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Resources > Global Issues > On The Record Arc... > Ecuador – The F... > Issue 6: The Dile...

Issue 6: The Dilemma of Negotiating with Oil Companies

On the Record - The Fight for the Amazon
Vol. 16, Iss. 6
March 14, 2002
Dining with the Devil: The Dilemma of Negotiating with Oil Companies
 
Contents:




From the Editors: Dining with the Devil
 
The oil invasion has created a major dilemma for activists in Ecuador. Should they fight to end all oil prospecting, using all the tactics of civil disobedience at their disposal? Or should they 'acknowledge reality' and negotiate firmly for the best possible benefit? The former may be daunting and even dangerous. But as Peter Lippman shows in the sixth issue of this series, the latter path is also fraught with risk.
 
In their hearts, Ecuadorian environmentalists would prefer that no more oil be taken out of the country. The question is whether this is practical or realistic. Chris Jochnick, formerly Legal Director of the Center for Economic and Social Rights (CDES) in Ecuador, recognizes that oil development has been a blight on the well-being of the Amazon and the country. But he also cautions that the Ecuadorian government and the companies will continue to drill for oil in the Oriente despite the best efforts to resist them. He feels that local acts of resistance can play a vital role in strengthening local organizations, but that they should not be confused with stopping oil outright. In addition, as was made clear in the last issue of On the Record, the law is not necessarily on the side of the indigenous.
 
All of this inclines Mr. Jochnick, and others, to argue that some sort of negotiation with the company is inevitable. The question is how. How can small, isolated, communities negotiate on equal terms with some of the world's mightiest corporations -- particularly when the law seems against them?
 
It is made harder by the fact that the companies attempt to turn communities against one other and bribe nonelected leaders to allow access to oil exploration. Practically every company has attempted to 'divide and conquer' in this way, devaluing and undermining the principle of representation to the point that it means whatever is convenient to the company. A community may receive what seems like an astronomical sum for the ostensible purpose of 'development' or 'environmental monitoring.' But such bribes are minuscule when set against the company's profits, or the damage to the environment.
 
If negotiating is difficult for local communities, it also poses a major dilemma for their international allies. One disastrous attempt occurred in the early 1990s, when the Washington-based Natural Resources Defense Council (NRDC) tried to negotiate with Conoco on behalf of indigenous communities. Joe Kane covered that fiasco, described briefly below, in an excellent book. [1]
 
Instead of negotiating directly with the companies themselves, as NRDC did, organizations like CDES and the Amazon Defense Front (FDA) are trying to help communities to direct their own negotiations from a position of strength and also to develop an alternative model of development. This would include keeping oil prospecting to a minimum by setting aside as much land as possible for protected areas, while negotiating with companies to moderate their activities in other areas. Throughout this process of 'capacity building,' communities are kept fully informed about the potential impact of oil and about their rights -- and are left with the ultimate decision of whether or not to negotiate.
 
This issue looks at some of the failures and successes of this approach. It begins by examining the case of Villano, a strategically situated town in the heart of oil country, where the companies tried to drive a wedge between the communities and their representatives. It then reviews NRDC's encounter with Conoco. The third example looks at a long and difficult negotiation between the Secoya community and Occidental Petroleum. Eventually, this led to the adoption of codes of conduct. The codes stand as a significant success and something of a model of what is possible.

US Appeal Judges Warned That Ecuador Will Not Hear Texaco Pollution Case
 
Lawyers representing the government of Ecuador and Ecuadorian plaintiffs in the Texaco pollution case warned the 2nd U.S. Circuit Court of Appeals on Monday that the case will not be heard in Ecuador if it is dismissed by the New York court.
 
The three judges on the appeals court are being urged by the Ecuadorian lawyers to reverse a decision by the lower court that the case cannot be heard in the United States because the alleged pollution occurred in Ecuador.
 
