Ecuador defends oil production in the Amazon after banks say they won’t provide funding

Jan 27, 2021 | 8 comments

Ecuador’s state-run oil company, Petroecuador, on Tuesday responded to the exit of several big European banks from financing the Amazon oil trade by saying it compensates  indigernous communities for environmental impact associated with infrastructure development and takes extraordinatary efforts to protect the environment.

Former president Rafael Correa began oil production in the Yasuni National Park in 2013, angering environmentalists and bringing pressure on banks to stop financing exportation from the area.

In a statement, Petroecuador said that it “carries out exploration, production, transport, refining … and marketing of hydrocarbons in rigorous compliance with Ecuadorean legislation on safety, health and environment.” Petroecuador added that any project license issued required the participation and consultation of local communities, noting that compliance is audited biannually by “qualified environmental consultants.”

On Monday, Credit Suisse, Dutch lender ING and France’s BNP Paribas said they have decided to stop financing trade in crude oil from Ecuador, after pressure from environmentalists aiming to protect the Amazon rainforest. An August report by advocacy groups and Amazon Watch named six European banks as major financiers of Ecuadorean oil exports to U.S. refineries.

Indigenous leaders said the banks’ role made them complicit in oil spills, violations of land rights and the destruction of rainforest by Ecuador’s oil industry.

Much of the controversy of oil production in the Amazon region stems from the 2013 government decision to be begin oil production in the Yasuni National Park, a previously protected area considered one of the most biodiverse in the world.  Former president Rafael Correa angered local and international environmentalists who claim that he reneged on a promise not to extract oil from the park. An Ecuadorian group, calling themselves the Yasunidos, attempted to put a referendum on the ballot to stop oil drilling, collecting tens-of- thousands more signatures than required. For various reasons, an election committee appointed by Correa threw out a large percentage of the signatures, killing the effort.