Marta Echavarria is a founder of EcoDecision, an environmental business promotion firm based in Ecuador and Colombia.
Tuesday, 16 Jan 2001
Here I am, an environmental manager who has worked with private Latin American companies for over 13 years, sitting on the other side of the table. Since November, I have been actively involved in a group opposing the northern route of a proposed oil pipeline to be built this year through northwest Ecuador. My husband and I have established a farm near Mindo, a town in the area that is recognized in Ecuador, and more and more internationally, as a special ecotourist destination. The construction of this pipeline, as with any development project in general — and oil development in particular — brings grave consequences to the area.
Photo: BirdLife International.
Two routes have been proposed and approved by the Ecuadorian government to pump heavy crude oil from the Amazon to Ecuador’s Pacific coast. The so-called northern route is proposed by OCP Ltd., a multinational consortium including Occidental Petroleum (U.S.), Kerr-McGee Energy (U.S.), Agip Oil (Italy), Alberta Energy Corporation (Canada), Repsol-YPF (Spain/Argentina), and Techint (Argentina). Chase Manhattan Corporation (U.S.) is providing financing. Constructing a pipeline along this route would destroy unique habitat that harbors over 450 species of birds (5 percent of the world’s total), imperil a host of endangered plants and animals, and undermine the livelihoods of local residents dependent on ecotourism.
The committee for the least-impact route, as our group has decided to call itself (for lack of a better name), recognizes that Ecuador needs the revenues that the proposed oil pipeline will generate, but this is not a case of having to choose between the environment and economic development. The government has also approved a southern route, which follows the path of an existing pipeline and passes primarily through previously deforested areas, thus causing far less environmental impact. Unfortunately, the company that proposed this southern route, Williams Brothers (U.S.), has decided not to continue with the process.
Today, a small group of committee members held a four-hour meeting to review a presentation we are preparing to give to the local provincial government on Wednesday and, hopefully, on Thursday, to the minister of mines. After the president of the country, the minister is the top decision-maker in this process, as designated in a special presidential decree.
The content of the presentation aims to address the gaps we have detected in various presentations by representatives from ENTRIX, the consultant firm in charge of the environmental evaluation. OCP Ltd. argues that it has evaluated all aspects of the routes and, after careful analysis, found the northern route to be the least damaging. Yet, its evaluation is selective, to say the least, and we are not allowed access to the documentation. At the same time, ENTRIX releases bits of information to the public in order to justify its position. For example, it argues that only 3.5 kilometers of primary forest will be affected, so what is the problem?! I’ve heard this figure in private and public circles, and it is accepted as a given.
What a frustration — especially when I think about my own experience with environmental impact statements. In general, I find them to be a requisite that companies are made to fulfill, and that the consultants producing the statements write what the client wants to hear. There are inherent limitations in this process. In addition, the authorities usually lack the capacity and political will to be environmentally strict. This is especially true in this case, where the environmental evaluation has been made a responsibility of the ministry of mines, rather than put in the hands of the ministry of the environment.
Wednesday, 17 Jan 2001
In November, I was asked to act as coordinator of the committee Pro Ruta Menor Impacto, a group composed of organizations and individuals representing a wide range of sectors: tourism, local governments, the environment, communities, and agriculture. We have attempted to assemble a group representative of the activities currently underway in the northwest part of the Pichincha province. Everyday I wonder if our work is going to pay off, since it seems as if things have been decided beforehand.
The government needs additional revenue, and it is estimated that the country loses $428 million dollars per year by not being able to export all the oil that is available. A consortium, OCP Ltd., which is composed of five multinational corporations that are exploring oil in the eastern part of the country, is willing to build a pipeline. This project would signify $1.5 billion in investment and generate $9.5 billion in exports of crude oil over 20 years. These are not minor figures, considering Ecuador’s current economic crisis and its decision to make the U.S. dollar the national currency.
Our story begins when companies like Agip, Oxy, Alberta Energy, Kerr McGee, and Repsol-YPF proposed to construct the pipeline at their own risk. The government of Jamil Mahuad, elected in 1999, decided to sign an MOU with these companies. When the new government came to power in early 2000, it issued a decree that tried to establish the rules of the game for the construction and operation of private pipelines. Three companies presented proposals and two, Williams Brothers and OCP Ltd., were authorized to negotiate a contract with the ministry of mines and energy of Ecuador. After some deliberation, Williams decided to back out of the process and only OCP Ltd. remained.
OCP Ltd. proposed to build the pipeline mostly along an existing route, but with a major deviation to the north in order to circumvent Quito, the country’s capital, a city of more than 1.2 million people. This northern route will go through the northwest part of Pichincha province. This area is part of the Choco-Andean corridor, a region recognized by scientist Norman Myers as one of the world’s biodiversity hotspots.
