Oil drilling in Yasuni creates tension between Germany and Ecuador

After Ecuador announced it would drill for oil in its pristine Yasuni National Park while blaming international donors for failed conservation efforts, Ecuadorian President Rafael Correa has now canceled German aid.

When Ecuadorian President Rafael Correa announced last week (15.08.2013) he had decided to allow oil exploration in parts of Ecuador's Amazon rainforest, Germany was dumbfounded. The German Development Ministry had long been opposing Correa's conservation scheme that asked developed countries to pay Ecuador for preserving the Yasuni National Park. According to Ecuadorian officials, the forest prevents about 400 million tons of carbon dioxide (CO2) from entering the atmosphere each year.

Correa wanted international donors to come up with $3.6 billion (2.7 billion euros) as compensation payments for not extracting the oil, but said Ecuador had only raised $13 million in actual donations and $116 million in pledges. Correa said the lack of support made it necessary to go ahead with oil drilling plans, despite the fact that the UNESCO biosphere reserve is home to rich biodiversity as well as indigenous tribes.

Germany played a crucial part in opposing the Yasuni project. When German Development Minister Dirk Niebel took over from his predecessor Heidemarie Wieczorek-Zeul in 2009, who was in favor of the Yasuni conservation scheme, the ministry turned on the project.

Germany says no to Yasuni scheme

"We never ever promised to pay into a fund, because we think it's a totally wrong approach," Gudrun Kopp, Niebel's parliamentary state secretary to the Ministry for Economic Cooperation and Development (BMZ), told DW. "We want to protect the forests, we would like to empower the indigenous people there and we know that the biodiversity in Ecuador is really unique. And we want to protect the environment by action and by reducing emissions. We don't pay for not drilling for oil."

The BMZ said such an approach would set a precedent for other countries that are exploiting resources like oil, gas or gold. The crux is that the BMZ doesn't want to pay for countries to refrain from doing something, but rather support actions to reduce CO2 emissions and work towards sustainable development.

"Refraining from oil drilling alone is not going to help in forest preservation, and compensation payments have little prospect of success in climate protection measures," Niebel wrote in a newspaper op-ed back in 2011.

Kopp added that, Germany and Ecuador had agreed on a 34.5 million euro program that had just kicked off this year - a program that includes managing the forest protection area, the UN's Reducing Emissions from Deforestation and Forest Degradation (REDD) program as well as protecting biodiversity and indigenous people.

That, however, was canceled by Correa who was furious about German "arrogance" in criticizing Ecuador's drilling plans. He said Ecuador would pay back every cent of aid that has been paid by Germany so far.

"We were completely astonished about this new development [Correa's announcement], because we thought with all our efforts to [protect] the environment and to support the country that we had found a wonderful solution and an agreement that was really being applauded to," Kopp said.

International concern over damages

According to Gorky Villa Munoz, an Ecuadorian botanist at US-based NGO Finding Species, the German decision not to support the Yasuni initiative certainly had a huge impact on other international donors. Donations that have been received so far - by private donors or countries including Belgium, Chile, France, Italy, Spain and Indonesia - had been placed in a trust fund run by the UN Development Program and would be returned.

Munoz expressed hope part of the oil revenues would go to development projects such as schools, conservation efforts and hospitals. He also warned that new roads would be Yasuni's downfall. "If the government will build new roads - that would be devastating for the park. But if the government drills [for] oil using offshore techniques, that means using helicopters to transport all materials, the impact will be less," he told DW.

Kelly Swing, a US biologist based in Ecuador, said the initiative's failure wasn't all that surprising since it hadn't met the desired level of support for years.

"The idea of the Yasuni ITT [the three oil-rich areas in the park - Ishpingo, Tambococha and Tiputini] initiative may have been to harvest cash, as opposed to getting trade-offs and such, but I know that Italy, for example, had agreed to a fairly large debt-swap I think in the order of tens of millions of dollars," he said.

Eco tourism as a way out?

Swing said damage caused by oil development will be devastating - and said he preferred other ways to secure revenue.

"You can get the oil out, $18 billion, in a few decades - but what happens after a few decades? If we keep the rainforest, we can continue to harvest income for basically forever through eco tourism and through the development of some super parks," he said. "Right now we are looking at maybe harvesting as much as $1 billion per year over a couple of decades in the form of oil, but as we know from other countries in Latin America, that have well-developed eco tourism industries, Ecuador could harvest maybe as much as $500 million per year just through that."

So far, Ecuador's President Correa has said he would only drill in about 1 percent of the Yasuni National Park. Ecuador already extracts oil in other parks. As laid out in the country's constitution, he now has to ask permission of the national assembly to drill.