Entered into the database on Tuesday, January 17th, 2006 @ 14:45:10 MST
An AlterNet Exclusive In the midst of an Amazonian oil boom, classified documents reveal
deep links between oil companies and Ecuador's military. Scanning bookshelves in his tiny law office in Quito, Ecuador, Bolivar Beltran's
disdain for Big Oil is as legible as the contracts that map their nefarious
ways. "These were all negotiated in secret," says the soft-spoken attorney
and Ecuadorian congressional aide, explaining how he used a lawsuit last year
to obtain pages of once-classified contracts between the Ecuadorian military
and 16 multinational oil companies. In November, when I visited him, Beltran handed me a grainy photocopy of a
contract dated 2001. Then another bearing an official government seal. Soon
a small table is covered, his finger running down keywords that spill off the
page. Occidental Oil. Ecuadorian Ministry of Defense. Counterintelligence. Kerr-McGee.
Armed Patrols. Military detachments. Burlington Resources. The contracts come to light as an oil boom bears down on the Ecuadorian Amazon.
Ecuador's 100,000 square kilometers of the world's richest rainforests unfortunately
sit atop 4.4 billion proven barrels of oil, the 26th largest reserve in the
world. Since the 1960s, state and private companies have taken oil from Ecuador's
eastern province, known as the Oriente, and sent much of it to the United States,
leaving behind environmental and public health disasters. And on top of all
else, serious poverty: Despite their country's vast natural resources, 70 percent
of Ecuadorians live below the poverty line. Impoverished, in debt and dependent on petro-dollars for revenues, the Ecuadorian
government has put some 80 percent of its oil-flush lands up for international
grabs, according to Amazon Watch,
a California-based watchdog group. Oil companies are given subsoil rights by
the government, but by law must negotiate with the pre-industrial societies
that hold title to jungle lands -- tribes like the Huarani, the Achuar and the
Shauar tribes, some of which have only come into contact with the modern world
in recent decades. Too often, the tribes' introduction to modernity comes from oil company negotiators.
By finessing them into signing away oil access in morally deplorable contracts,
these deals channel the legendary purchase of Manhattan island for $24
worth of trinkets. But they are learning fast. Increasingly savvy to the
oilman's ways, tribes here are putting on war paint, grabbing spears and shotguns,
and saying no, sometimes violently, to the world's most powerful interests. Against that backdrop of rising tension, these previously unpublished contracts,
including classified agreements between the Ecuadorian military and 16 oil companies,
are changing the debate. The bulk of the documents, obtained by Beltran and
verified by this reporter in November, offer what experts say is an extremely
rare and detailed look at how cut-throat capitalism and an oil-guided militarization
of the Ecuadorian Amazon are digging deep rifts through the country. Sealing the deal with a fingerprint "This one is one of the worst," Beltran says, handing me an eight-page
contract. In 2001, Agip Oil Ecuador BV, a subsidiary of the multibillion dollar Italian
petrochemical company Eni, convinced an association of Huarani Indians to sign
over oil access to tribal lands and give up their future right to sue for environmental
damage. In return Agip gave, among other things, modest allotments of medicine
and food, a $3,500 school house, plates and cups, an Ecuadorian flag, two soccer
balls and a referee's whistle. Indicative of the vast gulf in cultures, two of the tribal representatives signed
the document with fingerprints. Other contracts, some marked classified, are signed by multinational oil companies
and the Ecuadorian military. Activists and attorneys interviewed for this story
say the documents prove the Ecuadorian army has become a private security force
for oil companies, one obligated to patrol vast swaths of jungle lands while
engaging, and spying on, Ecuadorian citizens opposed to oil operations. The contracts I reviewed typically required companies to provide money and
nonlethal logistical support such as food and fuel in exchange for military
protection of staff and facilities in remote jungle areas. But some go even further. In July 2001, a "master agreement" was signed between the Ecuadorian
Ministry of Defense and 16 oil companies, including Petroecuador, the state
oil company, and U.S.-based companies Kerr-McGee, Burlington Resources and Occidental
Oil. Covering a duration of five years, the document is stamped "Reservado"
-- classified. Its purpose: "To establish, between the parties, the terms
of collaboration and coordination of actions to guarantee the security of the
oil installations and of the personnel that work in them." It obligates
the military to undertake "the control of arms, explosives and undocumented
persons" in areas of oil operations and to give periodic updates to oil
executives in monthly meetings. For their part, oil companies are obligated,
