Oil extraction or biodiversity protection? The dilemma in Ecuador’s upcoming referendum

On 20 August 2023, Ecuadorians will decide the fate of oil extraction in the Yasuní National Park, one of the most biodiverse regions in the world and home to Indigenous communities in voluntary isolation. Initiated by an environmental collective a decade ago, advocates for this popular consultation initiated emphasize environmental conservation, while critics raise concerns about economic losses and practical challenges. With the popular consultation coinciding with presidential and parliamentary elections, its outcome will have significant impacts on Ecuador's environment, economy, and societal priorities – write Professor Andrés Martínez-Moscoso and Elspeth Burdette

Introduction

Ecuador is one of the most biodiverse countries in the world and uniquely recognises that Nature itself is a subject of rights at the constitutional level (Article 10). It has established a National System of Protected Areas to safeguard ecosystems and conserve biodiversity. Yasuní National Park is the largest of these protected areas: designated as a Biosphere Reserve in 1989 by UNESCO, it encompasses an area of around one million hectares at the intersection of the Amazon, the Andes, and the Equator. One hectare of Yasuní purportedly contains more animal species than all of Europe and around 650 species of trees – more tree species than exist in all of North America. It is also home to Indigenous communities, including two Indigenous communities in voluntary isolation, who have fought for their right to remain living in their ancestral lands. But under this park also lies Ecuador’s largest reserve of crude oil, setting up a decades-long tension between environmental conservation, Indigenous rights, and economic development in Ecuador.  

Recognizing the importance of conserving this area for the world at large, in 2007 then-President Rafael Correa proposed an innovative and bold solution to the international community: Ecuador would not extract oil from the Ishpingo-Tiputini-Tambococha (ITT) field in Yasuní National Park in exchange for financial compensation. Called the Yasuní ITT initiative, the President sought compensation of $3.6 billion to permanently forgo extraction and avoid the emission of approximately 407 metric tonnes of CO2 into the atmosphere. At first, the Yasuní ITT initiative received positive international support. However, this momentum did not last and by 2013, only $13 million had been raised out of the requested $3.6 billion. Mr. Correa claimed “the world has failed us” and activated the exception contained within Article 407 of the Constitution (allowing the extraction of nonrenewable natural resources in protected areas based on “a declaration of national interest”), authorising the exploitation of crude oil in the area designated as Block 43 of Yasuní National Park. In theory, this authorisation affected around 80 hectares, or 0.01% of the National Park. Drilling commenced in 2016.

After a decade of campaigning by environmental activists, the Ecuadorian Constitutional Court has approved a popular consultation petition filed by the environmental collective Yasunidos, and on 20 August 2023, the momentous decision of whether to continue oil exploitation in Block 43 of Yasuní National Park will be decided by the people.

Backdrop to the referendum: elections following “mutually assured death”

The upcoming popular consultation on Yasuní coincides with the anticipated presidential and parliamentary elections set for 20 August 2023. Voting against the government position in previous referendums has been characterized as a way to ‘punish’ the administration, so the political climate may have an impact on the outcome of this vote.

Earlier this year, the National Assembly began the process of impeaching President Guillermo Lasso, prompting Mr. Lasso to invoke for the first time in the country’s history a constitutional measure known as “muerte cruzada” or “mutually assured death” to avoid impeachment. Under Article 148 of the Constitution, the President dissolved the National Assembly, and the President was empowered to issue decree-laws for up to six months before a new election. When the Constitutional Court ruled favourably on the Yasunidos’ petition for a popular consultation, the Yasuní referendum was added to the ballot, along with a local referendum on whether to prevent the mining of metals in the Chocó Andino Forest near Quito, the capital of Ecuador.

Direct democracy in Ecuador and Yasunidos’ proposal

Direct Democracy was given constitutional standing in the 2008 Ecuadorian Constitution (Title IV, Section 4), with citizens empowered to propose the creation, amendment, or repeal of legislation (Article 103). Further, a popular consultation, or referendum, can be initiated by the President, principle authorities from subnational governments, and citizens with the backing of five per cent of the electorate for national consultations (Article 104). In all cases, the constitutionality of the proposed questions must be decided by the Constitutional Court (Article 104).

Directly following the default on the Yasuní ITT initiative in 2013, the Yasunidos group was formed: an environmental collective consisting of a diverse group of activists, lawyers, artists and others, dedicated to preventing the exploitation of oil in Yasuní. The group started a nationwide signature collection campaign in order to fulfil the five per cent requirement stipulated within the Constitution to initiate a popular consultation. A few months after President Correa ended the Yasuní ITT initiative, Yasunidos delivered 756,291 signatures to the National Electoral Council, significantly over the 584,000 needed to encompass five per cent of the electorate.

