Ecuador has long lived with the puzzling dilemma: to preserve a biodiverse region unique to the world or to capitalise its oil reserve to address a substantial fiscal deficit worth millions.
Yet on August 20, Ecuadorians marked a revolutionary moment in Latin American history. The electorate voted overwhelmingly in favour of suspending oil drilling in the Yasuni National Park. The park has exceptional biodiversity, and the area is home to many Indigenous communities, including two who live in voluntary isolation: the Tagaeri and the Taromenane.
Yasuni Park has been the center of international attention and speculation in years past. In 2007, Ecuadorian president Rafael Correa attempted to launch the Yasuni-ITT initiative. He proposed that at least 850 million barrels of crude oil from the Ishpingo-Tambococha-Tiputini oil field (ITT) would be left untouched and unexploited, in the name of preserving biodiversity and Indigenous territories. However, since Ecuador relies heavily on the oil industry, the nation sought $3.5 billion from the global community to fund employment in the renewable energy sector. Only 0.37 per cent of the objective was attained, which prevented the goal of developing renewable energy sectors in the country from being achieved. Without the will of the international community to support this proposal, the Yasuni initiative could not succeed. This prompted the president to exploit the ITT oil field to tackle the country’s growing austerity.
As such, corporations were able to extract oil from one the world’s largest biodiverse areas, resulting in at least 689 hectares of deforestation.
On March 6, 2020, the state-owned company Petroamazonas EP, which subsequently united with Petroecuador, granted a $148 million contract for the development of 24 new wells on the ITT field, specifically in the Tambococha field. After awarding the contract to the Chinese corporation, Chuanqing Drilling Engineering Company Limited (CCDC), the government expected an increase of 7500 barrels of oil per day.
However, satellite images rendered by Monitoring the Andean Amazon Project (MAAP) observed that the construction of roads in the ITT field was seriously endangering the conservation of the Yasuni Park.
In response, Indigenous and environmental activists came together to advocate for the suspension of oil extraction in the park. The YASunidos collective assembled social organizations and movements to defend the Yasuni park and its Indigenous inhabitants.
Xavier Leon Vega, member of the Yasuni Collective, wrote extensively about the situation: “This whole situation was an incentive for the creation of the Yasunidos movement, which works against petroleum exploitation in the Yasuni and in favour of a post-petroleum society.” Their objective focused on conducting a referendum that would allow Ecuadorians the possibility to decide whether crude oil should be extracted from the ITT field. This mechanism lies within the rights stipulated in the 2008 Constitution, which recognizes the “plurinational nature of the Ecuadorian State, the rights of nature, but above all the right to participation and the guarantee of participatory democracy.” As such, the movement to preserve the Yasuni National Park gained 750,000 signatures and became recognized as “the first direct democracy initiative” assembled by the people.
Regardless, the National Electoral Council annulled more than half of the signatures gathered. Through appeals, mobilizations and peaceful protests, the Constitutional Court of Ecuador ruled the Ecuadorian state violated citizens’ rights through its arbitrary decision to invalidate the petition. The court even went further and granted a referendum on August 20 where more than 58 per cent voted in favour of preservation efforts of the park.
This historic referendum obliges Ecuador’s state-owned oil company, Petraecuador, to suspend all operations within a year . This includes the ceasing of drilling infrastructure and restoring the oil sites of block 43. This event has been appraised as the first time in which a nation’s country has voted resoundingly in favour of leaving oil reserves untapped.
However, it is unclear how oil operations in the ITT field would be worthy of foreign and national investment. For instance, “more than 90 per cent of what’s pumped is toxic water that needs to be removed and treated, making operations more expensive.”
With struggling debt, the government often views oil operations as the most viable way to gain funds. The irony lies within Ecuador’s financial state, where it holds a USD $5 billion of debt to China, and yet it has been using oil to repay loans by awarding contracts to Chinese petroleum companies within the oil fields.
This can be illustrated through Eduardo Galeono’s famous analysis, The Open Veins of Latin America, where he writes: “Nothing compares with this “black gold” as a magnet for foreign capital, nothing earns such lush profits, no jewel in the diadem of capitalism is so monopolized, and no business wields the global political power of the great petroleum corporations.”
Alternatives have been considered to create a sustainable economy such as developing markets focused on local products or the development of carbon offset programs. Recently, Ecuador secured an agreement wherein the country obtained at least $12 million in financial contributions to conserve the Galapagos Islands. As such, the country has solved its dilemma by deciding to preserve Yasuni Park. By taking this step, Ecuador is allowing itself to find other alternatives to support its economy.