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Clarke Stevenson – 4, June 2015GEO 426Consultant Packet

Ecuador as a Plurinational State: Oil Extraction in the Yasuní-ITT

In 2013, the president of Ecuador, Rafeal Correa, lifted the

moratorium on the Ishpingo-Tambococha-Tiputinin (ITT) land block of

the Yasuní National Park, re-opening the Amazon Rainforest to oil

exploration. In 2007, Correa created a “debt-for-nature” swap that

used conservation policies to help steer away from petroleum dependent

economies with the aid of the global community. The Yasuní-ITT

Initiative is what followed, originally constructed for a number of

reasons: (1) to maintain the oil underground, fostering the Amazonian

carbon-sink with a storage capacity of 410 metric tons of carbon; (2)

to internalize environmental costs on a global scale; (3) to

transition Ecuador’s economy toward alternative approaches to poverty

alleviation; (4) and to implement a new protection protocol for

Ecuador’s incomparable biological and cultural diversity. But it

stands out from other conservation initiatives as it goes beyond

payment to protect cultural and biological diversity. It uses the

need for Ecuadorian development to be the determining factor for

bringing about a politics that applies carbon abatement and post-

petroleum economies to sustainable living standards for all of the

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nation’s inhabitants, including uncontacted indigenous people living

in the Amazon1.

Stating that it was the global community that failed to be “co-

responsible” in making sure that Ecuador would be able to maintain the

progressive conservation polices, Correa has leveled the issue to one

that puts national security and stability against the livelihoods of

thousands of people and indigenes. His initiative was the sum of

neoliberal market schemes, contrasted with a concept of livelihood

that divests from extractive petroleum practice and reinvests in

social development for the country. The source of the conflict

primarily circles around the issue of the “addictive economy”2 in crude

oil extraction. Permission for multinational entities to enter the

ITT land block under oil exploitation practices devalues the

indigenous communities back into the historical pattern of

exploitation, colonization and cultural imperialism, while exalting a

particular form of the ambiguous term, “security”, for the nation.

This paper will examine local actors in relation to multinational

corporations and the state’s domineering hand under the guise of

carbon-aversion politics, despite a number of protections given

through the ITT initiative. Ideally, we can conclude how despite the

1 Pamela L. Martin (2011): “Global Governance from the Amazon”. pg. 232 Freudenburg (1992): “Addictive Economies”.

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achievements indigenous peoples have made in the past; the “curse” of

oil exploration in Ecuador continues to delegitimize their political

representation as well as threaten their well-being and way of life.

Secondly, we can hope to see how Correa’s use of the native phrase

“sumak kawsay” (“the good life”) has been compromised in lifting the

moratorium and inviting oil producers back into the Amazon.

Where the indigenous community believes that the oil-based

national economy marginalizes their lifestyle and land tenure to fit

within a standardized model of law and citizenship, the proponents for

oil exploitation are attempting to trump over pluralist politics with

the need to develop a resilient post-industrial state3. A citizen of

Ecuador cannot be privileged over another in order to abstain from the

nation’s well-being, say state officials4 attempting to incorporate the

indigenous as though they had always been pivotal in direct decisions.

The interesting claim about this issue is the definition of Correa’s

“security”. Land practice on the surface can be secured for

multicultural rights but unless the resource underground can be

converted into economic benefit, those rights become muddled in

privatization and deregulation practices. We must begin to ask what

type of security his politics is promoting: ancestral and cultural

3 Susan Sawyer (2004): Crude Chronicles. Pg. 1904 Ibid. pg. 192

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security would help protect the ecologically rich geography of the

land while also providing a way to sequester carbon. Yet, short-term

economic security would allow for more success in long-term social

development, and allow for a more adaptable and flexible nation to

absorb potential risks, which, only seem imminent with climate change

nipping on our heels. Needless to say, it is a difficult line to

draw.

