Playing out a full hand: Indigenous people=s movements and the vulnerability of transnational energy corporations
A paper written for the seminar AIndigenous People: The Way Forward,@
Universiti Kebangsaan Malaysia, November 1993
The authors, Craig S. Benjamin and Terisa E. Turner are members of the International Oil Working Group, P.O. Box 1410, Cathedral Station, New York, New York, 10025 USA
The authors challenge the assumption, prevalent among many Northern environmental and indigenous advocacy groups, that grassroots movements are powerless to stop large-scale development projects initiated by transnational energy corporations. The authors begin by examining the compromise position which the U.S. National Resources Defence Council (NRDC) advocated in the struggle against oil development in the Ecuadorian Amazon. They then present a multi-level structural analysis of the power of popular alliances in Ecuador and internationally to thwart development programs pursued by transnational energy corporations and their national allies. In a survey of the political economy of energy production and sale in the present century the authors identify three critical factors pertaining to the present vulnerability of the international energy industry. The first is the transnationals= fear of direct confrontation with movements of energy workers and their communities. The second factor is the ongoing effort by energy transnationals to promote intermediary social actors, including state energy corporations, that can serve as buffers against popular movements. The third is the weakening of the power and legitimacy of these intermediaries under the pressure of global economic restructuring in the period 1973 to the present. Key historical events referred to in this analysis include the 1973 oil embargo and the 1978 uprising by Iranian oil communities.
Playing out a full hand: Indigenous people=s movements and the vulnerability of transnational energy corporations
On November 8, 1993 the Rainforest Action Network, a U.S. based environmental organization, sent an open letter to individuals and organizations involved in the international campaign against oil development in the Ecuadorian Amazon. This letter stated that the government of Ecuador had decided not to license any further exploration or drilling within Yasuní National Park, a World Biosphere Reserve located in the Ecuadorian Amazon and home to indigenous hunting and farming communities. In addition, the letter confirmed an earlier announcement that the Ecuadorian state oil company had decided not to proceed with drilling operations within a second wildlife reserve, also located within indigenous territory in the Amazon. These are extraordinary developments, a fuller analysis of which, we believe, might benefit indigenous and other popular struggles around the world. These developments also perfectly illustrate the theme of our presentation C namely, the crucial dialectic between the power of indigenous people's movements and the instability of the international energy economy. So, before turning to the question of the potential for indigenous peoples and their allies to prevent the environmental and social destruction that inevitably accompanies large-scale energy development, we will briefly outline some of the background to these recent events in Ecuador.
Oil,, struggle and solidarity in Ecuador
The Ecuadorian Amazon or Oriente is home to seven distinct indigenous cultures: the lowland Quichua, the Shuar, the Achuar, the Siona, the Secoya, the Cofan and the Huaorani. The total population is estimated to be 63,000, with the lowland Quichua and the Shuar numbering 35,000 and 25,000 respectively, while the Huaorani number roughly only 700 and the Secoya around 150. Although modes of living differ greatly through the Oriente, anthropologist William T. Vickers comments that most indigenous societies in the region Aare expert managers of their subsistence economies, and that these economies have provided them with a satisfactory standard of living.@ Although a gendered division of labour is common among the indigenous communities, Vickers notes that the division is generally marked by relationships of reciprocity and mutual cooperation rather than by dominance and competition and that in all cases the indigenous economies are based on Afree access to environmental resources.@
Over the last twenty years, efforts by transnational corporations and the Ecuadorian state to develop the oil resources of the Oriente have brought enormous social, economic and environmental pressure to bear on the indigenous societies. Speaking in the Oriente in 1972, then president of Ecuador General Guillermo Rodriquez Lara said, AThere is no more Indian problem; we all become white men when we accept the goals of the national culture." The General=s comment speaks to the possibility, in this racially stratified society, for some indigenous people to move up the racial hierarchy, but only on condition that they abandon their native identities, along with their ability to provide for themselves through communal systems of land tenure, here frankly identified as obstacles to state development. But even this promise is largely illusory. By and large, indigenous people who cut ties with their own communities, find few opportunities to live as white men or women. Rather, excluded from both full-time permanent waged employment, and from free access to environmental resources, indigenous women and men pulled into state development schemes are typically among the most exploited and worst abused of all Ecuadorian workers.
