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Ecuador Signs Deal Not to Drill in Amazon Nature Reserve

Gonzalo Ortiz

QUITO, Aug 4 2010 (IPS) - “The trust fund that we have just established is historic, not only for Ecuador but for the entire world,” said Rebeca Grynspan, associate administrator of the United Nations Development Programme (UNDP), after signing an agreement with the government of Rafael Correa to leave 846 million barrels of oil under the ground in a pristine Amazon jungle wildlife reserve.

In the groundbreaking pact, the Ecuadorean government agreed to refrain from tapping three major oilfields in the Yasuní National Park for at least a decade.

The 846 million barrels of proven reserves in the Ishpingo, Tambococha and Tiputini (ITT) fields account for 20 percent of Ecuador’s total reserves.

In return for leaving the oilfields in the ITT section of the park untapped, Ecuador would be paid 3.6 billion dollars, equivalent to half of the expected earnings from the oil.

The trust fund will be administered by the UNDP, with the participation of the Ecuadorean state, civil society and representatives of the donors. The funds would be left untouched, and would serve as a guarantee in case the oil was ever exploited.

The project, thought up by environmental organisations a decade ago, was officially proposed to the U.N. general assembly by President Correa in September 2007.

But it has had to wind its way through a series of commissions, and along the way several high-level officials were laid off or quit, including former foreign minister Fander Falconí.

The trust fund “breaks with the paradigm of North-South relations,” Grynspan said, adding that rich countries of the North will not be the only contributors to the fund, “because the main contributors are the Ecuadorean people who refrain from using their oil reserves, for the benefit of a completely different model of development.”

The UNDP official underscored the originality of the initiative, saying that until now there were only market-based mechanisms to curb the effects of greenhouse gases already in the environment (under the Kyoto Protocol), while “this project is the first in the world to prevent the emission of such gases in a quantifiable and verifiable manner.”

The “novel initiative” will have multiple effects, said Grynspan, because not only will it keep over 400 million metric tons of carbon dioxide from being released into the atmosphere, thus combating climate change, but it also sets an example of shared social responsibility.

Grynspan and local officials also noted that the agreement will declare the area in question off-limits to development, thus guaranteeing that communities of indigenous people like the Huarani and Taromenane who live in voluntary isolation in the Yasuní National Park will be respected.

The interest generated by the fund, of around seven percent, will be invested in the conservation of the national park and 43 other nature reserves in Ecuador, and in social and energy projects.

Top priority for funding of social projects will be given to health care and education for the indigenous peoples of Ecuador’s Amazon region, an area that has produced oil — and suffered serious environmental damage as a result — since 1972.

This OPEC member currently exports some 470,000 barrels per day of crude pumped from oilfields in the country’s eastern Amazon region and carried by two pipelines to the Pacific oil port of Balao.

The fund will also invest “in renewable energy projects, tapping the country’s hydroelectric, geothermal, wind and solar potential,” said Foreign Minister Ricardo Patiño.

The minister said the agreement is also aimed at modifying Ecuador’s energy mix, in order to wean the country off oil dependency.

The contributions to the trust fund are expected to come from different countries, philanthropists, non-governmental organisations and companies interested in making donations to keep the oil in the ground, said María Fernanda Espinosa, Ecuador’s minister of the cultural and natural heritage.

“The UNDP has gone through an intense and fruitful learning process, and has modified its traditional concepts,” Grynspan said.

Bisrat Aklilu, coordinator of the UNDP-administered Multi-Donor Trust Fund (MDTF), which manages more than 30 funds totaling over five billion dollars, told IPS that “The name of my office is going to change, because of Ecuador.”

The Ethiopian economist added “It’s not a joke: we’re thinking of replacing the word donors with partners.

“This is one of the reasons for the global importance of what the UNDP has just signed,” Aklilu said. “Ecuador has convinced us that it is the biggest partner in the new trust fund, because it is contributing the greatest resources, through the sacrifice of the Ecuadorean people, who have given up producing the oil. The rest of the donors, whatever they contribute, will always be minor partners.

“We propose that this model be replicated in other latitudes,” the U.N. official said, concurring with the chief architect of the project, Ecuadorean economist Carlos Larrea, that “an analysis of the microeconomic consistency of the project demonstrates its soundness,” besides the fact that it “opens up new fields, such as in development theory.”

The 982,000-hectare Yasuní National Park, in the heart of Ecuador’s Amazon rainforest, is one of the world’s most bio-diverse areas. It was declared a world biosphere reserve by UNESCO (the United Nations Educational, Scientific and Cultural Organisation) in 1989.

Biologists explain that the reason Yasuní is so species-rich is that it forms part of the Pleistocene Refuge, which means it was never subject to glaciations, and animals and plants not able to survive in other areas found refuge here.

“The indigenous populations that inhabit the Yasuní use, and are the guardians of, that biodiversity,” native leader Manuela Omari Ima, president of the Association of Huarani Women, told IPS.

The Huarani have a reputation as a fierce warrior people.

Omari Ima and a dozen other native leaders, including Chief Kawo Boya, who lives in the Yasuní National Park, attended the ceremony announcing the trust fund, bearing broad smiles on their black-and-red painted faces.

“This is the most emblematic project of the government of the citizen revolution,” Minister Espinosa said in her speech.

But to the surprise of many, Correa himself did not attend the ceremony, held in the presence of the entire foreign diplomatic corps, the representatives of the donor and aid agencies, and the ministerial cabinet, but was represented instead by Vice President Lenín Moreno.

A government official and long-time environmentalist who spoke on condition of anonymity told IPS that the president’s absence once more demonstrated his “ambivalent commitment” to the Yasuní trust fund project, because “he has not fully come to grips with how revolutionary his own proposal is.”

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