among other things, to provide food, fuel and medical attention while maintaining
permanent communication links with military units in the sector. Activists say this seemingly innocuous language is harmful in scope: Hundreds
of thousands of remote jungle acres are covered by the accord, making especially
the mandate to control undocumented persons ridiculously expansive, since indigenous
citizens often either do not have IDs or don't carry them. Another contract between the ministry of defense and California-based Occidental
Oil, dated April 2000 and also marked classified, required soldiers to "carry
out armed patrol and checks of undocumented individuals in the area of Block
15; provide security guards for ground travel of personnel, materials, and equipment
within the area of operations and its area of influence; [and] plan, execute
and supervise counterintelligence operations to prevent acts of sabotage and
vandalism that interfere with the normal development of hydrocarbon activities." "This basically gives the company the ability to spy on citizens," Beltran
told me, a sentiment echoed by Steve Donziger, a U.S. attorney involved in an
Ecuadorian environmental lawsuit against Chevron Corp. Beltran and men like Ricardo Ulcuango, a popular Ecuadorian politician who
put his name on Beltran's disclosure suit, say the contracts are especially
troublesome given claims that a Quichua Indian settlement of Sarayacu, in Ecuador's
Napo province, as well as Shuar, Achuar and Shiwiar Indian communities in southeastern
Ecuador have been victims of state threats. For them, the army's involvement
in land disputes is part of "a policy of intimidation" by oil companies
working through what has essentially become their own private army. Oxy's invisible hand A few days after my visit to Beltran's office, I met Ulcuango in a dilapidated
high-rise office building not far from the Ecuadorian Congress. He was preparing
for a strategy meeting with other Amazonian lawmakers. Getting off the elevator,
the entire floor had the feel of a company gone belly up: dim lights, little
furniture, bare walls. But shy, smiling secretaries in brightly colored tribal
dresses hustled among political aides with bronze skin and wide cheekbones.
More lawmakers showed up: a group of short, elderly indigenous lawmakers in
red shawls and, like Ulcuango, trilby hats. Soon the three of us were sitting in a side office, empty but for an old desk
and two chairs, with the high-rise's view of Quito's morning chaos. I told Ulcuango
I had seen the contracts, and I needed to verify that he had officially filed
the disclosure suit and that the contracts were, as far as he knew, valid. He
confirmed both and added, "This is all unconstitutional because the military
is supposed to serve the people, not just oil companies." But that is far from clear. While the contracts are technically legal, Beltran,
whose oil investigations take place under the auspices of a small nonprofit
group called Las Lianas, says the fact they were negotiated in secret violates
Ecuadorian law requiring oil companies to publicize such agreements. Another uncertainty is the military's role in intervening in disputes between
oil companies and local tribes. Even the contracts seem contradictory. What
appears to be a November 2001 annex agreement to the master contract, for example,
forbade military commanders from getting involved in problems between local
populations and oil firms. But the 2000 Occidental agreement says they should
collaborate in helping solve problems between companies and locals. Do oil companies wield much leverage in guiding military policy? In a 2001 letter
to a ranking Ecuadorian military official, an Occidental executive offered to
build a military base near one of its remote operation areas, which Beltran says
is located near a Quichua Indian community. The base was eventually built and
supplied with Ecuadorian troops, all on what he claims is expropriated indigenous
lands. In a Las Lianas newsletter, Beltran and Jim Oldham, an American activist
working with the group write: It's unusual, to say the least, that a foreign-owned business, dedicated
to oil exploration and production, should choose to advise the Ecuadorian
Armed Forces as to where best to base their soldiers, and it is a sad reflection
on the power relations in Ecuador that the advice not only did not offend,
but was followed. The danger is that, now that the oil companies have established
their authority over the military, and now that indigenous lands have become
a target for military intervention, it is a short step to the military terror
that has been seen in Burma, Nigeria and Colombia. I also met with attorneys suing Chevron Corp. for damages left by Texaco Petroleum
Co., which launched the Amazonian oil boom in 1967 but left the country in the
early '90s. (Chevron and Texaco merged in 2001). On November 28, while visiting
the legal team's headquarters -- a white nondescript building with a security
guard located in a hilly section of Quito -- I was shown another military contract.