Ronald Minkoff, a New York-based lawyer representing the government, said Monday that under a 1998 Ecuadorian law, a plaintiff who files a lawsuit outside the country can never again bring the same case in Ecuadorian courts.
 
According to a Reuter's news report, Cristobal Bonifaz, the lawyer for the plaintiffs, repeated the argument that he made recently to On the Record. He pointed out that Ecuador's courts are inefficient and corrupt -- and that the legal system does not recognize the concept of a class action lawsuit. This would force each case to be heard individually, which would hopelessly clog an already deficient legal system. 'That's where we're going to bring the lawsuits? That's a joke,' he said.
 
Attorney George Branch, representing Texaco, argued that the case should not be tried in the United States because the corporation (which is now merged with Chevron) was not responsible for the environmental damage committed in Ecuador.
 
Humberto Piaguaje, president of the Secoya indigenous nation, was also present at the hearing. His community was one of many devastated by oil pollution, and he said that his nation was no longer able to live in the traditional ways. He said, 'Instead of hunting we must go and buy meat. We cannot bathe in rivers anymore or walk barefoot.'
 
Observers noted that three appeal judges repeatedly asked about the efficiency of the Ecuadorian legal system, raising hopes that they might agree to a trial in the United States. The court will announce its decision later.
 
Shell Oil's Alleged Complicity In Nigeria Torture Case Can Be Heard In The US, Rules US Federal Judge
 
In a ruling that could set an important precedent for the prosecution of corporations in US courts, a US federal judge has ruled that a civil lawsuit that accuses the Shell Oil Company of complicity in human rights violations in Nigeria can go forward in a US court. Judge Kimba Wood issued the ruling on February 28, 2002.
 
The case stems from the execution of Nigerian environmentalist Ken Saro-Wiwa and 8 other activists from the Ogoni people in Nigeria, on November 10, 1995. Saro-Wiwa had campaigned against the pollution caused by Shell's exploitation in Ogoniland. His execution by the military regime of General 'Sunny' Abacha provoked an international outcry.
 
The case against Shell has been brought by several groups, including the New York-based Center for Constitutional Rights (CCR) and EarthRights international, which is based in Washington, DC They invoked the same Alien Tort Claims Act (ATCA) that is being invoked by the Ecuadorians in their lawsuit against Texaco. This law allows for crimes committed outside the United States to be heard in an US court.
 
Legal experts say that until now, the only cases to be admitted under the ATCA are those that clearly involve a serious breach of international law or a crime against humanity. In her ruling on Shell, Judge Wood noted that the charges against Shell included complicity in crimes against humanity, torture, summary execution, and arbitrary detention.
 
Texaco is being sued for damages caused by pollution and destruction of the environment in Ecuador, not crimes against humanity. As has been argued in previous issues of 'On the Record', the damage has gravely affected the inhabitants of northern Ecuador, and arguably pushed some tribes close to extinction. But it remains to be seen whether this is seen as sufficiently grave for the suit to be heard in the United States. If so, it would create a major legal precedent.

 
Negotiating with the Oil Companies in Ecuador
 
Divide and Conquer
 
Whenever they enter a new territory, the oil companies usually try to negotiate exploration arrangements with a small, impressionable portion of the local population rather than go directly and openly to the official representatives. This allows them to gain access to the oil in return for the proverbial 'trinkets and beads.'
 
The strategy has proved effective in the northern part of the Oriente, where many indigenous communities have already been decimated by sickness and assimilation. This makes them highly vulnerable and greatly increases the likelihood that they will be lured into agreements that are not to their advantage.
 
One particularly notorious example occurred in Villano, a municipality in the western part of Pastaza province. Villano is inhabited by members of the Quichua indigenous nation and is the centerpiece of Arco and Agip's oil development in the Block 10 leasing concession. Throughout the 1990s, Arco explored the territory, drilled wells, and constructed a spur pipeline to transport oil out of the area. Arco turned over control of Block 10 to the Italian company Agip early in 2000.
 
