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20 de Diciembre del 2021
Lectura: 20 minutos
20 de Diciembre del 2021
Gabriela Ruiz Agila @GabyRuizMx
After making green pledges, Ecuador plans to expand oil on indigenous lands

Nema Grefa (left) and Andrés Ruíz (right), president and vice president of the Sapara Nation of Ecuador. Press conference on Tuesday May 25 outside the Ministry of Agriculture and Livestock of Ecuador. They denounced the handover of his ancestral territory to an organization that they consider "illegitimate", associated with Andes Petroleum. Photos: Ramiro Aguilar, Andrés Yépez, Josué Araujo. Photo: Ramiro Aguilar Villamarín @miro.a.villamarin (Ig)


Can a local or foreign oil company carry out extractive activity with social responsibility in indigenous territories? Three cases in Ecuador show that oil is exchanged for trinkets.

In Ecuador, the government of Guillermo Lasso appeared to show an attitude change towards the environment. After decades of extractive projects in the Amazon rainforest, the government created the Secretariat of Peoples and Nationality of Ecuador. On World Environment Day, it announced that Ecuador will be the first country in Latin America to make a national policy on the ecological transition.

But in the next few months, President Lasso appointed former Petroamazonas’ state executive Juan Carlos Bermeo as Energy Minister. Petroamazonas is the country’s main oil company and it sustains a large part of the national economy.

Then, on July 7, Lasso issued a decree that established the country's hydrocarbon policy: the country would expand oil extraction projects in the Amazon.

In spite of its green pledges, the Ecuadorian government plans to expand the “oil frontier” in the Amazon, with many of the planned projects located inside indigenous territory. 

According to the new policy, state oil company Petroecuador must increase production from 493,000 to a million barrels of oil per day (bdp).

To achieve this, they replaced the Hydrocarbon Operations Regulation that had been in force since 2018. The government now ensures that part of the income proceeds will finance development programs on areas like in the areas of influence and child malnutrition.

Apart from the environmental concerns, there are also human rights issues. In the past, to carry out these projects, the Ecuadorian government offered trinkets to indigenous communities. 

Darío Villacis is a technical advisor at NAWE (Nacionalidad Waorani del Ecuador, formerly Organization of Huaorani Nationalities of the Ecuadorian Amazon, ONHAE), an organization that brings together more than 70 communities. According to Villacis, internal documents show that indigenous communities received toys, machetes and axes as part of their “social compensation” duties.

Social compensation is a legally binding commitment meant to mitigate damages to local communities for their displacement. Now, as new oil projects are announced, human rights organizations fear that the signing of compensation agreements will be repeated in conditions of inequality and disrespect for the collective rights of indigenous people.

“There is a social compensation agreement that was signed for 30 years in Anzawa. There are no clear regulations that specify the expiration time of these agreements,” says Alexandra Almeida, biochemist and member of Acción Ecológica.

Petroecuador, a state company, acquired on January 7, 2021, is in charge of the exploration, exploitation, transportation, refining and national and international commercialization of crude oil. The company is responsible for 23 oil blocks and three refineries (Esmeraldas, La Libertad and Shushufindi). In addition, the SOTE Pipeline with a length of 486 km from Sucumbíos to Esmeraldas in the maritime terminal.

Globally, oil expansion goes against scientific recommendations. A recent report by the International Energy Agency (IEA) states that, for the world to achieve a “safe” level of global warming (1,5 °C), there must be no new fossil fuel infrastructure.

“There is a social compensation agreement that was signed for 30 years in Anzawa. There are no clear regulations that specify the expiration time of these agreements,” says Alexandra Almeida, biochemist and member of Acción Ecológica.

In 2018, an attempt was made to build the Prior Consultation Law, according to lawyer and activist Gabriela Bermeo Valencia. In a twitter session, Bermeo Valencia stated: "When we talk about the protection of the rights of peoples and nature, certain sectors want to sit down to build the law with the oil tankers."

The oil threat to indigenous people in Yasuni

Yasuní Park is home to the Waorani, Kichwa, Shuar, and the Tagaeri or Taromenane peoples in the provinces of Orellana, Napo and Pastaza. Yasuní is one of the most biodiverse places in the world and was declared a biosphere reserve in 1989

It is also one of the territories with the largest oil reserves in Ecuador. The oil block 43, also called the Ishpingo Tambococha-Tiputini field (ITT), hosts 18.3% of Ecuador's known oil reserves.

