In Ecuador, Home Truths for China

“We need to make contact with the Chinese media as urgently as possible.” I was on my university campus in New York when I received this call for help from an Ecuadorean NGO on March 5.

Some 4,000 kilometers south, in Quito, the Chinese embassy was already surrounded by protestors. Ecuador has a high level of environmental awareness and a tradition of popular opposition to mining. And this time, the target was a Chinese company.

That day, the Ecuadorean government had finally signed a contract with Chinese-owned mining firm EcuaCorriente, giving the green light to the country’s first big open-cast mine, the El Mirador copper project. The decision was a blow to civil-society groups, whose concerns about the ecological and social implications of the project had succeeded in staving off approval for a year. The El Mirador site is in a richly biodiverse area of southern Ecuador, which is also home to indigenous groups.

EcuaCorriente was originally Canadian-owned. But in 2010, Chinese joint venture CCRC-Tongguan Investment—a hook-up between China Railway Construction Corporation and Tongling Nonferrous Metals Group—purchased the parent company Corriente Resources, creating the largest Chinese-owned mining corporation in Ecuador.

This is the Chinese government’s “going out” policy in microcosm. Figures from the Chinese embassy in Ecuador show that, in 2010, more than twenty China-controlled firms were working on projects here, with investments amounting to US$2.2 billion (14 billion yuan). Ecuador is now one of the biggest recipients of Chinese investment in South America.

The media in China tend to be cheerleaders of Chinese companies who successfully establish themselves in Africa or South America. But often those same firms encounter a very different reaction on foreign turf. Has the truth about Chinese firms overseas been misunderstood, or distorted at home? In December 2011, and then again in March this year, I travelled to Ecuador’s Amazon rainforest to learn more.

“We only found out that the contract was going to be signed two days in advance,” explained an anti-mining campaigner from Ecuadorean NGO Acción Ecológica called Felicia. “This was clearly a political move. A nationwide day of mine protests was scheduled for March 8, and that would have made the deal harder to sign.”

She continued: “It was all such a rush; there was no time to think things through. All we could do was go to the Chinese embassy to hand over a petition.” Eight protestors stormed the secretary’s office, tied the door closed with silk scarves and demanded to see the ambassador.

Felicia calmly photographed the protest, even as the military police surrounded the campaigners and cut through their silk barricades. They weren’t worried about being arrested. They had attracted the attention they were after.

The protest was entirely non-violent. Acción Ecológica’s creed is radical but non-violent action. They use “eyeball tactics” to draw attention, in combination with the pursuit of their goals through legal channels. The group is not specifically opposed to Chinese people or the Chinese authorities – it is concerned with the mines and the government’s responsibilities.

Under Ecuadorean law, a mining company must provide an environmental impact assessment and the environmental authorities hold a public hearing before an environmental permit can be issued. Only once that permit is granted can the company and the government ink their deal.

The El Mirador project had not secured a permit by the time the deal was signed, while many concerns about the impact assessment were unresolved. But central government went ahead regardless. “The government says we are a few radical and ill-informed ecologists being manipulated by the rightists as part of their political struggle,” said Felicia, with a humorless laugh.

“But the mines bring lots of economic development. Don’t you want to see more schools and hospitals built?” I asked her.

“That’s just poor logic,” Felicia shot back. “Education, healthcare, these are basic government duties. Why should people have to drink water contaminated with heavy metals in order to get them?

“History shows that mining and oil make capitalists and politicians rich, while the locals only ever get the pollution, the poverty and the destruction left behind. And the benefits supposed to go to the locals never actually reach them.”

Ecuador was the first nation to enshrine the rights of nature in its constitution, and Ecuadoreans have long been wary of big resource and energy developments. Felicia said this is the first mining project of its size in the Amazon, and without the necessary experience and legislation, the country could see a repeat of the errors made here by oil giant Chevron: the company and the government filled their coffers, but left the area around the project with the country’s highest cancer rates.

Ecuador, a country the size of a single Chinese province, is known for its rich plant and animal life. The United Nations Declaration on the Rights of Indigenous Peoples also grants its indigenous groups the right to live in freedom, peace, and security. But, for decades, roads and oil pipelines have penetrated the rainforest, followed by an influx of people, the felling of trees and the building of oil towns.

I spoke to another NGO worker, Soledad, who works for an indigenous-rights lobby group in the Ecuadorean region of Coca. She said the oil industry has harmed the health of indigenous people here and impacted their way of life. The promise of profits is driving local groups to hunt large numbers of animals and negotiate land sales with the oil firms, she said. Now mining and hydropower have joined the party, and Chinese firms are becoming more prominent. The main target of anti-mining protests is EcuaCorriente.

But many Chinese firms operating in Ecuador are quick to defend their environmental and social records here. Hai Luo, part of the environment team at Chinese-controlled oil company Andes Petroleum, outlined the steps his company takes to reduce harm: “We invest a lot of money drilling inclined wells so as to reduce damage to the trees on the surface [inclined wells have just one entry point, from which various wells branch off, rather than multiple shafts]. To avoid pollution, we treat the water before re-injecting it underground. And our handling of air and solid waste are all in accordance with Ecuadorean environmental regulations. 

“We have satisfied every environmental regulation, and we’ve worked to create opportunities in the local economy and funded schools. We have fully met our social responsibilities.”

These words are echoed by the authorities. Both the deputy minister for the environment and the official in charge of the Yasuni region of eastern Ecuador – home to the country’s largest oil reserves –said that Chinese companies, in fact all oil companies operating in the country, meet those standards.

But Natalia, an official with rainforest and indigenous rights NGO the Pachamama Foundation disagreed: “What does meeting the environmental ministry’s standards mean? Those regulations just tell you what you can destroy and how you can destroy it!” She warned me not to be taken in by the so-called environmental regulations.

Her anger is reflected in the wider population. The first example of intense public opposition to a Chinese company in Ecuador took place in January this year, against oil drilling. Then in March, the signing of the Mirador deal prompted a more concerted public campaign against Chinese companies.

So what’s so bad about the Chinese firms?

“They’re very closed-off,” said a university professor called Lupita who I got talking to. All oil companies are secretive, she said, but Chinese companies especially so. “For one thing, they prevent outsiders from entering their oil fields. For another, they keep close tabs on their staff and don’t want outsiders to learn anything. They won’t talk to the public or NGOs, only to central government.”

I tried to explain the measures Chinese companies take to protect the environment – drilling inclined wells and recycling wastewater – but she dismissed it all: “How can you trust a company from a country which pollutes 70% of its own water sources? Especially when they won’t even talk to anyone.”

And how can the Ecuadoreans be expected to understand the Chinese, when the Chinese don’t even understand each other? A low-level manager with Sinopec said helplessly: “A lot of our subsidiaries are working here, but there’s very little communication between Chinese people from different provinces.”

Perhaps this is less a case of right and wrong than a clash between different values and cultures. “Projects like El Mirador would be much better off it they just talked a bit more with the locals,” said one insider at a Chinese company. “Even if it was just a meeting once a week.”