- On Aug. 20, 2023, Ecuador voted to halt all future oil drilling in Yasuní National Park, a sensitive protected area in the country’s eastern Amazon. Officials were given one year to withdraw from the 43-ITT oil block, and failure to comply could result in a lawsuit through the Constitutional Court and the dismissal of all officials involved.
- One year later, the government has not yet made much progress on the closure of the 43-ITT oil block, besides the creation of a commission and Indigenous groups groups they are not involved in the process.
- As a result of the country’s national crisis in Ecuador, violence and debts, President Daniel Noboa told local media in January that he would consider a moratorium to the referendum results due to the country’s dependence on income from oil production.
- In Ecuador, a group of economists have also proposed a series of economic alternatives to oil extraction in Yasuní, as well as a new sustainable, post-extractive vision for the country.
One year since Ecuador citizens voted on Aug. 20, 2023, to halt all future oil drilling in Yasuní National Park, the government is nowhere near close to meeting its deadline. After the historic referendum, the country’s Constitutional Court gave the government and the state-owned oil company Petroecuador one year to close the 43-ITT oil block (known as Block 43 or Ishpingo-Tambococha-Tiputini) in the protected area home to isolated peoples in the country’s eastern Amazon.
Progress toward the goal has been small, say the Confederation of Indigenous Nationalities of Ecuador (CONAIE) and the Confederation of Indigenous Nationalities of the Ecuadorian Amazon (CONFENIAE). Besides the creation of a commission to oversee the implementation of the referendum results, which was announced nine months after the vote, the government has not carried out any actions to decommission the 43-ITT oil block.
According to Petroecuador’s statistical report, the state-owned oil company responsible for the oil block, they were still carrying out operations up until June, when they had their latest assessment of oil production. Between January and June, the block produced 50,454 barrels of oil per day, which is only 3.6% less than they had produced during the same period last year.
“So far, no one has approached the Waorani nationality,” Gilberto Mincaye Nenquimo Enqueri, the ex-president of the Waorani Nationality of Ecuador (NAWE), told Mongabay. Their ancestral territory includes the entire Yasuní Biosphere Reserve region, and like other Indigenous peoples, they are not included in overseeing the implementation of the referendum results. “The Constitutional Court said you must close in a year but there has been no document, no mechanism, that says from such a date to such a date it must close.”
As a result of a national crisis in Ecuador, the declaration of an internal armed conflict with organized crime groups, a financial deficit of at least $5.7 billion and increasing external debt of $47.5 billion, President Daniel Noboa told local media in January that he would consider a moratorium to the referendum results. With Ecuador’s dependence on oil income to stimulate economic growth and pay its debts, Noboa said a moratorium would be “a viable path” out of the crisis.
“We are extremely concerned about this situation,” Zenaida Yasacama, the vice president of CONAIE, told Mongabay over a phone call. “The national government took advantage of this issue of insecurity, and in the end, [President Daniel Noboa] has been able to do whatever he wants, and that worries us because we have no security as leaders.”
According to Alberto Acosta, Ecuador’s former minister of energy and mines and ex-president of the Constituent Assembly, the referendum results are mandatory and must be complied with immediately. Those who do not comply may be dismissed, according to constitutional provisions, Article 106.
“[The moratorium] is not legal,” he told Mongabay. “The Constitutional Court would have to authorize it on technical grounds. But until now, [the referendum] maintains the deadline of one year.”
Neither the Ministry of Environment, Water and Ecological Transition nor the Ministry of Energy and Mines in Ecuador responded to Mongabay’s requests for comment.
Yasuní, one year later
After the referendum, the government was given one year to close the 43-ITT oil block. According to regulations, oil projects cannot be abandoned — closures require the dismantling of infrastructure and compliance with certain obligations, such as reparations for local populations and for nature.
The closure process requires investment, which, according to a bulletin published by Acción Ecológica, was never accounted for in the state budget after the referendum of August 2023. Each September, Petroecuador is required to prepare its investment and cost budget for the following year, and this gets approved in December. However, neither the government of former President Guillermo Lasso nor that of Noboa included any mention of the closure and dismantling of the 43-ITT oil block in this budget.
To date, the only concrete action that has been taken was an executive decree on May 8, 2024, nine months after the referendum, which announced the creation of a committee to oversee the implementation of the referendum and decommissioning of the oil concession. However, this announcement did not include mention of a plan or timeline by which the process would commence or be completed, and the committee only includes representatives from government agencies; it does not include the participation of the Waorani or other affected Indigenous communities.
“The territorial organizations directly impacted were not included in them,” Andrés Tapia, ex-communications coordinator at CONFENIAE, told Mongabay over email. This includes the Waorani and Kichwa Indigenous peoples, as well as members of the Tagaeri and Taromenane peoples — the last Indigenous peoples living in voluntary isolation in Ecuador.