Released that same day by the Defense Ministry (presumably a result of public
pressure by the plaintiff's attorneys in the case), the agreement was signed by
Chevron and a military detachment near a jungle oil town called Lago Agrio, where
the trial is taking place. That deal obligates Chevron to build a villa on a remote
jungle military base belonging to a Special Forces detachment known as Rayo-24.
The building remains army property but is used, currently, as temporary housing
for Chevron attorneys defending the company in a billion-dollar environmental
lawsuit here. Big Oil's Response Larry Meriage, Occidental's spokesman, dismissed Beltran's allegations as propaganda
of the well-intentioned, saying that tribes in the Oriente have long known about
the security arrangements. Regarding claims that tribes had been forced to open the lands to oil, he wrote
in a November email: "It is important to clarify that [they] do not allege
nor, to Occidental's knowledge, are there any allegations that indigenous communities
within Block 15 have ever been threatened or subjected to violence directly
by Occidental or by armed forces acting on behalf of Occidental." Meriage said the contracts in question were legal and far from nefarious, adding
that in 2004 Occidental received an amended agreement it requested in keeping
with its human rights policy. That version had no references to armed patrols
or counterintelligence, for example, and forbade the military from deploying
troops that had been "credibly implicated" in human rights violations,
Meriage said. He stressed the dangers of operating in the Oriente, a zone widely reputed
to be frequented by drug runners, FARC guerillas from Colombia and kidnappers
who in the past have taken oil employees hostage. Also, though the 2000 agreement
is clearly marked classified, Meriage told me that "pursuant to Ecuadorian
law, these documents are most likely freely accessible to the public from the
Ministry of Defense." He also said the base referenced in the letter was
not on indigenous territory, as Beltran claims. Chevron's Jeff Moore said plaintiffs in the Chevron case have long known about
the villa and only recently called it into question as their case deteriorates.
Like Meriage and extractive industry experts I interviewed, Moore pointed out
the dangers of operating in Ecuador's jungles. The Ecuadorian military did not
grant an interview for this story. People and politicians fighting back The potential significance of the contracts rises proportionally with social
tensions here. In August, state forces in Quito cracked down on populist protests
that had shut down the country's oil production. And such clashes will continue
as long as indigenous groups clamor for halts to or bigger stakes in oil operations. There are stories of military personnel serving as repressive minions of oil
interests. A woman who works for a Quito-based group called Accion
Ecologica told me she had interviewed several poor residents of eastern
Ecuador who had been subjected to intimidation and violence by state forces
after they complained about the oil companies. Beltran says he, too, has interviewed
people with similar claims and has worked with an NGO to videotape testimony,
a project that wasn't completed due to lack of funds. Santiago de La Cruz, a Chachi indigenous leader and president of the Confederation
of Indigenous Nationalities of Ecuador, said companies try to intimidate community
leaders. "The companies have the backing of the government, even though
the government is supposed to defend the towns and guarantee the conservation
of natural resources," he said. "That is why groups are resisting
oil companies. It is a process that is requires risks and sacrifices of the
people." In addition to populist uprisings, political waves have recently spread. In
early December, an Ecuadorian congressional committee on indigenous affairs
called the country's defense minister, Oswaldo Jarrin, to testify about contracts
with foreign oil firms. Though Jarrin did not attend, he later suspended all
military contracts with foreign oil companies on December 8. Local media reports
said he plans to create a special military unit to protect oil facilities in
the Oriente. Others have a different take on the military here. For many Ecuadorians, the
military is seen as a stabilizing social force, one that has even taken indigenous
sides in disputes with companies. Alex Alper, an American (and former AlterNet
intern) who for two years worked for an anti-mining newspaper in Ecuador, said
she was surprised to read the contracts. "Historically, the military in
Ecuador has been seen as a big safeguarder of the will and well-being of the
people, ousting several unpopular regimes and seeing to nonviolent government
transitions. So it's inconsistent to [describe the military] as primarily at
the behest of the petroleum companies." Randy Borman, a middle-aged son of American missionaries who was raised with
Ecuador's Cofan Indians, agreed. Over the years, as oil operations further encroached
on tribal lands, Borman, now a Cofan elder, put on face paint and organized
armed raids on remote oil facilities, even once kidnapping a group of oil employees
for a day. He told me that during the Cofan's confrontations, the military proved
to be fair. "They have basically been good," he said, "even though they
are often manipulated by political forces." In his dealings with oil companies
during land disputes, Borman said oil companies would bring the military as
backup for their position, but the troops would often end up supporting the
Cofan. Borman did say that some military officials "who are on the take"
are responsible for intimidation. (In a seeming reference to this problem, the
Master Agreement's amendment prohibits contracts, verbal or otherwise, between
military commanders and oil companies. It also prohibits commanders from taking
donations and "economic support.") The resistance: divide et impera Ulcuango symbolizes a recent shift in Ecuador's indigenous opposition: Whereas
groups once boycotted the political system, they are now starting to work within
it. But politics in Ecuador is a messy and unpredictable business. Corrupt,
unstable and prone to turnover, it has had eight presidents in ten years, the
last one, Lucio Gutierrez, being forced to flee street protesters. He's now
in an Ecuadorian prison, where he reportedly claims to still be the rightful
president, not President Alfredo Palacio, his former second in command. More than politics or law, force gets heard, says Borman. He believes aggressive
tactics helped the Cofan build a tough reputation and ultimately regain a respectable
chunk of its territorial lands. "We've got a reputation now," he says,
telling me how his tribe recently confronted a Chinese oil company whose newly
acquired operations encroached on Cofan territory. "They backed off and
put out a press release saying the area is highly biodiverse," he said.
