New Ecuador mining law angers social movements

By Zoe Kenny

The approval by Ecuador’s parliament on January 29 of a new mining law sparked protests and civil disobedience throughout the country. The protests have been organised by the Confederation of Indigenous Nationalities of Ecuador (CONAIE), the umbrella organisation representing the country’s indigenous Amerindians, who constitute a quarter of Ecuador’s population of 14 million, as well as by other peasant and environmental organisations. They claim that the law, pushed through by President Rafael Correa, prioritises the interests of foreign mining companies over the rights and health of indigenous communities, as well as over environmental protection.

The law will allow a number of mainly Canadian mining companies to begin exploiting large gold, silver and copper deposits they have discovered in southern Ecuador. In a January 30 press release, Canada’s Kinross Gold Corporation welcomed the new law as “a solid foundation and framework for the growth of a responsible mining industry”.

While the law demands a 5% royalty payment from the mining companies and gives the government significant influence over mining activities, the enactment of the law is regarded as a significant set-back by the grassroots organisations and local communities that have been struggling to stop large-scale mining projects since exploration for metal deposits started in the early 1990s.

Struggles over the environment have been one of the key flashpoints in Ecuador’s recent political history. Ecuador has the third largest oil reserves in South America. These have been exploited by foreign corporations for more than 40 years, wreaking considerable damage to the country’s environment as well as to the health and lifestyles of many of the country’s indigenous inhabitants. Most notoriously, the US oil corporation Chevron has been accused of dumping at least 68 billion litres of toxic waste into areas of the Amazon inhabited by six indigenous groups, causing numerous health problems, including cancer.

According to the website, Chevron has made more than US$30 billion in profits from its oil operations in Ecuador. Currently Chevron is fighting a $27 billion class action suit taken out against it by 30,000 Ecuadorians. Ecuador’s grassroots organisations see the danger in the new mining law for a repetition of the oil experience with metals mining.

The conflict over the law is indicative of a growing rift between Correa’s government, which proclaims it wants to create “21st century socialism” in Ecuador, and indigenous communities and environmental organizations. Ironically, while the new mining law has sparked some of the most strident protests of recent years, Correa is perhaps best known internationally for his proposal to preserve the Amazon forest through garnering financial support from wealthy countries to compensate Ecuador for leaving some of its oil in the ground in the ecologically important Yasuni National Park.

Correa made this proposal at a UN-sponsored climate change meeting in September 2007. He said that the Ecuadorian government would make a “commitment not to exploit nearly 920 million barrels of petroleum, thereby preserving one of the most bio-diverse regions in the world”, Ecuador’s Amazonian Yasuni National Park. The park covers an area of 982,000 hectares and is home to more than 500 species of birds, 173 mammals, 100 amphibian species, including 43 tree frog species and 100 reptile species.

This commitment would keep 436 million tonnes of carbon dioxide out of the atmosphere, but would also entail a financial loss of about $3.5 billion to the Ecuadorian people. While Ecuador is Latin America’s fifth-biggest oil producer, in 2006 the World Bank estimated that some 56% of the country’s 13.4 million people live in poverty. That figure rises to more than 80% for indigenous Ecuadorians, who are mainly peasant farmers in the mountainous highlands. Correa therefore called for offers of financial help from the rich countries to offset the economic losses of keeping the oil in the ground. However, more than a year later the proposal has floundered due to a lack of financial commitments from wealthy countries.

Correa, an economist critical of neoliberal “free market” policies, was elected president in 2006 on the basis of a left-wing platform that included opposition to a free trade agreement with the US, closing the US military base in the coastal city of Manta, increasing social spending and convening a constituent assembly to draft a new constitution. He proclaimed that his victory represented the beginning of a “citizen’s revolution” that would “refound” the country on the basis of “social justice”, protecting the environment and an end to neoliberalism.

While much of Correa’s platform echoed the demands of the powerful social movements that had succeeded in toppling three governments in the previous 10 years, he was only supported by CONAIE and other social movements after the candidate of Pachakutik (CONAIE’s electoral organisation) was eliminated in the first round of the presidential election. The second round was a two-way contest between Correa and Alvaro Noboa, a business magnate and the candidate of the right-wing Institutional Renewal Party of National Action.