“This is why the Waorani nationality through NAWE rejected the creation of said committee and demanded that the state include them in any decision in this regard since they are the direct actors in the territory,” said Andrés.
Impacts of noncompliance
The government “would set a disastrous precedent for the country by failing to comply with the popular will and decision of this magnitude taken by the majority of the Ecuadorian people,” said Tapia. “For the communities, the continuation of oil extraction will only mean more impoverishment and marginalization that almost 50 years of oil exploration has left for the communities.”
While some Indigenous peoples haven’t seen benefits from oil production in the region, other Indigenous communities living in or near the park who voted against the referendum say the industry brought development and stable livelihoods in the rainforest. The observed impacts on the environment, however, have been unequivocal.
Since it began operations in 2016, the 43-ITT oil block has led to numerous oil spills and the construction of a road through the 1,022,736-hectare (2,527,235-acre) biosphere reserve. Conservationists worry oil production threatens biodiversity and contact with vulnerable isolated Indigenous peoples such as the Indigenous Tagaeri and Taromenane communities.
Within the 43-ITT oil block, there was an increase in forest loss between 2012 and 2022. According to one study, fewer than 8 hectares (19.7 acres) were lost as a result of oil activity in 2012, but by 2016, it had reached more than 77 hectares (190.3 acres). By 2022, around 300 hectares (741.3 acres) of forest had been lost.
Yasuní National Park, one of the most biodiverse regions on the planet, is incredibly dense in its richness. One hectare of the forest has more than 655 tree species, more than there are native tree species in the U.S. and Canada combined. A hectare is also projected to contain more than 100,000 insect species.
Failure to meet the Constitutional Court’s deadline could put the region’s isolated Indigenous peoples in peril and raise the risk of biodiversity loss and climate instability, Amazon Watch wrote in a press release.
Alternatives to oil money?
In January, President Noboa declared a state of emergency after one of Ecuador’s most powerful gang leaders disappeared from prison, leading to chaos and violence across the country. In response to heightened insecurity, an energy crisis that led to a nationwide blackout for 17 million people in June and the country’s financial crisis, the government implemented a series of measures, such as raising VAT taxes to 15% and partially withdrawing fossil fuel subsidies. Another measure is for a moratorium on the closure of the the 43-ITT oil block as, according to ministers, Ecuador would lose $1.2 billion in oil income per year if operations were to stop.
A group of more than 20 economists from several institutions across the country, including the Pontifical Catholic University of Ecuador and the University of Guayaquil, dispute this figure and say it is inaccurate. In the most optimistic scenario, if oil activity were to continue, revenues would reach on average $510 million annually until 2030, they wrote in a recent report.
Given that oil production has been declining and so has the price of oil, a more pessimistic scenario showed that in the period 2024-30, the oil production of the 43-ITT oil block would fall by 34%. Therefore, the economic returns are expected to be an average of $275 million annually until 2030, the report said. Based on these two scenarios, the economists estimated an intermediate scenario where economic returns would come to $393 million each year.
The economists proposed a series of economic alternatives to oil drilling in Yasuní, which they estimated could raise more than $1.7 billion each year, surpassing the most optimistic scenario of oil revenues from the 43-ITT oil block. These alternatives included closing the tax gap, which is the difference between taxes legally owed and taxes collected, currently amounting to $379.3 million, by 10%. By reducing the tax gap by this amount, the country could earn the equivalent of 96% of what the government would lose from the exploitation of Yasuní.
To do so, the economists said the government should implement a series of measures aimed at labor formality and adequate employment, the digitization of records and transactions, improved tax regimes for small taxpayers and an increase in the budget of the entities responsible for carrying out tax audits and inspections.
Other measures proposed by the economists include a reduction in tax expenditure, which could bring in more than $641 million annually, permanent wealth tax for both individuals and companies, which would generate tax revenues of $321.6 million each year, an increase in the income tax rate for large financial institutions and other measures.
Nenquimo of NAWE told Mongabay that the Waorani are interested in strengthening their bioeconomy by selling artisanal crafts and other products, such as energy drinks made from garlic leaves and the morete seed. However, this would require financial support that can go directly to communities and not through intermediary organizations, he said. With this money, they could develop environmental tourism projects and other community-led businesses.
“The [Waorani] could support themselves with other projects, but these projects must be linked directly to the community,” he said. “For now, the [Waorani] has depended on others.”
Banner image: A pair of scarlet macaws perched near the water hold at Yasuni National Park in Ecuador. Image by Doug Greenberg via Flickr (CC BY-NC 2.0).
Ecuador project aims to protect Yasuní park borders & Indigenous peoples
Related Mongabay podcast episode: How the Indigenous Shuar regained their ancestral forest. Listen here:
Citations:
Puthuparambil, S. (2022). Digging Deeper: Impacts of Block 43 ITT Oil Development on Yasuní National Park. Digging Deeper. Recovered from: https://nature.berkeley.edu/classes/es196/projects/2022final/PuthuparambilS_2022.pdf
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