Environmentalists and community organizations denounce the river pollution that oil blocks 7 and 21 brought about within the Yasuní. 

"Two and a half million cubic meters of soil and all the underground water locations analyzed are contaminated by hydrocarbons, heavy metals or both," states a 2017 World Bank report. 

There is a history of incidents, too. In the 1990s, Oryx’s operations left numerous spills that sickened the population. Among other effects, the spills contaminated the well water at the school in Flor de Maduro. 

In 2019, the Waorani gathered over 122,000 signatures to prevent the opening of more wells. Unfortunately, the signatures did not succeed.

Waorani de Pastaza on the day they filed the protection action to guarantee their right to Free and Informed Prior Consultation and self-determination. Photo: Amazon Frontlines.

A real threat

Several communities located in the Waorani are under the influence of oil exploitation. As a result, some of the communities have signed social compensation agreements directly with the oil companies. NAWE did not participate in these agreements. 

Petroecuador operates in the Dikapare and the Kawimeno communities. In February, Dikapare signed a social compensation agreement for the construction, exploration and development of field 43. 

In March 2021, NAWE’s president Gilberto Nenquimo requested a copy of this social compensation agreement. When Nenquimo followed up in June, Petroecuador replied saying that they could not deliver the copy "for respect to the signatories."

Left. Official letter from the Waorani Nationality of Ecuador (NAWE). March, 2021. Right. Petroecuador´s answer. June, 2021.

Importantly, social compensation agreements must be public within the framework of the transparency and access to information law. Instead, Petroecuador recommended that the request be made directly to the signing communities. 

It is not just oil. According to the International Indigenous Peoples Working Group in Isolation and Initial Contact (GTI PIACI), illegal mining and logging, the presence of illicit crops, drug trafficking activities and the presence of irregular armed groups are other threats to the Isolated Indigenous Peoples (IIP) sharing territory with the Waorani people. 

GTI-PIACI (2021).

Militarization of Dikapare

On April 14 2021, seven military trucks arrived at the Dikapare commune, in Orellana province. They used tear gas and fired shots to deter the indigenous people. Images of a bloody Waorani woman and photos of pellets circulated on social media.

The following day, NAWE denounced "aggressions and excessive use of public force" by the Armed Forces of Ecuador. The military trucks reached the community of Dikapare, where Ecuaservoil  operates, a consortium made up of the Belarusian state-owned Belorusneft and the Ecuadorian company Edinpetrol.

Ecuaservoil, a subsidiary of Petroecuador, operates in block 55 known as ‘Armadillo’, in Orellana province. Ecuaservoil informed workers that the project was ending in the Armadillo field and that, therefore, profits will not be canceled. The company claimed that no work was done in 2020 as a result of the COVID-19 pandemic. 

As a result of the breach of the compensation agreement, the Waorani community of Dikapare took de facto action. They closed roads and intercepted a van with workers from the oil company. The facilities of block 55 were taken, and the protest spread to an oil well in Taracoa. 

As part of the compensation contracts and the laws in force, the oil companies are obliged to employ the indigenous people. Generally, the trades are physically demanding: digging, cutting roads with machetes, welding and electrical repairs, or simple carpentry. When oil spills occur, oil companies employ local people to clean rivers without proper equipment. The health consequences are serious.

The Dikapare community signed the social compensation agreement against NAWE’s advice. However they requested the organisation to mediate  the conflict. When the protest ended,  the agreement between Dikapare and Ecuaservoil was not revealed.

Owaldo Jarrín, Minister of Defense, appears in the Collective Rights Commission of the National Assembly of Ecuador. Ordinary session No. 041 of April 19, 2021.

On April 19 2021, the complaint was heard in the Collective Rights commission of the National Assembly without reaching clarification or sanction. In that instance, Oswaldo Jarrín, former defense minister, evaluated in the National Congress: “this is not a matter between the military and the indigenous poor”. Instead, he claimed, the conflict "is between the company and the workers." In this argument, Jarrín dismissed the fact that the workers are indigenous Waorani and the law guarantees their collective rights.

“If this really is about labor problems, why militarize the community?” Gilberto Nenquimo, questioned.

Military occupation of the Dikapare commune, Orellana Province on April 14 2021. Photo by community members.