The major achievement of Correa’s government has been the adoption of a new constitution on September 28 with 64% voter approval. The new constitution was the result of an almost two-year-long process, including the election of the Constituent Assembly which heard 3500 proposals, and the holding of hundreds of community forums. According to an October 2 Americas Policy Program article, the constitution “compiles varied aspirations from diverse social sectors that have fought for more than a decade against neoliberalism and policies that assured the payment of external debt to the detriment of social programs”.

The new constitution enshrines new rights for many sectors of Ecuadorian society; boosts the authority of the national government over public services such as health, education, housing and water supply and over strategic sectors of the economy such as energy production, telecommunications and transportation. Uniquely, the new constitution also ascribes “rights” to nature so as to give damaged eco-systems the ability to regenerate themselves.

The new constitution also forbids the establishment of foreign military bases and facilities. Last July Correa refused to renew a 10-year lease on the US military airbase in Manta, which had been used by Washington to support the right-wing Colombian government’s counterinsurgency war against that country’s leftist guerrilla movements. Since Correa’s election, Ecuador’s relations with both Colombia and the US have deteriorated. Correa broke off diplomatic relations with Colombia after a March 1, 2008 Colombian military attack on a Colombian Revolutionary Armed Forces (FARC) camp on Ecuadorian soil killed 24 people including one Ecuadorian. On February 8, Correa expelled two US embassy officials from Ecuador accusing them of interfering in his country’s internal affairs.

While Correa called for Latin American integration as a means of “confront[ing] this inhumane and cruel globalisation” in which “the profits are privatised and the losses are socialised”, his government has so far refused to become a full member of the Bolivarian Alternative for the Americas (ALBA) agreement, initiated by Venezuela and Cuba as an alternative to neoliberal “free trade agreements” pushed by the US. But at the same time, his government has continued to strengthen bilateral economic agreements with the revolutionary socialist governments of Venezuela and Cuba. In October Correa met with Venezuela’s President Hugo Chavez to discuss deepening joint development initiatives in the context of the global economic crisis. On January 9, Correa and Cuban President Raul Castro signed nine new co-operation agreements in Havana. Cuba operates three opthalmologic centres as a part of Mission Milagro (Mission Miracle), which has restored the eyesight of 16,000 Ecuadorians.

Another important element of the new constitution is the inclusion of the concept of the “illegitimacy” of a large part of Ecuador’s foreign debt. In 2007, Ecuador paid $1.75 billion to service its foreign debt, more than the government spent on health care, social welfare, housing, urban development and the environment combined. For the last 30 years, Ecuador has spent nearly 70% of its national budget on servicing public debt. On November 20, a government-commissioned audit report found that Ecuador’s debt had grown from $240 million in 1970 to $17.4 billion in 2007, largely as a result of fraudulent renegotiations on loans taken out by the military dictatorship that ruled Ecuador between 1972 and 1979. The report recommended that the government refuse to repay or service $3.9 billion of the debt.

In December, Correa announced that Ecuador would suspended a $30.6 million interest payment on $510 million in bonds due to be repaid by 2012. Last month, Finance Minister Maria Elsa Viteri announced that Ecuador wouldn’t pay bondholders $135 million in interest while it decides whether to default on 27% of its foreign debt.

However indigenous groups are not satisfied with a clause in the new constitution specifying that indigenous communities only need to be “consulted” about developments on their lands rather than having their “consent” attained. The government’s relations with the indigenous population over land use and the environment remains the most contentious issue facing Correa. The fact that indigenous communities did not attain what would have been essentially a veto right over use by others of their land could be an added reason for renewed militancy against the large-scale mining, with indigenous groups realising that their demands will only be achieved through mass struggle.

Another major point of contention is over the government’s response to a community protest against oil extraction in the Amazonian town of Dayuma in November 2007. According to a July 25 article from, the government declared a “state of emergency” when residents of the town began a campaign of civil disobedience blocking oil operations, resulting in “violent repression” and the arrest of 23 people. The article noted that, “It was at this point, when his commitment to an economy based on oil and mining became clear, that activists and leftist intellectuals increased their criticism of Correa”.

The resignation from the presidency of the Constituent Assembly on June 23 of former energy and mines minister Alberto Acosta, who complained about being hurried by Correa to an artificial deadline on the new constitution, has also shaken social movement leaders’ confidence in Correa. In early February, Acosta, who had favoured banning all open-pit mining, declined an offer made to him by Pachakutik to run for the presidency against Correa in elections scheduled for April 26.