Is Chinese Big Oil Going to Destroy Ecuador's Amazon?

By Sascha Kouvelis


Photo by Stefan Kistler

To oil and gas companies, the Amazon rainforest is one huge cash cow just begging to be milked. But anyone who'd rather not rid the world of 30 percent of its animal species would probably argue it's a region that shouldn't be destroyed by rich people.

However, if Deepwater Horizon and a slew of other warnings from history are anything to go by, devastating environmental damage isn't much of a concern to big oil. This year, Ecuador is set to have its 11th oil round—the 11th time the government has tried to sell off its share of the Amazon to foreign investors—and the most probable buyer is China. If the auction completes, all the nasty contamination that comes with dropping gas-guzzling machinery into the middle of a rainforest will likely threaten the lives of the area's indigenous people and the natural habitat of thousands of species of living things.

Bidders have until July 16 to place bids on 16 oil concessions, which translates to over 3 million hectares of rainforest potentially being pillaged by oil and gas investors. In the tenth oil round in 2011—when only six blocks were up for auction—sales were halted by indigenous activism. Unfortunately, Ecuador’s political situation has been hugely convoluted due to China’s investment in the region over the last few years, so it's unlikely that protesting tribes will be able to make much difference any more.


Photo by Stefan Kistler

Ecuador is one of the four main countries in South America that China has its sights set on. China has been spooning out loans primarily to Ecuador, Argentina, Venezuela, and Brazil, with repayments guaranteed by "long-term commodity sales"—which essentially means, "destroying the rainforest, dredging it of its natural resources, making the money back, and leaving everything to fester and die."

Ecuador is now in debt to China for around $8.8 billion. And yes, the Ecuadorian government maintains that this won't affect the future of oil sales in the region, but either they're lying or they're somehow planning on selling nine times more bananas annually than they do now.        

Despite the fact that China's involvement in these new oil investments would directly violate their new guidelines for "environmental protection in foreign investment," they're still allowed a bid. So unless China suddenly puts on a philanthropic face—which, let's be honest, is kind of unlikely—Ecuador is set to become China's pawn until the debt is cleared.

Although Texaco is now owned by Chevron, the company spent 28 years—from 1964 to 1992—devastating the northern Ecuadorian Amazon, and expansion into the remainder of the rainforest is likely to be just as destructive. According to Lou Dematteis, a photojournalist who's spent plenty of time in Ecuador, the water in the area has been irrevocably contaminated by nearly three decades of oil and gas extraction.   

“They can't drink the water—they'll get sick if they do," Lou told me. "They can't even bathe in it because it will give them cancer. They need to get water brought in from another source. The people in the southern part of the Ecuadorian Amazon facing this new round are desperately trying to avoid the same fate as those in the north.”


An oil pump in Peru. Image via

Unfortunately, it's likely that this new oil round, if completed, will put the south in exactly the same position as the north, or even Peru, its neighbor to the south. Just last month, the Peruvian government announced an environmental state of emergency after finding high levels of lead, barium, chromium, and petroleum-related compounds in the water and soil.

Rebecca Spooner from Survival International told me how the Peruvian people have been complaining for years about the low amount of fish in their rivers. Stefan Kistler from Arkana Alliance, an NGO based in the Amazon, described how one tribe in Peru is now living on an “oil dump” because their lagoon “completely disappeared after 40 years of oil contamination.” Others in Peru, he noted, no longer have the right to access the land because it's so contaminated. These problems could very easily reappear in Ecuador because, as Rebecca suggests, these oil companies have “the power to cover up these things, making it quite difficult to figure out what's actually happening.”

The ministry promises that the eleventh oil round in Ecuador will follow “strict sustainability guidelines” to ensure the protection of the forest. But if you pay any attention to the past, it's far from certain if those words will act as any kind of guarantee. Pluspetrol were responsible for 78 oil spills in the Peruvian Amazon from 2006 to 2010, particularly in the Pastaza region. A rise in birth defects and miscarriages has followed.


Narcisa Mashienta (left) and Jaime Vargas, president of the Achuar tribe of Ecuador.

The 169 International Law is the only international law in place to protect indigenous people’s rights, dictating that tribes must be consulted before anything happens on their land. However, Rebecca says that in Peru, where she is currently based, it's highly debatable whether the government has been consulting tribes at all. Narcisa Mashienta, a women’s leader of the Shuar tribe in Ecuador, revealed that what the “government's been saying, as they have been offering up our territory, is not true; they have not consulted us and we're here to tell the big investors that they don't have our permission to exploit our land."

According to Adam Zuckerman from Amazon Watch, the Ecuadorian government is in a "desperate place right now. It must give up a lot of its sovereignty to finance its development.” This is, of course, unfortunate, because it means that the importance of protecting the land is pushed ever further down the list of governmental priorities in favor of promising investment deals.

That's not to say the government doesn’t give a shit about the Amazon. Lou told me that the government has previously “come out and supported the case, but they just don’t have the money to do much about it.”

The fate of the Amazon is now in shaky hands. Balancing the survival of the pristine rainforest and paying back debts is a major challenge for Ecuador. And, according to Carlos Monge, Regional Coordinator at the Latin America Revenue Watch Institute, it is a huge mistake to continue viewing the Amazon Basin as “a space whose role in the national and world economy should be to provide energy.”

However, avoiding that mistake would require the entire world to wake up from the delusion that the Earth is an endless tap of natural resources. Which, unfortunately, isn't likely to happen any time soon.

Follow Sascha on Twitter: @SaschaKouvelis

More stuff about the environment:

No Justice No Trees

A Gang of Greek Activists Torched the Skouries Gold Mine

Toxic: Napoli

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