In addition to this erosion of indigenous social relations, transnational and state oil companies have been responsible for widespread destruction of the forest habitat. Evaristo Nugquag, a spokesperson for COICA, the Coordinating Body for the Indigenous People=s Organizations of the Amazon Basin, comments: AFor years the oil industry routinely used our open spaces as a free disposal system, pouring millions of gallons of untreated oil into hundreds of unlined open pits that bleed into the rivers that the Huaorani view as the jungle=s bloodstream." Furthermore, with the roads opened by the oil companies, come transient oil workers and colonos, displaced native and mestizo people from the highlands. In clearing land for themselves, these settlers open up new territory for agri-business development, and increase the pressure on indigenous territories.
Left unchecked, the combined pressures of oil development in the Ecuadorian Amazon would be ethnocide. Indeed, some indigenous communities have been all but destroyed. After more than 20 years of contact with Texaco, the Cofan, one of the first groups to be integrated within the advancing petroleum frontier, were reduced from several thousand to less than 500 people. The reason, according to Anita Parlow of Multinational Monitor, is Aa combination of disease from outside contacts, enormous health problems brought about by oil wastes and a sense of hopelessness that too frequently led to frontier prostitution and alcoholism."
The indigenous peoples of the Ecuadorian Amazon have resisted these threats to their survival through a wide range of strategies, ranging from sabotage and armed confrontation through lobbying efforts on the national and international stages. The Confederation of Indian Nationalities of the Ecuadorian Amazon (CONFENIAE) has taken a firm stand against unregulated oil development on indigenous territory. Their platform include a call for a moratorium on all oil development in the Amazon basin until indigenous territorial rights are recognized and the indigenous peoples are empowered to control the pace of development for themselves.
In this struggle to defend land and life from the destruction caused by oil development, the indigenous people=s movements in Ecuador have had to confront powerful adversaries which stand to profit from continued or accelerated development. Among these adversaries are transnational energy corporations such as Gulf, Texaco, Conoco and Maxus which have led the way in pushing the exploitation frontier deeper and deeper into the rainforest. The exploitation of Amazon crude has also proven beneficial to the Ecuadorian military, which is never far from the seat of power, and which continues to control transportation in and out of the Amazon. Finally, international bankers and wealthy Ecuadorian businessmen are also pressing for intensive exploitation of the Amazon as the only likely way to repay the state=s foreign debt.
The evident power of these various groups C transnational energy and finance capital, the largest Ecuadorian capitalists, and the petro-generals C has lead some international solidarity workers to assume that the most realistic strategy is to try to manage or ameliorate the impacts of oil development, rather than support the right of indigenous peoples to control development in their own territories. In 1990, the international environmental campaign against oil development in the Ecuadorian Amazonian was largely focused on Conoco, a subsidiary of DuPont chemicals and the holder of an important oil concession within Yasuní National Park. That year, representatives of two U.S.-based non-governmental organizations, the National Resources Defence Council (NRDC) and Cultural Survival, met in secret with representatives of Conoco, in an effort to work out a compromise solution that would allow Conoco to proceed with exploration while providing some protection for the environment. According to a transcript of that meeting which was later leaked to environmental organizations in Ecuador, and which neither the NRDC nor Cultural Survival have refuted, key demands expressed by indigenous and environmental movements in Ecuador C including demarcation of indigenous lands and formalization of indigenous land title, compensation for harm done by previous drilling and pipeline operations, and the right to impose royalties on future oil production C were either ignored or quickly dropped from the discussions. Instead, the minutes suggest that the two non-governmental organizations, having accepted that oil production would continue in Ecuador, tried to set themselves up as mediators in the deal they believed would inevitably be struck between Conoco and the international environmental movement. Having told Conoco that Athe NRDC accepts the reality that Ecuador will develop its resources@ and that Athe NRDC believes that it is better to have Conoco do the development than anyone else,@ representatives from the NRDC pressed the transnational energy company to provide funding to help create an independent, third party foundation to oversee energy development in the parklands. Later, when explaining this decision to negotiate with Conoco rather than support the demands made by indigenous and environmental movements in Ecuador, NRDC lawyer Robert Kennedy told a reporter,
On the surface this appears to be a realistic and sensible assessment of the power of transnational energy corporations and their allies to get what they want in Ecuador. But to us, in fact, Kennedy=s argument is deeply flawed. Kennedy appears to assume that the power of transnational corporations and their allies is somehow inherent to their size and position in the global economy. We would argue instead that the power of transnational corporations and their allies is, in fact, conditional on a wide range of shifting, constantly contested social relations. Furthermore, we would suggest that the power of transnational corporations is always relative to the power of popular movements organized within those same contested social relations.
