Environmentalists worry Ecuador will drill for dollars

Amazon Indians are concerned their country's switch to US currency will lead to more oil projects in sensitive areas.

No roads lead to the community deep in the Ecuadorean Amazon where Adolfo Shacay, a Shuar Indian, lives. An eight-hour hike from the nearest city, he and his community speak their native language and maintain their customs. They use canoes to fish from the river.

"The rivers are clean, the forests are intact, and the air is pure," says Mr. Shacay, who is also the president of the Ecuadorean Federation of Amazon Indians.

But that could be about to change. The government recently decided to replace the national currency with the US dollar in an attempt to pull the country out of the worst economic crisis in its 170-year history. And that means the economy will need a serious injection of dollars - fast. Environmentalists and Amazon natives fear the government will do this by implementing a no-holds-barred oil extraction program in the Amazon basin.

"To get dollars into the economy the government is going to force the production of oil," predicts Alberto Costa, an economic analyst in the capital, Quito. Activists also maintain that the thirst for dollars could lead to drilling in protected areas and an easing of environmental rules.

Currently nine oil companies operate in Ecuador's jungles, and the government is planning on increasing drilling activity this year. According to Fernando Proao, an official at the Ministry of Energy and Mines, the government is hoping to attract as much as $2 billion in foreign investment this year through a number of drilling ventures and a pipeline project.

"Reactivating the petroleum industry will bring investment and reactivate the whole country. The petroleum industry finances a high percentage of the nation's budget," he says. Last year, Ecuador's economy shrank by 7 percent, in a country where 60 percent of the 12 million population lives in poverty.

Mr. Proao maintains that no drilling plans will go ahead without a green light from the ministry's environment sub-secretary and that "companies now use new technologies that cause less damage to the environment."

The plan to "dollarize" the economy has already caused quite a stir, sparking indigenous protests two weeks ago that culminated in the ouster of the president. The Indian movement claims dollarization will raise prices, hurting the nation's poor.

But Amazon natives worry that the plan will also affect their land and culture. Ecuador's Amazon is known for its biodiversity, but is also rich in "black gold." For the past three decades, the Ecuadorean government and a host of foreign companies have been drilling in the Amazon. And, say critics, the efforts are taking a toll on the environment and the health of those who live there.

Activists cite Texaco's Ecuador operations, from 1964 to 1991, as one example. According to Ecological Action, a Quito-based environmental group, Texaco logged more than 2 million acres of trees and spilled 16.8 million gallons of crude oil in the Amazon basin, in addition to contaminating the water supply and the atmosphere.

In 1993, a group of Indians affected by Texaco's operation filed a $1 billion class-action lawsuit in New York. The case is tied up in a dispute over where the case should be tried. This week, US District Judge Jed Rackoff questioned whether, in light of the recent coup, Ecuador's courts could ensure an impartial trial and he asked both sides to present more evidence.

"Texaco acted responsibly during its years in Ecuador, utilizing recognized industry standards," says Faye Cox, Texaco's spokeswoman on the Ecuador case. Ms. Cox also maintains that case law supports a change of venue to Ecuador.

Regardless of how the case turns out, many Amazon communities, like Shacay's, say they will continue to say "no" to oil projects near their communities. "We don't want oil exploration on our land because we have seen what has happened in the areas," says Shacay. "If the government wants to force it, they are going to have to kill us all first."

(c) Copyright 2000. The Christian Science Publishing Society