Lack of prior, free and informed consultation

The Political Constitution of Ecuador of 1998 establishes the pluricultural and multiethnic character of the Ecuadorian state and recognizes indigenous peoples as subjects of

collective rights and guarantees, among others, their right to be consulted. Collective rights were ratified and expanded in the 2008 reform.

In 1998 and its 2008 reforms, the Political Constitution of Ecuador recognized the ownership of community lands and with this action, indigenous peoples have the right to prior, free and informed consultation to authorize the entry of oil companies and exploitation in their territory. But the indigenous groups were never consulted.

Lawyer and activist Verónica Potes explained that the 1998 Ecuadorian Constitution already recognized the collective rights of the indigenous peoples. In addition, in 2008, the constitutional reform emphasized in article 57: “The territories of the peoples in voluntary isolation are of irreducible and intangible ancestral possession, and all types of extractive activity will be prohibited in them."

In 2019, the Pastaza Criminal Guarantees Court ruled that there was a violation of the rights to self-determination and free and informed prior consultation by the Hydrocarbons Secretariat in 2012. 

That same year, the Sarayaku people obtained a favorable ruling at the Inter-American Court for the violation of the rights to consultation to indigenous communal property and to cultural identity, following  Article 21 of the American Convention. 

Lawyer Mario Melo represented the case. “According to what is determined in the Constitution, national legislation, the ILO Convention 169 signed by Ecuador and the jurisprudence of the Inter-American Court of Human Rights, rights cannot be subject to negotiation,” explains Melo, who is also dean of the Faculty of Jurisprudence of the Pontifical Catholic University of Ecuador.

The researcher Roberto Narváez agrees: "Compensations do not replace rights." He is the author of several academic articles on peoples that inhabit the Yasuní. Narváez recovered testimonies that were used in defense of the Sarayaku Case in the Inter-American Court of Human Rights in 2009. And more recently, he is the author of the expert opinion in a genocide case related to the Waorani in 2020.

The analysis of current public policies shows that human rights are subordinate to extractive policy. According to Narváez, in the Sarayaku case, “the ruling of the Inter-American Court of Human Rights (IACHR) orders the payment of USD 1.4 million in compensation for the people”. In a case against Occidental Petroleum Corporation (also known as Oxy), the Ecuadorian state  has been sentenced to pay USD1,700 million dollars.

Access to water, health and education are basic rights that must be guaranteed by the Ecuadorian state. However, indigenous communities like the Waorani cannot even bathe in the rivers within their territory. They are contaminated. 

In this context, oil companies offer services and sign social responsibility contracts to meet the needs of the indigenous peoples who own the territory. At first glance, it is good business for the state. 

However, these agreements result in a vicious circle: the absence of the state allows oil companies to gain increasing influence in indigenous territories. 

The weakness of the state in the local territory impacts its ability to guarantee basic rights as access to water, health and education.

Pacayacu, Sucumbíos. Estación Pichincha 1 Petroamazonas (2017). Foto: Andrés Yépez.

Exchanging oil for crumbs

The Waoranis, like other peoples, received offers ranging from monetary compensation to the delivery of jobs in construction, electricity, welding, and the like.

Agip Poli Ecuador B.V. and the NAWE signed the Mutual Cooperation Agreement on March 28 2001 on behalf of six Waorani communities.

Agip assumed operations in Block 10 in 2000. According to the fourth clause of the contract, the six Waorani communities received “a sack of rice, a sack of sugar, two cubes of butter, a bag of salt” from Agip.

Page 2. Extract from the Mutual Cooperation Agreement signed on March 28, 2001, between Agip Poli Ecuador B.V. and the Organization of Huaorani Nationalities of the Ecuadorian Amazon (ONHAE), now NAWE.

In addition, the agreement promised “For one time and only the months of May, August and November 2001: Sports equipment with the delivery of: 2 soccer balls; 1 whistle for the referee and 1 stopwatch." 

A special clause of the aforementioned contract obliges the Waorani to avoid migration and the settlement of families in the Villano Norte project.

Environmental experts and advocates Alexandra Almeida and Pablo Fajardo consider that the Agip Agreement signed in March 2001 with the six Waorani communities is the most scandalous. 

According to them, Agip Oil offered "crumbs" in exchange for millions of dollars from oil exploitation in indigenous territory. Importantly, this happened with the consent and support of the state and the state oil company.

