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article imageEcuador offers oil leases in forest area to Chinese oil companies

By Ken Hanly     Apr 13, 2013 in Business
Quito - Ecuador intends to auction leases on almost a third of its Amazon rainforest areas to Chinese oil companies. The move has angered indigenous groups in the area and environmentalists.
There have been several meetings of Ecuadorian politicians and Chinese oil company representatives. Meetings in Quito, Houston, and Paris were all accompanied by protests from indigenous groups. At a recent meeting in Beijing, Ecuador's ambassador to China said: "Ecuador is willing to establish a relationship of mutual benefit – a win-win relationship"
However, according to the California-based Amazon Watch group, seven indigenous groups who live in the area have not been consulted or consented to the projects. The group claims that the projects would devastate the area's environment and threaten their traditional way of life. In an open letter last fall, a group of Ecuadorean indigenous associations wrote:"We demand that public and private oil companies across the world not participate in the bidding process that systematically violates the rights of seven indigenous nationalities by imposing oil projects in their ancestral territories."
Ecuadorean secretary of hydrocarbons, Andres Fabara, said that indigenous leaders misrepresented their communities for political goals and that the government had withdrawn some blocks from bidding where there was no support from local communities. In an interview, Ecuador's secretary of hydrocarbons, Andrés Donoso Fabara, said. "These guys with a political agenda, they are not thinking about development or about fighting against poverty. We are entitled by law, if we wanted, to go in by force and do some activities even if they are against them. But that's not our policy."
Amazon Watch claims that the deal violates China's own investment guidelines which require that Chinese enterprises should "promote harmonious development of local economy, environment and community" while operating abroad. Fabara claimed that he was not aware of the guideliness but also said that Ecuador was interested in global investors :"We're looking for global investors, not just investors from China But of course Chinese companies are really aggressive. In a bidding process, they might present the winning bids."
Ecuador has received many billions of dollars in financing from China. As of last summer, Ecuador was in debt to China to the tune of $7 billion, almost a tenth of Ecuador's GDP. The loans were made contingent upon oil shipments from Ecuador to China. China helped Ecuador fund two large hydro-electric projects. China National Petroleum Corp may also soon own a 30% stake in a $10 billion oil refinery in Ecuador.
Amazon Watch believes that Ecuador is willing to compromise on social and environmental regulations to maintain Chinese support and loans. Seven indigenous groups are unhappy with developments as last year a court ruled that governments must obtain "free and informed consent" from indigenous groups before approving any oil activities on their land. As shown in the appended video, President Correa offered the international community a chance to ensure a large park area in the rainforest remains undeveloped. He pledged to ban oil development in the area if the international community paid Ecuador compensation to do so since not developing the area would mean a huge economic loss for Ecuador. Just click Watch on You Tube to view video.
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