Obstacles during the process and constitutional control

After Yasunidos submitted the signatures to the National Electoral Council (CNE), the signature verification process began, but the following decade demonstrated Yasunidos’ continuous struggle to realize their goal of a popular consultation, and the key role of constitutional control over the content of the question.

After submitting the required signatures, the CNE announced doubts over the signature collection and eventually rejected more than 400,000 signatures. Yasunidos filed an appeal to the CNE and a lawsuit for violation of political rights at the regional level. In 2018, the Ombudsman offered a public apology for inaction after Yasunidos’ complaint, ordering an independent audit. This independent audit was carried out by the transitional National Electoral Council, which recognized that the verification process was conducted in a fraudulent (and politically motivated) way. The validity of over 670,000 signatures was acknowledged. Even after this, the CNE denied the popular consultation request, stating in 2019 that it was inadmissible since the representative of Yasunidos who filed the request had since passed away.

In February 2020, the Yasunidos collective filed an extraordinary protection action which was accepted by the Constitutional Court in October of the same year. The Constitutional Court subsequently declared that due process rights were violated in the signature verification process and ordered the Electoral Dispute Tribunal (with new composition drawn by lottery) to hear Yasunidos’ appeal. On 6 September 2022, the Electoral Dispute Tribunal ordered the National Electoral Council to grant “a certificate of democratic legitimacy” to Yasunidos, after which the CNE finally submitted the necessary documentation to the Constitutional Court for its ruling on the constitutionality of the initiative filed nine years previously. The question presented for the Court’s review was “Do you agree with the Ecuadorian government to keep the ITT crude oil, known as Block 43, indefinitely underground?”

The Constitutional Court reproached the State’s actions that initially prevented the popular consultation and thus hindered the full and timely exercise of petitioners’ rights.

On 9 May 2023, the Constitutional Court issued its ruling (Dictamen Nro. 6-22-CP/23), which first recognised that when ruling on a request to initiate a popular consultation, the Court must ensure certain constitutional norms are respected, namely the right to participate in matters of public interest (para. 44.1), and the right to “freedom of the voter” (para. 44.2). The Court observed that when the question was originally presented, it was in a different factual and legal context: in 2013, extractive activities in Block 43 had not yet begun. In 2023, stopping extraction from beginning via the popular consultation is no longer possible. However, the Court clarified that the initial question could apply to the crude oil remaining under the subsoil and inferred that the question was aimed at stopping further extraction (para. 59-60). Accordingly, the Constitutional Court approved the popular consultation request, although it added the requirement that in the case of a ‘Yes’ vote win, all oil extraction related activities must cease within one year of the official results being announced. The Court also reproached the State’s actions that initially prevented the popular consultation and thus hindered the full and timely exercise of petitioners’ rights.

Positions of the stakeholders

Voting in Ecuador is compulsory for everyone between 18 and 65 years of age, and voluntary for those between 16 and 18, and over 65 (Article 62, Constitution; Article 11, Electoral Law – Code of Democracy). Those who fail to exercise this duty without a valid justification are subject to a fine of 10 per cent of the Unified Basic Salary (Article 49(12)) which currently amounts to $45. To facilitate easier voting, elections are always held on Sundays. A simple majority is needed for either side to win the popular consultation.

Those who advocate for the ‘Yes’ vote, i.e., those who are in favour of keeping the crude oil in Block 43 underground, recognise that Yasuní National Park is one of the most biodiverse areas in the world. Despite precautions, environmental damage has already occurred, including oil spills causing significant contamination of the land, and deforestation. Furthermore, the expanding presence of oil extraction sites and the implementation of infrastructure necessary to support these projects endangers the life and integrity of the Indigenous Peoples in Voluntary Isolation who live near the drilling sites, the Tagaeri and the Taromenane. As per the Constitution, the territories of Indigenous peoples living in voluntary isolation “are an irreducible and intangible ancestral possession, and all forms of extractive activity shall be forbidden there” (Article 57(21)). An ‘intangible zone’ surrounded by a 10-kilometre buffer zone is supposed to protect the territories and self-determination of these peoples. However, expansion of drilling sites is encroaching on the buffer zones. Furthermore, in 2020, the Inter-American Commission on Human Rights found that the constitutional protection under Article 57 was diminished by Article 407, allowing extractive activities and forest exploitation in intangible territories based on a Declaration of National Interest, and called on Ecuador to rectify the violations against Indigenous peoples living in voluntary isolation. Thus, from an environmental, social, and constitutional standpoint, the area known as Block 43 must be preserved.

