Tag Archives: Ecuador

The New Lepers: Oil in Ecuador and Arctic Drilling

Some of Europe’s largest banks are phasing out trading services for the export of oil from the Ecuadorean Amazon, a move that reflects the growing focus of global banks on climate change and their shift away from increasingly risky fossil fuels.

On January 25, 2021, Switzerland’s Credit Suisse Group AG and Holland’s ING said that they were excluding new transactions related to exports of Ecuador’s Amazonian oil from their trading activities, citing climate change and concerns for the Amazon rainforest and its Indigenous people. France’s BNP Paribas SA, the largest bank in the eurozone and one of the region’s trading powerhouses, said in December 2020 that it would immediately exclude from its trading activities the seaborne exports of oil from the Esmeraldas region in Ecuador under its latest environmental finance policies.

Ecuador isn’t one of the world’s top oil producers, but petroleum exports are a key contributor to the country’s economy. Petroecuador, the nation’s state-owned oil company, didn’t respond to requests for comment.  The banks’ flight from Amazonian crude follows last year’s crash in oil prices and growing fears of so-called stranded assets, which are fossil fuels that lose value due to the world’s transition to cleaner forms of energy…

Banks are also facing calls from environmentalists and Indigenous peoples to limit their involvement in fossil fuels. In Ecuador, a campaign by activists and Indigenous people spurred ING and Credit Suisse to reduce their exposure to the Amazonian oil trade. The nonprofits Stand.earth and Amazon Watch published a report in 2020 that called out banks—including ING, Credit Suisse and BNP Paribas—for their financing of Amazonian crude…

Banks and insurers are also cutting ties with Arctic oil drilling. This month, Axis Capital Holdings joined fellow insurers AXA and Swiss Re in pledging not to underwrite any new oil-and-gas drilling in the Arctic Wildlife Refuge in Alaska.  The six biggest U.S. banks— Citigroup Inc., Bank of America Corp. , Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and Wells Fargo & Co.—have also said they would end funding for new drilling and exploration projects in the Arctic.

Excerpts from Dieter Holger & Pietro Lombardi, European Banks Quit Ecuador’s Amazonian Oil Trade, WSJ, Jan. 25, 2021

Suing and Wining: Indigenous People, Ecuador

Hunter-gatherers in the Amazon sought in court on in April 2019 to stop Ecuador’s government auctioning their land to oil companies, as tension mounts over the future of the rainforest…The Waorani said the government did not properly consult them in 2012 over plans to auction their land to oil companies.

“We live on these lands and we want to continue to live there in harmony. We will defend them. Our fight is that our rights are respected,” said Nemonte Nenquimo, a leader of the 2,000-strong Waorani….Ecuador is pushing to open up more rainforest and develop its oil and gas reserves in the hope of improving its sluggish economy and cutting its high fiscal deficit and foreign debt…

The constitution gives the government the right to develop energy projects and extract minerals on any land, regardless of who owns it, but requires that communities are consulted first and are properly informed about any projects and their impact. Laws to regulate the consultation process have yet to be introduced – although the court case could push the government to do this, said Brian Parker, a lawyer with campaign group Amazon Frontlines, which is supporting the Waorani…

The government announced last year that it had divided swathes of forest up into blocs for auction, one of which – bloc 22 – covers the Waorani’s ancestral lands, raising the specter of pollution and an end to their way of life.  In two landmark cases in 2018, local courts sided with indigenous communities who said the government had failed to inform them before designating their land for mineral exploitation….The Inter-American Court of Human Rights also ruled in 2012 that Ecuador had violated its Sarayaku Amazonian community’s right to prior consultation before drillers started exploration on their lands in the late 1990s.

Excerpts Ecuador’s hunter-gatherers in court over oil drilling in Amazon, Reuters, Apr. 11, 2019

Chevron and Amazon: the $18 billion Ecuador Liability

The D.C. Circuit Court of Appeals  on June 12, 2012  (pdf) dealt another setback to Chevron over its $18 billion Ecuador liability, reversing a lower court decision that allowed the oil giant access to documents from a prominent consulting group for the Amazon rainforest communities that sued the company.