Agip and Arco set about trying to isolate Villano from the rest of the region, and Villano's local representatives from the Organization of Indigenous Peoples of Pastaza (OPIP). OPIP represents over 20,000 people in 100 indigenous communities and is one of the best-organized and most effective grassroots advocacy groups in Pastaza province. It asserts that any benefits from oil should be shared by the whole region. OPIP takes strong objection when companies negotiate with local communities without consulting the representatives of the entire area affected by oil projects.
 
Agip and Arco set out to make a deal with the inhabitants in Villano town and undercut OPIP. They bestowed relatively generous resources on the town that included several schools and clinics. In return, they received the right to explore and drill.
 
Villano's local leaders also withdrew from participation in OPIP. 'They declared independence from OPIP' said Cesar Cerda, OPIP's director of management of natural resources. 'The oil companies bought them things to persuade them to cooperate: schools, food, and free airplane flights into the community. They gave money to the leaders of the villages. They also organized a false 'community organization' that they named Asodira.'
 
At its height, Asodira had around 100 members of the local community, some of whom were employees of Arco or relatives of these employees. It was exactly the sort of group that activists have in mind when they refer to 'phantom organizations.'
 
The result is that Villano had been bought cheaply. It has turned into a relatively affluent island in a province that is still largely impoverished and threatened by environmental and cultural destruction. The area around Villano has also suffered from leaking pipelines, as was reported in previous issues of On the Record. The resources that have been invested in Villano might seem impressive on a local scale, but as Chris Jochnick of CDES notes, 'With hundreds of millions of dollars at stake, all the benefits...add up to less than one percent [of oil company profits].'
 
Meanwhile, the oil companies undermined OPIP's authority. Throughout the 1990s, OPIP tried to negotiate the best possible conditions for environmental protection in Pastaza. In 1994, the organization signed an agreement with Arco to organize local participation in an environmental impact study, a regional environmental management plan, and development projects financed by oil profits. But Arco failed to provide funds for the projects.
 
Furthermore, in spite of Arco's promise to use the most advanced technology in its oil development practices, oil leaks occurred. As mentioned earlier, the company attempted to cover up the leaks, and military units prevented local activists from investigating the pollution.
 
OPIP has asked Agip to fulfill four conditions: 1) provide indemnification for damages during Arco and Agip development; 2) evaluate environmental, cultural, and social impact in the area; 3) create a fund for monitoring environmental impact in the broader region; and 4) assist in creating a development plan for Pastaza. All four projects, says OPIP, should be supported by the profits from Block 10's oil.
 
But they are not particularly optimistic. 'Arco left without fulfilling their promises, and then Agip came in as if nothing had happened,' says Cesar Cerda of OPIP. 'This had a damaging impact on our environment and culture. They did not pay any attention to our petitions.'
 
In March 2001, The Advocacy Project visited the main office of Agip in Quito and spoke with public relations manager Francisco Vacas. Asked about Agip's strategy toward the environment and indigenous people, Mr. Vacas responded:
 
'You have an interesting way of looking at things,' he said. 'One of the last things they (indigenous people) care about is the environment. They want to integrate with the world. They want roads, education, and culture. The two don't go together, because roads destroy the environment. They don't want to protect their culture.'
 
In other words, the companies are trying to protect the indigenous communities from themselves. It is clear that some local representatives care more for material gain than for protection of their traditional way of life or of the environment -- otherwise, Arco would never have been able to enter Villano through the back door. But as Chris Jochnick of CDES points out, their numbers are often exaggerated and exploited by the oil companies. In fact, the activists of the Oriente do want to improve life in their communities -- but this is not possible if the environment is destroyed at the same time.
 
It is the position of OPIP, and every other organization that spoke with The Advocacy Project, that a company must negotiate with the legitimate recognized representative of an affected indigenous community. But Mr. Vacas of Agip sees things differently. 'We have open and honest communication with leaders of the communities,' he said. 'We are dealing with the organizations too, but they are politicians. They do not represent the interests of the communities.'
 
