing.

Correa has also announced that Ecuador is seeking a $1 billion loan from the Inter-American Development Bank to finance key infrastructure projects.

Ecuador’s electoral council is expected to call the 2009 elections on November 23, the first elections under the new constitution. All 5993 elected positions in Ecuador will be up for re-election, including the presidency.

While Correa has maintained strong support for his policies, he cannot afford to further alienate the indigenous population in the lead-up to the elections.

CONAIE and other social movements have been responsible for overthrowing three presidents in the past decade. Their renewed strength means they are likely to demand meaningful change — and a break from the current economic system that is destroying their communities.