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Ecuador’s plan falters

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Issue date: 
July 20th, 2012
Publisher Name: 
Le monde diplomatoque
Aurélien Bernier
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In 2007 Ecuador’s recently elected president Rafael Correa announced a “revolutionary” project: the Yasuní-ITT Initiative. This promised an end to oil prospecting in Yasuní National Park (a UNESCO biosphere reserve), where test wells had already been drilled at Ishpingo, Tambococha and Tiputini, if the “international community” would agree to compensate Ecuador for half of the unrealised oil revenues, estimated at more than $7bn over 13 years. The money would allow the government to develop renewable energy, preserve and restore ecosystems, protect indigenous peoples (some of whom live in total isolation), research biodiversity development and establish social programmes aimed principally at people living in Yasuní.

As climate and biodiversity talks were stalled, the Yasuní initiative at first seemed like a brilliant idea: it would avoid over 400m tons of carbon emissions that would have resulted from the exploitation of these resources, and protect one of the planet’s richest ecosystems. Without completely rejecting the concept of the “development” (and therefore commercialisation) of nature, it opposed neoliberal exploitation. Ecuador is poor and dependent on oil, and the initiative could transform its economy, ecologically and socially. But there are many difficulties.

Correa, formerly Ecuador’s economy minister, adopted policies like those of Hugo Chávez in Venezuela: nationalisation, social programmes and a new constitution favouring the poorest. He also set about reducing the burden of servicing Ecuador’s foreign debt, following a government audit which declared much of it had been illegally contracted by a previous administration. Unemployment fell, public sector wages rose and Ecuador freed itself from supervision by international organisations; but a failed coup in September 2010 underlined the fragility of Correa’s “citizens’ revolution”. Relations between Correa and indigenous peoples — especially the powerful Confederation of Indigenous Nationalities of Ecuador (Conaie) — are strained. Some Amerindians criticise the government’s policy on oil extraction, which endangers their habitat; others resent its attempts to prohibit tribal customs it considers incompatible with a modern state (such as elements of customary law that legitimise lynching).

Oil is key to Ecuador’s geopolitics. For the government, it is an indispensible source of funding for social programmes (in 2008, oil revenues accounted for half of the general budget). For Ecuador’s indigenous peoples, it is sometimes the only source of employment. But it makes Ecuador dependent on foreign companies (which control more than 40% of its oil extraction and behave like colonialists) and on the US market. It also causes environmental and health disasters. The militant organisation Acción Ecológica has campaigned for many years for a ban on further prospecting. In February 2011 it won a major victory when Chevron was ordered to pay damages of $18bn for pollution (confirmed a year later, on appeal).

The Yasuní initiative

From the start of Correa’s administration, oil exploitation was a contentious issue. Over the previous decade, the idea of a moratorium and of a post-oil society had emerged on the left. Alberto Acosta, who was appointed energy and mining minister in 2007, put the finishing touches to the Yasuní initiative, which had been planned before Correa came to power. However, the state-owned oil company EP Petroecuador had been trying to convince the government to go ahead with exploiting the Yasuní reserves, and the sooner the better. These reserves are particularly hard to get at, but now that the price of oil has risen (from $60 a barrel in 2007 to more than $100 in 2012) extracting them will be more profitable.

Correa had to choose between a quick but destructive way of financing his policies on one hand and satisfying ecologists and indigenous peoples on the other. After tense discussions, he proposed a clever solution: Ecuador would leave its oil underground if compensated, shifting the responsibility for exploitation onto the “international community”. The Yasuní initiative was approved in summer 2008 and presented at the Copenhagen climate conference in December that year. After a struggle with the United Nations, Correa secured the creation of a trust fund to be directly managed by Ecuador. The fund opened in August 2010.

Ecuador’s goal was to raise $100m by the end of 2011 and government representatives have visited many western countries to canvas for funding. However, only a few have agreed to donate (Spain, Germany, Italy) and the total collected is not as high as hoped. Spain, which has a sizeable Ecuadorian community, is the only country to have actually donated ($1.4m). Two local authorities in France (the Rhône-Alpes region and the department of Meurthe-et-Moselle) and a few countries which are neither great polluters nor very rich (Chile, Colombia, Georgia, Turkey) have given between $50,000 and $200,000 each. Others, such as the Belgian region of Wallonia, have promised to contribute but not delivered. After several contradictory announcements, Germany has decided to lend its “support” in a different way, choosing a form of bilateral cooperation that guarantees a return on investment.

