Ecuador's Correa says 08 GDP grew 6.52 pct

QUITO, April 11 (Reuters) - Ecuador's economy grew 6.52 percent in 2008 despite a global financial crisis that has curtailed key oil exports, Ecuadorean President Rafael Correa said on Saturday citing central bank data.

The central bank had initially estimated economic growth at 5.3 percent in 2008. The OPEC-member nation grew 2.49 percent in all of 2007.

"They gave me the last central bank estimate that says total growth in 2008 was 6.5 percent," Correa said during his weekly radio address. "And that's despite the fact that the crisis hit us in the fourth quarter and the economy slowed."

Correa said the country's oil economy slowed due to lower private investment, but non-oil economic activity grew 7.95 percent in 2008. He said higher-than-expected growth was mainly due to his government policies that include heavy public spending.

Ecuadorean officials have said the economy could grow between 1.4 percent to 3.2 percent this year depending on oil prices and the worldwide economic recession that has curtailed demand for its agriculture exports.

Local economists and analysts have questioned the central bank methods to calculate the gross domestic product after Correa ordered an overhaul of its statistics.

The central bank has not yet officially released economic growth data for the last quarter of 2008.

Correa Poised to Win Again in Ecuador

April 11, 2009

(Angus Reid Global Monitor) - Ecuadorian president Rafael Correa seems ready to win a new term in office, according to a poll by Santiago Pérez Investigaciones y Estudios. 54 per cent of respondents would vote for Correa in this month’s vote, up two points since mid-March.

Former president Lucio Gutiérrez is a distant second with 12 per cent, followed by Álvaro Noboa of the Institutional Renewal Party of National Action (PRIAN) with 10 per cent, and Martha Roldós—the daughter of former head of state Jaime Roldós—with six per cent.

Correa, a former finance minister, ran for president as an independent leftist under the Alliance Country (AP) banner. In November 2006, Correa defeated Álvaro Noboa of the Institutional Renewal Party of National Action (PRIAN) in a run-off with 56.69 per cent of the vote. He officially took over as Ecuador’s head of state in January 2007. Correa’s party nominated no candidates to the National Congress.

In September 2008, Ecuadorian voters ratified a new constitution in a nationwide referendum. The draft was approved by the pro-government majority in the Constituent Assembly. Under the terms of the new constitution, Ecuador will hold a new presidential election on Apr. 26. Correa is eligible for a new term in office and is seeking re-election.

On Mar. 31, Correa vowed to promote job creation and protect small businesses if elected to a second term, saying, "We seek to build a homeland with equal opportunities, to set a new work model which help us get rid of paternalism and achieve social development."

Polling Data

If the presidential election were held today, who would you vote for?

	Mar. 28	Mar. 21
Rafael Correa	54%	52%
Lucio Gutiérrez	12%	12%
Álvaro Noboa	10%	11%
Matha Roldós	6%	8%
Other / Spoiled / Blank ballot	18%	17%

Source: Santiago Pérez Investigaciones y Estudios
Methodology: Interviews with 1,700 Ecuadorian adults, conducted on Mar. 28, 2008. Margin of error is 3 per cent.

Conflict threatens Ecuador’s socialist government

Author: W. T. Whitney Jr.
People's Weekly World Newspaper, 04/10/09 11:50

Ecuador's Pres. Correa, fifth from left, accompanied by supporters in Quito Feb. 4. Patricio Realpe/AP

Prevailing opinion places Ecuador in company with Venezuela and Bolivia as exemplars of “socialism of the 21st century.” The three countries rely upon sub-soil natural resource extraction to fund social programs. Falling oil and natural gas prices have forced their governments to improvise.

They are allies in a war of intrigue emanating from the United States. Venezuela and Bolivia expelled U.S. ambassadors and Ecuador recently ousted CIA station head Mark Sullivan. He is accused of helping both to engineer the deadly March 1, 2008, Colombian Army attack on a FARC encampment inside Ecuador and to doctor computer files found at the attack site to paint a picture of hydra-headed regional terrorism.

Yet Ecuador’s course is different, with special perils and contradictions. A law suit filed March 25 by the indigenous CONAIE federation, for example, claims that a Mining Law passed in January violates provisions of the constitution approved in September. CONAIE’s member organizations represent 90 percent of Ecuador’s indigenous population. Together with social movements, they were instrumental in putting President Rafael Correa in office in January, 2007 with a 56.7 percent majority.

CONAIE alleges that indigenous people were excluded from early discussions of the law, that revisions will be impossible given the Mining Law’s characterization as “organic,” and that the law violates environmental protections written into the constitution. Throughout the 1990s CONAIE struggled for a “multinational” state and fairness in exploiting natural resources.

Responding to the law, thousands of indigenous people and representatives of Ecuador’s environmental movement marched, protested and blocked highways. Splashed on walls in Quito were slogans like “Water is worth more than gold” and “All mining exterminates.” Correa castigated “the infantile left, the infantile pro-indigenous movement, the infantile ecological movement” for holding meetings to push for an uprising opposed to mining,”

In mid-March, Correa’s health minister declared the important group Environmental Action illegal. The government backed down in the face of worldwide protests.

Indigenous groups in Azuay Province in Ecuador’s mineral-rich south filed another claim before the Constitutional Court on March 31 alleging potential environmental abuses under the law and disregard of indigenous land rights. Opposition to the Mining Law intensified on Feb. 25 when a pipeline in Chaco leaked 14,000 barrels of crude oil. Four rivers were contaminated affecting water used by 30,000 people in 47 communities.

At issue are 14 million acres of land representing 20 percent of the nation’s land surface, set aside for industrial mining. Foreign corporations have eyed newly discovered copper, gold and silver deposits. They anticipate concessions in land previously reserved for indigenous use, for natural preserves and parks.

Described as “artisanal,” mining in Ecuador was the province of small businesses, cooperatives and community groups. In April, 2007 the government suspended almost all concessions pending formulation of the Mining Law. Now a legal framework exists for explorations, licensing and royalty payments to the state set at a low 5 percent. Plans are under way for gigantic open pit mines.

Why did the government promote legislation threatening to break up the multinational, people-centered mobilization that brought Correa to power? First, oil production is projected to decline this year by 8.8 million barrels, leaving state coffers $268 million short. Ecuador’s oil and natural gas deposits have waned and the oil industry has decayed.

Second, on top of cuts in state income caused by previous oil price reductions and diminished yield from oil exports, the government recently lost almost $3 billion in income when oil prices fell from $80 to $20 per barrel. The state’s fiscal deficit now exceeds $7 billion, an amount approaching half the spending projected under this year’s budget. Meanwhile capital flight ranges into the billions, while interest rates for state loans rise and liquidity is reduced on state assets.

“This country’s mineral wealth is immense, exceeding $200 billion,” declared Correa. “Are we going to leave it untouched in the name of not running up against a bird or a tree?” Promised social spending is lagging while 56 percent of the population is unemployed or underemployed. Late last year Correa announced Ecuador’s external debt would remain unpaid.