To effectively analyze the power of popular movements relative to the power of transnational energy corporations and their allies, we need to look at the social relations of race, class and gender within social movements themselves; at the relations among movements at the local, national and international levels; at the relations between popular movements and the nation state; and at the shifting composition of transnational capital itself.
Popular movements and global restructuring
A full analysis of the dialectic of capitalist vulnerability and indigenous power in Ecuador would require considerably more detail than can be accommodated here. There are, however, five specific points which we would like to outline as examples of some of the crucial, interlocking themes which require greater attention. These are the ecological and economic constraints on oil development, the rise of indigenous radicalism, the creation of new models of internationalism, the self-mobilization of the Ecuadorian working classes in response to economic restructuring programs, and the structural crisis of energy capital.
One of the advantages that the indigenous peoples of the Ecuadorian Amazon and their allies have in this struggle is that the exploitation of oil in the Ecuadorian Amazon is a comparatively recent phenomenon. In 1968, a Texaco-Gulf consortium made a major find near Lago Agrio on the western edge of the Amazon basin. But, because the heavy crude found in the Ecuadorian Amazon was considerably less valuable than the light crude prevalent in the major petroleum exporting countries of the Middle East, and because exploration and extraction in the Amazon proved relatively expensive, the intensive exploitation of these resources has required both high oil prices and relatively easy credit. Thus the Ecuadorian oil boom really only got underway after 1973 Middle East embargo and the subsequent restructuring of the international energy economy.
We should also point out that the future of Ecuadorian oil is extremely uncertain. On a world-scale, known reserves in Ecuadorian Amazon are of limited significance. As Joe Kane, formerly of the Rainforest Action Network, the most hotly contested concessions in Ecuador, those in Yasuní National Park, would total U.S. energy consumption for roughly 13 days. At the current rate of exploitation, all proven reserves of Amazon crude will be exhausted no later than the year 2005. In other words, unless new discoveries are made, the exploitation of oil in the Ecuadorian Amazon will collapse little more 30 years after it began. Given the high failure rate of recent exploration efforts, it seems highly unlikely that future findings will significantly extend this projected life-span.
In Ecuador, the struggle against the environmental and social impact of oil development has been carried out primarily by the various ethnic federations representing the indigenous cultures of the Oriente. Throughout the 1970s, these federations, dominated by the various rival missionary orders that had helped set them up in the first place, generally worked to ameliorate the impact of oil development, rather than attempt to control the pace of development themselves. However, in the 1980s these organizations came to take an increasingly militant stance in respect to state development projects on indigenous territory. A number of factors were at work, of which we will note two. Firstly, with the generalized failure of state land reform initiatives undertaken within a framework of a mestizo or campesino cultural identity, more and more members of dispossessed classes were turning to indigenous social relations as a source of subsistence and of political counter-power. Secondly, the social and environmental threat to the survival of indigenous social relations was becoming more and more apparent with the expansion of the oil frontier ever deeper into indigenous territories. The consequent reassertion of indigenous cultural identity within the struggle for social power in Ecuador led to the creation of new organizational forms and expressions. In 1980, the ethnic federations of the Oriente agreed to the formation of a regional confederation, CONFENIAE, with no links to the missionaries. In June 1990, a Pan-Indian uprising supported by CONFENIAE and other organizations briefly shut down the Ecuadorian economy, demonstrated the potential power of a unified indigenous majority.