"But basically they surrendered without a fight." Other groups have gotten oil companies to back down, or at least stand still.
In one case, the Ecuadorian government has given Houston-based Burlington Resources
subsoil rights to vast tracts of undisturbed rainforest that crosses into lands
belonging to the Shauar and Achuar Indians (the latter group only came into
contact with the outside world in the late 1960s). That project has since stalled
because the tribes vow to fight. Borman sees oil's march as inevitable and works to shape rather than stop it.
He said the right technology can take oil without leaving an environmental mess,
and that tribes can work to make sure they get a fair stake in profits, not
just payoffs. A common claim I heard is that oil companies use sophisticated ways of dividing
and conquering tribal opposition. According to Atossa Soltani, director of Amazon
Watch, in some cases the oil companies employ anthropologists who speak local
languages to offer development in exchange for oil rights. Likewise, Chachi tribal leader De La Cruz says oil company representatives
offer health centers, schools and "other things that will offer a better
life." And if there is dissent in the community, he said the companies
"buy the conscience" of certain leaders who convince their base to
follow suit. In 1999, an Ecuadorian court ruled that an oil company could only
negotiate with legally recognized federations of indigenous communities, but
activists say it changed little. As environmental writer John Vidal puts it,
"yesterday's mirrors and beads have become today's roads, health and education
centers." Cracks in the oil well Can tribal people of the Ecuadorian Amazon stop the pipeline push? How much
will the Ecuadorian government, bent by debt to the globalizing North, tolerate
opposition to Big Oil? And if clashes come, how will rank and file soldiers
respond? By one estimate, global oil consumption is forecast to grow from 82 million
barrels per day now to 111 million barrels per day over the next 20 years. In
this light, the billions of barrels of oil lying in wait below Ecuador are understandably
tempting for the oil companies. Scott Pegg, a political scientist at Purdue University in Indianapolis who
studies natural resource conflicts, says having documents like these contracts
and letters is "extremely rare" and points out that oil companies
have a "catalytic effect," if not a direct one, on human rights in
developing nations. "Simply by virtue of them being there and generating extremely valuable
revenues for the government, they tend to bring an increased military and security
presence into oil-producing areas," he says. "The increased presence
of soldiers then potentially adversely affects the local population through
increased bribes, corruption, shakedowns, drunkenness, bad behavior, rape, etc.
My point is that this can happen even if the companies are not actively participating
in the security dynamics themselves." Pegg says oil companies accused of rights violations typically justify their
actions in a few basic ways: First, they say they are simply conducting business
and remain "neutral," or "apolitical" or "uninvolved"
in political matters. Second, they point to their own legitimate security needs.
Third, he says, they sometimes claim that they are required to follow the domestic
laws in place. "Obviously, he added, "the documents you have blow serious holes
in a number of these justifications." Related documents These are untranslated, scanned versions of the contracts mentioned in this
report. Right-click these links to save the files to your computer. Agip contract [PDF] Kelly Hearn is a former UPI staff writer who divides his
time between the U.S. and South America. A correspondent to the Christian Science
Monitor, his work has appeared in TheNation.com, E Magazine, Grist, the American
Prospect and other publications. He is a regular contributor to AlterNet.
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Master contract
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Oxy contract [PDF]
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