The most significant contribution could be that made by Italy, which, rather than donating, has cancelled $51m of debts owed by Ecuador. Apart from the PR benefits at a time when Italy is facing a severe debt crisis, it is hard to tell how far the Yasuní initiative influenced the decision. In 2006 Norway cancelled $20m of Ecuadorian debts in response to public pressure, without the excuse of an ecological initiative. For want of anything better, Ecuador has accepted these contributions and considers its target of $100m by the end of 2011 to have been reached. But the actual amount in the trust fund is still only $3m.

NGOs should be more committed than states, but this has not been the case. The search engines on the websites of the big environmental organisations don’t respond to the key word “Yasuní”. The World Wildlife Fund, Greenpeace and Friends of the Earth have no official position on the initiative and, unofficially, they are divided: Greenpeace applauds the proposal not to extract oil but refuses, on principle, to support any government project. Friends of the Earth approves the initiative’s plan to avoid greenhouse gas emissions and preserve biodiversity, and its respect for the rights of indigenous peoples, but fears it will legitimise “environmental blackmail”. Sylvain Angerand, who heads the tropical rain forest campaign for Friends of the Earth in France, said: “We need a real debate on Yasuní. Leaving the oil underground is a good thing, but settling the ecological debt that the countries of the North have incurred to the countries of the South does not necessarily have to involve financial compensation.” Like some of Ecuador’s indigenous peoples, Friends of the Earth also criticises Ecuador’s policy of intensive exploitation of oil resources.

Beset by difficulties

An international petition in support of the initiative, launched by Ecuadorian NGOs in 2010, has been signed by some European organisations and individuals, including the Association pour une Taxation des Transactions Financières pour l’Aide aux Citoyens (Attac), the Front de Gauche, the Nouveau Parti Anticapitaliste (all French), Die Linke (German) and many environmentally conscious members of the European Parliament (1). But only the French Parti de Gauche shows real interest in the initiative, which fits its concept of “ecological planning”. The Greens would like to support Yasuní without seeming to support Correa’s government. They feel Correa’s approach is too close to Chávez’s populism (2), and have only signed the petition.

Since its launch, the initiative has run into many difficulties. The financial crisis in 2008 and the failure of the Copenhagen summit in 2009 nearly killed off the already ailing international negotiations on climate change. The UN is focusing its energies on the adoption of REDD+ (Reducing Emissions from Deforestation and Forest Degradation in Developing Countries), an expanded version of its anti-deforestation programme designed to appeal to the private sector and the carbon trading market, under which decision-making would remain under the control of the major economies. The intrusion of the Yasuní initiative into the debate does not please the developed countries, and budgetary austerity has been taken as an excuse to politely ignore it. The rich countries must also fear that agreeing to finance the initiative could set a precedent, and that many countries of the South will demand the same deal.

Ecuador has turned to the business sector, in the hope that it will be more generous. Not only is this solution uncertain but it could easily be abused. Donors would have the right to use the Yasuní brand in marketing. The idea of car manufacturers or energy companies using the official logo and claiming “A Yasuní Product — Building a New World” is horrifying. But Correa’s government could take an even more dangerous path if it chooses an option put forward when the initiative was launched: making it part of the carbon market. Yasuní Guarantee Certificates issued in exchange for financial donations would be converted into carbon credits to offset the greenhouse gas emissions of rich countries and big companies (3). This option has been set aside, but could still be resurrected.

The ecological conversion of a small and poor country like Ecuador is not an easy task. The initiative’s chances of success are slim, and Correa’s primary objective is probably to keep it alive until the next elections, in 2013. The demonstration against large-scale mining organised in March by Conaie, which supports the initiative, makes it difficult for Correa to show any sign that his resolve is weakening. But in the absence of any new donations, it is hard to see how Ecuador’s diplomacy can remain optimistic.

The Yasuní initiative and its uncertainties tend to obscure the real, though fragile, successes of the citizens’ revolution. It conforms to a simple model that appeals to symbol-loving western Greens and alter-globalists: it sets out to defend indigenous peoples who are supposed to be natural ecologists; it limits the use of fossil fuels (bad), which hinders the development of renewable energy sources (good); it deals with environmental issues that could, as if by magic, transcend political divides. It also resonates with local campaigners in Europe, such as those opposed to the extraction of shale gas. Yet the initiative cannot be separated from the revolutionary process in Ecuador, which has to come to terms with the country’s social and economic realities and delicate balances of power.



Extpub | by Dr. Radut