Ecuador's Amazon for Sale in Beijing

Investors risk violating Chinese government regulations

Beijing, China – Amidst widespread international outcry, Ecuadorian government officials are slated to meet with dozens of Chinese investors and oil company executives today at the Hilton Beijing Wangfujing in an effort to auction off over three million hectares of pristine Amazon rainforest for oil activities.

Now on its fourth stop, the 11th Oil Round roadshow has been met by forceful protests in Quito, Houston, and Paris. Over one million people have signed a petition calling on Ecuadorian President Rafael Correa to suspend his government's tendering of oil concessions that threatens to devastate the rainforest and the native communities that live there.

Chinese companies including Andes Petroleum, a subsidiary of CPNC and SINOPEC, are among the likely bidders. In addition to violating international law and the Ecuadorian Constitution, Chinese participation in the round would directly violate China's new guidelines for environmental protection in foreign investment and cooperation that the Ministry of Commerce and Ministry of Environmental Protection released just last month. It would also contradict the China Banking Regulatory Commission's Green Credit Guidelines.

Article three of the ministries' new guidelines on environmental protection in foreign investment directs enterprises to respect the cultural traditions of local communities and "promote harmonious development of local economy, environment and community." Similarly, article nine directs companies to "take into full account the impacts of their...operation activities on the social environment such as historical and cultural heritages, scenic spots and folk customs."

However, Chinese investment in the round would fly in the face of those articles. Seven nationalities that call the southern Ecuadorian Amazon home – the Shuar, Achuar, Kichwa, Shiwiar, Andoa, Waorani and Sápara – have united in opposition to oil exploration on their lands and have issued a declaration denouncing the round that they say would devastate their rainforest home and cultural heritage. They claim that in none of the blocks has the Ecuadorian government obtained Free, Prior and Informed Consent (FPIC), an internationally recognized human rights benchmark that is intended to protect the rights of indigenous communities whose lives and lands are affected by extractive mega-projects such as oil drilling. This is in direct violation of the Inter-American Court on Human Rights July ruling in favor of the Kichwa community of Sarayaku stating that the government must consult with indigenous communities prior to oil operations and pay for physical and "moral" damages to the community.

Speaking at a February protest of the oil round, President of the Achuar Nationality of Ecuador Jaime Vargas noted that communities in the northern Ecuadorian Amazon are still suffering from contamination that recently led to a $19 billion ruling for the communities. He declared, "Any drilling activities on our lands will be met with fierce resistance. We've seen the impact of oil extraction in Ecuador and the world and we know that it only brings contamination, poverty, and cultural destruction. We will defend our sacred lands and culture as we have for millennia."

Chinese participation in the round would also violate the CBRC's green credit guidelines. According to the China Daily, the directive "order[s] lenders to cut loans to industries with high-energy consumption and high levels of pollution." The primary rainforest that makes up the proposed oil concession is one of the most biologically diverse places on earth and financing oil drilling there would defy CRBC rules.

"The Chinese government is courting disaster with this round," said Adam Zuckerman of environmental and human rights organization Amazon Watch. "These blocks are the most controversial in Ecuador and there's already a list of companies who have tried to drill there and have failed. Drilling in some of the most pristine regions of the Amazon would not only violate the rights of local communities, it would break China's own laws."

The roadshow comes to Beijing as investors grow increasingly concerned about the high risks of hydrocarbon activities in remote areas of the Amazon. The government was forced to scrap the last round of oil auctions, which included all of the blocks in the current 11th Round, because it received no bids. Companies including ARCO, ConocoPhillips, Burlington Resources, and Compania General de Combustibles (CGC) attempted to drill in the controversial area but were forced to withdraw due to united indigenous opposition. Interested companies have until May 2013 to bid on the blocks currently up for tender.

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