This blanket dismissal of the organizations gives the company an excuse for not working with advocates who are the best prepared to represent the needs of their communities -- and are also the least likely to be bribed. So in the Oriente, the need for broad community participation has run up against the arbitrary decision-making processes of the 'Company' as a higher power.
 
The Yasuni Fiasco
 
In the early 1990s, the U.S.-based Natural Resources Defense Council (NRDC) undertook to represent communities of the Oriente who were trying to prevent the Conoco Oil Company from exploring for oil in Yasuni National Park. It turned out to be a fiasco and a watershed for relations between the indigenous community and the oil companies.
 
Conoco, a subsidiary of DuPont, held the development rights to Block 16, a territorial oil development concession located in and near Yasuni National Park. Yasuni Park overlaps Orellana and Pastaza provinces and is part of the Huaorani traditional homeland.
 
DuPont was considering whether to allow Conoco to prospect for oil in Yasuni in the face of massive opposition from regional and international organizations, as well as the Huaorani themselves.
 
Over 20 North American environmentalist organizations were involved, and they were working closely with the regional indigenous organization CONFENIAE. The Sierra Club Legal Defense Fund brought a case to the Organization of American States on behalf of the Huaorani, and there was even a threat to boycott DuPont by international pressure groups.
 
The NRDC was one of the North American organizations that opposed drilling in Yasuni Park. In late 1990 Conoco asked the NRDC for a meeting to discuss ways to find common ground on this issue. Together with a representative from Cultural Survival, NRDC senior staff attorney Robert F. Kennedy Jr. and international director S. Jacob Scherr met with the company. They came away persuaded that it would be in the interests of the indigenous people of Ecuador if Conoco were allowed to prospect in Yasuni, because Conoco would develop the concession in a more environmentally sensitive way than any other company that may ultimately take it over.
 
In a subsequent meeting in early 1991, Kennedy and Scherr discussed with Conoco the idea of creating an independent environmental foundation in Ecuador, to be run by indigenous people and funded by Conoco. This foundation would monitor environmental impact of oil development in parks. Conoco offered $10 million to create the fund, and Kennedy and Scherr then met with CONFENIAE, the regional group, to talk about the proposal. CONFENIAE made a counter-request that Conoco donate over $200 million for the foundation.
 
The problem was, according to author Joe Kane, that CONFENIAE did not represent the Huaorani in good faith at this time. The organization was, after all, negotiating to sell drilling rights on Huaorani land. As Kane points out, oil exploration would open up roads into Yasuni Park, thus opening up remote Huaorani territory to increased colonization. And it was the Shuar and Quichua who stood to gain the most from this opportunity to take over Huaorani land. These two communities were traditional rivals of the Huaorani and were the strongest groups in CONFENIAE.
 
The outcome was that the NRDC gave the outward appearance of having met with Conoco without the participation of indigenous representatives. Notes from one of the meetings were leaked and word of the plan to establish the environmental monitoring group spread. It was immediately interpreted as a scheme to co-opt local opponents of Conoco. Activists had good reason to be suspicious, because the company had already cleared hundreds of helicopter landing sites, as well as at least 1,000 hectares of forest for camps. Toxic waste dumping was already poisoning rivers from which the Huaorani fished.
 
Members of the Ecuadorian environmental movement were scandalized that North American environmentalists who had spent little time in Ecuador could presume to make important decisions on their behalf, without their consultation.
 
As the NRDC-Conoco discussions were proceeding, important demands of Ecuadorian environmentalists were being ignored. These included the demand for demarcation of indigenous lands, the settlement of unresolved title claims, compensation to communities for harm done to their lands, and the right to royalties from future oil profits. This caused further anger.
 
