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Mega-Development Threatens Devastation of Indian Ecologies

(from Native Americas: Hemispheric Journal of Indigenous Issues, Fall/Winter 2001, 450 Caldwell Hall, Ithaca, NY 14853)

by Bill Weinberg

In the aftermath of the devastating September 11 terrorist attacks, energy security and an increased reliance on Western Hemisphere sources have been proclaimed national priorities with an unprecedented urgency. Already, politicians are calling for expansion of the Free Trade system and industrial penetration into the most remote regions of the American continents-and the tentative gains of ecological protection and indigenous land rights are likely to be dismissed as "unpatriotic" indulgences in the new climate of war and crisis.

A week after the attacks, US Trade Representative Robert Zoellick argued in the Washington Post that giving President Bush "fast track" authority for expanding the Free Trade Area of the Americas (FTAA)-limiting Congressional input on the trade negotiations-was an imperative response. "Earlier enemies learned that America is the arsenal of democracy," Zoellick wrote. "Today's enemies will learn that America is the economic engine for freedom, opportunity and development. To that end, US leadership in promoting the international economic and trading system is vital. Trade is about more than economic efficiency. It promotes the values at the heart of this protracted struggle." That same week, Sen. Frank Murkowski of Alaska announced that the attacks mandated opening the Arctic National Wildlife Refuge (ANWR) to the oil industry. "There is no doubt that at this time of national emergency, an expedited energy-security bill must be considered," he told the press. "Opening ANWR will be a central element in finally reducing this country's dangerous overdependence on unstable foreign sources of energy." Legislators immediately added amendments to the emergency Defense Authorization bill that would open the ANWR to exploitation.

Such impacts will be felt throughout the hemisphere. Just before the terrorism crisis banished all other news from the headlines, it was reported that destruction of South America's Amazon rainforest-which scientists had recently believed to be slowing due to the demarcation of traditional indigenous lands and crackdowns on illegal resource exploitation-was once again rapidly accelerating. Deforestation of the Amazon Basin jumped in 2000 to the highest level since 1995, according to a study by Brazil's National Institute for Space Research. Some twelve to 20 percent of the Amazon has already been deforested or significantly degraded, and a new joint study by Brazil's National Institute of Amazon Research and the University of Michigan, recently published in Science, found that if road-building and industrial development continue apace, as little as five percent of the original forest cover could survive by 2020. But the region's governments are actively cooperating with corporate designs to massively expand industrial exploitation in the heralded "lung of the planet"-and this cooperation is poised to escalate in the new atmosphere. The vast rainforest basin faces rapid industrial encroachment from all sides-from Brazil to the south and east, from the Andean states of Colombia, Ecuador, Peru and Bolivia to the west, and from Venezuela to the north. The multinational masterplan for the twenty-first century is to link these industrial arteries, finally conquering the remaining interior heart of the rainforest. The interlocking plans are drawn up by the same governments and multilateral loaning agencies which mouth rhetoric about protecting global biodiversity. The opposition has come from the indigenous peoples who inhabit the rainforest, and their allies in the ecology movement-and they will certainly now face greater obstacles in making their voices heard.

Says Atossa Soltani, executive director of Amazon Watch, a California-based group which is working to raise public awareness of the new corporate threat to the rainforest: "Export-oriented development is punching infrastructure such as roads, pipelines and transmission lines into the last indigenous lands and protected areas in the Amazon. The World Bank and the Inter-American Development Bank get together with the energy ministers of these countries and say, 'Lets have an integrated grid throughout South America.' But with each new road or pipeline cut through the Amazon, thousands of workers stay behind, resulting in massive deforestation, prostitution, pollution of local water sources from their own settlements. The social impacts on indigenous peoples are enormous."


