ECUADOR: Forging a `citizens' revolution'

by Duroyan Fertl
Green Left Weekly, 19 October 2007

After winning a stunning 82% of the vote in the April 15 referendum for a constituent assembly to rewrite the constitution, Ecuador’s left-wing president Rafael Correa scored his third major victory in a year on September 30 with his party, Country Alliance, winning 70% of the votes for the new assembly.

The extremely popular constituent assembly, based on similar projects in Venezuela and Bolivia, will begin sitting in mid-November, and will have at least six months to re-write the constitution. Correa’s allies in the assembly will include the Socialist Party, the indigenous party Pachakutik and the Movement for Popular Democracy, however his party has the required majority to pass reforms without their support.

Unlike the constituent assembly in Bolivia, which has been bogged down by the right-wing opposition, the Ecuadorian assembly only requires a simple majority to approve any proposed measure. When its work is complete, the new constitution will be put to a referendum, and new elections called.

However, Correa is already calling for the dissolution of the Congress, a body widely regarded as corrupt and useless. While left-wing deputies have offered their resignations, the right-wing “party-ocracy”, as Correa calls them, is crying foul, although they are too politically impotent to have any real effect.

Correa has also proposed that the assembly create a new constitutional court, to “guarantee the necessary and efficient separation of all the powers of the state”. To attempt to ensure it is independent of economic or political interests, Correa is pushing for a model that would allow the court’s members to be picked on merit, rather than political connections. At present, courts are chosen on the basis of political horse-trading.

Correa’s government has already taken commentators on the left and right by surprise. Despite Ecuador’s dependence upon oil, which accounts for 40% of Ecuador’s exports and over a third of revenues, environmental issues have been high on the government’s priorities — filing lawsuits against polluting mining companies, placing national parks off-limits to mining and asking the international community to subsidise conservationist policies.

In the final week of September, Correa suspended the controversial Ascendant Copper’s plan for an open-pit mine in Junin. One of Correa’s close advisers and likely president of the constituent assembly, Alberto Acosta, stated that he wants Ecuador to be declared “open-pit mining free”. Like Correa, he has also said that the “economy should be based on human beings” and subordinated to human needs.

But the biggest surprise came only hours after the constituent assembly elections when Correa increased the government’s share of windfall oil profits — profits gained from unexpected increases in oil revenues — from all private oil ventures from 50% to 99%, explaining that the extra revenue would go towards social spending and much-needed infrastructure. The government also demanded that oil companies pay US$317 million in unpaid windfall royalties from 2006.

Correa warned that if companies objected, the government might take 100% of windfall profits. Oil minister Galo Chiribogahe has since suggested a compromise position whereby foreign oil companies could switch their contracts for deals that will allow Ecuador to keep all the oil they extract. Correa’s government has already used oil revenue to double social welfare, and has created two new provinces in the past month, undermining the power of local bureaucratic elites and opening the door for more grassroots democracy.

A major step forward in Latin American integration — a key part of Correa’s platform — is the planned signing of the articles of agreement for Bancosur (the new Bank of the South proposed by Venezuela’s socialist President Hugo Chavez and supported by Ecuador as an alternative to the World Bank and International Monetary Fund) on November 3 in Caracas.

To borrow a phrase from Chavez, Correa is indeed proving to be a “subversive in the Carondelet” (the presidential palace). Correa’s strategy for far-reaching change in Ecuador, which he refers to as a “citizens’ revolution”, relies heavily on the involvement and mobilisation of the mass of people to construct what he, like his ally Chavez, calls “socialism of the 21st Century”. He has repeatedly called on the Ecuadorian people to confront the corrupt system — whether at the ballot box, or by blockading the Supreme Court and the Congress.

Ecuador has a long tradition of mass mobilisations, leading to the overthrow of three presidents in the past decade. On September 18, a conference of Ecuador’s indigenous organisations, including the powerful national indigenous federation CONAIE, met in the south of the country to form a new united front, the Southern Resistance Front, to fight environmental destruction caused by mining companies. They are also calling for the government to nationalise all mining and oil industries, and redirect all profits into social and environmental spending.

An “Open Letter to Ecuadorian Society” signed in February by individuals and organisations involved in the battle for the constituent assembly declared that “never before has the theory that it is the people who make history been so certain. We are today at the beginning of an era of popular power, of the constituent assembly’s power. The impulse flows out of the depths of the Ecuadorian people. It is potent and tumultuous.”

From: International News, Green Left Weekly issue #728 24 October 2007.

Official: OPEC accepts Ecuador as member

BusinessWeek, October 23, 2007

QUITO, Ecuador

The Organization of Petroleum Exporting Countries has accepted Ecuador back as an active member, Energy Minister Galo Chiriboga said Tuesday.

OPEC sent a letter to Ecuadorean authorities dated Oct. 23, two weeks after the Andean country officially asked to regain its active membership status, Chiriboga told The Associated Press. Ecuador stopped paying OPEC dues in 1992, although it never formally quit the organization.

Chiriboga said Ecuador and OPEC agreed on a three-year payment plan for the dues "according to the state's financial possibilities." The South American country owes the cartel about US$5.7 million (euro4 million).

OPEC countries' heads of state meet Nov. 17 in Saudi Arabia, and Ecuador's President Rafael Correa has said he wants to take part.

Ecuador is a marginal oil producer, with 507,000 barrels a day in private and state production.

Alejandro Fuentes, a deputy minister at the Mines and Energy Ministry, said Chiriboga and others will travel to OPEC headquarters in Vienna to make sure all legal requirements for resuming active membership are met.

The Correa administration has said several times it wants to rejoin OPEC for strategic reasons, ranging from technology support to access to loans from other member countries.

Ecuador Indigenous Peoples for Changes

Quito, Oct 23 (Prensa Latina) Ecuador needs a deep change in its power structures and redistribution of its resources, to guarantee the rights of all nationalities, leader of the indigenous movement Luis Macas asserted on Tuesday.

The Ecuadorian State nature has to start changing and reforms have to be in depth, said Macas, president of the CONAIE, Ecuadorian Confederation of Indigenous Nationalities.

After ratifying support to a Constituent Assembly with full power, he was in favor of recognizing the diversity of identities that have coexisted in this Andean nation for thousands of years.

He told Prensa Latina "the economic axis has to do with nationalization of natural resources and production reactivation, which logically has to start by redistributing the means of production."

The indigenous leader said the indigenous people will be paying attention, in their communities and country, to the development of the Constituent Assembly, which will elaborate a new Constitution to change the national political-economic model.

He warned that papering over the cracks or retouching will not be allowed, because the country needs changes to boost an agrarian reform that allows a true reactivation of production.

