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Ecuador's Yasuni Park: Oil Exploration or Nature Protection?

by Agneta EnströmSpecial to CorpWatch
March 20th, 2008

Cartoon by Khalil Bendib

Manuela Omari Ima, a Waorani woman from the Ecuadorian Amazon, was born in the Yasuni National Park, a 2.5 million acre primary tropical rainforest at the intersection of the Andes, the Amazon and the Equator. That intersection is also the heart of a struggle between two plans: one for oil exploration and another that would permanently protect one of the most biologically diverse regions of the planet.

The United Nations Educational, Scientific and Cultural Organization (UNESCO) declared Yasuni a biosphere reserve in 1989, after biologists found that a mere 2.5 acres of this forest contained as many tree species as in the United States and Canada combined. It is also home to jaguars, woolly and spider monkeys, and harpy eagles -- the most powerful bird of prey in the world. Some of the species in Yasuni, however, live on the brink of extinction: including more than 20 globally threatened mammal species such as the white-bellied spider monkey and the rare golden-mantled tamarin.

The animals, birds and plants are not the only species whose numbers are shrinking rapidly. At the time of her birth, Omari Ima, who is now in her mid-thirties and is chair of Amwae, the Waorani women’s organization, says that there were some 16,000 Waorani. “Today, there are no more than about a thousand of us left,” says Omari Ima. “It is, simply, a struggle for survival.”

One of the key reasons for this, she says, was the arrival of multinational oil companies in the latter part of the 20th century, which represented her tribe’s first and forced contact with industrial civilization. Soon displaced to a controlled existence in a reservation, Omari Ima’s family and tribe was divided, just as the rainforest itself soon became divided by roads and oil fields.

A new plan, yet to be funded, could bring a halt to this exploration, but some damage has already been done.

Petrobras Wins Yasuni Contract


Yasuni sprawls over two countries -- Ecuador and Peru -- both of whom see the Amazon as a potentially lucrative source of income. In August 2004, when Brazilian president Lula da Silva came on a state visit, the Ecuadorian government granted an environmental license for Petrobras, the Brazilian state-owned corporation, to drill for oil in Block 31. Also known as the Ishpingo Tambococha Tiputini (ITT) oilfields, ITT is believed to hold up to a billion barrels of oil, almost a quarter of the country’s total known reserves. At today’s oil prices, this could mean revenue of over $700 million a year. (The Peruvian government has just approved environmental impact studies for two areas -- known as Blocks 67 and 39, that have been acquired by U.S.-based Barrett Resources and Repsol of Spain.)
Explosion in Bolivia

One evening in June 2005, 45-year old Emilio Uceida and his two sons were out on a fishing trip by the river next to their home in Chapare-Surubí, in the Bolivian Amazon. The area is being explored for oil and gas by Repsol-YPF, a Spanish company, which has contracted with Skanska to oversee technical matters. A spark from a cigarette lighter used by one of the men in the boat caused gas that had drifted over the river from an exploration site to ignite, causing the father and his sons to catch fire.

Emilio and his 13-year old son Edgar burned to death, while theother son, 18-year old Mario Uceida, received such life-threatening burns that he remains in hospital care to this date. His condition is critical and doctors say that he will remain an invalid for the rest of his life.

According to Repsol-mata, a Spanish activist group, Skanska and Repsol refused to allow the Bolivian authorities into the area for a criminal investigation for a whole week after the incident. When the various authorities and organizations from the Cochabamba province later visited the area to inspect the oil field, they were denied access to the exploration sites.

Repsol-mata claims that Repsol-YPF also threatened to report the Uceida family for “sabotage,” which has scared Emilio
Uceida’s family into silence.

Armed with these new contracts from Quito, Ecuador’s capital, the  companies have attempted to win over the people of the forest. Alicia Cahuiya, another Waorani woman who lives in the town of Pujo, says the companies offered the indigenous villagers items such as soccer clothes and candy in return for permission to drill for oil on their land.

“The companies have often bought villagers off with small gifts, because the villagers have not understood what was going on when the company representatives came calling,” she says. “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.”

Exploration Begins


With the tacit permission of the villagers, Petrobras started to set up the infrastructure for oil exploration on the outer edges of  Yasuni, such as the construction of a harbor along the edge of the Napo River in March of 2005. They hired a Swedish construction company named Skanska, which has numerous similar contracts in the region such as in Brazil and Bolivia, to do the work. Skanska currently works in Ecuador with Tecpecuador and Petrobras in Block 18, and in Bolivia it continues to do controversial work with Repsol.

Local authorities soon started to complain about Skanska’s work in the area. Environmental inspector Marcos Baños, head of the environmental authority for the Amazonian province of Orellana, says that Skanska behaved in a suspicious manner. Baños says that company representatives have visited the authority to offer to perform “projects.” “I considered it extortion,” says Baños.

And Raul Vega, an official in the provincial environmental office in the oil town of Coca, says that the company refused to cooperate with them. “The Skanska boss Oswaldo Contreras was the first Skanska person we contacted,” Vega explains, “and he refused to give us the information we required. If they had only shown us they’d done an environmental study, we would have given them a permit, but it was not until a subsequent occasion that Skanska submitted any information. That information, however, turned out to be false. The company claimed it had conducted an environmental study, which was a complete and utter lie.”