For the past two years, Colombian army troops have been evicting the U'wa Indians from their ancestral high tropical forest lands to make way for oil exploration by the California-based Occidental Petroleum. The government has refused to cancel the contract despite legal challenges, international protest and the U'wa's claim that the lease area lies entirely within their traditional homeland, although it is just outside their officially demarcated reserve. An U'wa protest encampment on contested lands was ejected by the military in January 2000, leaving several Indians injured. In subsequent raids on U'wa protest encampments, tribal leaders report that two Indian children were killed when they were driven by troops and tear gas into the Cubojon River. This remote region of cloud forest on the east-facing Andean foothills near the Venezuelan border was recently pristine, protecting headwaters that feed the Orinoco, the next major river basin north of the Amazon. But these forested mountains are now heavily militarized by a profusion of armed groups. The area immediately to the north has already been massively developed by oil companies, with the usual ecological impacts compounded by Colombia's state of war. Since the CaĖo-Limon pipeline, which delivers the resources of this region across the Andes to the oil boomtown of Barrancabermeja, began operation in 1986, it has been bombed by the guerillas every four to six days-spilling the equivalent of ten Exxon Valdez disasters into the surrounding forest. In 2001 alone it has been bombed 110 times. The region's Guahibo indigenous people have been almost entirely forced to flee their homeland into urban poverty.

The entire 5,000-strong U'wa people pledged to commit collective suicide rather than surrender to such a fate. The tribe received something of a reprieve in July 2001, when Occidental announced that its first test drill in the region, Gibraltar 1, had failed to find any oil. But exploration continues in the region, by Occidental (nicknamed "Oxy") and other firms. And the same issues face indigenous peoples at Oxy's new exploratory site in the rainforest of Ecuador-which environmentalists as well as Pentagon analysts warn may be the "next domino" to follow Colombia into crisis. Multinational oil companies have drawn a patchwork map of exploration and development "blocks" over Oriente, as the Ecuadorian Amazon basin region is known. "The majority of the Ecuadorian Amazon is already under exploration blocs," says Soltani. Unlike the ostensibly "protected" areas which form another patchwork overt his same area, these development blocks do not appear on the maps used by tourists. Several blocks-including Occidental's 200,000-hectare Block 15-overlap with Yasuni National Park. Block 15 also covers nearly all of the Limoncocha Biological Reserve and PaĖacocha Protected Forest, a blackwater lagoon system which is home to rare freshwater dolphins. It is also adjacent to the Cuyabeno Wildlife Reserve directly to the east.

"Obviously protected areas don't mean the same thing in Ecuador and other Andean nations as they do here," says Soltani. "The government controls subsurface rights and says it makes the decision with respect to the resources. It doesn't matter if it's a nature reserve or an indigenous reserve. These areas aren't really protected from oil drilling and exploitation."

Many of these same lands are demarcated as indigenous homelands, and Occidental has won a "code of conduct" agreement with the local Secoya and Siona indigenous peoples-although Quichua and campesino lands at El Eden were expropriated by the government and turned over to Occidental's block in 1999, with the community only receiving after-the-fact compensation.  In her 1991 study of oil exploitation in the region, Amazon Crude, investigator Judith Kimerling charged that Oriente had become "an environmental free-fire zone," with local water sources contaminated by oil and chemicals-leading to increases in cancer, disease and birth defects-and "black rain" falling on indigenous villages from burning waste pits.

Ostensibly, the oil concessions are granted only after consultation with local peoples. But in nearly every case, native peoples have had to fight to have their land rights respected. ARCO, which had development rights to Block 24 (since sold to Burlington Resources), tried to go around the Shuar-Achuar Indigenous Federation by dealing only with local villages instead of the Federation government. The Federation went to Ecuador's courts and got an injunction to stop drilling. Soltani says the Federation is "unwavering in its opposition," and resisting government pressure to enter the "tripartite" government-corporate-indigenous negotiations brokered by the World Bank and Inter-American Development Bank (IDB). "Meanwhile, the companies can't even land their planes on Federation territory-no roads, no drilling, nothing." The pressure on Oriente's indigenous peoples is about to massively increase, however. Occidental is a major player in the Heavy Crude Oilduct (OCP), a major new pipeline slated to deliver Oriente's oil resources across the Andes to the Pacific and global markets. The OCP has been repeatedly delayed for 10 years due political instability and pressure from native peoples and environmentalists. But on June 7, 2001, Ecuador's President Gustavo Noboa gave approval for the OCP Consortium to begin construction of the $1.1 billion pipeline which is slated to double Ecuador's oil production capacity.