In its defense, Cultural Survival released a letter in early 1991 asserting that no decisions had been made without consultation; that an idea had merely been broached; and that implementation of this idea was subject to open discussions with CONFENIAE. Robert Kennedy stated that because of Ecuador's dependence on oil, 'it would be ridiculous to say we can shut down oil in Ecuador.'
 
'It was clear to us,' he said, 'that Ecuador was going to develop that rainforest no matter what. Conoco apparently was willing to lose money on the deal to make it an environmental showcase.' [2]
 
Theodore MacDonald, director of the research section of Cultural Survival, expressed support for Conoco's funding of an environmental foundation if indigenous activists approved the arrangement. But his backing for Conoco's continued operations in Ecuador was unambiguous. 'As for Conoco, we felt that they were the one company in the world... that was willing to talk to Indian and environmental organizations and to meet mutually agreed-upon standards.'
 
The NRDC and Cultural Survival had both decided that oil exploration in the Oriente was inevitable, and that Conoco's involvement in the process would be helpful to the local population. But in the end, their efforts ended in embarrassing failure. The NRDC was accused of ignoring the essential needs of the indigenous movement in their haste to bless Conoco's oil exploration. Several months after the Conoco/NRDC proposal fell through, Conoco pulled out of Ecuador altogether. The company cited poor exploration results as the reason for their withdrawal, but political pressure from grassroots activists was clearly involved.
 
Maxus replaced Conoco and commenced drilling in Yasuni after signing agreements with the Ecuadorian government. This company became subject to some of the most widespread protest in Ecuador in recent years, and it also eventually pulled out. Today, Huaorani land in part of Yasuni is protected, while oil companies, including Repsol and YPF, continue drilling in another part of the park.
 
The controversy continued long after the incident. Theodore MacDonald, while acknowledging that it was important to consult with indigenous groups, nonetheless called Conoco a 'humane oil company' and described its departure as a 'tragic lost opportunity.' Critics of the dealing, on the other hand, called it a 'sellout' and assailed the notion that the oil companies were invincible. They argued that the indigenous movement of Ecuador had tactics at its disposal that could, in some cases, succeed in preventing oil development.
 
The unfortunate episode showed that international organizations face many pitfalls when they get involved in the struggles of Ecuadorian environmental activists. NRDC may have been well intentioned, but its officials did not understand the internal politics of the indigenous movement in Ecuador and they made the mistake of operating over the heads of Ecuadorian activists. In doing so, they subjected themselves to the anger and mistrust of much of the grassroots environmental movement in Ecuador.   The one positive outcome was that NRDC's failed initiative served to fortify indigenous resistance to oil development in the Oriente. The next decade was to see a major push toward better organization and representation.
 
When Negotiations Succeed
 
In 1996 a group from the Secoya people signed an agreement with Occidental Petroleum (Oxy) to permit the exploration of oil on their land.
 
The Secoya have a population of several hundred and share territory in the northeastern part of the Oriente with the Siona, a nation of similar size. Their land overlaps a 200,000-hectare oil concession (Block 15) that Oxy acquired in 1985. Oxy developed several oilfields and then began negotiating with individual Secoya communities for further exploration rights.
 
Oxy's negotiation tactics included both bribes and threats. In exchange for chain saws, medicine chests, and raincoats, one community signed an agreement that allowed the company to conduct 'petroleum activities' in Block 15.
 
Occidental's chief negotiator had warned Secoya representatives that if they did not sign, the government would confiscate their land. He even threatened military action. Secoya representatives then signed a vaguely worded document that read, 'The Siona-Secoya communities promise to authorize the right of way to Occidental work groups and their contractors to carry out their petroleum activities.'
 
Such language could have given Occidental a free hand. Oxy's only real obligation was to supply some water pumps and solar panels. Some monetary compensation was also agreed, but Occidental claimed that this was contingent on the discovery of oil reserves.
 