History and the Emergence of Neoliberalism in Ecuador

In a remarkable period of global recognition, Ecuador’s inclusion

in OPEC took less than a year after building the first Trans-Andean

pipeline in 1972. This was the start to the oil-dependent economy

(and global identity) that would eventually comprise half of the

state’s budget and pay off large sums of inherited debts from past

governments5. So, after being demeaned by respected economists who

projected a sense of instability for Ecuador’s politics and economy

(compared to the rest of Latin American in the early 90’s) the

National Congress adopted frameworks of economic development by

entities like the International Monetary Fund and the World Bank6. In

1994 the Septima Ronda de Licitación (seventh round of the public

contract) of Ecuador’s oil concession bidding brought the mores of

5 Ibid. pg; 946 Ibid. pg; 95

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neoliberal agenda to edges of the Amazonian Rainforest, home to a

number of indigenous cultures living on the periphery of “modern

civilization”. In other words, privatization, liberalization,

deregulation and decentralization became a new model of organization

for the country. It marked the moment where multinational

organizations would be able to bid for rights to invest and develop

the oil industry in the Pestaza Providence, largely claimed as

indigenous territory7. This also marked a shift where private

enterprises were able to explore for oil with no supervision by the

state or the nation’s petroleum corporation, Petroecuador, while

allowing for a “production-sharing contract” – a type of high-risk

auctioning forum for oil extraction by multinationals to offer the

best production-sharing “deal”. Essentially, foreign investors

suffered no costs and took no responsibility for the guess-and-check

exploration practices conducted in the Amazonian Rainforest.

The new contracts allowed for multinational corporations to

reinforce their autonomy and have a greater share in profits, thus

creating an incentive for any international oil producer to come

invest. Their investment into oil exploration in the Amazonian land

parcels became a process of industrial profit with most cost of

drilling being put onto the ecological landscape and the neighboring 7 Ibid. Pg; 92

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communities. The investments provided the intended results of

security for Ecuador’s political economy in black gold. They were

able to maintain a level path towards “development”, yet were still

unable to surpass any status of poverty or social dysfunction. The

neoliberal models that created this new, attractive contract came at

the expense of altering relations between multinational corporations

and the state, between multinational corporations and local

populations8. Sovereignty and indigenous rights had been redefined to

the relationship they shared with multinational corporations and

neoliberal features of (official) property rights, cultural

recognition and new economic hierarchies9.

With the intention of “development” and “progress” for the

benefit of the people on the minds of Ecuador’s leaders, the adoption

of neoliberal regulations opened up the country for international

actors to be louder in representation. Ironically, it produced a

crisis of representation for the citizens and local actors while the

concept of a “sovereign nation-state” became challenged. Who is

really making the decisions for Ecuador’s politics? Who are the

demographics that are being included into the public sphere and at

what expense is oil controlling the interest for a country dependent

8 Ibid. pg; 979 Ibid. pg; 107

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upon larger foreign actors? Can Ecuador no longer afford to make

their own decisions, or are they forced into certain political and

economic actions set by other nations and the global economy? Do they

have the ability to transition out of their single sector economy

without depending upon foreign investment or aid? The indigenous

people, feeling bereft and threatened, became activated against the

neoliberal agenda, shouting for just democracy and against the misery

oil exploration has had for the Ecuadorian people.

The most notable circumstance in Ecuador is the Chevron-Texaco

oil spills that wrecked the Amazonian landscape and harming the lives

of both indigenous and non-indigenous peoples in the effected regions.

Correa himself has denounced the oil company as committing “one of

humanity’s most serious disasters” due to oil seepage that not only

decimated wild habitat but also contaminated a score of water wells

for communities10. A lawsuit eventually broke out that attempted to

hold Chevron, who had just merged with Texaco Oil Company at the time,

accountable for the damages done to the rainforest and its

inhabitants. The Ecuadorian court required the company to pay more

than $18 billion in damages, but the lawsuit eventually was extradited

to the United States where Chevron-Texaco was acquitted for the

allegations put against them. They then reacted with a counter-10 Becker (2014). Pg; 12.

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lawsuit against the accusers, saying that the lead attorney was guilty

of fraudulent evidence and swashbuckling people for testimony in order

to defame the company. Either way, the presence of the oil spills was

clear to anyone who traveled to the effected communities and continues

to linger on the minds of the people and in the medical costs that

came with their contaminated environment.