Thus, he demanded that the assembly members discuss a new redistribution of the land, and that food sovereignty is guaranteed.

Ecuador to Host 5th Continental Meeting in Solidarity With Cuba

Havana, Oct 23 (acn) Cuban ambassador to Ecuador, Benigno Perez, said that over 800 representatives of Latin American movements will attend to the 5th Continental Meeting in Solidarity with the island, to take place in Quito on October 26-28.

In statements to the press, Perez noted that this is the first time a meeting of this kind will be held outside Havana. He added Quito has been chosen as the venue taking into account the solid and historical bonds of friendship existing between Cuba and Ecuador, reported PL news agency.

Perez pointed out that the participants in the meeting will discuss new ways to intensify the struggle against the US blockade of the island and how to promote the international campaign undertaken to demand the freedom of five Cuban anti-terrorist fighters unjustly held in US prisons for over nine years.

Antonio Guerrero, Gerardo Hernandez, Ramón Labañino, Fernando Gonzalez and René Gonzalez —internationally known as the Cuban Five— were detained in 1998 for trying to prevent terrorist actions organized by right-wing anti-Cuba organizations based in Florida. The men were charged with espionage and punished with extremely harsh sentences despite the anti-terrorist character of their mission.

The Cuban diplomat said the delegates at the meeting will also talk about regional integration projects, the disinformation broadcast by the mainstream media about the island's current situation, and the work of the movements in solidarity with Cuba.

Accompanied by Quito's local authorities, Perez announced the arrival of a large delegation to the Ecuadorian capital led by Cuban Parliament President Ricardo Alarcon.

Venezuelan doctors carry out Miracle Mission journey in Ecuador

Caracas, Oct 22 (ABN via Mathaba).- A commission of three Venezuelan doctors is traveling Ecuadorian lands in order to attend the poorest zones of Quito and the indigenous village of Saraguro, where they are carrying out a patients selection journey for the Miracle Mission.

This way, the integrationist foreign policy of Venezuelan President, Hugo Chávez Frías, is in solidarity with the needy people of the region, supporting this brother country, as it says a press bulletin emitted by the Embassy of Venezuela to Ecuador.

Since Thursday 19 until the date, the ophthalmologists Milangel Hidalgo and José Daniel Barbosa, in joint with the anesthesiologist Segundo Urbina, have seen about one thousand people in Quito, at the Embassy venue and in poor zones like Sur y Calderón. This Monday they will visit Sangolquí.

As a result, 225 Ecuadorians have been selected to travel to Venezuela, where they will be chirurgical operated in order to solve their pathologies of cataracts and pterygium.

They will be added to the 2 thousand 875 Ecuadorians that have already been operated since December 2005 in Venezuela, who have been moved in 28 flights of the state-owned airline, Conviasa.

This Tuesday, the doctor commission will travel to Loja, specifically to Saraguro municipality, where they will see the indigenous people of the zone. The expectations at that place are very high, since it is the first time that Miracle Mission arrives at that sector of the country.

The journey will finish this Friday 29, when the doctors will come back to Venezuela in joint with a group of Ecuadorians of the rural sectors of Loja, who will be chirurgical operated next week.

Translated by Ernesto Aguilera

Ecuador introduces entry cards to protect Galapagos Islands

People's Daily Online, October 23, 2007

Ecuador began issuing a special entry card to the Galapagos Islands on Monday in a bid to protect the endangered world heritage site.

The 10-dollar migration control card (TCM) seeks to control tourists to the archipelago as visitors must state their status whether as tourists or workers to avoid permanent stay in the 19 islands in the Pacific Ocean, 950 km west of Ecuador.

The Galapagos was the first site to have been placed on the World Heritage List for its unique flora and fauna in 1978.

The World Heritage Committee of the United Nations Educational, Scientific and Cultural Organization (UNESCO) put it on the List of World Heritage in Danger in June, citing the fact that the islands' existence is increasingly endangered by invading species, growing tourism and immigration.

The "Galapagos National Institute (Ingala) will issue the migration card, which will be handed out directly or through travel agencies, airlines and tourism operators," Ingala's director Schunbert Lombeida told the press.

There are three categories of the card, a 90-day stay for tourists, for workers that expires when the labor contract expires and for natives, Lombeida said.

Earlier this year, Ecuadorian President Rafael Correa announced that the Galapagos islands are at risk and the archipelago's conservation and environment management as an issue of national priority.

With the introduction of the control card, some 3,500 people must abandon the islands, since the Galapagos archipelago only has20,000 legal inhabitants.