The Economic Transformation Law, or TROLE II-imposed on Ecuador by the International Monetary Fund (IMF) as a condition of a bailout package following the country's inability to meet payments on its $16 billion foreign debt-mandates opening all sectors of oil development to private companies. Ecuador's government hardly has a hand in the OCP mega-project. The 300-mile pipeline is to deliver up to 450,000 barrels per day from Oriente to refineries at Esmeraldas on the Pacific coast, from where it is to be shipped out via the port of Balao. Starting at Oriente's Lago Agrio, the OCP is to run parallel to the existing Trans-Ecuadorian Oilduct System (SOTE) until just east of Papallacta, then cut north of Quito across the Andes before rejoining the SOTE at La Unión. This route cuts through the remote Mindo-Nambillo Cloud Forest Reserve, a micro-region of high-biodiversity, high-altitude jungle. This region also forms the headwaters of several rivers that flow to both the Amazon and the Pacific, and a major spill on the OCP could contaminate downstream communities on either side of the mountains. A less controversial path would follow the SOTE pipeline all the way across the Andes, but still impact local agricultural communities. The SOTE itself has suffered 14 major spills in past three years-most recently in May, when a landslide ruptured the pipeline near Papallacta, spilling 7,000 barrels.

The OCP Consortium, which is to build and operate the pipeline, is financially backed by consortium members Deutsche Bank and Citibank. Other members include Alberta Energy of Canada, Occidental Petroleum, Agip of Italy and the US oil/uranium titan Kerr-McGee.

Soltani believes the plunder is fueled by the dynamics of globalization. "Most of the revenues from auctioning off the rest of the Ecuadorian Amazon are going to pay international creditors who basically got Ecuador into the situation by allowing it to borrow more than it could pay back because they had oil revenues to depend on," she says. "The oil got Ecudaor into this mess." According to PetroEcuador, the state oil company (whose monopoly has been pried open by IMF pressure), of Ecuador's $2.4 billion in 2000 oil revenues, $1.3 billion went to foreign debt payments, and $1 billion went to the bailout of failing commercial banks, leaving less then $100 million for Ecuador's domestic spending.

Soltani states that "export-oriented development policy is unilaterally imposed by the international institutions like the World Bank through their Country Assistance Strategy, or CAS. This is basically a business plan by which the World Bank, IMF, IDB and other international creditors decide how much money countries get to create a favorable investment climate." She says the projected $2.4 billion expansion of Ecuador's oil industry will mean "an immense amount of new drilling and feeder pipes fueled by the new pipeline. Many of these areas are claimed by tribes, and many of them have legal title to the lands." "The bankruptcy of the banks followed IMF-mandated privatization," says Soltani. "The IMF has Ecuador on a strict regime of structural adjustment as a condition of the payback plan. Another condition is dollarization of economy and the national development plan which includes doubling of oil production-of which 80 percent would go to pay the debt. They decided Ecuador had to have at least a billion in new investment in order for the dollarization plan to work. There goes the Amazon."

In January 2000, plans to phase out Ecuador's national currency and replace it with the US dollar sparked a nationwide coordinated uprising led by an unprecedented alliance of Ecuador's highland indigenous peoples, labor unions and elements of the military. The protests succeeded in bringing down President Jamil Mahuad, and only the last-minute intervention of the military chief prevented an Indian-led revolutionary junta from taking power. Instead, Mahuad's vice president Noboa was installed in power. But Noboa went ahead with the dollarization plan, and protesters again blocked roads nationwide and occupied Quito, the capital, in January 2001.

