Crisis and Opportunity in the Ecuadorian Amazon

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Before the Covid-19 lockdowns hit, Ecuador was already struggling politically, socially, and economically. In the Covid era, Ecuador is facing even more challenges from a triple whammy of Covid deaths, rock-bottom oil prices, and extreme flooding that culminated in the rupture of pipelines. However, these challenges can lead to lasting change that will wean Ecuador off of fossil fuels toward a more sustainable future.

Two of Ecuador's mounting woes are directly related to Covid. First, on a per-capita basis, this small country was one of the world's leading Coronavirus hot spots. With over 25,000 Covid cases, Ecuador's public health system couldn't keep up. There's a shortage of coffins to contain the growing numbers of corpses stacked up on the streets.

Another Coronavirus side effect Ecuador is experiencing is the plunge in oil prices. That's bad news because Ecuador's top export is oil. However, Ecuador's production was shut in for a while anyway because of Woe #3: torrential rains devastated native communities. The deluge also contributed to pipeline ruptures that contaminated Amazon rivers.

Pipeline ruptures—when, where, and why

On April 7th, both of the country's transnational oil pipelines ruptured in the wake of mudslides. The pipeline breaks polluted the Coca River and its tributaries with an estimated 15,000 barrels of crude. The pipelines transport Amazonian crude across the Andes to refineries on the Pacific coast, most of them in California.

The worst part of this spill—the largest in a decade—is that it could have been avoided. For years, geologists and hydrologists warned that severe erosion along the Coca put the pipelines at risk. The most recent alarm was sounded in February 2020, when scientists visited what had been one of Ecuador's most impressive falls, the San Rafael Waterfall. Scientists concluded the falls had collapsed because a controversial Chinese government-funded hydroelectric dam above the waterfall had depleted river currents and accelerated erosion under the pipelines.

Indigenous lawsuits

In response to the spill, Indigenous organizations filed suit on April 29th against the Ecuadorian government and private and state oil companies. They charged the government with violating their rights to health, territory, food and water sovereignty, and the rights of nature. The suit was filed by the Confederation of Indigenous Nationalities of the Ecuadorian Amazon (CONFENIAE), Kichwas Indigenous Federation (FCUNAE), national and international human rights organizations, Catholic bishops of two affected provinces, and impacted families.

Lina Maria Espinosa, an attorney from Amazon Frontlines, summed up the case like this:

"Although the rupture of the pipelines was not intentional nor caused by direct actions, the authorities and companies named in the lawsuit were acting negligently and omitting information about the situation, and failed to monitor despite prompt warnings regarding the erosion affecting the San Rafael waterfall. By not taking action to prevent the risks, they failed to comply with their constitutional duty to protect people and nature, as enshrined in article 389 of our Constitution. We will be holding the government accountable and responsible for this oversight."

Oil production in Ecuador

It costs about $39 per barrel to produce crude in the Ecuadorian Amazon. Given the current low prices of oil globally, the country will probably produce oil at a loss for a while.

There's pressure to keep up oil production because Ecuador has $65 billion in public debt hanging over its head. Most of that is in oil-backed loans from China. With tourism—its primary non-commodity source of income—shut down, the country is facing default on an estimated $17 billion in bonds.

Oil companies completed bypasses on the ruptured pipelines and resumed production in June. Hopefully, the companies have learned something from the ruptures, as they shut down production when heavy rains threatened more mudslides.

Flooding from climate change

The same torrential rains which led to the pipeline ruptures devastated Indigenous communities. "We have never witnessed anything like [the flooding in April]," said Patricia Gualinga, an Indigenous leader who helped organize rescue and relief efforts. "Our families were lucky to escape with their lives."

Gualinga says the flooding is another sign of the havoc climate change that is wreaking on the Amazon's ecological cycles. She adds, "We are fighting on the front lines to protect our forests for our survival and that of the planet, but we are already bearing the brunt of climate chaos."

Transitioning from fossil fuels

The worst of times can lead to the best of times. With the government and oil companies having to answer for their neglect and exploitation of environmental and Indigenous interests, it's time for a just transition off of fossil fuels in Ecuador.

To overcome its multiple disasters, Ecuador needs economic support, but that must include debt forgiveness and relief, not just new loans. In the past, Ecuador hasn't qualified for such packages because it was considered to be too mineral-rich. Oil hasn't been the economic bonanza that it was expected to be, though. Since black gold was first discovered in Ecuador in the 1960s, the country hasn't been able to drill its way to prosperity, even when oil fetched north of $100 per barrel.

Ecuador contains some of the most biodiverse tropical rainforests on Earth. Its rainforest is essential to mitigate climate change, and it's home to thousands of Indigenous peoples living in voluntary isolation. To protect this fragile piece of the planet, Ecuador needs debt cancelation or a debt swap with its largest creditors, like China. Ecuador needs global support to keep its billions of barrels of oil in the ground and shift to a post-petroleum economy in light of the climate crisis and the need for rapid phase-out of fossil fuels.

The current crisis illustrates how vulnerable Ecuador's resource-dependent economy is. Still, it also offers the opportunity for reflection and course correction. Said Marlon Vargas, president of CONFENIAE, "There is no return to business as usual. We need a different model – one that respects rights, our forests, our climate—and an economy that is sustainable and not based on the boom and bust cycles of fossil fuels."

How OMA helps bring about change

OMA echoes the need for sustainable, non-fossil-fuel based rainforest economies. To do that, we focus on empowering Indigenous communities with economic opportunities—one of the most effective ways to combat deforestation. And your purchase of a fair-trade bracelet provides income for Indigenous people and the protection of an entire acre of endangered rainforest through our conservation partner Rainforest Trust.

Protecting rainforest lands isn't just a one-shot deal with OMA, though. Once we've purchased the acreage, we empower locals through education and jobs to ensure the areas remain protected into the sustainable future.

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