In Ecuador’s version of “socialism of the 21st century,” nationalization of underground resources, as in Venezuela and Bolivia, is apparently not in the cards. Under Ecuador’s new constitution Correa faces an election on April 26. He is favored to win in a landslide.

Ecuador Hopefuls Intensify Campaigns

Quito, Apr 8 (Prensa Latina) Presidential candidates are intensifying their campaign activities to get votes in provinces, with just 18 days left to general elections.

President Rafael Correa, who is looking for re-election under a new constitutional framework, is expected to travel to Guaranda city, in Bolivar province, after visiting Guayaquil yesterday.

Besides traveling to popular neighborhoods, Correa is focusing his efforts on spreading achievements made by his government in barely two years in power and reiterating the continuation of the process of changes implemented in the country.

In Guaranda, he is expected to give interviews to radio stations on issues related to the region's political, economic, social situation.

With an over 50 percent backing, according to surveys, Correa seems to be the favorite to win elections of April 26 in the very first round.

Ranking second are former President Lucio Gutierrez, from Sociedad Patriotica Party, and multimillionaire Alvaro Noboa, from the Renovador Institucional Party (PRIAN).

Little more than 10 million electors are expected to cast their cotes to elect their country's president and voce president, as well as Congress members, municipal mayors and provincial prefects, among others.

Ecuador Crisis Alleviation Underway

Quito, Apr 8 (Prensa Latina) The Ecuadoran government is currently boosting a new strategy to guarantee labor stability and create around 80,000 new jobs amid damage caused by the current global financial crisis.

The proposals, announced on Tuesday by President Rafael Correa would be materialized with increased social programs, support from ministries and financing.

Termed a national anti-crisis strategy, it has five parts: economic inclusion of micro and small producers, fostering people's economy and that of solidarity, a productive boost, orientation of public investment towards intensive activity in employment and protection of Ecuadorian family income.

Taking these actions aims at securing around 80,000 new jobs, and the head of State has already signed an executive decree to create a Solidarity and People's Economy Institute, which will be in charge of this job.

That institute will receive a $14 million contribution from the state budget and another $10 million to be obtained through a foreign loan.

The Executive has also planned to generate other jobs through the ministries of Tourism, which will implement a program to create 10,000 new jobs; Industries, creating 2,000, and Agriculture, an institution that will create 15,200.

The State will also earmark $12 million for training, certification granting and labor links, to benefit 145,000 people.

These proposals also include the urgent reform presented to the Legislative and Supervising Commission that seeks to give the reserve fund to the workers every month, not accumulating it, as has been done so far.

Such measure represents a 8.33-percent increase in salaries, and will also benefit the country, because it will allow $35 million to be injected into the economy.

Correa stipulated a $5.00 increase of the $30 Human Development Bond, devoted to the low-income families, and remarked that the free social benefits will be maintained, in sectors as education, health, and child development, as well as the subsidy to the dignity tariff (electricity).

These measures add to others of financial nature, with which the Executive intends to palliate the damage caused to the country by the international financial crisis.

SEC Rejects Chevron Attempt to Block Shareholder Resolution on Ecuador Environment Case

Amazon Defense Coalition

FOR IMMEDIATE RELEASE

2009-04-08

Karen Hinton
Karen@hintoncommunications.com
703-798-3109

SEC Rejects Chevron Attempt to Block Shareholder Resolution on Ecuador Environment Case

Chevron Fines Have Tripled In Recent Years

Chevron Request for No Action and SEC Response

Washington, D.C. (April 8, 2009) - The Securities and Exchange Commission has rejected an attempt by Chevron management to block a vote by shareholders on a high-profile resolution that threatens to focus attention on the company's record-breaking $27 billion environmental liability in Ecuador, according to a letter made available by the regulatory agency on its website.

The SEC decision comes after months of lobbying by the oil giant to scuttle a resolution sponsored by two large pension funds in New York that together own more than $1 billion of Chevron stock. The resolution calls on Chevron's management -- under fire in Ecuador, Burma, and Nigeria for being linked to human rights problems -- to assess whether the company's operations in host countries comply with environmental regulations.

"We applaud the SEC for rejecting Chevron's attempt to deny shareholder democracy on this extremely significant environmental issue," said Mitch Anderson, who monitors the company for Amazon Watch, a non-profit environmental group in San Francisco.

The resolution was prompted by evidence in the Ecuador litigation that Chevron uses lax environmental standards in developing nations that allow it to pollute with virtual impunity. Chevron's lawyers have proposed that the Ecuador court adopt a soil clean-up standard 100 times more lax than in most U.S. states to avoid liability, according to the plaintiffs.

"We believe that Chevron's record to date demonstrates a gap between its international environmental aspirations and its performance," the resolution noted in a supporting statement, citing the fact that Chevron's fines for environmental and safety problems worldwide more than tripled between 2003 and 2007.

In Ecuador, Chevron is a defendant in a 15-year legal battle over the dumping by Texaco of billions of gallons of toxic waste into Amazon waterways when that company operated an oil concession there from 1964 to 1990. Chevron bought Ecuador in 2001 and will bear any liability in the case, which was transferred to Ecuador from U.S. federal court at Chevron's request.

Two weeks ago, the trial judge in Ecuador completed the last of 102 field inspections of former Texaco oil production sites. Separately, a court-appointed expert who worked with a team of 14 scientists estimated Chevron's damages at up to $27 billion, which would mark a historical record for an environmental case. A decision is expected later this year.

Amazon Watch and shareholders have criticized Chevron for refusing to set aside funds to satisfy the potential Ecuador judgment and for filing misleading information with the SEC to downplay the significance of the Ecuador case. Chevron claims the trial court in Ecuador is biased, but the plaintiffs point out that Texaco had filed 14 expert affidavits praising those same courts as fair to get the case transferred out of U.S. federal court.

"Only when the evidence started to prove its own culpability did Chevron begin to attack the court process in Ecuador," said Anderson in reference to the Ecuador litigation.

Chevron recently took the rare step of filing a supplemental letter with the SEC as part of a last-ditch effort to persuade the agency that the environmental resolution was too similar to another filed by the International Brotherhood of Teamsters. In responding, the SEC ruled that it was "unable to concur" with Chevron's arguments.

The resolution was co-sponsored by the state pension funds of New York City and New York State and supported by a wide variety of Chevron shareholders, including Amnesty International, the Pennsylvania Treasury Department, and Trillium Asset Management.

It will be voted on May 26 at Chevron's annual meeting near San Francisco. At the meeting, several shareholders and Amazon indigenous leaders are expected to ask pointed questions of CEO David O'Reilly.

For copies of the shareholders' resolution, Chevron's no-action letter to the SEC, and the SEC response, visit www.chevrontoxico.com or contact Karen Hinton at the email address and phone number above.

#

About the Amazon Defense Coalition
The Amazon Defense Coalition represents dozens of rainforest communities and five indigenous groups that inhabit Ecuador's Northern Amazon region. The mission of the Coalition is to protect the environment and secure social justice through grass roots organizing, political advocacy, and litigation.

FACTBOX-Ecuador's Correa challenges foreign interests

April 7 (Reuters) - Ecuador's planned lawsuit against Brazilian builder Odebrecht, alleging faulty construction of a hydroelectric plant, is the latest move against foreign interests by President Rafael Correa ahead of the April 26 general election.

