A major strike in ecuador’s main oil-producing provinces in August dealt a heavy blow to multinational oil corporations operating in the country, sending a stern message to the hobbling government of President Alfredo Palacio. The August 13 strike, led by residents of the northeastern Amazonian provinces of Sucumbíos and Orellana, successfully crippled Ecuador’s oil industry, forcing both the notoriously oil-friendly national government and the foreign oil companies to capitulate to many of the protesters’ demands. With the backing of the provinces’ regional and local governments, protesters blockaded roads leading to oil fields, dynamited pipelines, disabled pumps belonging to the state firm PetroEcuador, seized two regional airports and took control of oil wells.
The strike cut Ecuador’s oil production in half and cost the government an estimated $180 million. The most contentious demand of the protests was the expulsion of the two major foreign energy companies in the region: Los Angeles-based Occidental Petroleum and EnCana, a Canadian firm. Protesters also demanded the improvement of local infrastructure such as roads and electricity, the construction of medical service centers and immunity from prosecution for leaders of the mobilizations.
Palacio declared a state of siege on August 17 and brought in the military to retake some of the installations and put down the protests. Violent confrontations between the military and protesters led to several injuries and arrests. The strike was called off on August 21 when the government agreed to release some of the leaders from jail with the caveat that they negotiate their demands with the government. The ensuing talks lasted nine days.
At the negotiations, which included government and oil company representatives, negotiators acceded to all the protesters’ demands except the expulsion of the multinationals. The government agreed to allocate 66% of local oil income tax revenues directly to the Sucumbíos and Orellana governments, while the oil companies agreed to hire 80% of their workforce locally and to pave 162 miles of roads in the two provinces.
The residents of Sucumbíos and Orellana have a long-standing list of grievances against big oil. According to Amazon Watch, an advocate for environmental and indigenous rights, between 1964 and 1992 Texaco (now owned by Chevron) “dumped more than 18 billion gallons of toxic waste directly into the rainforest.” The organization estimates this to be 30 times the amount of pure crude that was spilled by the Exxon Valdez tanker in 1989. The resulting ecological disaster has reportedly affected some 30,000 people. And according to an Amazon Watch press release, “Several studies published in peer-reviewed journals have demonstrated skyrocketing cancer rates and other health problems in the area.”
After 10 years of wrangling between the United States and Ecuador, an Ecuadoran court is hearing a class action lawsuit against Chevron. Court reports indicate that out of 105 water samples brought by both sides in the case, 98% contain levels of toxins and poisons that exceed the country’s lax environmental laws. The case will likely drag on until early 2007.
Palacio has been pulled in two opposite directions since he assumed power after the ouster of President Lucio Gutiérrez last April. Given that Palacio has no political party affiliation and no base of support, he has little room to maneuver. Ecuadorans have repeatedly demanded that the president abandon the neoliberal economic policies that proved so unpopular under the previous government. On the other hand, the government is under tremendous pressure to make payments on its $26 billion debt to the International Monetary Fund (IMF) and other financial institutions. In the aftermath of the August unrest, Palacio has continued to give mixed signals. Citing record oil prices, Palacio called for a renegotiation of foreign oil contracts, saying the 20% of profits now received by the government should be raised to 50%. But the President has also pushed out more than 90 members of his Administration in just five months in office, leading critics of the government to accuse Palacio of purging only leftwing cabinet members and other top officials as the government enters the final stages of debt negotiations with the IMF and trade talks over the U.S.-backed Andean Free Trade Agreement. Alexis Ponce of Ecuador’s Permanent Assembly of Human Rights (APDH) told a reporter: “It seems the interests of those in economic power are stronger than the government’s desire for independence and sovereignty.”
About the Author
Alex van Schaick is NACLA's Editorial Assistant.
