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Slippery Business: Canada's Role in the Ecuador Pipeline

By  Tom Peacock August 12, 2009

An award-winning documentary draws attention to a Canadian company's role in Ecuador's oil mess.

An Ecuadorian reaches his cigarette lighter into a muddy hole and lights the ground on fire. He then touches a piece of paper to the wet, burning mud and it bursts into flame. The ground he is standing on, just 50 metres from his home, is full of waste left over from the oil extraction process. “This is the venom the oil company left us,” the man tells the camera.

The scene plays out during the opening minutes of  Canadian filmmaker Nadja Drost’s documentary, Between Midnight and the Rooster’s Crow, about Canadian energy giant  Encana’s involvement in Ecuador’s contentious oil industry.

In the ensuing scenes, Drost follows a number of people as they reveal the carefully hidden environmental damage left over by oil companies like Encana, operating in the Amazon. Locals insist the oil waste pollutes the food supply and destroys the land and river systems. They show Drost open sores on their skin and the skin of their children; they insist the sores are a result of the oil waste.

Encana representatives say they’re working hard to clean up the mess they claim is mostly left over from earlier, dirtier operations. They are also proud to show off an environmental award they received for their efforts. One local wonders how they could have won an award when nobody living near Encana’s main base of operation in the village of Turapao was even told about it. “It must have been awarded between midnight and the rooster’s crow,” he laughs.

Encana moved into Ecuador in 1999 and soon moved front and centre in Ecuador’s oil industry when it took over the lead role in a massive oil pipeline project, called the Oleoducto de Crudos Pesados (OCP). There was much opposition to the pipeline along its route. Protestors argued that it cut far too close to some communities, that it threatened fragile, protected areas, and that it was being pushed through people’s private property in spite of their wishes.

Drost’s documentary clearly depicts the tense political and social climate around the pipeline project. Communities come out in force to protest against the project, and they are met by army soldiers and police. When farmers try to stop the pipeline builders from tearing up their pasture land, they are beaten, shot at and arrested.  It’s difficult to prove, but  locals suspect the soldiers and police were hired by the oil consortium to protect their project.

The pipeline was completed in 2003, but just three years later, after pushing so hard to complete it, Encana has pulled out of Ecuador entirely. It’s baffling, but company officials explain it away as if it was planned from the start.

In news reports of the sale, Encana’s chief executive Gwyn Morgan makes no mention of the fact that his company was being targeted by human rights and environmental activists for its part in pushing the pipeline through. Instead, he blames the Ecuadorian government, which owed his company $120 million in tax refunds, and was beginning to make life very difficult for Encana, in spite of its support for the OCP.

Drost first became interested in the Ecuadorian oil issue while completing her undergraduate degree in International Development and Environmental Studies at Trent University. In 1999, as part of her degree, she went to work alongside the Shuar indigenous people who were trying to work out how to deal with oil companies approaching their communities.

She retuned to Canada following her internship, but in December 2002, after learning of Encana's involvement with the pipeline project and hearing reports of human rights abuses, she headed back, with a friend, Nick Galletti, and a video camera.

Drost made two short videos detailing the pipeline project. She sent one of the videos to shareholders all over the US and Canada, and followed this up by showing up in person at  Encana’s annual general meeting to express her concerns about the company’s operations in Ecuador.

The following year, Drost returned to Ecuador to film again, this time to make a feature-length documentary. The only problem was, Drost had never made a film before, and she had next to no money with which to undertake such a project. “I started looking for film grants, and I did manage to get quite a few, but they just weren’t nearly enough to cover the cost of making the film,” she recalls. “Once you’re in that deep, though, you can’t pull out.”

While environmental activists are adamant that Encana is profiting at the expense of the environment and the health of the people of Ecuador,  CEO Gwyn Morgan insists that Encana’s presence in Ecuador was a step towards lifting the country out of poverty. “There is no question, the vast majority of people in Ecuador want this pipeline built and they want more development. Quite frankly, they’re desperate for development,” he says on camera.

The pipeline is now complete, but the possibility that Ecuador’s rich oil reserves will bring prosperity to the impoverished country is far from certain. In March 2006, during the latest in a series of stand-offs, the eastern provinces of Napo, Orellana and Sucumbios were placed under military control after oil workers went on strike and brought Ecuador’s national energy company, Petroecuador’s operations to a standstill.

That same month, Encana finalized the sale of all its Ecuadorian assets to Andes Petroleum Co., a consortium of Chinese energy companies, for an estimated $1. 4 billion.

“Unfortunately, if anything, I think the Chinese are going to be worse, and there’s no leverage we can use against them,” Drost says. “There’s not going to be any Chinese activist community fighting against this consortium.”

“I think that if any change in Ecuador is going to happen, it’s going to have to happen as a result of the resistance of the people and of the Ecuadorian government, so that oil has to happen on different terms.”

Drost’s 2005 documentary, Between Midnight and the Rooster’s Crow, picked up numerous prizes at festivals around the world, including Best Documentary at the Paris Environmental Film Festival and Best Canadian Documentary at the Hot Docs Documentary Festival in Toronto.

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