QUITO, (Reuters) – Ecuadorean referendums to ban oil drilling in a part of the Amazon and mining in a forest outside Quito easily passed, drawing cheers yesterday from Indigenous leaders and environmentalists despite warnings from oil and mining groups about billions of dollars in lost income.
A ban on oil development in part of the Yasuni Amazon reserve passed with just under 59% approval, with nearly all votes counted. A ban on mining in the Choco Andino forest near Quito has 68% support.
The Yasuni vote – which gives state oil company Petroecuador a year to shutter production in the 43-ITT block – is set to result in the loss of about 12% of Ecuador’s 480,000-barrel-per-day (bpd) crude oil output.
Petroecuador said in a statement on social media that it would carry out the actions necessary to comply with the voters’ decision.
The company has previously said a “yes” would cost Ecuador $13.8 billion in income over the next two decades.
The Yasuni ban will lead to a 1.9% reduction in projected economic growth between this year and 2026, the central bank predicted last week.
Two other Petroecuador blocks in the area are unaffected.
“We will follow up to make sure the government respects the decision of the Ecuadorean people,” Juan Bay, president of the Waorani Indigenous community, told a press conference in Quito. “We have saved the greatest biodiversity and we have saved the communities in voluntary isolation.”
The uncontacted communities are the Tagaeri, Taromenane and Dugakaeri, according to Indigenous leaders and environmental groups.
“The fight is not just today but years-long,” said Ene Nenquimo, also a Waorani leader, adding that behind the victory were years of pain felt by Indigenous communities.
The “yes” victory sends a message to investors “including major U.S. banks and asset managers, that the era of unchecked resource extraction is at an end,” said Kevin Koenig, of advocacy group Amazon Watch.
The ban could cost the country not just in lost income but in indemnity payments that must be made to companies, presidential hopeful Luisa Gonzalez, who led voting tallies in a first round on Sunday, told local radio.
“Those indemnifications could cost $15 billion,” she said on Punto Noticias on Monday afternoon, adding that the country was already hard-pressed to cover health, education and other costs. “We need to review to see how we’ll get out, what contracts there are, how they will close. It’s a complicated scenario.”
A single hectare (2.5 acres) of the Yasuni has 650 species of trees, as well as hundreds of species of animals, according to the environment ministry.
Both oil and mining guilds have said their industries are needed to shore up the battered economy and that bans would expose the areas to illegal mining and deforestation.
The local Quito referendum will scupper six gold concessions.
“Obviously what happened with Yasuni and in the Choco Andino doesn’t help any oil or mining investment, nor any foreign investment,” Maria Eulalia Silva, head of Ecuador’s Chamber of Mining told Reuters, adding that investors seek certainty. “You cannot protect the environment when you have communities caught in poverty.”
The chamber has said opposition to mining nationwide is blocking some $1 billion in potential investment for the next two years.
Mining was the country’s fourth-largest source of income last year, behind sales of oil, bananas and shrimp, and bringing in $2.8 billion.