Other Secoya and Siona communities in Block 15 were outraged. The Siona organization ONISE wrote a letter of strong protest to Occidental. In 1999 OISE, the organization representing all Secoya communities, filed a protest against the agreement. It eventually succeeded in forcing a renegotiation, and Oxy retracted the contract.
 
This procedure led to elaboration of a 'Code of Conduct' for future negotiations between the Secoya and Occidental Petroleum. The Code of Conduct requires Occidental to negotiate exclusively with OISE as the only legitimate representative organization of the Secoya. It outlines transparent and honest methods of negotiation.
 
It was an important agreement, and it set an important precedent. From now on, it would reinforce the principle that anyone negotiating with a company would have to represent all those affected by oil development, and not simply single communities in the immediate vicinity of a drilling site.
 
Further to the south, the Shuar and Achuar nations won a similar case in 1999, when they repelled an attempt by Arco to sidestep their established representatives.
 
Arco leased the concession to Block 24 in Morona Santiago and Pastaza provinces in 1998. Block 24 includes territory traditionally inhabited by the Shuar and Achuar, two closely related indigenous communities.
 
Immediately after Arco leased this land, the three indigenous organizations FIPSE (Independent Federation of the Shuar Nation of Ecuador), FINAE (Federation of Achuar People), and FICSHA (Interprovincial Federation of Shuar-Achuar Centers) passed a resolution forbidding entry of oil companies onto their land. Together, the three represented over 50,000 people.
 
When Arco received its concession, company representatives began visiting individual Shuar families, offering them sacks of food and transportation in their airplane in return for the right to explore for oil. The company succeeded in persuading some villagers to allow oil exploration in three communities, in return for $3,000 for each community.
 
Arco spokesman Herb Vickers publicly played down the importance of the indigenous federations. He was quoted as saying that Arco 'has concentrated on working more on the local level because.the large indigenous organizations no longer represent the people.' Vickers called the federations 'political machines.'[3]
 
Santiago Kawarim, leader of FINAE, angrily refuted these assertions. Kawarim claimed that ARCO was creating 'representative' groups of small numbers of Achuar and Shuar people, to claim they had consulted with the people.
 
In the summer of 1999 the case went to civil court in Ecuador. FIPSE and FINAE complained that Arco's actions were violating their right to consultation as protected by the Ecuadorian Constitution and ILO 169. The court case was backed up by direct action, including a demonstration of hundreds of Shuar and Achuar in Macas in 1999 and the occupation of an airstrip by a thousand Shuar. Arco had organized a consultation meeting in one Shuar community, without consent of the representatives. The airstrip occupation prevented company planes from landing, thus canceling the meeting.
 
In August 1999, the court prohibited Arco from dealing with individual Shuar families or communities. For once the law was on the side of the indigenous. The court decision required the company to negotiate exclusively with the FIPSE general assembly. While such a decision does not carry the same weight of law in Ecuador that it would in the U.S. legal system, the judgment validated the concept of legitimate representation. The injunction did not explicitly prohibit Arco from drilling in Block 24, but it slowed down the company's operations significantly.
 
Later in 1999, Arco sold its concession rights for Block 24 to Burlington Resources Company. A civil court in Macas ordered Burlington to respect the Arco injunction, after it too tried to bypass FIPSE. Ecuador's Supreme Court upheld the injunction in early 2000.
 
Coming after the Secoya's elaboration of a Code of Conduct for negotiations, the Shuar and Achuar court victory strengthens the principle that oil developers must negotiate with the legitimate representatives of the entire indigenous community in any case where decisions are involved that will affect the environment.
 
Trained to Negotiate
 
One of the clauses in the 1996 code of conduct between the Secoya and Occidental Petroleum gave OISE, the Secoya organization, exclusive rights to represent its community.
 
The Code also affirmed community rights to information, consultation, collective negotiations, advisors, and arbitration. Only after several months of hammering out the Code of Conduct did the Secoya engage directly in negotiations about drilling. The arrangement enabled the communities involved to receive $280,000 for community infrastructure development and for direct assistance to families.
 