Source: Xinhua

Ecuador: Swedish Construction Versus Indigenous Survival in the Amazon

Written by Agneta Enström

From UpsideDownWorld, Tuesday, 09 October 2007

This is part 1 in a series (Part 2) (Part 3) (Part 4) (Part 5) Waorani people protest against the oil exploration As late as a mere generation or so ago, the Waorani people in the Amazon basin of Ecuador had succeeded in surviving colonialism’s numerous rushes to extract natural resources. But then oil deposits were discovered on their rainforest lands, and ethnic annihilation and ecological destruction ensued. No longer free to exist as semi-nomadic hunter–gatherers, they are now forced to live on contaminated land and on reserves under the military control of multinational oil companies. It is in this context of devastating exploitation that the Swedish company Skanska operates in the Amazon basin. Skanska, one of the biggest construction companies in the world, conducts operations in cooperation with multinational oil companies in the Ecuadorian rainforest – despite local resistance, illegal conditions and the fact that its operations cause horrific ecological and cultural destruction. The Waorani people are only one of several indigenous peoples whose existence is threatened in the region in which Skanska has made itself notorious. Traditionally, the Waorani people are rainforest nomads who live by hunting and gathering, and researchers believe they have lived in the Ecuadorian Amazon basin for tens of thousands of years. The history of their culture is difficult to document, however, since their sustainable lifestyle has not left any noticeable traces in nature. This lack of evidence of indigenous cultural history has jeopardized the land rights of indigenous groups across the globe and caused their right to exist to be questioned by political and economic players with interests in their lands. Today, the Waorani people are condemned to live on the edge of annihilation because of the consequences of oil exploitation in Ecuador. After intense struggles to achieve political recognition as an indigenous people, in the past few years, the Waorani people have regained territorial and self-determination rights under national laws and international conventions (such as the UN Convention ILO: 169 concerning Indigenous and Tribal Peoples in Independent Countries). Destruction in former forest However, despite this victory and the fact that their land is in the UNESCO recognized Yasuni national park, unbridled oil exploitation of their land is taking place. The oil industry’s activities in the Amazon basin are often unlawful and companies have brutally occupied the rainforest by taking advantage of wide-spread corruption and the absence of full regulatory permission. Skanska’s cooperation with the Petrobras oil company in the Yasuni national park is clear-cut example of this kind of abuse. A low-Intensity War To circumnavigate the indigenous people’s right to self-determination, the oil industry has resorted to strategies of a low-intensity war. Various ways of wielding power are used to frighten, divide and manipulate a local population. The exercise of oil industry power over the Waorani people’s Amazon basin manifests itself in the rampant militarization and paramilitarization of the region, manipulation of indigenous organizations, and the use of threats and violence. Networks and organisations like Oilwatch and Acción Ecológica, which fight oil exploration in sensitive ecosystems and on indigenous land, have shown how the oil companies typically proceed to swindle indigenous peoples like the Waorani. Tribal people (with little or no prior contact with civilization) have been enticed into entering into agreements with the oil companies by signing contracts with finger imprints when they could not read, write or understand Spanish – a practice that is, of course, entirely illegal. According to Alicia Cahuiya, former leader of Amwae, the Waorani women organization, the Waorani people have been tricked by the companies in various ways. She relates instances where the companies have given indigenous villages items such as soccer clothes and candy in return for permission to drill for oil on their land. “Companies have often bought villages off with small gifts,” says Cahuiya, “because the villagers have not understood what was going on when the company representatives came calling. Later, when people have become sick from contamination caused by the oil extraction and begun to protest, the military have rushed in to support the companies…Obviously, we are afraid of their retaliation – they have established military control around the entire territory and, if anything happens, we can neither leave nor enter our villages without their approval. Even government agencies are not always allowed to pass.” Private security at oilfield When political scientist Hanna Dahlström and I investigated the oil industry and Skanska’s operations in the Amazon basin, our picture of this type of manipulation, control and violence has been reinforced. By socializing with Skanska employees while under cover, we managed to get ourselves invited to one of Skanska’s oil fields (block 18), a site the company shares with Petrobras. We were driven to the oil field in a Skanska jeep, accompanied by regional general manager Milton Diaz and a heavily armed guard (who always joins the Skanska boss on trips to the field). Diaz explained that “the Indians can be violent at times” and that there are “rebel groups” in the area. While in the jeep, Diaz received important calls telling him that the situation at the oil field was not good. Just when we were about to turn onto the bumpy road to the fields, we were stopped by a homemade roadblock. It was one of the days when local residents stage protests against the exploitation, which they consider immoral, illegal and destructive to their health. Diaz made call after call, explaining to us with irritation that they’ll have to call for reinforcement “to deal with the people.” We returned to Skanska’s administrative base in the oil town of Coca, several kilometres away, where we joined Skanska top brass for wine and food while we waited for news of the tense situation. Colonial Racism A colonially racist discourse pervades Skanska’s administrative base – or rather luxury estate – behind its walls, gates and armed guards. In the evening after our foiled trip to the oil fields, there was a poolside party for Skanska and Petrobras management. Company directors discussed “the unreasonable demands of the local population” and the high taxes companies are forced to pay in “these banana republics.” They compared the local population to developmentally disabled people and apes. Production at oil field 18 was down for a few days, after which we heard from Diaz that the problem with local people “had been resolved,” and normal operations resumed. What we were not given any exact information about was how the situation was resolved. Later, lawyers with the Amazonian Defense Front (Frente de defensa de la Amazonia, FDA) received a steady stream of eye-witness accounts of violations of environmental and human rights laws from area residents. An Industry of Death Not much remains today of the Ecuadorian rainforest and the places where indigenous groups like the Waorani peoples have lived for hundreds, or even thousands, of years. According to Oilwatch, over 70% of the region is controlled by the oil industry – which includes companies like Skanska.(1) By fulfilling the technical and infrastructural needs of the oil companies in the Amazon basin, Skanska is one of the pillars of what is perhaps the most diabolically destructive industries of our time. The indigenous people who live with the effects of the industry have a single word to describe it: Death. Road block in the oil region Manuela Omari Ima, who is the new chairperson of Waorani women’s organization, Amwae, has first hand experience in the devastating consequences of oil exploration. “The indigenous peoples of the Ecuadorian Amazon have been decimated in just a few decades,” she says. “The Waorani people alone numbered around 16,000 at the end of the 1960s, when the oil exploration began. Today, there are no more than about a thousand of us left... I don’t know how much longer we can survive under the current conditions. Perhaps the industry will out-live us – judging by how it has wiped out other tribal peoples in the Amazon. Maybe the earth will have nothing left to give when the companies leave.” Altogether, an estimated 90% of the indigenous peoples in the Amazon region of Ecuador have been wiped out over the past few decades, according to the FDA.(2) Contamination from the oil industry, forced relocations, militarized violence and civilization-borne diseases are the critical factors behind the process of extinction. Today, there is an important resistance against oil exploration in the Ecuadorian rainforest and on indigenous territories. Together with the Waorani people and other local populations, there are networks fighting against the devastating industry in the region. Some of them are the international Oilwatch, and the Ecuadorian Accion Ecologica and FDA. However, according to Omari Ima, the existence of Waorani people and other tribal people is doomed, unless the ravaging of raw materials ceases today. Agneta Enström is an editor and reporter at www.yelah.net. Yelah is a Swedish independent media group, uncovering activism and politics worldwide. She has recently worked in Ecuador, researching Skanska and oil exploration on indigenous land. Contact: nettila@hotmail.com For more information: Contact Manuela Omari Ima of the Waorani Women’s group (La Associación de Mujeres Waorani de la Amazonía Ecuatoriana, AMWAE ) at tagaeri_wepe2001@yahoo.es Oilwatch - http://www.oilwatch.org/ Accion Ecológica: http://accionecologica.org/webae/index.php Frente de defensa de la Amazonia (FDA) - http://www.texacotoxico.com/

Ecuador Province-Cuba Sign Agreement

Quito, Oct 19 (Prensa Latina) The Ecuadorian Pichincha provincial government and the IPLAC, Cuba's Latin American and Caribbean Teaching Institute, will sign on Friday a collaboration agreement to improve the quality of education in that province of this country.

IPLAC rector Cesar Torres Batista told Prensa Latina this agreement will allow optimizing the quality of education in Pichincha, where Quito is located.

It is a project that goes beyond the Yo Si Puedo basic literacy teaching program, because it comprises assistance to children from zero to six, families, and even differently abled minors, he said.

He explained that health specialists, and teachers of Spanish, Physics, Mathematics, scientific orientation, and other subjects, are involved in this work, and will contribute to implement an integral education.