The construction was halted after a few months. Petrobras’ permit was revoked and the company was asked to conduct an environmental feasibility study.

Local Complaints

Skanska and Petrobras’ joint operations were also sharply criticized by environmental groups and local communities in Ecuador for the initial exploration work conducted in 2005.

Acción Ecológica, a Quito-based environmental group that opposes oil exploration in the Amazon, says that they conducted an on-the-ground inspection in Chiru Isla, a Quichua indigenous village inside Yasuni and along the Napo river. The inspection revealed that five families out of 20 experienced poisoning due to dumped diesel and oil in the watercourse from where the villagers got their drinking water. All the members of these families became seriously ill, suffering from headaches and vomiting.

The investigation by Acción Ecológica also revealed that waste from latrines on Skanska’s construction site had been dumped in the surrounding water courses. This is in violation of Ecuador’s health laws, and causes a major hazard for the local population.

The Chiru Isla villagers, who fear repression and therefore prefer to remain anonymous, also say that Skanska hired people from the local population to perform dangerous jobs, like carrying heavy equipment and climbing at the construction site without protection -- but never paid them. Skanska is also accused of having purchased food supplies like bananas and yucca in the villages, but failing to pay.

The company disagrees. One of Skanska’s regional managers in the Amazon basin is Milton Diaz, an Argentinian oil exploration veteran who has worked in the industry for many decades. He dismisses the complaints: “People here in the bush should be grateful to industry instead of just complaining and making unreasonable demands,” he says.

Private Security

Diaz also says that the indigenous people are a threat to Skanska. “People here are slightly backward. You never know when the barbarians are going to start shooting arrows from the bushes. At Skanska, we also have a strict security culture. Personally, I never go unarmed in the bush.”

The Skanska engineeers pay for armed private security guards, but the company also has an agreement with the military for support under a special security council set up by the government of Ecuador in January 2006 called GESPETRO - Grupo Especial de Seguridad Petrolera (Special Group on Oil Security). GESPETRO is charged with coordinating security for the companies involved with oil extraction such as Petrobras.

The contracts include stipulations that the oil companies are to supply the military with infrastructure, food, fuel, living quarters and emergency medical care in exchange for protection. Similarly, the companies are obligated under the contracts to inform the Napo military base of community projects and programs that the company provides to the civilian population.

Alicia Cahuiya says that effectively the land belonging to her people in Yasuni has now been occupied by the companies’ oil fields and the military:  “Every step we take is watched, and if we voice a protest, Repsol turns the military on us,” she says. “If we do not comply, they threaten or beat us. There have even been cases where the military have killed Waorani people and thrown the bodies in the rivers.”

Attorney Bolivar Beltran, from Fundación Lianas, says that the contract violates Chapter V of Ecuador’s constitution, as well as the UN Convention on the Rights of Indigenous and Tribal People. Both assure indigenous peoples a set of cultural and self-determination rights, such as the right to be part of all decision-making on issues concerning their lands.

Standard Practice?

Pablo Fajardo, a lawyer for the Ecuadorian network Frente de Defensa de la Amazonia (FDA), says that this is standard practice. “The population is being exposed to serious health hazards and illness related to oil spills and deliberate waste dumping while they often live in fear of the companies, whose power is expressed through threats and violence,” he says. “By using armed private forces,  the companies try to control and stifle local resistance at any price. This is what it’s like in the entire region, and all companies working with oil are forced to deal with this reality.”

Back in Sweden, Noel Morrin, Skanska’s sustainability manager at the company headquarters in Stockholm, claims that the company is not breaking laws or violating its own ethical code of conduct.

But some Skanska officials say that they are concerned about the allegations in Ecuador. Peter Gimbe, the senior vice president for communications in Stockholm, says that headquarters has little insight into local conditions and that they are investigating the complaints.

An Uncertain Future

Today the future of the ITT fields remain uncertain. The new government of Rafael Correa initially considered the possibility of creating a consortium with Ecuadorean state-owned oil companies to develop the ITT fields. Venezuela’s state oil firm PDVSA and Argentina’s Enarsa expressed interest in taking part in any future consortium.

In May 2007 Correa put forward an innovative idea: his government would refrain from exploiting Yasuni in exchange for receiving at least $350 million annually from the international community. The idea was promoted heavily by the government, with vice-president Lenin Moreno Garces staging an event during the Live Earth concert last year. TV cameras broadcast him joining nearly 100 people to spell out the words “Live Yasuni” from a forest clearing.

Organizations like the Wallace Global Fund have committed $100,000 to the initiative. A number of other groups including Acción Ecológica, Amazon Watch, Earth Economics, University of Maryland, Charles Stewart Mott Foundation, Pachamama Alliance, and World Resources Institute, have put their weight behind it as well, but the plan has yet to get firm commitments for the full sum of money.

Editor’s Note: CorpWatch is a recipient of funding from the Wallace Global Fund. This article was commissioned without any input from the Fund.