As the development of petroleum resources in the Ecuadorian Amazon is articulated with a shifting international energy economy, so too are the struggles of the indigenous peoples of the Oriente articulated to emerging international movements for indigenous resistance and survival. CONFENIAE, for example, played a leading role in the creation of COICA, which represents indigenous people's movements in all five states of the Amazon basin. The Peruvian anthropologist Stefano Varese writes of COICA:
The rise of an indigenous radicalism rooted in the Ecuadorian Amazon is paralleled by the dynamic response of other sectors of the Ecuadorian popular classes to the ongoing restructuring of the state and global economy. Two examples help illustrate this point. Firstly, as in other countries throughout the world, attempts by the state to enforce privatization of land, cuts to social programs, elimination of subsidies on basic goods and service and other conditions of the debt repayment schemes imposed by the World Bank and International Monetary Fund, have been met with powerful, organized resistance from the wide range of social classes directly threatened by these measures. Between 1982 and 1992, two general strikes as well as protests and rioting in the streets of Quito and Guayaquil, led to at least token roll-backs of the restructuring programs. Ecuadorian women, largely excluded from the old boys network of electoral/clientalist politics, have come to the political forefront in these movements to defend the resources for community survival. On International Women=s Day in 1989, a recently formed umbrella organization, Accion por el Movimiento de Mujeres, staged a protest outside the offices of the world=s largest and most-influential private money-lender Citibank after Citibank seized $80 million from the Ecuadorian state=s account. According to Amy Conger Lind,
Our second example of the shifting basis of popular power comes from the oil industry itself. If structural adjustment in Ecuador follows the model already imposed, for example, in Nigeria, we can expect to see the most lucrative aspects of the state oil company=s operations sold off to private capital. Ecuadorian oil workers rightly fear the consequences for their jobs. This uncertainty has led to some important developments, including, most significantly, talks between the oil workers union, environmentalists, Ecuadorian peasants, and representatives from the indigenous people=s movements in the Oriente. One such meeting, titled Apopular strategy and alliance for the oil exploitation in the Amazon,@ was organized by CONFENIAE, Campaña Amazonia por la Vida, and FETRAPEC, the Ecuadorian oilworkers= union, among others and held on September 26-8, 1992 in Cauca, Ecuador. According to an announcement published in the newsletter of the South and Mesoamerican Indian Information Center, the purpose of this meeting was Ato develop a unified strategy between indigenous people, workers, ecologists and international organizations to campaign against the oil exploitation in the Ecuadorian Amazon.@ Thus, the possibility is raised, for the first time, of all the popular classes intimately affected by the exploitation of petroleum working together to assert collective social power over the industry=s wealth and practice.
These two examples, we believe, illustrate the broad outlines of a new politics of solidarity today being forged in opposition to those lines of division formed by Athe technical and political character of production and reproduction@ in capitalist society; Ai.e.. the division of labor, hierarchy of skills and wages, division between the employed and the reserve army of the unemployed, between the legal and the criminal.@ As the example of the partial roll-back of structural adjustment programs in Ecuador indicates, the power of the state to act in the interests of transnational capital is restrained and undermined in the face of this recomposition of the popular classes.
This erosion of state power has profound consequences for international energy capital. Historically, energy capitalists, acutely conscious of their own vulnerability, have tried to defend their profits by fostering the creation of intermediary social classes to stand between these profits and popular insurgency. This strategy can be clearly seen in the two periods of global capitalist restructuring this century, both of which have been lead by the energy sector.
For the first three decades of this century, U.S. and European energy capital was under siege by insurgent union organizations, particularly concentrated in the coal industry. In 1915, a U.S. coal and oil company, Standard Oil, introduced the first company union, thus for a time establishing a temporary line of defense between popular power and industry profits within the United States. Following World War II, U.S.-based energy companies internationalized this strategy of mediation. Using emerging U.S. military and political influence, as well as tax money channeled through the Marshal Plan, U.S.-based oil companies were able to accelerate the conversion of European and North American industrial production from coal to oil, thus critically undermining the power of established independent trade unions in the energy sector. Then, by consolidating their control over the newly created sheikdoms of the Middle East, the oil transnationals tried to ensure that oil workers and oil communities in the new centers of production were brought under the control of sufficiently repressive regimes to defend the industry=s profits.