Since taking office in 2007, Correa has remained widely popular, in part because of his tough stance against foreign investors he accuses of pillaging the OPEC nation's wealth.

Some of Correa's actions against foreign governments and investors:

* In February Correa expelled two U.S. Embassy officials after accusing them of interfering in his country's affairs.

* In December Correa refused to repay $3.2 billion in foreign debt over charges the bonds were linked to corrupt former officials and that their terms were unfair. He has often threatened to default on Ecuador's global bonds.

* In November Brazil briefly recalled its ambassador after Ecuador filed suit to stop payments on a Brazilian loan on charges it was acquired illegally. Correa later said payments would continue until a court decided on the legitimacy of the debt, which he says is unfair to his poor nation.

* In September, Correa kicked out Odebrecht and sent troops to seize its projects in Ecuador in a contract dispute.

* In 2007, Correa imposed a windfall tax hike, seizing nearly all of the extra revenue oil companies generate above a benchmark price for each barrel they extract. The move sparked a rash of international lawsuits as companies charged the measure violated their contracts.

Ecuador trade move would hit $4.3 bln of imports-WTO

GENEVA, April 7 (Reuters) - Ecuador's measures to restrict imports to defend its balance of payments would affect $4.3 billion of its 2008 imports, or 23 percent of the total, according to a World Trade Organisation report.

The report, dated April 6 and published on the WTO website, was drawn up in preparation for a meeting on April 22 of the WTO's Committee on Balance of Payments Restrictions, where Ecuador will seek a temporary waiver from WTO rules.

Ecuador, whose trade balance has been battered by the global recession, imposed the restrictions in January on imports from Colombian bubblegum to Chinese shoes.

The move has strained relations with its Latin American trading partners, and Quito threatened last month to withdraw the world's largest banana exporter from the four-nation Andean trade bloc CAN if they reject its move.

CAN also includes Colombia, Peru and Bolivia.

The restrictions cover 8.7 of products imported into Ecuador, with some goods attracting an additional tariff of 30 or 35 percent of value.

Textiles and clothing will pay an extra duty of $12 a kilo, while shoes will pay an extra $10 a pair.

For other products Ecuador has imposed import quotas of 65 or 70 percent of the 2008 value.

The WTO report lays out the impact on exports of Ecuador's major trading partners, and on products.

 1. EXPORTS OF TRADING PARTNER (2007 FIGURES) AFFECTED BY MEASURES
COUNTRY    2007 EXPORTS AFFECTED   SHARE OF THAT COUNTRY'S 2007 EXPORTS TO ECUADOR
Colombia      $575 million                                 38.6 pct
China             $475 million                                 42.3 pct
U.S.                $303 million                                10.8 pct
Peru               $147 million                                 30.6 pct
Chile              $167 million                                 almost one third
Source: WTO

 2. MAIN PRODUCTS AFFECTED
PRODUCT               EXPORTER          2007 EXPORT VOLUME
trucks                            Japan                       $213 mln
cars                                South Korea            $197 mln
trucks                            Thailand                  $172 mln
cars                                Japan                       $135 mln
cars                                Colombia                 $59 mln
trucks                            Colombia                 $51 mln
motorbikes                  China                        $40 mln
television sets              Panama                   $39 mln
shoes                             China                        $38 mln
radio sets                      Panama                   $36 mln
toilet paper, tissues    Colombia                $35 mln
apples and pears         Chile                        $33 mln
food preparations       Chile                        $32 mln
Source: WTO

Ecuador to sue Brazil's Odebrecht over plant

* Ecuador alleges plant construction was faulty

* To seek $210 mln in damages

* Odebrecht says rejects Ecuador's charges

* Latest move against foreign investors by Correa (Adds Odebrecht response in paragraphs 6 and 7)

By Alexandra Valencia

QUITO, April 7 (Reuters) - Ecuador said it would sue Brazilian builder Odebrecht for $210 million, alleging faulty construction of a hydroelectric plant, the latest move against foreign investors by President Rafael Correa ahead of an April 26 general election.

Correa frayed ties with Brazil last year after he expelled Odebrecht and later launched an international suit to halt payments on a Brazilian loan linked to the company.

"It was easy to see that Ecuador was swindled by Odebrecht," said Jorge Glass, a government official in charge of the planned lawsuits. "We will demand via courts about $210 million."

He declined to say when the suits would be filed, or if they would be filed abroad or in local courts.

Ecuador alleges that Odebrecht failed to build the San Francisco electricity plant properly, and illegally raised the price of the job. The plant had to shut down for repairs a year after its construction.

Odebrecht said in a written statement it rejects any charges of wrongdoing and has no knowledge of the findings of an audit group hired by Ecuador to examine the San Francisco plant.

"We have hired an international engineering company to clarify the temporary disruption of San Francisco," the company said. "Odebrech continues open for talks."

CORREA'S TOUGH STANCE

Even as the global crisis hurts Ecuador's economy and government income, Correa remains aggressive with foreign investors, seeking to gain more benefits for the state in new deals.

Correa is expected to win re-election and key local government seats to consolidate his socialist revolution in the April 26 general election, pollsters say.

Since taking office in 2007, he has remained popular, in part because of his tough stance against foreign investors whom he accuses of pillaging the OPEC nation's wealth.

Most Ecuadoreans have applauded Correa's move to default on $3.2 billion in foreign debt he charges was issued illegally by past administrations.

Analysts expect Correa to propose tough terms to bond holders in restructuring the defaulted debt.

In September, Correa ejected Odebrecht and sent troops to seize its projects in the Andean nation, only days before a referendum on extending his powers.

Correa has refused to settle the row with Odebrecht.

Ecuador President's Party Seen Winning Control Of Legislature

QUITO (Dow Jones) April 7--Leftist Ecuadorian President Rafael Correa's political movement is expected to win control of the country's new legislature, new polls show.

A nationwide Cedatos-Gallup International poll of 2,824 people showed 54% of Ecuadorians voting for Correa's Alianza Pais party in the April 26 election.

Correa is seen easily winning the presidency in the vote, which was called after Ecuadorians approved a new constitution last year, written by Correa's allies.

Some 10.5 million Ecuadorians will vote for president, the entire 124-seat National Assembly and local authorities.

The Cedatos-Gallup poll, which had a margin of error of 5 percentage points, showed 14% voter support for representatives from Sociedad Patriotica of Correa's opponent, former ousted President Lucio Gutierrez.

A poll by Santiago Perez Investigation y Estudios said that Alianza Pais could obtain 62 of the 124 seats in the National Assembly, while Sociedad Patriotica could win at least 12 seats. The poll of 1,500 people had a margin of error of 3 percentage points.

The remaining seats in the assembly will likely be distributed among the party of banana magnate Alvaro Noboa, whom Correa defeated in the 2006 election; supporters of former president Abdala Bucaram, the Social Christian party, of deceased former President Leon Febres Cordero; and other minority groups.

To capture the presidency in the first round of voting, Correa must win at least 40% of the valid votes by a margin of more than 10 percentage points over his closest rival, otherwise, a runoff ballot would take place in June.