Those who oppose the drilling ban primarily base their position on economic, technical and practical aspects. First, according to figures from the state-owned oil company Petroecuador, stopping drilling would cost the country approximately $13.8 billion over the next two decades, not including expenses for removing equipment and compensating contractors. Furthermore, more than $1.8 billion has already been invested in ensuring protection for the surrounding ecosystem. Thus, Petroecuador maintains that the government stands to lose $1.2 billion a year. Additionally, they argue that meeting the one-year deadline imposed by the Constitutional Court to dismantle the operating infrastructure in the event of a ‘Yes’ vote victory is impossible. Finally, they assert that the popular consultation is untimely because drilling has been ongoing in the area over the past seven years, and reversing the environmental damage that has already been caused is not realistically feasible.

One of the primary factors behind the need to drill for oil in the ITT region is foreign debt to China, which remains tied to oil payments for at least another three years.

The defenders of these positions often fail to acknowledge the arguments of the other side. If the ‘Yes’ vote triumphs and a mining ban is enforced, while it would be a win for the environment, a solution must be proposed to compensate for the sudden lack of revenue. One of the primary factors behind the need to drill for oil in the ITT region is foreign debt to China, which remains tied to oil payments for at least another three years. Although the state oil company, Petroecuador, holds the permissions through the Declaration of National Interest that allows the exploitation of Block 43, the Chinese company CDEC and Sinopec are the ones actually operating in the field. However, should the ‘Yes’ vote win, all oil activity will be suspended regardless of operational and contractual status. Solving the sudden deficit could be costly, necessitating economic and tax measures, for example eliminating fuel subsidies or reducing the budget for essential services such as healthcare and education. And while President Lasso recently secured a landmark “debt for nature” deal for a marine reserve in the Galápagos Islands, international climate financing to make up the pitfall for Yasuní’s potential profit in the event of a ‘Yes’ vote is currently not forthcoming.   

On the other hand, if the ‘No’ vote triumphs, a robust system ensuring ‘high standards’ in the exploitation of crude oil would need to be established to prevent further threats to the area’s biodiversity. Additionally, the State would have the responsibility to protect the constitutional and human rights of Indigenous peoples living in isolation.

Conclusion

As stated previously, the August 20 referendum coincides with the anticipated presidential and parliamentary elections. Recent polls indicate that the ‘Yes’ vote is slightly ahead, predicted to win 55 to 45. Sentiment about the popular consultation has the potential to influence the presidential election: with the environment at the forefront of the election, it is hypothesised that the Ecuadorian people might favourably vote on a candidate who stands for the protection and conservation of the environment.

Should the ‘Yes’ vote win in August, all drilling in Block 43 will have to cease and all oil extraction related activity must be withdrawn within one year. While this outcome would be an obvious, and vital, win for the environment, Ecuador faces a challenge due to lack of funds and resources available to restore Block 43 to its pre-drilling conditions. The damage has already been done, thus raising the question of how to implement a ‘Yes’ victory without causing further harm to the environment through additional exploitation, such as deforestation. One approach could be to repurpose the area as an observatory and research station or develop it into an ecotourism destination. The human impact on the area will never realistically be erased, but should the ‘Yes’ vote win, it will be necessary to ensure that the land is repurposed in a way to prevent further exploitation and minimize any additional damage.

Professor Andrés Martínez-Moscoso is a professor of Constitutional Law at Universidad San Francisco de Quito, Ecuador. He holds a PhD in Constitutional Law from Alicante University, Spain. He is a member of the Ecuadorian chapter of the Ibero-American Institute of Constitutional Law.

Elspeth Burdette is a research assistant at Universidad San Francisco de Quito, Ecuador. She is a recent graduate of the University of Glasgow with an undergraduate degree of Bachelor of Laws (LLB) with Honours of the First Class. She will be attending Uppsala University in Sweden to pursue the Joint Nordic Master's Programme in Environmental Law commencing in August 2023.

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Suggested citation: Andrés Martínez-Moscoso and Elspeth Burdette, ‘Oil extraction or biodiversity protection? The dilemma in Ecuador’s upcoming referendum’, ConstitutionNet, International IDEA, 2 August 2023, https://constitutionnet.org/news/oil-extraction-or-biodiversity-protection-dilemma-ecuadors-upcoming-referendum

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