The second phase of global economic restructuring in this century was catalyzed by the rapid rise in the world price of crude oil following the 1973 Middle East oil embargo. At this point, international energy capital C and international capital in general C was already in crisis, as anti-colonial and civil rights struggles, the resurgent women=s movement, the environmental movement, waves of wildcat strikers, and many others fought to transcend or breakup the political-economic hierarchies built during the last phase of global restructuring. The rapid rise in energy prices bought international capital some breathing space. First of all the massive rerouting of the flows of international finance in and out of the pockets of the various regimes of the petroleum exporting countries forged new circuits of capitalist accumulation. Saskia Sassen writes:
Secondly, because this restructuring took place under the guise of a nationalist movement by the Arab states, energy capital=s intermediaries were temporarily reinforced. As the president of one energy transnational acknowledged at the time, the nationalization of petroleum production in the OPEC states was welcomed by much of the industry as it enhanced the Abuffer@ between oil workers and oil capital.
This buffer, however, soon collapsed under the weight of popular protest against the state corruption and gross inequities in the division of oil wealth. The inability of the OPEC petro-bourgeosie to protect the profits of international oil was made clear in 1979 when 80,000 Iranian oil workers went on strike. With the active involvement of some two million women and men living in Iranian oil towns they succeeded in closing down the world=s second largest oil exporting operation, cutting off all oil to the Shah=s military, as well as to Israel, Portugal, Britain, South Africa and the United States, and taking approximately five million barrels of oil out of the world market for each day of the strike. In this uprising against the Shah, the Iranian regime was explicitly identified and repudiated as a broker for U.S .and European oil corporations.
While this second global effort to foster and reinforce intermediaries between energy capital and popular movements ultimately failed, we are still living with the consequences of that failed effort. International borrowing for the purpose of expanding energy production was a significant source of the massive growth of international debt in the 1970s. In 1970, for example, Ecuador=s external debt totaled $217 million. By 1990, this debt had grown to $11.6 billion. The greatest part of this debt had been contracted to pursue oil development. In another example, by the time Mexico defaulted on its debt payments in 1982, the state oil corporation alone had borrowed $20 billion, or a quarter of the total state debt. This outstanding, and, indeed, impossible to repay debt, has provided transnational corporations with a powerful tool with which to pressure state governments to cooperate in the provision of cheap labour, cheap goods and materials and lax standards. And we should not doubt that those government members and national bourgeoisie who channeled much of the wealth of the oil boom years into foreign investments are eager to comply. But with an increasingly impoverished population resisting structural adjustment measures at every step, most regimes will inevitably be tempted to try to meet repayment schedules by further intensifying the production and export of basis commodities, including oil. Thus we return full circle to expansion of the petroleum frontier and the growth of indigenous fightback. Or, perhaps more accurately, global energy capital takes another turn on a deepening spiral of crisis and struggle.
Indigenous people and international energy capital: looking to the future
We have argued that in two periods of global economic restructuring in this century international energy capital has attempted to restructure the global organization of energy production with the object of fostering or reinforcing intermediary social classes for the purpose of protecting industry profits from direct confrontation with popular movements. We have also argued that under pressure of global economic restructuring, the national state has been discredited and undermined, thus limiting the ability of the national bourgeoisie to protect the profits of international energy capital. What then is the real potential for indigenous and other popular movements to prevent the social and environmental destruction caused by large-scale energy development?
To begin with, in the last decade there have been many inspiring examples of partial and even overwhelming victories by popular movements against energy development. In Nigeria, for example, women in the town of Ogharefe rose up against a local subsidiary of the U.S. oil transnational Pan Ocean in 1984. By blockading the production station at a change of shift, and by threatening using a customary form of cursing-laying, namely removing their clothes in public, they were able to disrupt production for a day. The company, at that point in the midst of a dispute with the Nigerian state and so unable to call for military repression of protesters, was forced to concede to reparations for the environmental destruction it had caused over the years.