Carlos Cordova, of Cedatos-Gallup, said Correa is unlikely to have a majority as he did in the assembly that wrote Ecuador's new constitution.

In the 2007 Constituent Assembly elections, Correa's party won 80 of the 130 seats.

Gandhi Espinosa, from Perfiles de Opinion, said mainly in small provinces people choose well-known local leaders with concrete proposals for their regions rather than the general proposal of change that the government offers.

Of the 124 assembly members, 15 will be national, 103 provincial and six delegates will represent citizens living abroad.

Local analysts have said if Correa's party does win control of the assembly it would be fragile, because of some party infighting and desertion.

Ecuador Readies for OPEC Meeting

Quito, Apr 6 (Prensa Latina) Ecuador is preparing to host the 4th Meeting of the Organization of Petroleum Exporting Countries (OPEC) Research and Development executives, starting Tuesday.

The official release says Ecuadorian Mining and Oil Minister Derlis Palacios will open the 48-hour meeting that will address cooperation, research and development of the oil sector.

The working tables beginning Tuesday will discuss oil extraction and processing technology and future OPEC plans, policies and regulations, plus cooperation on carbon gas emission, greenhouse effect and heavy oils. On Wednesday, the participants will take a field trip to an oilfield in the Amazonia region.

Participants include Hasan Qabazard, director of the OPEC Research Division, Mohamed Hamel, head of the cartel's Energy Research Department, and Fuad Siala, Senior analyst of Alternative Energy Sources and specialists from the member countries.

Oil is Ecuador's top export item, and it quit the OPEC in 1992 and returned in 2007.

Ecuador Election Materials Almost Ready

Quito, Apr 4 (Prensa Latina) All the election material including ballot papers, ballot count certificates and ballot boxes for the April 26 elections is 85 percent ready, according to the National Electoral Council (CNE).

It is expected the election material be ready ready next

week, CNE coordinator Alvaro Saenz stated.

Election officials toured Friday the Taski company facilities to check on the printing of all voting papers and stated they are almost ready.

Printed documents are being sent to the Montgar company, in charge of preparing 45,246 electoral packages to be distributed in the country's 24 provincial councils.

About 10.5 million Ecuadorans will vote elect the country´s president and vice president, 124 National Assembly members, municipal mayors, and provincial prefects, among others.

They also elect about 6,000 public representatives out of 10,000 candidates from 18 political movements and parties.

This will be the most complex electoral process in the history of Ecuador.

Ecuadorian Government Provisionally Delays Suspension of Environmental Organization's Legal Status

2009-03-20

Members of Acción Ecológica, a close partner organization of Amazon Watch, were notified yesterday by Ecuador's Ministry of Health that the suspension of their legal status to operate in the country was provisionally put on hold. The Ecuadorian government will reach a final decision on this matter within two months.

Acción Ecológica is hopeful that their legal status will be definitively reinstated especially given that Ecuador's President Raúl Correa confirmed on March 14th that the organization has met all legal conditions required of it. The President's affirmation should clear the way to the signing of inter-ministerial agreement between the Ministries of Health and Environment and allow the organization to move beyond its recent legal impasse.

While Acción Ecológica recognizes the roles of distinct government ministries in assuring the transparence of legal regulations, the organization says it expects that the recent action taken in favor of their legal status will lead to better protection of civil rights in the country and allow them to continue their work to defend the health and well-being of Ecuadorian communities and ecosystems.

Ivonne Ramos, the President of the Acción Ecológica collective, issued a statement expressing gratitude for the solidarity of the hundreds of individuals, communities, organizations, academics, and journalists around the world who came forward to support the organization, guided by their deep concern for the environmental situation on the planet and for the rights of organizations striving to defend nature and life.

“With your words and support we feel like a part of a great wave, which grows ever more universal, of all those defenders of life and nature, breaking on the beach of our collective struggles,” affirmed Ramos.

Other links:
• Accion Ecologica

New Evidence of Fraud in Chevron's "Amazon Chernobyl" In Ecuador

Amazon Defense Coalition

FOR IMMEDIATE RELEASE

2009-03-24

Karen Hinton
karen@hintoncommunications.com
703-798-3109

New Evidence of Fraud in Chevron's "Amazon Chernobyl" In Ecuador

On Eve of Final Inspections, Proof that Dozens of Waste Pits Never Touched Were Counted As "Remediated"

Quito, Ecuador (March 24, 2009) –With judicial inspections in Chevron’s long-running environmental trial in Ecuador about to end, new proof has emerged that the oil giant never touched the majority of toxic waste pits that it certified as “clean” to Ecuador’s government in exchange for a legal release, said a lawyer for the Amazon Defense Coalition.

The new evidence will be turned over to prosecutors who already have indicted two Chevron lawyers and seven former government officials for criminal fraud relating to the purported remediation, said Pablo Fajardo, the Ecuadorian lawyer leading the class action lawsuit on behalf of 30,000 rainforest residents.

The purported remediation was performed by Texaco (now Chevron) between 1995 and 1998 on pits that were mostly built in the early 1970s. The so-called clean-up was controversial from the start, with Amazon residents claiming toxic pits were covered with dirt for cosmetic purposes, allowing contaminants to continue leaching into the soil and groundwater to this day. Texaco also received the release before any work was done.

The release has no bearing on the claims of the 30,000 residents bringing the civil suit, as they did not sign off on it, said Fajardo. But it does provide evidence of an underlying fraud that proves the remediation never really occurred, despite Chevron’s claims today to the court and its public relations materials.

Texaco was the exclusive operator of several large oil fields in Ecuador’s Amazon from 1964 to 1990. Chevron bought Texaco in 2001 and will bear any liability in the case.

In any event, the so-called release and remediation are now haunting Chevron in an even bigger way with new evidence that Texaco never even touched the majority of pits it certified as cleaned, said Fajardo. The final four inspections of 101 ordered by the court will be finished this week, clearing the way for a final decision on $27 billion in damages.

“Some pits Chevron covered with dirt for cosmetic purposes and called them remediated,” said Fajardo. “We now know there are many more pits that Chevron never even touched but counted as remediated in its certification to the government.”

“It is just unbelievable that a sophisticated American oil company could think it would get away with this,” added Fajardo. “This took a high level of sophisticated planning and clearly could not have been done without the cooperation of corrupt Ecuadorian government officials.”

A report by Texaco sub-contractor Woodward Clyde, the U.S.-based company that did the clean-up, clearly indicates that the results fell far short of what Texaco claimed at the time and what Chevron today continues to maintain today.

According to the Woodward-Clyde report:
• Texaco agreed under its contract with Ecuador’s government to “remediate” only 130 of its 356 well sites to obtain a legal release from government claims. At the 130 wells sites, it identified the existence of 250 unlined waste pits, which were used to permanently dump toxic sludge when wells were drilled – a violation of customary industry practice and environmental laws in both the U.S. and Ecuador.
• Of the 250 waste pits identified, Texaco actually touched only 162 of them. Texaco claimed he other 88 pits were being “used” by the local community, despite the fact they were filled with toxic oil sludge. (No evidence has ever been produced by Texaco or Chevron that any pit was actually being “used” by the local community other than what its engineers claimed at the time.)