This accord -- and the manner in which it was reached -- has provided the Amazon Defense Front with a model to use in training other communities.
 
I attended one of the sessions that FDA held for a group of activists from the Quichua people in the spring of 2001 by FDA's director Luis Yanza and two of his FDA colleagues.
 
We were heading for Pompeya, location of the Capuchin monastery that is a central meeting place for several nearby communities. The road to Pompeya in southern Sucumbios province takes many turns, ever deeper into the jungle. But the trappings of oil development are everywhere. Pipelines follow every road, sometimes four or five pipes of varying diameter, running together. They come out of the ground unexpectedly, in assorted colors, with meter boxes and valve wheels. Refineries, oil company offices, and storage yards for tractors appear next to the road, all of them surrounded by cyclone fencing.
 
This land is in oil concession Block 15, run by Occidental Petroleum, and the FDA was working to help representatives from nearby villages -- Pilche, San Roque, Sanisla, and Huamayacu -- prepare for a meeting with Oxy.
 
These Quichua communities along the Napo River are worried that their lands, as yet unspoiled by Texaco's damage, will now suffer the same degradation that happened in less remote areas. The good news is that they have a far greater chance of being consulted than the indigenous communities had 30 years ago when Texaco first arrived.
 
Their goal was simple: to arrive for their talks with Occidental so well prepared that the company will have no option but to minimize the impact on their lives while paying them appropriate benefits for the use of their land.
 
A dozen men and women sat in a meeting room at the monastery while Luis Yanza and his colleague, attorney Pablo Sarzosa, explained how they could protect their communities from oil damage.
 
Yanza and Sarzosa explained that the oil companies must sign an agreement with the communities affected by oil development. Mr. Sarzosa discussed the price a company should pay per square meter of damaged land, and how much compensation the villagers should demand for repair of damages to plants and animals.
 
Luis Yanza underlined that the company would have leverage over the communities. 'The company has money, technicians, lawyers, and the ability to mobilize resources and people on its behalf,' he explained. 'The community only has power if it is united. It has to be united, because if not, it will repeat the situation of the Secoyas, when some of them were fooled into negotiating too quickly.'
 
Luis Yanza urged the community representatives at Pompeya to demand from Occidental a code of conduct that would stipulate who was to participate in the talks, including international observers. He told them, 'You need to deliberate on what kind of agreement to sign, and how to deal with the oil company on a community level. Don't sign anything fast. You must be united and get all the information you need first. The company will put pressure on the communities to sign an agreement quickly. But you must take your time and have patience.'
 
One of those present, Santiago, a Quichua activist from San Roque, told me about his hopes for the outcome of eventual negotiations:
 
'We are four communities. In San Roque there are 162 people. We have no electricity, but we have generators. The oil companies have threatened to drill without our agreement, if necessary. But they have to pay. The companies don't want to accept our proposal; they don't want to know anything. They want to give us $30,000. This is very little to put a pipeline through our communities. It's going to hurt our trees and our medicinal plants. This is our life; we don't have pharmacies. We have always used the plants.'
 
Ten or twenty years ago, $30,000 would have seemed an astronomical amount of money to these villagers, many of whom make no money at all. But now they are much better informed about the value of the resources under their ground and the potential impact of oil extraction on their community.
 
It is not entirely clear whether companies are under an obligation to sign an agreement with the local communities. And while communities can obstruct development, they may not be able to prevent it legally because under the constitution of Ecuador, it is the state that owns the oil. This conflict, which was noted in an earlier issue of this series, has still to be resolved. The Secoya and Siona may have opted for a firm negotiating stance, and their Code of Conduct may be an acknowledgment of indigenous consultation rights. But it also acknowledges that the companies are going to drill.
 