Batista highlighted that this program seeks to educate human beings and allow including them in society, with a more comprehensive knowledge, which will favor socio-cultural development.

The agreement will be signed at the end of the Yo Si Puedo Basic Literacy Teaching program national meeting, in which around 200 delegates, including Cuban teachers and Ecuadorian collaborators, are participating.

Ecuadorians Demand New Congress

Quito (Prensa Latina via Escambray) Actions to favor dismantling the Ecuadorian Congress fill the capital's streets with symbolic acts and farewell activities for deputies.

Social groups, workers' unions and elected assembly members are preparing to press legislators and invite them to leave their seats with dignity before a resolution from the Constituent Assembly.

A first protest took place Thursday with the attendance of hundreds of people from grass-roots and human rights organizations, to urge deputies to abandon their seats.

Participants in the rally ratified, with songs and slogans, their support of the breaking up of the Parliament, once the Constituent Assembly is created in mid November.

Also on the list are other actions of this kind to force lawmakers to leave their seats, coinciding with prior calls made by President Rafael Correa.

The statesman urged parliamentarians last week to have a little dignity and go home, because in the September 30 elections, people voted for changing and constructing a new Ecuador.

Head of new Ecuador assembly vows leftist drive

QUITO, 19 October, 2007

(Reuters via Jamaica-Gleaner):

He drives a beat-up car, shuns suits and is the black sheep of his well-connected family, but Alberto Acosta is now set to head Ecuador's main legislative body on a mission to boost state control over the economy.

The ideological architect of President Rafael Correa's leftist policies, Acosta led the government party to an easy win in a election for a new assembly that will start work next month, and is charged with rewriting the constitution.

The academic, who cut his political teeth in clashes with police at anti-government protests in the 1990s, has pledged to deepen Correa's push to help the poor majority with income from the Andean country's oil and other natural resources.

Colombian rebels laud victory by Ecuador's Correa

BOGOTA, Oct 18 (Reuters) - Colombia's biggest outlaw guerrilla army on Thursday congratulated leftist President Rafael Correa of neighboring Ecuador for winning last month's vote to reform the country's constitution.

The open letter from the Revolutionary Armed Forces of Colombia, or FARC, called the victory by Correa supporters in the Sept. 30 election of a constitutional assembly an "inexorable triumph" for socialism.

Correa wants the assembly to dissolve Congress, call early elections and rewrite the constitution to curtail the power of the country's political old guard.

The FARC letter, signed by guerrilla spokesman Raul Reyes from "the mountains of Colombia," lauds Correa for combating Ecuador's "predatory oligarchy."

An ally of Venezuela's anti-American firebrand President Hugo Chavez, Correa has been criticized by Colombia and the United States for declining to join them in branding the FARC a terrorist group.

With the exception of Colombia, the Andean region is a caldron of leftist sentiment with Chavez, Bolivia's Evo Morales and Correa using popular mandates to shore up state control of energy resources and roll back free-market policies.

Ecuador ends Amazon oil protest, reports losses

QUITO, Oct 18 (Reuters) - Ecuador reached a deal with protesters in the oil-rich Amazon region to end a three-day protest that cost the country 26,227 barrels of crude and $2 million in revenues, the state company said on Thursday.

Petroecuador said in a statement that its daily output was down to 155,364 barrels on Thursday from last week's average of 174,124 barrels. It said it will take eight days to reach normal production levels.

Earlier this week dozens of villagers in the Shushufindi region in the Sucumbios province blocked roads leading to key oil fields operated by Petroecuador. The company said the blockage prevented workers and needed fuel to reach oil facilities.

Government negotiators late on Wednesday agreed to some of the villagers' demands for more jobs.

Repeated oil demonstrations in the poor Amazon jungle have slashed output of both private and state companies in South America's fifth largest oil producer.

Petroecuador faces oil protests, output down

QUITO, Oct 17 (Reuters) - Petroecuador said on Wednesday it has lost 4,000 barrels of crude due to a protest by villagers in the Amazon jungle, while other communities were threatened by regional strikes to demand more benefits from the government.

Earlier this week, dozens of villagers in the Shushufindi region in the province of Sucumbios blocked roads leading to Petroecuador oil facilities to demand more jobs, a company spokesman said.

"This could really hurt production if it's not over soon," the spokesman said, adding that protesters are blocking oil workers and necessary fuels from reaching key oil fields.

Protesters are blocking the roads leading to the 45,000-barrels-per-day Shushufindi oil field and the 90,000-per-day oil Block 15, he said.

In the neighboring Orellana Province, its prefect, Guadalupe Llori, told Reuters villagers are planning a regional strike to demand a bigger share of the oil wealth from the state.

Llori demands that part of the revenue stemming from a recent hike in a windfall royalty charged to foreign oil companies reach the province's poor communities.

President Rafael Correa has successfully kept major protests at bay in the oil-rich Amazon region during his nine months in office with promises to boost social spending.

Energy Minister Galo Chiriboga on Tuesday said that the Shushufindi protesters demands were "not viable."

Ecuador: Challenges facing Correa’s government and the new constituent assembly

From International Viewpoint, October, 2007

Eric Toussaint

QUITO - Within less than a year Rafael Correa has won four election battles (the two rounds of the presidential elections at the end of 2006, a referendum on the election of a constituent assembly in April 2007, and elections of the constituent assembly members on 30 September 2007).

While all right-wing parties had been campaigning to block Rafael Correa’s party, calling it a communist threat, ‘Alianza Pais’ won over 70 to 80 seats out of 130, which means it can count on a comfortable majority to draft and vote the new constitution. Moreover it should be able to rely on the support of such left-wing movements as MPD and Pachakutik to introduce in-depth democratic changes into the country’s political structure. Election results for the constituent assembly are more favourable to change than in Bolivia where President Evo Morales’s party and supporting movements do not total the two thirds of seats required for a new constitution to be voted in. This may explain the current political deadlock in that other Andean country.

Even the large media, a vast majority of which had clearly sided against Rafael Corréa during the election campaign, now prudently seem ready to change tack. The parties they supported have been so overwhelmingly disavowed that they (temporarily at least) tune down their attacks against the president and his party. Indeed the right-wing and centre-right parties (Christian democrats – UDC – and social democrats – ID) were completely crushed. PRIAN, the party of the banana tycoon Alvaro Noboa, who had been defeated by Rafael Corréa at the second ballot for the presidential elections last year, will not get more than 5 percent of the constituents’ seats. The Social Christian Party, a traditional pillar of the Right, is thoroughly routed. Former president Lucio Gutierez just managed to save 15 to 18 seats. This took them by surprise since poll surveys predicted modest scores for the candidates that Correa supported. The cautious evolution of the media is however still limited and they give very little air time to Rafael Corréa or the leaders of his party. The President speaks on the radio every Saturday. Various private and community radios broadcast his speech live. A public radio and television channel will open in a few weeks’ time.