The threat of further unrest, in turn, fuels Ecuador's militarization. "Ecuador is going the way of Colombia," Soltani warns. "There were three pipeline bombings in Ecuador in the last year, and ten oil workers kidnapped and one-an American-killed. This has mostly been in the border region near Colombia, where the new pipeline is planned. Oil companies, including Oxy, have asked for extra military commitments from the Ecuadorian government, and are complicit in Ecuadorian government plans for militarization of the border region." In August 2001, the Energy Intelligence Group's Oil Daily reported: "In a bid to improve security in areas bordering Colombia, Ecuador's oil companies-16 private companies and state company PetroEcuador-and the country's armed forces signed a framework agreement under which each company can arrange to pay the military for protection." Citing the threat of guerilla infiltration from across the Colombian border, the article concluded: "With construction starting on a new, heavy crude oil pipeline, companies operating in Ecuador are even more concerned about protecting their investment."

Public hearings on the OCP in Quito have been packed with indigenous, campesino and ecologist opponents of the project, who charge that the environmental impact studies have been inadequate. The National Confederation of Indigenous Peoples of Ecuador (CONAIE), which led the January 2000 uprising, has joined with the environmentalist Acción Ecológica, local farmers along the pipeline route and the petroleum engineers union to try to stop the project through the courts, charging failure to adequately assess environmental risks or consult with affected communities. But the Ecuadorian courts have failed to halt construction, even while some cases are still pending.

On August 31, nine women activists from Acción Ecológica were assaulted by company security guards when they attempted a peaceful protest at the offices of the OCP Consortium in Quito. The guards violently ejected the activists and two journalists, destroying their cameras. One journalist, Gustavo Abad from the leading national daily El Universo, was reportedly beaten and detained by OCP employees. The sit-in was in support of a one-day general strike underway by residents in the oil-producing region of Lago Agrio to protest the construction of the new pipeline complex.


Nearly a thousand miles east of Ecuador's Oriente, in the Urucu River region of Brazil's central Amazon Basin, a similar pipeline scheme is also linked to an ambitious national development strategy. President Fernando Cardoso's $45 billion Avanca Brasil-"Advance Brazil"-plan includes a new gas and oil pipeline network in the very geographic heart of the Amazon, linking Manaus, capital of vast Amazonas state, to remote Porto Velho, through the isolated territory of the Apurina, Paumari, Deni and Juma indigenous peoples. None of these peoples have yet had their land demarcated, and therefore have little legal recourse to stop the project.

The first 165-mile leg of the project was completed in 1998, following Urucu River from Coari to the new Urucu-Jurua Gas Field complex, which includes new wells, feeder pipes, processing plants and transmission lines. Investment is pouring in from the Houston-based El Paso Energy International, a majority owner of two power plants served by the pipelines. New gas-burning power stations are also planned, including one at Porto Velho, the terminus of the expanded pipeline project. In 1997, the Japanese Export-Import Bank loaned $64 million for construction of the Urucu Gas Processing Plant. Also involved are GasPetro, a subsidiary of the state oil company PetroBras, and the multinational oil infrastructure giant Halliburton.

The first Coari-Urucu leg has already had disastrous impacts on local populations-firstly, by blocking numerous creeks used as a water source by indigenous and campesino communities. Fish populations have dropped dramatically, and local manioc subsistence agriculture has suffered. Many communities now have to bring in water remotely. Brazil nut and fruit trees were also destroyed-in violation of Brazil's forestry code-and compensation did not reach all affected communities. The urban-to-rural population boom which followed the pipeline has turned Coari, the jungle settlement midway between Manaus and Urucu, into the region's prostitution center, and seen an attendant explosion of AIDS and sexually transmitted diseases. The new settlers have also brought a boom in illegal logging.