• The 88 pits were designated “No Further Action” based on a “visual” inspection of the pit. No soil or water sampling was done to determine if the pit was actually contaminated with hydrocarbons – a clear violation of scientific protocol and of Texaco’s legal obligations under its clean-up contract with the government.
• Even worse for Chevron, the 250 pits identified was a gross undercount. During the trial, the court found 379 pits at the same 130 sites – or 129 more pits than Texaco had claimed at the time that it was obligated to remediate.
• Texaco thus moved dirt at only 43% of the 379 pits that it was obligated to “remediate” even though it received credit for cleaning all 379 pits to receive its legal release, according to Fajardo.
In September of last year, the two Texaco lawyers who negotiated and supervised the clean-up – American Ricardo Reis-Veiga and Ecuadorian Rodrigo Perez Pallares – were hit with a criminal indictment for lying about the remediation results. Seven key government officials with whom they worked closely at the time were also indicted.

Both Reis Veiga and Perez Pallares continue to work for Chevron. Both have played instrumental roles in supervising Chevron’s defense in the current civil trial where their previous conduct relating to the remediation is at issue.

The lawsuit charges that Texaco dumped more than 18 billion gallons of toxic waste into Amazon waterways and abandoned more than 900 large waste pits gouged out of the jungle floor, creating one of the worst oil-related environmental catastrophes in the world. The $27 billion in damages is more than the company’s record-breaking profits in 2008.

More than 62,000 chemical sampling results are in evidence. The court expert found the sampling results prove that 100% of the inspected sites, which cover an area roughly the size of Rhode Island, show illegal levels of toxic hydrocarbons in the soil.

A final decision by Judge Juan Nunez is expected later this year.

Ecuadorian president pledged to protect national economy

QUITO, March 31 (Xinhua) -- Ecuadoran President Rafael Correa Tuesday said if he was reelected he would continue his reforms to protect the country's small businesses and promote employment.

While addressing a ceremony attended by 800 businessmen in Guayaquil, Correa said if he wins the presidential election on April 26, he would carry on his "five revolutions," which means institutional, democratic-constitutional, social, ethical and economic reforms, to set up a mutual-benefit economic system.

Correa said Ecuador will adopt a law to impede the privatization and give more decision-making power to public enterprises.

"We seek to build a homeland with equal opportunities, to set anew work model which help us get rid of paternalism and achieve social development," Correa added.

"Poor people need justice, equity and opportunities, rather than charity or donations," he said.

According to Correa, the main purpose of the reforms is to promote the country's employment opportunities.

President Correa Stays Popular in Ecuador

March 31, 2009

(Angus Reid Global Monitor) - Ecuadorian president Rafael Correa enjoys a high level of public support, according to a poll by Cedatos/Gallup. 60 per cent of respondents approve of Correa’s performance, down one point since February.

Correa, a former finance minister, ran for president as an independent leftist under the Alliance Country (AP) banner. In November 2006, Correa defeated Álvaro Noboa of the Institutional Renewal Party of National Action (PRIAN) in a run-off with 56.69 per cent of the vote. He officially took over as Ecuador’s head of state in January 2007. Correa’s party nominated no candidates to the National Congress.

In September 2008, Ecuadorian voters ratified a new constitution in a nationwide referendum. The draft was approved by the pro-government majority in the Constituent Assembly. Under the terms of the new constitution, Ecuador will hold a new presidential election on Apr. 19. Correa is eligible for a new term in office and is seeking re-election.

On Mar. 26, Correa dismissed rumours about changes to the dollarization of Ecuador’s economy—which began in 2000—saying, "This president guarantees to you that there is no plan whatsoever to exit dollarization. [The rumours] are another vile calumny by eternal opponents who hope to win a few votes in the next election."

Polling Data

Do you approve or disapprove of Rafael Correa’s performance as president?

	Mar. 2009	Feb. 2009	Jan. 2009
Approve	60%	61%	70%
Disapprove	35%	34%	27%

Source: Cedatos/Gallup
Methodology: Face-to-face interviews with 2,766 Ecuadorian adults, conducted from Mar. 6 to Mar. 10, 2009. Margin of error is 5 per cent.

Ecuador Presents Social Security Benefits

Quito, Mar 30 (Prensa Latina) Ecuadorian government representatives are holding a meeting on Monday at the Carondelet Palace, the presidential headquarters, with a group of retired people to present the benefits of the Social Security Law.

The proposal was presented the past weekend by the country's President Rafael Correa, who suggested that the pensioners went to Carondelet to discuss the mentioned legislation.

Wityh this initiative, they seek to end distortions and misunderstandings originated by a law approval.

Correa highlighted that the approved regulation establishes that nobody would receive a pension under $109 dollar, according to the pensioner's occupational category and years of contribution.

"What we have done is to rise the minimum pensions," asserted Correa, highlighting that nobody would receive the previous $60 and $70 payments.

The president explained that those who worked from 11 to 20 years can not receive less than $131, while those who worked from 21-30 years will receive over $153.

There are many cases of retired people that despite having contributed for over 40 years have lower pensions than the minimum salary, and with this law, they will not experience the same situation, he stated.

The president urged the pensioners not to be politically manipulated, especially in this electoral campaign.

Several ministers and Ecuadorian Social Security Institute Chair Ramiro Gonzalez are expected to participate in this meeting, for which around 100 retirees' representatives registered.

Correa Clearly Ahead of Rivals in Ecuador

March 29, 2009

(Angus Reid Global Monitor) - Rafael Correa could earn a new term in Ecuador, according to a poll by Santiago Pérez Investigaciones y Estudios. 52 per cent of respondents would vote for the current president in next month’s election.

Former president Lucio Gutiérrez is second with 12 per cent, followed by Álvaro Noboa of the Institutional Renewal Party of National Action (PRIAN) with 11 per cent, and Martha Roldós—the daughter of former head of state Jaime Roldós—with eight per cent.

Correa, a former finance minister, ran for president as an independent leftist under the Alliance Country (AP) banner. In November 2006, Correa defeated Noboa in a run-off with 56.69 per cent of the vote. He officially took over as Ecuador’s head of state in January 2007. Correa’s party nominated no candidates to the National Congress.

In September 2008, Ecuadorian voters ratified a new constitution in a nationwide referendum. The draft was approved by the pro-government majority in the Constituent Assembly. Under the terms of the new constitution, Ecuador will hold a new presidential election on Apr. 19. Correa is eligible for a new term in office.

Earlier this month, Correa discussed his views on the global financial crisis, saying, "Ecuador will pass this difficult test, of a crisis that was not created by the Ecuadorian government, that was not created by Latin America, but created by the developed world. We are the victims of their mistakes, their abuses, and their dishonesty."

Polling Data

If the presidential election were held today, who would you vote for?

Rafael Correa	52%
Lucio Gutiérrez	12%
Álvaro Noboa	11%
Matha Roldós	8%
Spoiled / Blank ballot	17%

Source: Santiago Pérez Investigaciones y Estudios
Methodology: Interviews with 1,700 Ecuadorian adults, conducted on Mar. 21, 2008. Margin of error is 3 per cent.