The one thing that is clear is that under the law, the government and the indigenous people must decide together whether any exploitation of oil in indigenous areas is in the national interest.
 
This underlines the importance of negotiations, but according to Chris Jochnick, oil companies tend to talk with the communities more for practical than for legal reasons. 'Companies like Oxy are very sensitive. They push for agreements in the hope of avoiding political conflicts and bad publicity. They do not want to be sued, and they do not want to face sit-ins in their oil fields.
 
'At the same time, how CDES, the FDA, and the communities define consultation can be very different from how the government and the companies define it. If a company goes and talks with a community, and the community does not sign an agreement, the company can say, 'We consulted.' But progressive lawyers and activists will interpret the 'right to participation and consultation' as requiring an agreement with a community. Hopefully that is where the law is moving, but it hasn't arrived there quite yet.'
 
The influence of the companies works on a very personal level. People in remote communities are sometimes employed by the oil companies and are intimidated by the prospect of losing their work if they participate in human rights activism.
 
After the meeting in Pompeya, Luis Yanza from the FDA spoke of how he felt things were going with the community representatives and their organizing efforts.
 
'No va,' he said, 'It is not going. Members of the communities are culturally very susceptible to money. There is division in the communities. Some people hope for fast negotiations. Some want to go slowly, but they are in the minority. There is company pressure for quick negotiations. They say, 'If you don't take advantage of this now, later you could lose the opportunity.'
 
'We see that our work can be measured in its impact on people. It is a very slow process. More people know they have to pressure the oil companies, but they are not doing it. Some of the companies give candies to the kids - but this is 'tonteria' (foolishness). Or they will provide some concrete or roofing for a communal house. Because of this kind of arrangement, there is a fear of loss. Things are changing, but it is very slow.'
 
Mr. Yanza expresses the ambivalence of communities that negotiate from weakness because they fear that they will end up with nothing, as has already happened in many places throughout the northern Oriente. Each community must weigh its prospects and determine whether outright resistance or strong negotiation will work: there is no third option. But one thing has become clear: if communities can band together, learn from the lesson of the Secoya, and take advantage of the training of the FDA and CDES, they will have a chance of preventing the worst of the damages that oil development can cause.
 
References and Resources
 
[1]. Joe Kane, 'Savages'  (New York: Vintage, 1995), ch. 6.
[2]. Robert F. Kennedy Jr. on Conoco
[3]. 'Indigenous Groups 'At War' with US Oil Giant' http://www.unii.net/confeniae/english/news/atwar.html

Glossary
 
Block--A concessionary piece of territory where exploration and drilling rights are leased by the Ecuadorian government to an oil company.
 
CONAIE--Confederation of Indigenous Nationalities of the Amazon.
 
CONFENIAE--Confederation of the Nationalities Indigenous to the Amazon of Ecuador.
 
FDA--Amazon Defense Front (Frente de Defensa de la Amazonia).
 
HUAORANI, ZAPARA, SIONA, COFAN, AND SECOYA--Pre-Incan indigenous communities of Ecuador whose numbers are threatened by oil development.
 
IMF--International Monetary Fund.
 
Manta--Port city on the Pacific, location of U.S. air base covering operations for Plan Colombia.
 
Mindo--A small Andean town not far from Quito, on the slope of Mt. Pichincha. Location of the Mindo Cloud Forest Reserve, through which the new pipeline is set to pass.
 
OPIP--Organization of Indigenous Peoples of Pastaza.
 
Oriente--The Ecuadorian Amazon; eastern half of Ecuador.
 
Pastaza--A central province of the Oriente.
 
Plan Colombia--An economic and military plan to eradicate drug activity in Colombia and strengthen the state. The United States has contributed $1.3 billion to this plan since 2000. Spillover effects are being felt in Ecuador.
 
Yasuni Park--A national park in the central Oriente inhabited by Huaorani; part of it is protected.
 
In the next issue: Profiles of Resistance

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