What is most troubling is that the environmental evaluation process has been inverted. According to the environmental law of Ecuador, all development projects require an environmental impact study approved by the ministry of environment before construction. But the special presidential decree establishes that the environmental impact assessment will be done after the contract is signed and an approved route for the project exists. We seriously question this approach and believe that the government has to maintain the possibility of approving a different route. The ministry of mines and energy has told us that yes, it will demand the environmental impact assessment in the strictest terms, and that the route will be reviewed. However, we contend that there will be limited space to negotiate the route if it has already been determined in the contract.
Today, after holding interviews with government decision-makers, it is still unclear to me how much room for discussion remains. The contract negotiations are finished between the consortium and the ministry of mines. The text is currently being reviewed by the attorney general’s office and then it will be signed by the president. To confuse things further, an impeachment trial for the minister of mines and energy has been scheduled on January 23. What is going to happen?
Thursday, 18 Jan 2001
The front-page news today states that the attorney general will not approve the pipeline contract in the two weeks allotted to him for review. Maybe w
e have more time. I sit down to try to work on my own affairs: I am an environmental consultant specializing in environmental evaluation and corporate environmental management. But still I wonder if I should not spend more time working on our campaign to prevent approval of the destructive pipeline route. The project is all-absorbing, and I cannot concentrate on anything else. I review the PowerPoint presentation we have prepared for the public and that we hope to present in meetings with decision-makers.
Our perspective is that the project by five leading multinational companies is not upholding the highest environmental standards. An illustration of this is their presentation to our committee of an environmental evaluation that ENTRIX has done for OCP Ltd. The evaluation is incomplete and incoherent to say the least. They have determined that the best route for the pipeline, after “careful analysis” of all the possible routes, is the northern route. But the analysis has not been at all careful. For example, they argue that the only “sensitive area” on their suggested route is a stretch of 3.5 kilometers. This figure has become well-known by the public and it justifies their comments that those of us in opposition to their route are extremists or crazy ecologists.
After intensive inquiry, we have learned that they define a “sensitive area” as primary forest in the right-of-way of the pipeline. If you look at Ecuador in general, only 9 percent of its Andean forests remain. The northwest area holds an important remnant of forests due to two protected forests and private conservation efforts. These are not necessarily primary or untouched areas. Unfortunately, many of the forests have been affected by the removal of the valuable trees many years ago, or are areas in regeneration. These depleted primary forests and regenerated secondary forests are important habitats for flora and fauna but are not considered “sensitive.” Outside the “sensitive area,” in the proposed right-of-way, a critically endangered species has been identified recently. The multinationals are ignoring vital ecological information for an environmental impact assessment.
The news is more promising from the international campaign. We are working with Birdlife International, with partners in Italy, Spain, Canada, and the U.S. We have sent several letters to Alberta Energy of Canada, one of the leading shareholders of OCP Ltd., asking it to review the situation. Talks are also underway with Canadian environmental organizations. Lupo, a partner in Italy, has put out an amazing ad in leading newspapers, and the pressure is on AGIP, a leading multinational company with many interests in Ecuador.
Friday, 19 Jan 2001
What a long and intense day! Our committee held a meeting with the minister of mines and energy and the president of the state oil company, Petroecuador. To our surprise, the meeting was attended by representatives from OCP Ltd., at the request of the government. After a short introduction, we highlighted several concerns we have about the OCP Ltd. northern route proposal. These include the lack of information available, the deficient quality of the information that is available, the criteria for defining critical and/or sensitive areas, the potential for spills to damage ecosystems, and legal gaps.
We also proposed that the route should not be determined in the contract signed with the company. Rather, it should be a result of the analysis and risk assessments made after the contract is signed. To our surprise, both the minister and Petroecuador’s president answered that the route will be not be determined by the contract. This opens the way for a real discussion regarding the route. Tomorrow, a group of representatives from our group, OCP Ltd., and the ministry of mines will visit the alternate, or southern, route. We were interested in having someone from the Ecuadorian oil company attend, but this has not yet been confirmed.
The meeting had a positive spirit and the minister said he intended “to do things the best way possible.” Our next phase will be to keep an eye on the environmental impact assessment preparation and evaluation process. The terms of reference of the environmental impact agreement have been described to us verbally, but we have not seen the actual text. It seems that irreversible damage, such as the disappearance of a species, is unlikely. But to the ministry and ENTRIX, all impacts can be compensated. This is troublesome!
We await the contract signing with optimism, but we also have to be alert. The attorney general needs to release his report by 29 Jan. The minister now faces an impeachment trial in Congress, where he can be censured. According to the new constitution, a presidential appointee, such as a minister, cannot be removed from the post by Congress. However, things could get ugly politically.
In the meantime, we need to strengthen our position. Tomorrow, I will make a presentation to the committee in the defense of the environment (CEDENMA), the group that brings together the environmental NGOs in the country. At that meeting, we hope to drum up more active involvement in this process. We need all the help we can get! We now enter a phase of intellectual debate regarding the environmental impact assessment of the routes. If we play our cards right, this could be the way to prevent the pipeline from going through the amazing and beautiful northwest Pichincha area in Ecuador.