Indigenous Communities Confront Ecuadorian Government and International Financiers at Oil and Energy Conference

Today the leaders of Ecuador's Indigenous movement and the regional pan-Amazon Indigenous organization mobilized outside Ecuador's Annual Conference for Oil and Energy (ENAEP) to demand justice for communities affected by the recent disastrous Amazon oil spill on January 28, 2022, and to denounce plans for new drilling.

"The impact of this spill has left the Amazon in a critical situation. We want territories free of resource extraction. It has caused so much damage to our territories, it is killing people. We call for climate justice," shared Nemo Andy Guiquita, a Waorani Indigenous leader, and Coordinator of Women and Health for CONFENIAE, in the action outside the event.

ENAEP is an effort by the government to attract global investment in its plans to double oil production by expanding extraction and new exploration into Indigenous territories and Amazon rainforest- including biodiversity hotspot Yasuni National Park. Yasuni is home to the Tagaeri and Taromenane Indigenous peoples living in voluntary isolation.

The event was overshadowed by the impact of last week's spill that turned the forest and rivers black with crude after the rupture of the OCP pipeline. The spill occurred inside of the Coca-Cayambe National Park and has reached the Coca River - the water source for thousands of Kichwa Indigenous peoples living along the riverbanks downstream. The government and the OCP pipeline consortium have so far refused to provide the size of the spill, only labeling it as a "major" event. No speakers acknowledged the spill during the entire event. Between 2015 and 2021, 899 spills were reported, and the country is averaging two spills a week.

"We are here, again. Behind these walls are people who think there is no life..." said Gregorio Mirabal, Executive Coordinator of the Coordinating Body of Indigenous Organizations of the Amazon Basin (COICA). "It hasn't even been 100 days since COP26, where all the presidents promised to defend the rights of nature and human rights. And yet, here they are, already negotiating our rights. Right now our rights are under negotiation and the rights of our children are at stake!"

During the conference, company representatives discussed the risks of not securing a social license to operate. The panelists advised the oil industry and government agencies to work together to provide confidence and guarantee safe investment for financiers to meet Ecuador's goals to double production. In 2020, Spanish oil company Repsol announced it would be selling its 30% stake in OCP to Canadian company New Stratus Energy. The sale was completed on January 14, 2022. JPMorgan Chase advised on the sale. JPMorgan Chase's advice to Repsol indicates the increasing consciousness in the industry about the financial and ESG risks of Amazon crude.

"In the face of an event like this one, there is a false sense of security and belief that there is no legal risk. With Executive Decree 95, the government is lying. As long as collective rights and consent are not respected, there is a liability. We tell international investors that do not respect our communities that we have in fact won and secured several legal cases against the oil industry," emphasized Leonidas Iza, Executive Coordinator of Confederation of Indigenous Nationalities of Ecuador (CONAIE). "About the oil spill - the government did not guarantee our rights. We call on the president to respect his own words and the agreements signed with environmental groups before he became president."

Since January 2021, several European banks have committed to ending their trade financing of Amazon crude, citing ESG risks. The commitments forced state-run Petroecuador to take the unprecedented move of modifying the terms of oil sales to allow buyers easier access to lines of credit. U.S. banks have not made any such commitment, despite their immense role in backing Amazon oil.

"Any investor or company jumping into Ecuador's oil expansion plans is buying a problem. The government is trying to downplay the real risks companies and banks face by backing Amazon crude extraction. Banks should adopt an Amazon Exclusion Policy to end financing and investment for any oil and gas activity in the Amazon biome," shared Kevin Koenig, Climate and Energy Director at Amazon Watch.

Communities are still reeling from a 2020 spill that sent 16,000 barrels of crude and gasoline into the river. Ecuador's rampant oil spills over the last three years are taking a devastating toll on Indigenous communities and Amazon region's fragile ecosystems and world-renowned biodiversity.

Background

During the conference, government representatives highlighted plans to double production, much of which would come from the ITT oil block inside Yasuni National Park -a UNESCO Biosphere Reserve. Road construction to connect well sites is now at the doorstep of a protected area for the Tagaeri-Taromenane, for whom drilling is an existential threat. The government also announced its intent to auction new oil blocks in the largely roadless rainforest and Indigenous territories of Ecuador's southern Amazon.

While the administration of Guillermo Lasso seeks to court investment for its ambitious plans, EU banks responsible for roughly 80% of the finance for the trade of Amazon crude from Ecuador - $10 billion over the last decade - made commitments in 2021 to end financing over concerns of contamination, deforestation, Indigenous rights violations, and the climate impacts of rainforest drilling.

Ecuador's plans face daunting legal challenges. Multiple legal cases are pending before the county's constitutional court, including one that could strike down decree 95 which paved the way for legal reforms of the hydrocarbon sector. Several cases are also pending on the right to Free, Prior, Informed consultation, and Consent of Indigenous peoples. Ecuador currently has no law on FPIC, a major ESG requirement for investors. Lack of FPIC has resulted in the departure of several companies in the past, and the recent declaration of force majeure by Andes Petroleum in two oil blocks.

Recent research by Stand.earth and Amazon Watch revealed that California is the number one destination for crude sourced from Ecuador.