The next 200-mile leg, south from Urucu to Porto Velho, will cut into what one biologist calls the "nucleus of the Amazon"-which is believed to contain Brazil's highest concentrations of oil and natural gas. The project is facing legal challenge by local unions and non-governmental organizations, again charging inadequate environmental review or compensation to affected communities. But the Apurina and other indigenous peoples of the region fear the project will result in the theft and degradation of much of their land before it can be demarcated.


Another ambitious mega-development plan is the Venezuela-Brazil Transmission Line, connecting the Guri Dam on the Caroni River in Venezuela's southern Bolivar state to Boa Vista, in the northern Brazilian state of Roraima. This leg of the project was completed in 2001, following years of resistance by affected indigenous peoples on both sides of the border. A possible extension south to Manaus is also planned, effectively merging the electrical grids of Venezuela and Brazil.

The Arawako, Pemon and other Indian nations of La Gran Sabana, Bolivar state's highland plateau which divides the Amazon and Orinoco basins, had repeatedly blockaded construction roads through the region. But in 2000, the Bolivar Indigenous Federation (FIB) and National Indigenous Council of Venezuela (CONIVE) both signed off on the Transmission Line project-partially in return for autonomy guarantees in the new constitution instated by Venezuela's populist President Hugo Chavez. On the Brazilian side, the Macuxi at the Sčo Marcos Indigenous Land reserve also cut a deal allowing the power lines to cross their territory. In exchange for dropping their opposition to the project, the Macuxi finally got government action on their long-outstanding demands for eviction of ranchers who had been encroaching upon their officially demarcated homeland. Ironically, the August 2001 ceremony at the Brazil-Venezuela border officially inaugurating the project was attended not only by presidents Cardoso and Chavez, but also by Cuba's Fidel Castro, who was in Venezuela on an official visit. The development scheme is likely to meet new resistance, however. Ecologists are unhappy that the new transmission line cuts through Venezuela's Canaima National Park. More importantly, it is conceived as but a first step in a string of far more ambitious projects with immeasurable impacts. The hydro-power of the Guri Dam is to be augmented by a series of new dams on the Caroni, a major Orinoco tributary. The Caura-Paragua Project would actually divert Venezuela's Caura River across a mountain divide into the Paragua River, so as to increase hydro-power output on the Caroni, into which the Paragua drains. A new phase of mineral development is also projected, with a Guri-Manaus gas pipeline to follow the transmission lines. The Canadian company Placer Dome has plans to develop a gold mine at Las Cristinas in La Gran Sabana. Manaus, already the crossroads of the Amazon, is to be linked with both oceans and numerous commodity ports. Connected with the Orinoco and Venezuelan ports via the transmission lines and gas ducts, it will also link to remote Porto Velho via the Urucu project. Porto Velho, in turn, is to be linked to Lima, Peru, through a new road, BR-364, cutting through Serra do Divisor National Park near the Brazil-Peru border-and the territories of the Poyanawa, Kaxinawa, Katukina, Shanenawa and Kulina peoples. A more southerly road route, dubbed the Inter-Oceanic Transport Corridor, would link Bolivia's Santa Cruz gas fields to the Chilean port of Arica. The Santa Cruz gas fields, deep in the Bolivian Amazon, are also slated to be linked to Porto Alegre on Brazil's Atlantic coast via the new Bolivia-Brazil Natural Gas Pipeline. Japan has pledged $1.5 million for a feasibility study for the pipeline. These projects are explicitly linked to the expansion of the FTAA to South America, beginning with the Southern Cone nation of Chile. According to a recent IDB report, the agency is seeking to "identify corridors that would facilitate linkage and promotion of trade within the Southern Cone between the Atlantic and Pacific basins."


The most ambitious mega-projects of all call for harnessing the Amazon Basin's waterways as arteries for global trade. Giant hydro-electric dams on the Amazon and Orinoco basin rivers already fuel industrial development across the South American continent. The next envisioned phase calls for enlarging these rivers into a an interlocking network of inland shipping lanes, each on the scale of the St. Lawrence Seaway.