Alberto Acosta, whom I met a couple of days ago, says that the new constituents are faced with a very tight schedule. They will have to draft a new constitution within six months. 45 days later a referendum will be organised on the proposed text. The last months in 2007 and the year 2008 are full of democratic ballots: referendum on the content of the constitution as well as most probably election of a new parliament and new presidential election. Indeed Rafael Correa is said to want to bring his presidential mandate to a premature close (long before its normal conclusion at the the end of 2010), so as to further buttress his popular support and to begin a mandate under the terms of the new constitution. If this scenario goes through, if the Ecuadorian democracy is not smothered by a military coup, by the end of 2008 Ecuador might have a new democratic constitution, a new parliament (in which Correa’s party could presumably count on a majority of seats which is not currently the case) and a newly elected president. This opens the way what could be to far-reaching economic and social reforms.

Economist Alberto Acosta, one of the former leaders in the campaign for the cancellation of the debt, [1] is likely to chair the new constituent assembly. He will suggest that they work in thematic commissions and in plenary meetings. In so far as the public debt is concerned, he intends to invite the Commission for a Comprehensive Audit of Internal and External Public Debt (CAIC in Spanish) to participate in the sessions of the constituent assembly’s economic commission. The new constitution could include a clear definition of the conditions under which the State government and local authorities are allowed to contract public debts, as well as repudiating odious debts and fixing a maximum amount which can be used for reimbursing debts. For instance the constitution could specify that the part of the State budget devoted to paying back the debt can never excede the amount allocated to education and health.

A few days after the election victory of 30 September 2007, Rafael Corréa’s government announced that oil companies operating in the country would have to pay a larger share of their benefits to the State. This should bring the State slightly over one billion dollars additional revenue, which could be devoted to social expenditure.

This measure is highly appreciated by the population. Furthermore, Rafael Correa’s government wants the banks to lower their interest rates, which are currently very high. A few months ago parliament, still with a right-wing majority, voted against a bill lowering interest rates. The parliament has become most unpopular. Surveys carried out after September 30 indicate that the majority of the electors are in favour of the current parliament resigning and being replaced by the consitituent assembly.

The population expects a lot from Rafael Correa. His radical discourse has persuaded most Ecuadorians that a fundamental change is both necessary and possible if the president has a clear majority. President Rafael Correa wants to drastically reduce the portion of the budget allotted to repaying the country’s public debt. At the same time he wants to increase social expenditure. Will he actually suspend payment of some debts in 2008? Will he repudiate the many odious and illegitimate debts the country is burdened with? [2] This is not at all certain, and this for a number of reasons. The main one is that with higher oil revenues the goverment considers it can still repay the debt while gradually increasing social expenditure. As indicated above, in order to implement this policy it has raised the portion of their revenues that oil companies are to pay to the state and it has decided to borrow on internal and external markets so as to restructure old debts. The latter policy is hardly advisable since it does not take into account the dangers looming over Ecuador and most developing countries, namely a rise in interest rates (a large part of the new loans are with banks that practise variable rates) and a fall in the market price of oil or other raw materials. It is likely that the Commission for a Comprehensive Audit of the Debt (CAIC) will be able to clearly identify odious and illegitimate debts. Will the governement still repay them in order to avoid international tensions with creditors and tensions at home with the large private corporations that still control a large part of the country’s economy? This essential debate will take place in 2008. Will Rafael Correa choose the way of a fair and sovereign solution to illegitimate debts? We hope so but this is not certain.

At the level of Latin American regional integration, the creation of the Bank of the South, which was announced for June 2007, has been delayed because of reticence on the part of Brazil. However, an important ministerial meeting took place in Rio de Janeiro on the 9th and 10th October 2007, during which a series of obstacles were lifted. In spite of Brazil and Argentina’s attempt to go back on the one-country-one-vote ruling (which was ratified in May-June 2007) and which had been put forward by Ecuador, it would seem that the meeting did finally agree on this democratic ruling. The Bank of the South, whose headquarters is to be in Caracas, should normally come into being on 3rd November 2007 in the Venezuelan capital city.

The path to social reform is full of pitfalls. Several left-wing presidents have won elections in Latin America in past years by promising to break with the neoliberal policies of their predecessors, but few of them have actually kept their word. Let us hope that Rafael Correa will stay the course and that he will succeed in implementing social justice with democratic policies. So far his strategy has increased and comforted popular support for change. It has also laid down the necessary conditions for a democratic change in the institutions. It has further reinforced the country’s independence towards the United States while strengthening Latin American integration. This is a lot already.

The situation in Ecuador must be followed closely. On Friday 19 and Saturday 20 October 2007 CADTM is pleased to welcome in Brussels a delegation from Ecuador led by Minister Ricardo Patino, who is in charge of the auditing of the debt and of the creation of the Bank of the South. The delegation will speak about debt auditing in the Congress room of the Belgian senate on Friday and Saturday (see programme). On Friday evening (8.00) at the Jacques Brel youth hostel a talk will be given on "Challenges facing Correa’s government and the new constituent assembly."

Translated by Christine Pagnoulle and Elizabeth Anne

Eric Toussaint is President of the Committee for the Cancellation of the Third World Debt (CADTM).

NOTES

[1] Alberto Acosta has published several books as well as over one hundred articles on the debt. In 2003 he took part in a seminar organized by CADTM in Brussels on current changes in Latin America.

[2] See the chapter on the Ecuadorian debt “Ecuador at the cross-roads” in Les Crimes de la dette, CADTM-Syllepse, Liège-Paris, 2007. The text is also available online www.cadtm.org It was translated into Spanish, English (see http://www.cadtm.org/spip.php?article2767 ) and Japanese.

Ecuador says oil firms mull switching deals

QUITO, Oct 17 (Reuters) - Foreign oil companies could consider switching their contracts for deals that will allow Ecuador to keep all the oil they extract, Oil Minister Galo Chiriboga said on Wednesday after holding talks with the firms.

In a move that shocked investors, Ecuadorean President Rafael Correa earlier this month grabbed nearly all the extra oil revenue generated by oil firms above a set contractual price and pushed for companies to accept deals in which the state will pay them a fee to extract oil.

"They have not discarded the possibility of switching contracts," Chiriboga told a local radio station. "But then we need to think about how to compensate their investment that in some cases they say it has not generated profits."