With the neoliberal market beginning to steer political and

social behavior, the indigenous were once again placed back into a

continual fight against interests over their land and way of life. It

is crucial to note that crude oil found under the Yasuní National Park

is what has conflated this issue. Once crude oil was discovered, the

potential for Ecuador as a nation to escape the “underdeveloped” label

reframed the conflict into one of land use between multicultural

perspectives; while also highlighting a myriad of aspects ranging from

property rights to cultural imperialism.

The Marvel of Ecuadorian Politics: The ITT-Initiative

The ITT initiative is a multipurpose plan to help create an ideal

Ecuadorian State. As stated before, the initiative had four main

goals wrapped around oil divestment and cultural values tied to the

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environment. Yet, it was only the back of international funding that

Ecuador would have been able to support and maintain the biodiversity

of the Amazon, the rights of the indigenous communities, and to divest

from a carbon-producing economy in fossil-fuel extraction. So in

2007, Correa broadcasted this initiative to the international

community to request aid using the coy framing of “service economy”,

indicating the service (instead of the product) Ecuador would be doing

to the world’s carbon capacity by abstaining from oil exploration. In

a proposal for the global community to “share in the sacrifice”,

Correa set up a plan for the world to begin a collective shift towards

environmental preservation11. He asked for compensation for leaving 20

percent of all Ecuadorian proved oil reserves in its ITT land block,

parceled out to over 3000 indigenous people. Nine hundred barrels of

oil on the concurrent market would amount to an incredible sum,

however, the deal would only request about half of what it would be if

extracted – about US$ 3.6 billion, and was scheduled for payment

plans to be reached by 2013.

Its origins are said to start with the Economist and former

Minister of Energy and Mines, Alberto Acosta, who fought for the new

perspective of analyzing the amazon as a global responsibility12.

11 Ibid. pg; 33.12 Becker (2014). Pg; 10

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Although, it also has momentum drawn from the growing environmental

reforms through the Americas in the 1980’s and 90’s, with specific

claims taken from the Colombian and Brazilian constitutions of the

90’s. The intention to frame more extractive policies as an issue of

carbon-emissions and climate change emphasized the moral stake

involved during a time of growing concern for atmospheric carbon

capacities. The international treaty (Kyoto Protocol) that sought to

face and act against human factors that induced climate change was

relatively new and fresh enough for the international community to see

the ITT-Initiative as an extension of the treaty. It even began to be

framed under the label of “Post-Kyoto”. So, even though the

Initiative had many valuable and hearty goals embedded in its

framework, the way it was able to extend itself to the international

community was through an image of transnational consequences if the

initiative was not upheld. It was an incredibly bold strategy on

Ecuador’s part. Realizing the value that the Amazon – nicknamed as

the “lungs of the world” due to its ability to sequester carbon – has

for the world, Correa exploited the need to conserve this precious

environmental service in order to build his country. Nonetheless, the

direct and foremost consequences was neither on foreign investors or

distant politics in Europe, but rather seeded right with the

multicultural backdrop of rural communities in the Ecuadorian State.

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This introduces the idea of “plurinationalism”, something that

Correa has defined as the co-existence of multiple nationalities

within the larger Ecuadorian state13. Earlier we questioned the

ability for Ecuador to make their own decisions – to be a sovereign

nation-state – due to foreign investors, however, the extent to that

question can be considered is dependent upon the proper acknowledgment

of the conflicting worldviews and cultures that exist in Ecuador. The

recognition of differentiated politics on this level is another

impressive step that Correa must be complimented for. International

actors might be able to incentivize certain actions for economic

security but with a large percentage of people in Ecuador being or

having close ties to indigenous nationality, the appreciation for

their lifestyle is necessary for social stability. The rights written

out for the indigenous communities were developed under this idea of a

“plurinational state” as a way to incorporate multiculturalism into

public consensus. In this way, indigenous communities had the liberty

to express and self-regulate their own lifestyles that would fulfill

their own cultural norms instead of having to constantly compromise to

imposing dominant norms. And because, to a certain degree, the

protection of indigenous life became synonymous to environmental

protectionism, social development for the rural classes coincided with

13 International Press Service Report

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maintaining foreign aid for divesting from oil exploration14. At this

early point in Correa’s term in office, the ability to ensure a form

of protection for his citizens seemed to be his priority, where

“citizens” would even recognize the historically neglected cultures

that exist in the Amazon. Security, in this way would come from an

uplifting of people out the dirt, so to say, and into a society that

lessened the pressures of systemic poverty.