The Brazilian government has drawn up plans for a Tocantins-Araguaia Waterway, which would dredge these two Amazon tributaries, turning them into industrial waterways, with several new shipping terminals along the way to facilitate export of timber and other resources from the conquered rainforest. The project would entail building locks at the Tucurui and Santa Isabel dams. The Xavante Indians, whose lands would be affected, are opposed, as are the Ava-Canoeira people, much of whose homeland would be flooded by the Serra de Mesa dam on the Tocantins River, now nearing completion.

The related Madeira-Amazon waterway would connect Porto Velho to the Amazon River at Manaus, running through the lands of the Mura, Munduruku and Parintintim peoples. First proposed by local ranchers and cotton producers carving new agricultural empires out of the destroyed Amazon, this plan has also won the support of Brazil's government.

In March 1997, the Brazilian Movement of Dam-Affected People issued the Declaration of Curitiba, calling for moratorium on all dam construction in the Amazon. Some 30 new hydro-electric dams are currently pending in the Brazilian Amazon, and increasingly they are financed by private capital. The Belo Monte Dam on the Xingu River would flood much of the traditional land of the Kayapo people. Due to the opposition of the Kayapo and their allies, the initial 1,200 hectares slated to be flooded-including much of the Kayapo's demarcated reserve-has been reduced to 400 hectares. This would avoid the flooding of villages, but still mean relocation of some 2,000 families living outside the centralized Kayapo villages. Construction is foreseen for 2002. Opponents of the plan still face threats and actual violence from the private thugs of local economic interests who hope to profit from the development. On August 25, 2001, Ademir Alseu Federicci of the Movement for Development of the Trans-Amazon and the Xingu (MDTX) was shot to death in his own home in Altamira, near the dam site. According to a statement by his supporters: "It is believed that the crime had a political motivation as Dema, as he was called, was a principal leader in Altamira in the fight against large landowners, loggers and dams."

The Canadian utility Hydro-Quebec now has an advisory contract for the Hidrovia project, a plan being promoted by several South American governments to link the new industrial waterways of the Amazon Basin with the Parana River to the south. The Hidrovia would drain the vast wetlands of southern Amazonia to turn the Parana into a major artery for ocean-going freighters. Stretching from the remote Amazonian wetlands of Brazil, Bolivia and Paraguay to the metropolitan ports of Buenos Aires and Montevideo, the Hidrovia would facilitate the industrial super-exploitation of Amazonia and South America's continental interior in the 21st century. Opposition is led by the Guarani Indians of southern Brazil and northern Paraguay, who, having already lost most of their traditional territories to cattle interests, now stand to have their last landbase drained by the Hidrovia.

While the dynamics behind the corporate super-exploitation of the Amazon are complex and entrenched, they have not been impervious to challenge by citizens of both the South American exporting nations and the North American consuming nations. Texaco, a leader in Ecuador's oil industry in the 1980s, pulled out of Oriente when its contract ended in 1992 following Judith Kimerling's expose of Amazon Crude.

"We have to take responsibility for the footprint of these globalization projects in places like the Amazon," says Atossa Soltani. "Much of the destruction is driven by our energy consumption patterns. The oil and gas exports from the Amazon mostly go to the US. Over 20 percent of US oil imports last year came from Venezuela, Ecuador and Colombia. Venezuela has overtaken Saudi Arabia as our top source of foreign oil. We have to demand an end to drilling and exploration in frontiers and culturally sensitive regions, and demand that the World Bank stop funding this development. The ultimate challenge is to reduce our dependence on oil-because from the Arctic to the Amazon, it is our appetite for oil that drives the destruction of some of the last wild places, and the indigenous peoples that live there." That challenge is certain to be greater than ever, thanks to the September 11 carnage, and the new hemispheric war footing it has sparked. ###

Reprinting permissible with attribution.