He said talks with the firms late on Tuesday were positive and that the government will create two negotiation groups to overhaul contracts on a case-by-case basis.

No companies were immediately available for comment.

Correa wants to renegotiate deals to boost the state's share of the oil wealth extracted from South America's No. 5 oil producer by firms such as China's Andes Petroleum, Spain's Repsol and Brazil's Petrobras (PETR4.SA: Quote, Profile, Research).

Other companies that are part of the talks are France's Perenco and U.S.-owned City Oriente. Under current contracts companies are allowed to keep part of the oil they produce.

Private oil firms extract nearly half of Ecuador's daily output of 530,000 barrels, and some analysts warn that the country's hard stance on deals could hurt foreign investment in the key sector.

Ecuador creates new province

People's Daily Online, 17 October, 2007
Ecuador's Congress approved Tuesday the creation of a new province, Santa Elena, two weeks after creating the nation's 23rd province Santo Domingo de los Tsachilas.

As many as 57 deputies voted in favor of the plan, which creates the nation's 24th province from the counties of Salinas, Santa Elena and La Libertad, all part of a peninsula facing the southern province of Guayas.

Santa Elena residents, who had come to the capital Quito for the occasion, cheered as they heard the news. In Santa Elena itself, residents announced a parade celebrating the event that will pass through all three counties.

The deputies had discussed the topic amid a heavy police presence and with thousands of peninsula residents waiting.

The debate on the issue was largely partisan: right-wing party members opposed the idea while left-wing members backed it. The measure was supported by the nation's left-leaning president, Rafael Correa.

Ecuador to halt oil drilling in pristine forest

QUITO, Oct 16 (Reuters) - Ecuador said on Tuesday it will not allow oil drilling in a pristine Amazon jungle area inhabited by unique tropical species and Indian tribes hidden from the outside world.

The move could hurt the operations of China's Andes Petroleum, Spain's Repsol and Brazil's Petrobras who manage oil fields partially inside the area.

"We are not going to allow oil exploitation in this area because there are international treaties that protect these tribes," Oil Minister Galo Chiriboga told reporters.

Leftist President Rafael Correa has recently turned up the heat on foreign oil firms by grabbing nearly all extra oil revenues generated by the companies above a benchmark price and pushing for the renegotiation of their contracts.

But government officials said companies could consider asking the government for compensation for not extracting oil out of the 700,000-hectare (1.7 million acres) area home to species ranging from endangered white-bellied spider monkeys to rare jaguars.

Repsol produces around 65,000 barrels of oil per day in South America's No 5 oil producer, while Andes Petroleum's daily output borders 60,000 barrels.

The protected area is inside the Yasuni rain forest, which Ecuador has offered to protect from oil drilling in exchange for cash compensation from the international community. The Yasuni holds the country's largest oil reserve of around 1 billion barrels.

Stephen Lendman: Social Change in Ecuador

Countries like Ecuador face conflicting interests - maintaining the status quo from the right and demands for real change from below through redistributive social policies and nationalizing strategic sectors.

By Stephen Lendman
PalestineChronicle.com, 16 October, 2007

Raphael Correa was elected Ecuador's president last November and took office January 15 promising social change. He's the country's eighth president in the last decade including three previous ones driven from office by mass street protest opposition against their misrule and public neglect. Correa must now deliver and just got a boost from his governing Movimiento Alianza Pais' landslide Constituent Assembly election victory to rewrite the nation's constitution for the 177th time in Ecuador's history hoping to get it right this time. Awaiting a final tabulation of results, it appears Correa supporters got around 70% of the vote winning 80 of the 130 Assembly seats. That's a comfortable majority to push through change, but doing it won't be easy, and Correa's commitment has yet to be tested.

Longtime Latin American expert James Petras writes "Ecuador today faces great opportunities for a basic social transformation and also grave threats from imperial networks" the way states in the region always do. He notes how in recent years mobilized urban and rural popular classes ousted neoliberal regimes only to see them resurface under so-called left-center leaders (who are neither left nor center) like Lula in Brazil, Kirchner in Argentina, Morales in Bolivia, Vasquez in Uruguay and others. Even Hugo Chavez governs from the "pragmatic left." He combines grassroots participatory democracy and redistributive social policies with support for business interests but on a more equitable basis than under previous Venezuelan leaders.

Petras quotes a Forbes magazine editor's comment on former Mexican president Luis Echeverria (1970 - 1976) that's very revealing and explains Correa's challenge - "He talks to the Left and works for the Right." That's pretty common in Latin America today, and Brazil stands out as Exhibit A under former Workers' Party co-founder and the country's current president, Luiz Inacio Lula da Silva (2002 to present).

Lula promised social change, but delivered betrayal. Even before being elected, he signed a letter of understanding with the IMF promising no change and business as usual. He agreed to full debt service and repayment terms as well as to back economic stability and neoliberal policies. He didn't disappoint.

Once elected with a clear majority, he cut public employee pensions 30%; his agrarian policy subsidized agribusiness; his promise of land redistribution to the Landless Workers Movement (MST) was broken; spending for health and education was cut; employer rights to fire workers and cut severance pay were supported; extended privatizations of state-owned companies were backed; thuggish troops occupied Haiti; and right-wing bankers, corporate executives and free-marketeers were appointed economic ministers and central bankers. Petras sums up his record saying: "Lula fits the profile of a right-wing neoliberal politician," not a "center-leftist" one.

Current Argentina president Nestor Carlos Kirchner is Exhibit B (in office from 2003 to the present with an October 28 presidential election ahead and the president's wife ahead in the polls to win it). Petras notes how compared to Lula, he seems progressive. He cut unemployment from 20 to 15%, raised pensions and wages, renegotiated part of the country's foreign debt and rescinded immunity for military torturers although with little to show for it.

In sharp contrast, "fraudulent privatizations" in Argentina's key industrial areas weren't reversed; inequalities remained the same or increased in some sectors; poverty levels are still almost 30%; 10% inflation diluted nominal earnings gains; the socio-economic power structure stayed the same; Argentina's thuggish troops occupy Haiti; its central bankers and economic ministers are hard right; debt service was placed above health and education spending; and unfettered capitalism was supported following the 2001 economic collapse and subsequent uprisings. Petras calls Kirchner a "pragmatic conservative willing to dissent from the US when it" serves Argentina's business interests. As for being a social democrat? Forget it.