However, security has always been a tight-rope between short-term

economic gains through (resource and cultural) exploration in order to

promote long-term equality. An earlier movement in the 90’s against

agricultural laws that imposed large-scale industrial farming over

small-scale farmers combined the efforts and interests of the indigena

and rural inhabitants (campesinos) of the Amazon, creating the

foundation for further rural-based social movements15. The local

interests of the indigena-campesino interethnic coalition to assert

themselves into the operations of neoliberal agendas allowed for

problems of external investment to be critically analyzed. This

projected itself on the campaigns of social and political leaders up

to the point where key activist leaders were able to constantly

14 Acosta can be noted as being one of the biggest defenders of the phrase “sumak kawsay” and how it has been misconstrued in Ecuador to fit Correa’s economic priorities. 15 Sawyer (2004). Pg; 180.

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reframe the issues of Ecuadorian inequality (on the local and global

scale) through the constant aliments of oil extraction. On the back

of the Chevron-Texaco lawsuit which pinpointed the grave social,

health and environmental problems involved in oil spills, the book El

Ecuador Post-Petrolero co-written by Acosta and Acción Ecológica served as

the groundwork for Correa’s implementation of the ITT-Initiative16. It

called for a moratorium on oil extraction in the Amazon based off past

business practices and failures which ultimately scarred rural

communities both physically and psychologically.

Acosta’s vision for an Ecuadorian state to preserve the Amazon

was elemental to Correa’s 2008 constitution that pioneered the greater

concepts of social development, poverty alleviation, anti-neoliberal

sentiment, and the first time an official document sanctioned

intrinsic rights for nature under the indigenous-derived concept of

“sumak kawsay”, or “the good life”17.

Nonetheless, the problem is that even in a plurinational state

that has given as many of the rights to indigenous groups as Ecuador

has, the Initiative is being pulled away. Where it once marked a

success story for how developing nations would be able to shift to a

16 Martin (2011). pg; 32.17 Ibid. pg; 27. Also; Becker (2012): “Building a Plurinational Ecuador”. Pg; 3

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more sustainable model of economics and politics despite their lack of

“modernization”, it now stands as a failure. The dilemma set up by

this initiative is that it heavily depends upon international aid in

order to protect the symbiotic relationship the biological and

cultural diversity found in the Amazon. Just as much as the oil

extraction industry is a single-producing economy that relies on

external imports for sustenance and standards of living, so too does

the ITT-Initiative. Or at least it would until the payments would

have been fulfilled, which, they were not.

Correa agreed to a primary goal of leaving oil underground for

the overall well-being of his nation and for those generations to

come. His attempt to work under the unprecedented transformation for

an “underdeveloped”, oil dependent country to forgo GDP for the

benefit of social development certain stood out enough for

international sympathy. But, for Ecuador to support a post-industrial

economy and still push for his ideal society before reaching the

standards of affluent countries, a strong dependence on the

international community for financial support must have complimented

any sense of permanence.

The Resource Curse and Addictive Economies

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So, in the failure to receive promised compensation for the ITT-

Initiative upkeep, along with other development agendas, Correa has

been reduced to what has been called “environmental blackmail”18. He

has proposed to reinstate oil exploration in the ITT land block –

still home to thousands of indigenous peoples and unmistakable

biodiversity – by the year 2016 if the state does not receive the

appropriate amount for continuing Ecuadorian development. But herein

is the problem: the indigenous and environmental left, spoken for

through key actors like Alberto Acosta, insist that the Ecuador’s

glorified motto of “sumak kawsay” is not compatible with concepts of

“underdeveloped” or “developing” models19. With president Correa

demonstrating his use of executive power towards established notions

of growth and development, local actors and activists are emphasizing

a need to overcome western values of nature-human dualities. They

prefer to enter into a state that harks back to indigenous knowledge

and ancestral concepts as a way to guide alternative ideas for the

inclusion of Ecuador’s citizens, marginalized, and ecological well-

being20. Correa’s adherence to past models of exporting raw materials

will make Ecuador vulnerable, once again, to the global oil market.