Ecuador Creates New Police Intelligence Unit

QUITO – Ecuador’s National Police announced the creation of a new unit to battle organized crime, which will replace the controversial Special Investigations Unit, or UIES, that had been financed by the United States Embassy in Quito until recently.

Police commander Jaime Hurtado said Friday that the new unit will be in charge of consolidating intelligence operations that for 23 years have been carried out by the UIES, the press secretary of the president’s office said.

Hurtado said that the new unit will have the mission of countering criminal mafias of the international drug trade, economic crime, people trafficking and terrorism.

“The unit will be an important support for all police investigation agencies aimed at combating organized crime,” the commander said.

He also said that the unit “will maintain a high level of cooperation with similar international agencies within the framework of transparent agreements based on policies laid down by the Ecuadorian Foreign Ministry and other authorities charged with national security at home and abroad.”

He also said that domestically the new unit will provide “support for the work carried out by the Attorney General’s Office” and other elements of the Ecuadorian judiciary.

He said that Col. Juan Carlos Rueda of the police high command will head the new unit, and recalled that the latter has held several important posts in the department, plus serving as attache to the Ecuadorian Embassy in Lima and as a member of the now-defunct UIES.

He added that the Council of Police Generals created the unit and named it after Maj. Eduardo Zea Lopez, an ex-member of the department who died in 1989 on a mission against organized crime.

The creation of the new unit is part of the comprehensive restructuring of national police-intelligence agencies promoted by the government of leftist President Rafael Correa and including the dismantling of the UIES, questioned for its close ties to the U.S. Embassy and the Central Intelligence Agency, or CIA, of that country.

In February Ecuador’s foreign minister announced that U.S. Embassy First Secretary Mark Sullivan was being expelled for interfering in the internal workings of the Andean nation’s police.

Fander Falconi told a press conference the decision to declare Sullivan persona non grata was based on a report from the National Police high command detailing the diplomat’s meddling.

Sullivan sought to condition continuing U.S. aid to the National Police on his having a say in personnel decisions, Falconi said.

He said the first secretary was given 48 hours to leave the country.

Ecuador: Mining and the Right of Way

Written by Jennifer Moore for UpsideDownWorld

Wednesday, 25 March 2009

Indigenous leaders delivered a lawsuit in Quito last Tuesday before Ecuador's Constitutional Court asking that the country's new mining law be declared unconstitutional. The case is the next step that the Confederation of Indigenous Nationalities of Ecuador (CONAIE) is taking to try to put the brakes on large scale metal mining which has achieved unwavering support from President Rafael Correa's administration. “The burning issue in our province and on our ancestral territories is mining,” said Angel Awak, President of the Shuar Federation of Zamora Chinchipe. “It is going to contaminate the rivers and result in social conflict.” Ecuador has been an oil producer for more than forty years. Now that oil reserves are running low, the Correa administration views metal mining as a future source of state revenues. However, even before any large scale project has reached production, indigenous and non-indigenous communities alike are divided over whether it will result in net benefits or net destruction. CONAIE's lawsuit alleges that the mining law is unconstitutional for having failed to consult with indigenous organizations whose territories will be affected by the activity. It also criticizes as “absurd” a final disposition in the law that defines it as superior to others. “The constitution clearly states that organic laws (the highest category of laws in Ecuador before international conventions and the political constitution) can only include those that regulate personal rights or norms pertaining to state institutions,” explained Lawyer Wilton Guaranda from the Regional Human Rights Advisory Foundation in Quito, and one of the signatories on the case. With this legal status, Guaranda believes that the mining law becomes a “barrier” limiting judicial decisions and the development of new laws, such as those to regulate water and nature. Awak's biggest concern is water, a right achieved in the 2008 political constitution that Ecuadorians overwhelmingly approved in September and that government representatives affirmed this week during the Fifth World Water Forum in Turkey. “Mining companies consume millions of liters of water,” said Awak, “which effectively privatizes it.” He envisions that the precious resource could become scarce and speculates that they will end up having to buy back water from the companies. “We will struggle so that our water is not privatized." However, Canadian companies situated in Awak's home province and hoping to develop some of Ecuador's biggest gold and copper deposits have already secured government approval. The same day that CONAIE presented its lawsuit, both Vancouver-based Corriente Resources and Toronto-based Kinross announced that they have received notice fromthe Ministry of Mines and Petroleum to resume exploration work following a suspension on all large scale mining. From chaos to closer alignment between Correa and Canadian interests "The rules of the game are clear for everyone now," Undersecretary of Mines Jose Serrano said speaking to Reuters. "The mining decree has been fulfilled...it can't be revived."1 But what is most clear is the importance of Canadian investment to Correa. All large scale mining was suspended last April when the National Constituent Assembly passed a mining decree that ordered the Ministry of Mines and Petroleum to revoke most mineral concessions for reasons such as failure to consult with communities, or for overlap with protected natural areas and sources of water. It also gave the government 180 days to rewrite the mining law. At the time, Correa met with Canadian investors and explained that the decree was necessary “to put the sector in order,” which had been open to speculation and weak regulation since legal reforms were implemented following a World Bank sponsored study in the 1990s. But in addition to the controversy that the new law has generated, application of the mining mandate has also been limited. Most notably, Copper Mesa Mining (formerly Ascendant Copper Corporation) in the northwestern Intag valley lost two of its main concessions for failure to consult with local communities. In contrast, companies such as IAMGOLD, Corriente, Kinross, and International Minerals maintain key holdings in the south despite heated conflicts over similar complaints. In the case of Corriente Resources, its suspension dates back to late 2006 when violent repression of local protests was carried out by state security forces making use of company installations. With such issues yet to be fully investigated and Corriente now on the verge of selling its project to an industry senior, Correa continues courting Canadian business leaders. With assistance from the Canadian Embassy, investors met with Correa in February to discuss how to deepen relations across various sectors including mining, tourism and hydroelectric generation - also necessary for large scale mining. Correa gushed to the national press afterward saying that “Canada has always been a good friend of Ecuador.” In a possible new offense to delegitimize the CONAIE, he added that he has invited Canadian Ambassador Christian Lapointe to bring indigenous leaders from Canada to Ecuador “so that they can testify for themselves, because here some of the leaders of our ancestors have taken up the flag of anti-mining.” He called such leaders “false” adding “they are just radical indigenous leaders,”2 even if they represent about 90 percent of first peoples across Ecuador.3 “In the mining sector,” he added, “they are the best investments, they respect the environment and our laws the best.”4 This simplistic claim is backed up with images of Ecuador's small scale and artisanal miningsector which is short on investment and environmental controls, and long on devastating impacts to rivers and local communities. Top-of-the-line technology will prevent any future disasters, he argues, echoing industry promises while calling activist concerns over watercontamination “absurd.”5 Foolproof technology? But groups protesting large scale metal mining have heard these promises before. “We will use the latest technology...[and] The steel being used meets international norms...which will diminish the risk of rupture in case of seismic movements,” recalled Quito-based environmental organization Accion Ecologica in a press release entitled: “You were warned, the OCP spill confirms that secure technology does not exist.”6 The privately-owned Heavy Crude Pipeline (OCP) was built in 2003 after years of multi-sector opposition. As another major contract that benefitted Canadian investors, the OCP faced its first major accident on February 25. The company says a tremor caused the spill which dumped approximately 14,000 barrels of oil into the Santa Rosa river in Orellana Province. The pipeline travels from the Amazon region to the coast, crossing 94 seismic fault lines and 6 active volcanoes.7 Designed to boost oil production previously limited by the capacity of the state-owned SOTE pipeline, Canada's EnCana was the country's biggest investor at the time of its construction with a 31.4 percent share in the $1.2 billion project.8 For lawyer Wilton Guaranda “the accident is clear evidence that the geographic and natural conditions of Ecuadorian territory are not compatible with such a highly contaminating and toxic activity.” He added that the CONAIE is considering a lawsuit against the OCP consortium. “This event should be cause for reflection so that a much more critical examination takes place of the natural reality of Ecuadorian territory to really determine the costs and benefits of [mining],” said Guaranda, “not just in relationship to the environment but alsowith regard to its social dimensions to know whether or not in the long term it will provide us with the opportunity for development and progress, or if this will become a barrier so that we have to obtain international loans or other debts in order to recuperate the nature that has been affected.” So far, Minister of Mines and Petroleum Derlis Palacios has congratulated company remediation efforts while asking social organizations to be “a little more objective with the hope that certain communities or leaders don't try to benefit from this misfortune by making a business out of it.”9 Good living before big business But for communities living in constant conflict over mining whose benefits and protections are stacked on the side of big business, leaders like Angel Awak are trying to avoid unnecessary risk. Awak sees greater potential in ecotourism and micro-credit programs for small farmers over the long term and adds that their wealth and well being is in their territory: “When the Shuar have territory, they have everything they need, they can hunt, they can fish, they have the river and all of the elements that are necessary for the Shuar to live well. This is what we want to defend so that our youth are also conscious of this and work to defend the natural environment.” Explaining that this is what “Sumak Kawsay” or right living means for the future of the Shuar nation, he said the government should be behind them. “We are not saying anything beyond the law. Rather we are demanding that our rights be respected within the framework of the constitution,” he said, noting that Sumak Kawsay is a central principle of Ecuador's new Carta Magna. However, given Correa's current stance and his likely success in upcoming national elections at the end of April, social-environmental conflicts over mining are anticipated to grow with groups promising to halt projects at the local level. A response from the Constitutional Court to the CONAIE's lawsuit is anticipated within six to twelve months. Notes: 1. Reuters, 10 Mar 09 “Ecuador lifts ban on miners, sees them as priority” 2. President Rafael Correa, National Radio Address, 31 Jan 09 3. Kintto Lucas, IPS 22 Jan 09, “Los indigenas vuelvan al camino de la protesta” http://www.ipsnoticias.net/nota.asp?idnews=91081 4. El Comercio, 19 Feb 09 “Ecuador desea la inversion Canadiense” 5. President Rafael Correa, National Radio Address, 18 Oct 08 6. See: http://www.biodiversidadla.org/content/view/full/47723 7. Lorna Li, June 25th 2007, “Ecuador's OCP Pipeline – A False Promise of Wealth” 8. Dr. Leslie Jermyn, 2002 “In Whose Interest? Canadian interests and the OCP crude oil pipeline in Ecuador” 9. EFE, Mar 5th 2009 “El ministro Palacios habla del buen manejo en la solución al derrame de crudo en la Amazonia”

