In the name of poverty eradication: The terrible costs of Ecuador’s extractivist policies

By Carlos Zorrilla

Codelco in Junín, Intag region, Ecuador

Despite its very dark history in Latin America and Africa (1), extractivism- or the extraction of natural resources at unsustainable rates- is still being favored by self-proclaimed progressive governments, such as Ecuador and Bolivia, with the justification of ending poverty. This has become a mantra for these governments, transforming poverty eradication into an end in itself, and any means to do so is being justified. However, what makes extractivism attractive to governments is the quick easy money it can provide for inept and or corrupt governments.

This, in spite of abundant and irrefutable evidence that extractivism often backfires as a way to mitigate poverty, and more than likely ends up creating more social ills (2), such as wide scale corruption (3).

In the case of Ecuador, opening up of one of the world´s most biologically important protected areas to petroleum extraction in late 2014, the Yasuni Biosphere Reserve (4), was the icing of the extractivist cake that had been baking for a long time. Large-scale mining was part of that multi-layered cake, though it had not yet risen to the level of the petroleum industry, mainly due to a mining legislation that made it relatively expensive to mine in comparison to neighboring countries. Besides wide-scale protests against most mining projects, such as the case of Intag against a large-scale copper mine, the high taxes helped to slow down the development of mining in Ecuador- which is still the only Andean nation free of large-scale metal mines.

But the mining industry has a very long history of cajoling governments until they get their way- especially in corrupt, commodity-dependent countries, and Ecuador was no exception. Since the latest mining law was enacted by the present regime, back in 2009, there have been several modifications to the legislation that has made it much easier and cheaper for mining companies to pillage the country´s minerals. The changes have created exemptions so the mining companies will be able to, for example, avoid paying the value added tax- a tax all ordinary Ecuadorian citizens and businesses have to pay. Another change, in practical terms, did away with the Windfall tax, a tax levied on extraction of mineral resources in times of boom years. The government also eliminated many regulations and permits that companies had to comply with but which the companies considered burdensome (these are some of the basic tenets of neoliberalism). Some of these changes, it is important to note, occurred after the president categorically said that no more incentives would be allowed to favor the mining industry, and that if the mining companies did not like the country’s mining legislation, that they could go elsewhere to mine (6).

Incentives such as these can easily provoke innumerable conflicts on the ground when companies- some owned by unscrupulous individuals- invade a country looking for a quick buck in fiscally and regulatory friendly environment. The effect these decisions have are enormous, and can be felt decades later, affect hundreds of thousands of people, severely impact civil and human rights as well as create environmental nightmares that can last decades or even centuries. It is what can, and often, happens when extractivism become imperative for governments to pursue. And, in the case of large-scale mining, when it is carried out by state-owned companies in a setting where independence of power is absent or dysfunctional, the impacts can be that much more devastating.

In such cases- that is, when used by self-proclaimed progressive or leftist governments in the name of poverty alleviation and in the absence of true independence of power, all of a sudden it is acceptable to violate human rights, undermine local governments, break laws, and criminalize the protests that take place when people feel their welfare, human rights and livelihoods are at risk.

In Ecuador, the Junín copper mining project, where Chilean owned Codelco, the world’s largest copper producer, has been drilling exploratory wells in primary cloud forests for nearly a year with the full blessings and support of the Correa government, typifies many of extractivism’s evils. The exploration phase includes drilling ninety 10cm holes hundreds of meters into the subsoil to assess if the extraction of the copper is economically feasible. Given today’s sliding copper prices, that is a big IF.

The drilling is taking place in community-owned and administered land, in primary forests exceptionally biodiverse even by Latin American standards, and in the midst of pristine rivers and streams. The forest also harbor dozens of mammals and other species facing extinction, and is much more threatened than Ecuador’s Amazonian forests. To even reach the mining area the government sent in hundreds of special-forces police to overwhelm the 20 year old community resistance to mining development. Weeks before that outrage Javier Ramirez, the president of the Junín community, which has been at the front-line of the resistance, was arrested without an arrest warrant and kept in jail for 10 months before being found guilty of using violence to stop mining employees from going into the mining area. At the time of the supposed incident, according to a Belgian doctor who was attending Javier for a swollen knee, he was in bed and unable to move.

The arrest and consequent occupation and intimidation of the Intag area by hundreds of police produced the effect the government and Codelco wanted, and the company recently concluded the first of three phases of exploration. But already the environmental impacts are being felt (5). Old-growth trees in primary forests are being logged to build mining infrastructure, the community’s forest reserve and infrastructure are being arbitrarily utilized, trails used by the community ecotourism project destroyed, and water welling-up from the exploration has contaminated rivers and streams- all unthinkable in most countries. The social impacts, as in all extractive projects, were felt long before the environmental ones. These include wide-scale violations of human rights- many documented and denounced by prestigious human rights organizations (7,8).

The most painfully obvious social impact is the divisions created by the mining companies. Many people from Junín itself as well as nearby communities were seduced by the false offers of jobs and the relatively easy money and security the companies provided, bringing about deep divisions within families and friends. The social fiber of the communities is also breaking down, as social, cultural and spiritual values are slowly being replaced by the lure of individual financial well-being. Even so, and as a testament to the resilience of Intag’s agricultural communities and individuals, the resistance to this devastating project continues. In this context, it is well to remember why in spite facing such powerful forces aligned against the community, there is still so much opposition.

This is a project, after all, that would not only impact some of the most biodiverse forest on our planet and dozens of species facing extinction, but would also relocate at least four communities, increase criminal activity, provoke massive deforestation of primary forests (which, according to an environmental impact study would dry up the local climate), plus contaminate rivers and streams with heavy metals. Who, then, in their right mind would not want to be part of the opposition to stop something as devastating as this?

Economic poverty is terrible, there is no denying it. But, tragically, we keep forgetting that there are other kinds of wealth and many other kinds of poverty. Even when the desire to eradicate economic poverty is well-intentioned, if the policies adopted undermine legality, weaken democratic institutions, violate human rights, threaten human populations, affect species facing extinction, in addition to decimating sustainable economic activities, you risk creating a worse, and more enduring kind of poverty; one that will haunt future generations.

References and further readings

For more in-depth information about the human rights abuses see the documentary Javier with i Intag at http://bit.ly/1mCtEdP

1. https://openknowledge.worldbank.org/…/282450Natural0resourc…
2. http://earth.columbia.edu/…/dir…/pubs/EuroEconReview2001.pdf
3. http://www.theguardian.com/…/the-global-extraction-industry…
4. http://www.theguardian.com/…/ecuador-approves-yasuni-amazon…
5. https://www.facebook.com/media/set/…
6. http://lta.reuters.com/…/businessnews/idltakbn0ny2ch20150513
7. http://bit.ly/1OVd9TX
8. http://bit.ly/1QgGMDl

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