Bolivia's president and first ever indigenous head of state (2006 to present), Juan Evo Morales Ayma, is Exhibit C, and along with Lula, the greatest disappointment. Petras cites his government as "the most striking example of (a) 'center-left' regime" to betray its supporters and embrace neoliberalim once in office. Mass uprisings ousted two earlier presidents who defended foreign investor natural resources ownership, and Bolivians elected Morales to do what they didn't. Instead, he rejected oil and gas expropriation, supports Big Oil interests, and embraced business as usual policies. Under nationalizations Morales-style, current contractual arrangements are effectively intact, and the country's mineral resources have been sold off to the greatest ever number of foreign investors.

In addition, Morales broke his promise to triple the painfully low minimum wage, increased it 10% instead, and maintained previous neoliberal fiscal austerity and economic stability policies. He also tolerates the US Drug Enforcement Agency's intrusive presence and the Pentagon's Chapare military base; appointed hard right economic, defense and other ministers; opposed agrarian reform; supports large landowners; provides them large subsidies and tax incentives; and backs the Confederation of Private Businessmen in Bolivia by promoting foreign investment, social spending cuts, prioritization of exports, and other pro-business policies above the interests of the people who elected him. Petras says Morales "excels in public theater" by combining "political demagogy" to his base while backing neoliberal IMF austerity and business-friendly policies.

Here's a sample of the former from Morales' September 24 UN General Assembly speech when he said: "....each day we are destroying the future of humanity. (We must) pinpoint who our enemies are (and the) damage (they do) that may put an end to humanity....I think that capitalism is the worst enemy of humanity and if we do not change the model, change the system (our efforts here) will be totally in vain....Capitalism has twins, the market and war....This is why (we must) change economic models....particularly in the western world." It's lovely rhetoric from a man who, in fact, embraces the model he denounces.

He symbolizes the fantasy of "new winds from the Left" sweeping the region, but too many others do as well in Brazil, Argentina, Uruguay, Peru, Chile, Colombia, Mexico and all of Central America including Costa Rica. There, a US intimidation campaign narrowly got DR-CAFTA passed in an October 7 national referendum that still awaits a recount before confirming what pre-referendum polls predicted would go the other way.

That aside, there's strong support for the left throughout Latin America that eventually may bubble up into change. It's too early to know for sure where Correa stands, but his commitment will soon be fully tested. Here's what he's up against.

US regional dominance is still strong, and thinking otherwise is misguided. It's not like in the 1990s "Golden Age of Pillage," but it's still able to keep business flourishing, including in Venezuela where it's booming. Nonetheless, a new generation of committed leftist leaders are emerging with Correa yet to prove he's one of them and may in the end disappoint.

His chance to prove otherwise is coming, and he won it convincingly with a 54% second round presidential electoral victory. It was followed by an overwhelming 82% referendum majority to convoke a Constituent Assembly to draft a new socially progressive constitution. Correa says it will be based on "principles not models (and) every country must decide according to its own different realities." The Assembly will convene the end of October to begin its work with a long struggle ahead to complete it. It hopes to finish in six months, but its mandate allows more time if it's needed.

Correa wants the constitution to "facilitate" foreign investment (especially in banking) "to force competition." He's against monopolies, traditional oligarchic power, and the one-sided big media opposition to his government. He's also renegotiating the country's debt, is assessing its legitimacy, wants a constitutional limit on its repayment, and intends to keep the dollar the official currency with eventual plans to abandon it. In addition, he favors ending the central bank's autonomy, joined the Bank of the South (to be officially founded November 3 and headquartered in Caracas), expelled the World Bank's representative in April, is ending relations with the IMF, and aims to transform the current neoliberal system into one that will aid "the recovery of the government's planning capacity (and be a) beginning of the concept of a solidarity system."

Correa's close economic adviser and leading September 30 vote getter, Alberto Acosta, said the nation's "economy should be based on human beings" and that capital, investment, the profit motive motive and workings of the state should be subordinate to human needs. If Correa supports that view and will back it fully, he's off to a good start. It's too soon to tell but early signs are promising.

He talks the talk and is starting to prove it. He promised social democratic change and a "citizens' revolution" and said he'll use the country's oil revenues for the people with a positive step already taken. On October 4, he signed a decree increasing Ecuador's share of windfall foreign oil company profits from 50 to 99% while committing to honor existing contracts. Announcing the move, Correa said: "No more plundering, no more surrender, no more waste. (Ecuador's oil) now belongs to all Ecuadoreans" with revenues from it earmarked for social welfare and infrastructure.

Correa also indicated after a new constitution is drafted and approved by referendum, he'll call for new elections for president, vice-president and Congress. The current legislature has no Correa party representatives in it, but he hopes overwhelming popular support will change that. The sitting Congress, according to Correa "must be tossed back into the street," but that's for the people to decide. Democracy, however, isn't just about elections. It's about what happens afterwards, and that's for Correa, the Constituent Assembly and a newly elected Congress to decide.

The September 30 victory was Correa's third triumph in nine months, and he hailed it saying the "Ecuadorean people have won the mother of all battles. (It was) an unquestionable victory." Earlier he echoed Hugo Chavez's call for a "new socialism of the twenty-first century (and that Ecuador must end) the perverse (neoliberal) system that has destroyed our democracy, our economy, our society." He won't have long to back that rhetoric with action, but doing it won't be easy.

The long shadow of Washington haunts the region, and its influence pressures and subverts change from the left. At the same time, countries like Ecuador face conflicting interests - maintaining the status quo from the right and demands for real change from below through redistributive social policies and nationalizing strategic sectors like oil, gas, banks and land.

Petras is hopeful "decay and profound disintegration of all the traditional parties opens the way for (progressive) new political forces." He sees an "historical opening" and opportunity for change through an "alliance of trade unionists, Indian militants, movement leaders and ecologists" in the newly formed Polo Democratico (PD). Its agenda calls for a "total rupture (and) transformation of the Constituent Assembly into the legislative arm of the peoples' movement." Its aim is bold and revolutionary - to establish "popular sovereignty" that places basic resources like oil and gas under "popular self-management" and out of the hands of local oligarchs and exploitive foreign capital. It's a national liberation struggle to defeat imperialism and savage capitalism and return power to the people. Now it's for Correa and his coalition to prove they're up to the challenge. So far at least, it looks like they'll try.

-Stephen Lendman is Research Associate of the Centre of Research on Globalization (CRG). Stephen Lendman is based in Chicago and can be reached at lendmanstephen@sbcglobal.net. Also visit his blog site at www.sjlendman.blogspot.com and listen to The Steve Lendman News and Information Hour on TheMicroEffect.com now moved to Mondays at noon US central time.

Ecuador Oil: More Trouble Ahead

Latin Business Chronicle, 16 October, 2007

President Correa's oil policies will result in more disputes with foreign companies and reduced oil production, experts predict.