Ecuador to Unveil Bond Restructuring Plan April 20

By Stephan Kueffner and Helen Murphy

March 28 (Bloomberg) -- Ecuador will unveil detailed plans on April 20 for restructuring its $3.2 billion in defaulted international debt, President Rafael Correa said.

Correa, in his regular Saturday radio and television broadcast today, gave no specific indication of the terms holders of the country’s 2012 and 2030 bonds will be asked to accept. Standard & Poor’s Rating Services analyst Richard Francis said today in an interview he expects the government to offer 10 cents to 30 cents on the dollar to buy back the debt.

“That debt was overpriced in the 1999 renegotiation,” Correa, a 45-year-old economist, said. “We will restructure it in the interest of the country and with legitimacy and legality.”

Correa, whose criticism of foreign debt is a political trademark, will make the restructuring offer six days before he stands for election in a bid for a second consecutive term. That will give him a chance to show the electorate he’s tough on unpopular bankers, said economist Vicente Albornoz, head of the Cordes research institute in Quito.

“He’s buying time while trying to show a political triumph,” Albornoz, said in a phone interview today. “He can tell voters ‘look how we’ve scored a goal.’”

Criminal Wrongdoing

Correa, an ally of Venezuelan President Hugo Chavez, defaulted on the bonds on Dec. 12 after an audit he commissioned said there was evidence of criminal wrongdoing in the issuance of its foreign debt. Ecuador has enough cash to meet its interest payments and its debt amounts to less than 20 percent of gross domestic product.

Still, Ecuador’s $45 billion economy is likely to shrink 1 percent this year as the nation’s oil revenue declines and access to credit dries up, said S&Ps Francis.

“In the past if they got into severe problems Venezuela would have, on a marginal level, helped Ecuador out,” said Francis on the sidelines of the Inter-American Development Bank’s annual conference in Medellin, Colombia.. “Now that’s not the case because Venezuela has its own problems.”

At the time of the default, Correa said it was better for Ecuador to renegotiate the $510-million, 12 percent bond due 2012 and the $2.7-billion, 10 percent bond due 2030, from a position of strength.

Deteriorating Accounts

Since then, Ecuador’s accounts have deteriorated amid a swing to a trade deficit brought on by the plunge in revenue from the OPEC-member’s top export, crude oil, and shrinking markets for other key exports including shrimp and roses. The default has exacerbated the nation’s problems getting access to credit during the global financial crisis, Correa told government daily El Telegrafo on March 11.

“They have a lack of financing and right now they are running through reserves,” said Francis. “At some point, if get low on reserves, it will put dollarization to the test.”

Finance Minister Maria Elsa Viteri said today in Medellin the government expects 2 percent growth this year.

Ecuador’s government may be forced to issue scrip as a transition away from the dollar, Francis said. Ecuador began using the dollar in 2000, after its own currency, the sucre, lost about two-thirds of its value the previous year, and the deepest recession in more than a century forced the country to default on $6.5 billion of debt.

“If they start issuing IOUs -- and it’s certainly a possibility -- that would be the transition in my mind and then after that it might just collapse,” Francis said.

Correa has denied any plans to drop the dollar, instead capping imports and seeking $1.5 billion from multilateral lenders to compensate for deteriorating exports.

Viteri said today New York-based Mackenzie Partners Inc., a proxy-solicitation and investor relations company, will take charge of contacts with holders of the defaulted bonds.

Ecuador is receiving financial advice from Lazard Ltd., which also advised Argentina in its negotiations with creditors after its default, and legal advice from Clifford Chance LLP.