In the national imagination, public policies promoted the idea of "wastelands'' in the Ecuadorian Amazon. Through this narrative, the public policies legitimized the "national interest" to expropriate ancestral lands.

The lawyer Pablo Fajardo, based in Shushufindi since 1987, has accompanied several collective proceedings (like the UDAPT case). Fajardo puts it clearly: “The compensation agreements are a perverse form of blackmail for the damage that companies will cause in the territory.” Fajardo remembered that in 1997, the Occidental oil company managed to uproot the Redwoods from its territory.

There are many other cases that should be analyzed and that Fajardo cites for the study of social compensation agreements. Crucially, Petroecuador delivered computers to the community of Cascales, Sucumbíos province in 2003, where there is no electricity.

This report addresses the cases of communities such as Dikapare or El Edén in the province of Orellana, an area of ​​exploitation of the oil industry. The use of public force and the militarization of conflicts in favor of the oil companies reached maximum gravity in 2006.

Three communities took over the facilities of the French oil company Perenco Ecuador Limited, in a demand for compensation for environmental damage. They were brutally repressed with tear gas and rubber bullets. The same thing happened a year later in the community of Dayuma.

Pacayacu, Sucumbíos. Persecution of activists and critics of oil exploitation is continuous in the area in which Petroecuador operates. The driver in this picture followed us and took pictures of this journalistic team in 2017. Photo: Andrés Yépez

Commune Kichwa El Eden

In the Kichwa El Edén community, a social compensation agreement was signed in 2001 with the oil companies Occidental Exploration and Production Company (OEPC) for ten wells. "Today there are more than 30". 

Twenty years earlier, the president of the El Edén commune, Clemente Quindigua, signed a 19 year agreement with OEPC in 2001.

In 2006, the Ecuadorian government declared the expiration of the contract with Occidental Oil Company. As a result, the administration of the El Edén Yuturi field was transferred to the administration of Petroecuador.

The oil company has refused to renew the agreement for two years for the operation of oil blocks 12 to 15, explains Wilson Quindigua, president of the commune since January 2021. 

Petroecuador reports social responsibility actions, including the intercultural childbirth project. Only five women have used it, explained a medical staff member at the local health center.

Wilson Quindigua, current president of the El Edén commune in front of  platform C’s entrance, Edén Yuturi station, under the administration of Petroamazonas. Kichwa El Edén Community - Ecuador, June 2021. Photo: Josué Araujo

"It is not possible to exploit oil in an environmentally responsible way" affirms Almeida. “In the 54 years that the country has been extracting oil, we have been told that it is a disastrous industry that pollutes and kills. The oil production goal set by the government is impossible to meet," she continued.

According to unionized oil company workers, the government gave other fields as “gifts” in the El Edén field operation. Occidental oil company received other oil fields close to the El Edén field without major paperwork, explains Almeida.

The policy of President Lasso's government is to privatize and take the administration of contracts and service stations out of Petroecuador's hands

Dependency and corruption

Currently, Ecuador produces approximately 500,000 (bdp). Oil revenues are crucial for the cash-strapped government, which in 2020 signed a USD $ 6.5 billion deal with the International Monetary Fund (IMF). 

The Ecuadorian government faces this debt challenge in addition to fighting corruption: USD 40 million received in bribes from Petroecuador, since the revelations of the Panama Papers.

The treatment of oil companies towards indigenous communities is scandalous and asymmetrical. This is especially so when considering that oil companies receive permission to occupy indigenous communities’ ancestral territory and carry out  oil extraction.

In conclusion, the Ecuadorian government is not succeeding at applying the Law of Transparency and Access to Information to the contracts and agreements of the oil companies operating at the national level. 

Petroecuador did not reply to the information requests about the prior consultation procedures and social compensation agreements signed with indigenous communities.

The criticism towards government policies is increasing, especially in the Alliance of Human Rights Defenders Organizations in Ecuador. The Alliance is made up of 15 organizations that defend human rights. Its main demand for justice concerns the oil spill of April 7 2021 when 15,800 bdp contaminated the Napo and Coca Rivers

On the contrary, Kichwa leaders and their lawyers face criminal investigation for demanding truth and reparation for 27 thousand affected people. On August 17 2021, there was a new oil spill in a well in the Yamanunka commune, managed by Petroecuador. Will they answer for their omissions this time?


After making green pledges, Ecuador plans to expand oil on indigenous lands



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