China's Presence Grows in Ecuador

New report analyzes threats to Ecuador’s sovereignty and rainforest

Amazon Watch

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Oakland, California – A new report released today by Amazon Watch highlights China's growing influence in Ecuador and what it means for Ecuador's sovereignty, Indigenous peoples and the fate of the Amazon rainforest. The report, titled Beijing, Banks and Barrels: China and Oil in the Ecuadorian Amazon, analyzes how Ecuador's dependence upon Chinese loans has pushed the Andean nation to open up its Amazon to large-scale industrial and extractive projects including oil drilling and mining.

The depth of that dependence is staggering: In 2013 China provided an estimated 61% of Ecuador's external financing and bought nearly 90% of its oil, most of which ended up in refineries in California, including some operated by Ecuador's number one public enemy: Chevron. While Ecuadorian President Correa has publicly criticized China's demands as "barbaric," "humiliating," and "attempts against the sovereignty of Ecuador," his government has privately pushed forward controversial and often secret deals with Beijing.

According to recently revealed official documents, Petrochina has the ability to seize assets from any oil companies operating in Ecuador if the nation does not pay back China in full. Other documents reveal what some analysts have called a "sovereignty immunity waiver" that allows China to seize many of Ecuador's assets if the country fails to repay the loans.

The report highlights the impact of those agreements on the Ecuadorian Amazon and the Indigenous nationalities that call it home. It examines existing and proposed Chinese oil operations in Yasuní National Park, the south-central Ecuadorian Amazon via the 11th Oil Round, and large-scale mining and hydro projects throughout the southern Amazon. It also explores Chinese regulations that would ban their proposed projects in the Amazon.

"In the south-central Amazon, we do not support the 11th Round or the exploration of oil in our territories," said Franco Viteri, Kichwa President of the Governing Organization of the Indigenous Nationalities of the Ecuadorian Amazon (GONOAE). "We will continue to defend our territories from these threats that do not benefit our communities or our forests."

Last November Ecuador received offers on just three blocks from its much-touted auction of 13 Amazonian oil blocks known as the 11th Round. Two out of the three bids were from Chinese conglomerate Andes Petroleum and Ecuador has ten days to decide whether to accept the offers.

"China's deals are driving the destruction of the Amazon rainforest, rolling back Indigenous peoples rights and undermining Ecuador's sovereignty and democracy," said Adam Zuckerman, Environmental and Human Rights Campaigner at Amazon Watch. "These deals are also increasing our dependence on Amazonian oil when we should be keeping it in the ground to help combat climate change."

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