Indigenous communities in Ecuador, Bolivia, and other South American countries have started to push back against multinational oil and gas companies, which have had a presence in the region since the beginning of the 20^th century with the support of pro-business governments.

 

Many complaints have been lodged against the foreign companies, including charges that profits derived from the extraction of oil and gas provide little, if any, economic benefit to the local communities. An even more serious charge is that the foreigners have had no regard for the needs of local communities and are causing significant environmental damage by polluting water and soil and destroying large tracts of rain forest. The environmental damage is also said to have contributed to health problems in some of these communities, many of which are in indigenous areas.

 

The complaints against the foreign companies have been around for decades, but the problems have not received international attention until recently. Read more...  

The Ecuadoran government has been threatening to cancel a contract with US petroleum corporation Occidental after a ruling in a legal dispute regarding US$75 million in taxes Ecuador collected from the company went in Occidental's favor. A London-based international arbitration court has said Ecuador improperly collected the money and should return it to Occidental, or Oxy, but Ecuadoran officials said Oxy had not complied with a contract it had signed with the country, and they were looking at rescinding the deal. This comes as Ecuador struggles with a drought-induced emergency in its electrical sector and the president and Congress battle about proposed changes to the nation's laws on hydrocarbons.

The Ecuadoran government began investigations into whether Occidental had broken the
terms of a contract it had with the state petroleum company Petroecuador. Read more...

Bolivian President Carlos Mesa refused to promulgate a Hydrocarbons Law that Congress sent him on May 6, leaving it up to Senate president Hormando Vaca Diez to sign the bill. The law failed to satisfy indigenous and labor sectors that wanted either a larger increase in the tax and royalties charged to corporations for hydrocarbons or the complete nationalization of hydrocarbon resources, as well as petroleum corporations that have contracts with Bolivia and business organizations within the country. Mass protests paralyzed the capital while a cartel of petroleum companies froze investments in Bolivia.

Congress signs law with new 32% tax
A measure increasing taxes on foreign oil companies became law May 17 without the support of President Mesa and with the opposition of thousands of street protesters who wanted the industry nationalized. Mesa refused to approve the bill, saying it damaged national unity and strongly discouraged much needed foreign investment in Bolivia.  Read more...

The Huaorani people who inhabit the Ecuadoran Amazon decided to put an end to the oil exploitation that is destroying their land and their traditional way of life that is based on hunting, fishing, and gathering.

"The Huaorani was a society that had little division of labor within the family," said Esperanza Martiez of Ecological Action, an organization working with the Huaorani to defend their land. "They hunted together and shared housework, farm work, and the raising of the children. The leaders were the elders and the decisions were taken by the community as a whole."

The Huaorani, along with the Tagaeri and Taromenane, are people who lived isolated from Western society. In the last few years, however, they have come face to face with oil and lumber companies.  Read more...

In mid-May Ecuador's government terminated Occidental Petroleum Corporation's contract to exploit oil resources on one of the country's most productive fields after a 19-month legal prosecution of the company for the unauthorized sale of an oil field. The US retaliated by suspending ongoing trade talks with the Andean country immediately after Energy Minister Ivan Rodriguez found against Los Angeles-based Occidental, also known as Oxy. The move followed an April vote in the Ecuadoran Congress that increased the royalties oil companies operating in Ecuador must pay.

Ecuador's termination of Oxy's contract means the largest single corporate entity extracting petroleum there has been ousted, opening the possibility for greater involvement by nearby Venezuela or Brazil.

Petroecuador told Occidental on May 16 that it was taking back the field known as Block 15, according to a statement from the state-run company. The field may be auctioned to Petroleos de Venezuela SA (PDVSA), Petroleo Brasileiro SA (Petrobras), or another company, Ecuador Public Administration Minister Jose Modesto Apolo said.  Read more...

In the days immediately after his party's overwhelming win in an election to name members of an assembly to rewrite the national Constitution (see NotiSur, 2007-10-12), Ecuador's President Rafael Correa announced plans to heavily tax private companies extracting oil and pressured banks to reduce interest rates. The taxes on petroleum companies would take 99% of additional profits beyond the price of oil at the time the companies signed their contracts with the government. Correa also announced Ecuador's intent to rejoin the Organization of Petroleum Exporting Countries (OPEC).

High petroleum prices motivated Correa to announce the elevation of taxation in a way that surprised the Ecuadoran press and oil companies. He made the decision through an executive decree, reformulating a "50/50" deal that had previously been in effect.  Read more...

A growing number of protests against the administration of Peru's President Alan Garcia led to a declaration of a state of emergency in several departments in August after indigenous groups seized petroleum and natural-gas facilities. The indigenous groups were fighting to overturn presidential decrees that would have allowed tribes to sell their lands to private interests, a measure required under the terms of the free-trade agreement (FTA) that Peru and the US ratified (see NotiSur, 2008-01-11). The Congress ultimately overturned Garcia's decrees by an overwhelming majority, leading to the end of the indigenous protests. Nonetheless, broad popular discontent with Garcia--as demonstrated by multiple protests and a union call for a general strike in July--remains a major factor in the Peruvian political environment.

Congress repeals tribal-land-sale decrees
On Aug. 22, Peru's Congress voted to repeal the two land laws that Garcia had approved by decree, laws aimed at opening up Amazonian tribal areas to development. At that point, protests had lasted more than 10 days, with indigenous groups taking several police officers hostage and gaining control of both a major natural-gas field in southern Peru and an oil pipeline.  Read more...

Chevron (formerly ChevronTexaco) wasted millions of dollars to delay the trial brought against it by Ecuador's Amazonian Indians and campesinos for the environmental disaster caused by 20 years of oil exploitation. The verdict is expected to go against the company and to be handed down within the next two months.

In 2001, Texaco Petroleum Company was bought by Chevron, which then became ChevronTexaco until 2005 when Chevron dropped Texaco from its name. Texaco extracted petroleum in the Ecuadoran Amazon from 1967 to 1990 in a joint venture with state-owned
Petroecuador. As part of its operations, the company built an oil pipeline across Ecuador from the Amazon jungle to the Pacific port of Esmeraldas, set up 22 pumping stations, drilled 339 wells, and obtained some 1.5 billion barrels of crude, roughly 80% of the nation's oil production during that period. Read more...