In March 1992, the governor of New York state canceled a U.S. $12.5 billion contract for the state power authority to purchase hydroelectricity from its counterpart in the Canadian province of Quebec. As a consequence, planned construction on the second phase of a mammoth hydroelectric project on Cree land in the James Bay watershed was at least temporarily halted. This victory was the result of extensive public lobbying both by representatives of the Grand Council of the Cree and by concerned New England citizens, two social forces joined by the electrical lines the province of Quebec has stretched between them.
In Colombia, British Petroleum has been unable to develop the Cuisiana oilfield, reputedly the largest find in the Western hemisphere in 25 years. The Colombian state oil company, the ironnically named Ecopetrol, attributes the breakdown of this major energy development initiative to attacks on their pipelines by leftist guerrillas and restraints imposed by the national international environmental movement.
In Ecuador, a half-year after the attempted deal between the National Resources Defence Council was made public, Conoco gave up exploration activities in Ecuador citing poor results. Conoco was immediately replaced by Maxus Corporation which became the new focus of international solidarity work. It was Maxus Corporation=s lease in Yasuní National Park that, as we mentioned, was canceled in the fall of 1993.
Native American activist Winona LaDuke documents these additional examples from North America:
Finally, we have the words of the chair and chief executive officer of Atlantic Richfield, quoted in the April 6, 1992 edition of Platt=s Oilgram News. According to Lodrick M. Cooke, AOil companies are leaving the U.S. because they have lost confidence in the future, they do not think they can make it here anymore. The signs of hasty departure are everywhere.@ For Cooke the defeat of the energy transnationals in their efforts to open the Arctic National Wildlife Refuge for exploitation Atruly symbolizes the industry=s despair.@
In short, it appears that international energy capital is on the run. Or perhaps more accurately, in response to the rising power of popular movements worldwide, and to the weakening of the old intermediaries, transnational energy corporations have seized on a new strategy and that strategy is flight.
Two recent developments have considerably enhanced the opportunities of international energy capital to turn its mobility to its advantage. The first of these developments is the breakup of the Soviet Union and the reintegration of the various states of the former Eastern bloc into the capitalist market economy. Although the ultimate outcome of this historical transformation is far from certain, international energy capital is clearly looking to these states both for a rich supply of energy resources and a supply of energy workers.
The second critical, recent event is the U.S. recolonization of the Middle East oilfields which was faciliated by the Iraqi invasion of Kuwait in 1990. In the 1991 Persian Gulf War, 150,000 Iraqi workers, sent to the front linesbySaddam Hussein, were massacred by what the Midnight Notes Collective has described as convergence of the political-economic interests of Hussein and international energy capital, represented by the U.S. military. This mass slaughter and the subsequent expulsion of Palestinian oilfield workers from Kuwait and Saudi Arabia, has offered energy capital a temporary safehaven, albeit one that is secured only by continued military occupation of the oilfields.
The only reasonable response to these developments, we believe, is already being charted out by indigenous people's movements, as demonstrated, for example, in the development of international coordinating bodies such as COICA, as discussed earlier. This internationalization of indigenous people=s struggles, however, also poses an urgent challenge to non-indigenous peoples who would participate in these struggles. For too long, professional advocatess, by emphasizing only the cultural particularities of the people they study, rather than the ways in which these cultures are articulated in relation to global structures of power, have practiced what Roxanne Dunbar Ortiz has accurately called Athe politics of isolationism.=" In other words, the organic links which the functioning of the international economy has itself forged between indigenous people and other social classes are all too often ignored in favour of the frankly artificial links between indigenous peoples and their chroniclers. To date, the institutional, northern environmental organizations which are succeeding anthropologists on the stage of indigenous advocacy, have also failed to develop a politics of solidarity appropriate to the present state of the world economy. We have called this challenge Aurgent@ because, as the example of the National Resource Defence Council=s secret negotiations with Conoco illustrates, without a precise and multi-level analysis of the real issues of power in the struggle between indigenous peoples and the energy transnationals, would be advocates can easily become the new intermediaries serving global energy capital.
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