BY CHRONICLE STAFF

Ecuadorian president Rafael Correa, inspired by policies in Venezuela, is aggressively attacking foreign oil companies in a gamble that likely will lead to further falls in oil output from Latin America's fifth-largest oil producing country. Foreign oil companies account for half of Ecuador's oil production, while state oil company Petroecuador continues to be plagued by mismanagement and a heavy debt burden.

"The changes implemented by the Correa administration will constrain the ability of Ecuador to lure foreign investors into the country," Bear Stearns analyst Alberto Bernal said in commentary Friday.

MORE DISPUTES

The new policies will also lead to more formal disputes, risk consultancy Exclusive Analysis warns. "President Correa's moves to increase state control over the oil industry will likely lead to more litigation with multinationals," Exclusive Analysis said in a commentary late last week.

The latest hike comes after the then-government of president Alfredo Palacio raised the government's share from 30 to 50 percent in April last year. Several oil companies are still in arrears on those hikes, the government says. All in all, they owe $317 million, which they have to pay the next two weeks - October 31 - or face sanctions, officials warned yesterday.

Spanish oil giant Repsol YPF, French-based Perenco and Chinese-owned Andes Petroleum are among the companies that are in arrears, the government claims. Amazingly enough it also mentioned U.S.-based Occidental Petroleum, which left Ecuador last year after being forced to do so in a move that caused the U.S. government to stop free trade talks with Ecuador.

The latest action follows last week's decree that the state's share of oil revenues above set benchmarks would increase from 50 percent to 99 percent. Those that disagreed, he said, would face contracts with a 100 percent government share of windfall profits. Venezuela's government will advise Ecuador on the negotiations for new contracts, Correa said Saturday.

That measure will affect some 15 contracts signed since 1996. Most of these were due to expire in 2012, according to Exclusive Analysis. They include Brazil's state-owned Petrobras (Latin America's largest company) in addition to Repsol YPF, City Oriente, Perenco and Andes Petroleum.

"President Correa’s decision to increase the tax on extraordinary oil income of the private-sector oil fields ... implies an almost complete fiscalization of the extra income that oil companies are receiving for taking the risk of investing in this country," Bernal says. "The government’s aggressive stance suggests that the Correa administration intends to force oil companies to migrate from participation contracts into service contracts, as in the case of Venezuela."

Meanwhile, Ecuador also has pending disputes with Chevron, Occidental Petroleum and City Oriente.

DROPPING PRODUCTION

Ecuador last year produced an average of 545,000 barrels per day, a 0.7 percent increase from 2005, according to the latest BP Statistical Review of World Energy. In the first quarter this year, however, it fell to 501,056 barrels per day, according to U.S.-based consultancy Global Insight.

And if Ecuador follows the lead from Venezuela, it will likely see even stronger declines. Venezuela's production averaged 2.8 million bpd last year, a 3.9 percent decline from 2005. In 1998 - the last year before Chavez became president - it was 3.5 million bpd, according to BP. That means the daily average has fallen 18.9 percent during the Chavez administration, according to a Latin Business Chronicle analysis of the BP data.

In the same period, Brazil's oil production has grown 80.4 percent. Even Mexico, which has suffered from well-publicized problems in production, increased its production by 5.3 percent in the 1998-2006 period, according to the Latin Business Chronicle analysis.

"Unlike Venezuela, Correa's growing political clout is not matched by the state's market leverage," Exclusive Analysis points out.

While the Ecuadorian government should get an additional oil windfall next year - amounting to $700–900 million (depending on the international price of oil) - the royalty hike will deter more foreign investment in the key oil sector, Bernal warns.

The measure also contradicts the purpose of a recent trip to New York by Economy Minister Mauricio Davalos, the analyst argues. "In typical Ecuadorian fashion, however, the president decided to squander the goodwill achieved—and the money spent by Ecuador’s taxpayers in paying for the minister’s business trip—by “kicking the table” with the international investors interested in developing the oil industry in Ecuador," Bernal observed.

Correa also plans all oil contracts to be on a service provider basis, which means foreign oil companies would receive a fixed fee instead of the current deals that allow them to retain a share of the oil extracted, Exclusive Analysis points out.

IGNORING ARBITRATION

Chevron, a former partner of Petroecuador, says the state company illegally sold oil on the international market at below market prices and last year filed a $750 million claim against the state company at the International Court of Justice in Hague. That dispute comes on top of a lawsuit filed by Ecuadorian citizens against Chevron for alleged contamination of the Amazon. Chevron last week filed a claim at a superior Ecuador court to dismiss the $6 billion lawsuit, alleging an unfair process (see Chevron: Ecuador Tests Flawed). Among other things, the lawsuit uses a 1999 law that cannot be used retroactively, according to Charles James, Chevron's general counsel. The company has now asked a panel of distinguished jurists to observe the case, company officials said at a press briefing in Miami last week.

Both Occidental and City Oriente have claims pending at the World Bank's International Center for Settlement of Investment Disputes (ICSID). Occidental Petroleum filed a claim against Ecuador after its operations were expropriated in May 2006. Oxy was the top foreign investor in Ecuador at the time and had invested more than $1 billion in the Andean country. That case is still pending a decision by the ICSID.

Meanwhile, City Oriente's ICSID case is a dispute over last year's royalty rate hike. However, Correa has said he won't allow any ICSID arbitration of Ecuador oil disputes. And his government even launched its own $30 million lawsuit against the City Oriente, Exclusive Analysis points out.

"Ecuador expects an increase in international litigation, as evidenced by Correa's instruction ...to his foreign minister to inform the ...ICSID body that Ecuador would no longer accept it as a mediator in oil cases," Exclusive Analysis says.

Ecuador's Correa Proposes New Court to Oversee Constitution Law

By Stephan Kueffner

Oct. 15 (Bloomberg) -- Ecuadorean President Rafael Correa proposed forming a new constitutional court, part of his efforts to reshape the Andean country's political framework.

The new top court should ``guarantee the necessary and efficient separation of all the powers of the state,'' Correa, 44, said in a speech in Quito today. It must remain ``independent from pressure by groups with economic or political power,'' he added.

Correa's announcement comes after his Alianza Pais party won a majority of seats last month in elections to choose members of a national assembly that will redraw the constitution. The new court would rule on matters of constitutional law, replacing a tribunal picked by members of congress. A separate court would have jurisdiction over civil and criminal cases.

The new court's members should be picked on merit, not because of political connections, Correa said. Formation of the new court is subject to approval from the assembly that will rewrite the constitution.

To contact the reporter on this story: Stephan Kueffner in Quito at skueffner@bloomberg.net