Where even under the justifications of “development”, Acosta argues

18 Davidsen, Kiff (2014). Pg; 4. Quoting Time Magazine, 19 Dec 2011.19 Becker (2014). Pg; 11.20 Ibid.

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that using this extractive market as a platform for development would

only produce a “mal desarrollo” (bad development), which he believes

would contribute more directly to issues of climate change21.

At this point Correa has revealed another side to his ITT-

Initiative – a “Plan B” that has been maintained since 2008 (some link

this to the economic downturn) which established potential contracts

with external oil producers such as Sinopec of China, Petrobras of Brazil,

and la Industria Petrolera de Venezuela22. Quoting Correa in his response to

criticisms of his about-face on the ITT-Initiative he responds that,

“the biggest mistake is to subordinate human rights to ostensible

natural rights”23. The same report that covered Correa’s

acknowledgment of a plurinational reality, mentioned earlier, also

clarified the limits to the rights given to indigenes. The

constitution that helped guide the principles to the ITT-Initiative

indeed gave indigenous communities self-regulating power but doled no

rights or entitlements to own natural resources on their land blocks.

Profitable resources, like oil, belonged to society as a whole and are

therefore the property of the state24. Correa was willing to provide a

21 Ibid.22 Martin (2011). Pg; 33.23 “Correa takes big risk by bailing on Yasuní,” Latin American Weekly Report WR-13-33 (August 22, 2013): 1-2.24 International Press Service Report

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sheath of protection for these communities, however, international

economies and norms had an indomitable fix on his agendas.

Now assuming a utilitarian position, Correa is placing the

result of negative ecological and cultural involvement and impact on a

few people to be for a greater good of alleviating poverty for many

more Ecuadorians. He has pushed alternative norms for a post-

industrial, post-Kyoto economy as a long-term goal and confesses the

short-term dependency on resource extraction for revenue and

employment as unavoidable. And as people continue to lament about the

“resource curse” of petroleum and Correa’s “false dilemma” of

extraction policies, his neoliberal tactics to invite more private

enterprises into the ITT-block has revitalized the fear of new

consequences while being haunted by past Chevron-Texaco oil spills.

In an earlier debate over Ecuadorian agricultural reforms in the 90’s,

a comment about Ecuador’s status as an UNESCO heritage site, along

with its ancestral relations to indigenous communities, echoes similar

sentiment to Correa’s problem: “Are we talking about incorporating

indigenous communities and all member of the Ecuadorian community into

a rational economy and free market where all can prosper while

maintain cultural identity? Or do we want to convert Ecuador into a

museum?”.25 25 Sawyer (2004). Pg; 191.

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William Freudenburg has a good analysis of this type of

“paralysis” to transitioning out of economies that extract raw

material, or “primary good” economies. He calls them “addictive

economies” due to the immediate pleasurable effects in economic

growth, followed with a debilitating crash, withdrawal symptoms and,

in some cases, eventual relapse to the extraction-based economic. In

the connection between a number of different ambiguities associated

with resource extraction – price signals, employment security and

development possibilities – the incentives to convert and constantly

relapse back to these practices are placed under the model of

improving living standards and opportunity. In reality though, it can

intensify poverty or centralize profit to a certain demographic for

the short-term while never being able to reach the level of

flexibility a nation would require to shift into a multi-sector

economy. And although a more thorough examination of Ecuador is

necessary, Freudenburg’s classification of a resource extractive

economy has merit to be applied. With 37 years of dependency on

petroleum, Ecuador had high poverty rates throughout the country. In

places where oil is abundant, the poverty levels one grew more

severe26. The economic prosperity of Ecuadorian past, present, and an

alluding future was based on a system of operations that depended upon

26 Martin (2011). Pg; 24.

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and continued oil extraction. With the honorable intention of trying

to relieve the poverty and low living standards contained in Ecuador,

the compliance of agendas to continue extraction for the global oil

market would render the nation and citizens vulnerable to past harms,

with the intention to stop not being in clear sight. The risks

associated with external investment were always distributed towards

the ecological and direct communities who happen to located next to or

above (as in the case of the ITT land block) oil explorations and

rarely were held by the accountable parties. Correa even admits that

dependence on extractive policies for revenue and employment was

unavoidable in order to begin thinking about creating alternatives to

their economy.