Viteri reiterated that the government will continue making scheduled payments on its bond maturing in 2015.

Opposition Heats up Campaign in Ecuador

Quito, Mar 27 (Prensa Latina) Electoral activity has intensified in Ecuador, with fuel added by violent actions by the opposition.

The scramble for votes is focused in Guayaquil, the cradle of SocialChristians, with followers of Mayor Jaime Nebot, who is seeking re-election, attacking members of Alianza Pais (AP), the party led by President Rafael Correa.

Former Minister and AP candidate to the Guayaquil Mayoralship, Maria de los Angeles Duarte, denounced that employees and policemen beat members of her movement yesterday, when they were conducting a campaign in the Bastion Popular area.

Television channels showed images of several people, some of them wearing plain clothes and carrying sticks and clubs, getting off a Metropolitan Police van to attack AP followers, who were pinning posters of their candidate.

Municipal employees snatched the posters from their hands and attacked the members of Alianza Pais, said Duarte, who urged Nebot to adopt measures against his employees. This is the second such action registered in Guayaquil, the country's most populated city (more than two million inhabitants). A few weeks ago the metropolitan police beat other AP activists, who were painting propaganda in a wall in their area.

Ecuador´s Correa: Dolarization Stays

Quito, Mar 26 (Prensa Latina) Ecuadorean President Rafael Correa warned that people propagating rumors about the introduction of a new currency instead of the US dollar will be jailed.

"I am not going to allow some people to play with citizens" good faith and the country"s stability," Correa told reporters at the Carondelet Presidential Palace after denying reports of a cabinet plan to change from the US dollar.

The President held the opposition responsible for spreading the rumors, whose aim, he said, is to affect the government in the upcoming April 26 general elections.

“It is another vile calumny by eternal opponents who hope to win a few votes in the next elections," he said.

The head of State threatened to jail those "irresponsible people" for spreading news that has already created uncertainty in some of the country"s coastal territories.

Ecuador introduced the dollar as its currency a decade ago amid a financial crisis that caused almost two dozen banks to collapse.

According to Correa, Ecuador will be able to weather the global economic crisis without resorting to a change in the currency.

Correa Threatens Jail for Spreading Rumors on Ecuador Currency

By Stephan Kueffner

March 25 (Bloomberg) -- Ecuadorean President Rafael Correa said that people spreading rumors about the introduction of a new currency instead of the U.S. dollar will be jailed.

Rumors of a new currency threaten to destabilize the economy, Correa told reporters today at the presidential palace in Quito. In December, he denied rumors of a forced closure of banks.

“This president guarantees to you that there is no plan whatsoever to exit dollarization,” he said. “It’s another vile calumny by eternal opponents who hope to win a few votes in the next elections.”

Ecuador introduced the dollar as its currency a decade ago amid a financial crisis that caused almost two dozen banks to collapse. While he has criticized the way the dollar was introduced on several occasions, Correa, who stands for re- election on April 26, said there are signs Ecuador will be able to weather the global economic crisis without resorting to a change in the currency.

“Thanks to God, we have been able to manage this crisis adequately,” Correa said. “The price of oil has recovered markedly.”

Correa said that it was rumored that the government had ordered new currency minted in Iran and imported in 11 containers via Chile. “The government won’t allow these ill- intentioned rumors to continue,” Correa said.

Oil Rebounds

Ecuadorean oil, the country’s key export, is currently being sold at about $45 a barrel, above an initially budgeted $35 a barrel for the first quarter, he added.

Earlier today, Central Bank President Carlos Vallejo said Ecuador needs about $1.5 billion in loans from multilateral lenders to defend the use of the U.S. currency.

The money is required to maintain adequate dollar inflows, Vallejo said. He expects the Inter-American Development Bank, Caracas-based development lender Corporacion Andina de Fomento and the Latin American Reserve Fund to approve the loans.

Strains on the banking system and falling reserves could force Ecuador to introduce a new currency, Credit Suisse wrote in a research report on March 18.

Not easy to be candidate as well as president, says Correa

QUITO, March 25 (Xinhua) -- Ecuadorian President Rafael Correa, who is also a presidential candidate, said on Wednesday it was not easy to play the two roles well at the same time.

"Spending most of my time on the management of the state, I have little time to campaign... and am also under attack by other candidates," Correa said in a radio station interview.

He said most of the national media (right-wing) is against him.

Correa's political opposition has accused him of using the administration's resources to mobilize public support.

Correa refuted the accusation. He pointed out that former U.S. President George W. Bush and Colombian President Alvaro Uribe also have been presidents as well as candidates.

"If I could chose I prefer just to be a candidate, but I have no choice," he said.

According to the latest poll, Correa is the leading candidate with 52 percent support. The presidential election will be held on April 26.

IAEA to Fund Ecuador Nuclear Projects

Quito, Mar 25 (Prensa Latina) International Atomic Energy Agency (IAEA) General Director Mohamed ElBaradei on Wednesday continues his visit to Ecuador, where he pledged support for Ecuadoran authorities´ plans to develop nuclear energy for peaceful purposes.

After meeting on Tuesday Vice President Lenin Moreno, ElBaradei said IAEA has approved seven projects for 2009-2011 with the agency's technical cooperation worth $1.1 million aimed at increasing the use of nuclear technology in medicine, agriculture and other fields.

This concern four new projects to promote the creation of a nuclear instrumentation center, improve the use of irrigation water from Chota River, and a national tissue bank, as well as the improvement of a nuclear medicine department in a university hospital in Guayaquil, he said.

The UN official and 2005 Peace Nobel Prize winner also expressed his agency´s willingness to cooperate with Ecuador in the exploration and exploitation of uranium.

This is an alternative to change its oil-based energy matrix, stated ElBaradei by stressing that the use of nuclear energy to produce electricity is a solution to the exhaustion of other fuels.

ElBaradei is visiting Ecuador as part of Latin America tour that already took him to Venezuela. He is scheduled to visit Bolivia on Thursday.

Ecuador, as a member of the IAEA Board of Governors from 2007-2009 supports the Vienna-based UN agency´s efforts to achieve disarmament and the non-proliferation of weapons of massive destruction.

OAS Checking Ecuador-Colombia Border

Quito, Mar 16 (Prensa Latina) A mission from the Organization of American States (OAS) is touring on Tuesday the northern Ecuadorian zone, to check the situation of bordering people, affected with the Colombian conflict.

"This concerns an observation work on site, to analyze security, defense measures and the issue of refugees in the Ecuadorian border with Colombia," Victor Rico, chief of the OAS delegation, highlighted.

After visiting towns of Chiral, El Carmelo and Tulcan, in Charchi province, the regional organization commission will move today to San Lorenzo, Tobar Donoso and Mataje, in Esmeralda.

Their aim is to prove consequences of the entrance of irregular groups from the neighboring country in that territory.

The nation's President Rafael Correa denounced some days ago that the Colombian military raid in that area has provoked the displacement of people within the country.

The delegation expects to visit Wednesday localities of General Farfan, Puerto Nuevo, Puerto Mestanza and El Palmar, in the province of Sucumbios.