This has been the main source of Correa’s decision to go back on

his laudable ITT-Initiative. Ecuador needed help in order to shift

out of this addictive economy. Without it, the country had no

flexibility or opportunity to introduce alternatives. “The world has

failed us”, Correa says. With only $13 million in donations and $116

million in pledges being met for the $3.6 billion compensation needed

for Correa’s development plans, it would seem that Correa had no

choice but to revert back to past neoliberal practices in order to

avoid backtracking on his accomplishments on reducing poverty27. 27 Becker (2014). Pg; 10

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The response has been immediate and severe on the local level by

a long-standing and influential coalition of indigenous leaders, la

Confederación de Nacionalidades Indígenas de la Amazonía Ecuatoriana

(CONFENIAE). Resentful for their return back to the protest against

oil exploration on their land, the CONFENIAE has mirrored past success

against the 1994 Septima Ronde de Licitación and condemned the

historical pattern of indigenous “ethnocide” due to petroleum

exploration28. The problem they emphasize is the hypocritical nature

to one of the world’s most advanced constitutions that recognizes

collective rights of indigenous peoples through a number of aspects

such as “sumak kawsay”, rights of nature, and free, prior and informed

consent. Capital accumulation will be the first and last

justification to reform laws that protect them from theft, looting,

and human rights violations, they say29. A number of protests and

attempts to pass a referendum have failed since 2013 while

radicalization of the social sphere have now pitted itself against the

same concepts that originally opened up interest in Correa’s 2007

Leftist government. Correa has undermined the interests of his

cultural past and ecological sympathy to the point where the CONFENIAE

has confessed that its worst fears have been realized: the ITT-

28 Ibid. Pg; 13.29 Ibid.

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Initiative only served as an advertising platform to gain further

international investment. Once the economic pursuits failed to reach

their expectations, Correa’s administration disavowed the

revolutionary initiative and compensates for the rest of the expected

return with traditional forms of exploitation of resources and

cultural rights. They relapsed into past exploitative practices.

Conclusion

The exploration of oil has spelled social and cultural

destruction for Ecuadorians through practices that neglect ecosystem

integrity and the importance of biodiversity. Road construction, site

building, and past oil spills have permeated an unsettling disregard

for contaminated communities and bioregions; indigenous rights only

strengthen the needs to protect the ITT initiative; and heightened

carbon-emissions through the support of fossil fuel extraction is what

has globalized this event. Through local activism against past

follies in neoliberal agendas, the government has been able to develop

a model of ecological protection for the rights of indigenous peoples.

That said, the level of involvement the local actors have in a

centralized government has apparently been used as a gambit for

getting further international aid to conserve a globally recognized

area of environmental value. Where carbon markets maintain their

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permanence in the global sphere, the local controversy is one of human

rights, health and proper recognition of cultural practices in an

economy that devalues the individual for marginal profit. The

conservation of culture and nature for Ecuador would only occur by

social, political and economic transformation into a post-industrial

framework, something President Correa has been forced to consider as

an utilitarian dilemma. So with government revoking the ITT

Initiative the only thing that people like Acosta see to do is to

create new and better Yasuní protocols that create a strong Leftist

mobilization for the protection of the environment and the cultures.

The CONFENIAE has had success in the past, so there is positive

evidence to prove that a compromise will be struck before oil comes

back, as its curse often plays out. However, the issue of

international aid to support the transition out of an addictive

economy, like oil, through financial compensation still remains on the

slag of international politics and global reform for addressing issues

of human rights, cultural recognition and climate change.

Bibliography

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2. Davidsen, Conny and Kiff, Laura 2014. “Global Carbon-and-Conservation Models, Global Eco-State? Ecuador’s Yasuní-ITT Initiative and Governance Implications”. Journal of International and Global Studies, vol. 4, issue 2, pg. 1-19. Lindenwood University Press. Academic Primer Database. Web.

3. Freudenbur, William (1992). “Addictive Economies: Extractive Industries and Vulnerable Localities in a Changing World Economy”, Rural Sociology. V. 57, Iss. 3, pp. 305-332. The Rural Sociological Society: Wisconsin.

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