Alarmed by the popular expulsion of President Lucio Gutierrez in April, the governing class hurriedly substituted un-elected Alfredi Palacio (see FRFI 185). He made a series of promises, hoping to calm the national outcry against the ruination of the country by imperialism, but the workers have not waited for the privileged class to betray them. In mid-August workers revolted in the Amazon provinces of Sucumbios and Orellana, dynamiting pipelines and stopping extraction, demanding the retention of oil wealth for investment in local towns and infrastructure.
Palacio, trying to ride the storm that pushed him into the presidency, had already changed the law to reduce the drain of oil revenues as debt to international banks, although he doesn’t want a break with the World Bank. This was not enough for his Finance Minister, who resigned. Still Palacio pressed on, trying to show some independence from the US. Palacio has pressed Colombia to stop the aerial fumigation of coca and other crops in FARC-held areas near its borders. Ecuador has threatened to take Colombia to the OAS and International Court if it doesn’t stop poisoning rural communities and the environment. It is even considering no longer referring to the FARC as terrorists.
Years of intense class struggle in Ecuador have shown the workers the impossibility of feeding both themselves and imperialism! No nonsense here about a ‘third way’. On 14 August workers in the Amazon oil towns revolted at dreadful conditions there. They demanded the expulsion of foreign oil firms, sacking the government buildings in Lago Agrio. They demanded investment in schools, social services and transport. The government has claimed that $200m of damage was inflicted. The strike paralysed oil production and shipment, stopping at least 1.5m barrels of oil. The following day the oil price rose to $64.36 a barrel. Ecuador shipped 535,000 barrels a day during 2004, half of it to the US. A third of Ecuador’s state revenue comes from oil.
On 17 August a state of emergency and curfew was declared. On 18 August the state-owned Petroecuador had to stop production and export of oil. Talks were hurriedly arranged in Quito with the leaders of the strike on 21 August. Such is the feeling against the corporations that local politicians were forced into siding with the workers, whether from genuine anger or from fear of losing their own privileges.
However the final deal excludes the strikers’ demand that they would not face legal charges for their action. The multinationals would not accept this clause and prolonged negotiations for four days as the army slowly took back control of production facilities, to weaken the workers’ position. Palacio sacked the defence minister for failing to get all the installations back. Meanwhile Congress, anxious to end the conflict and offended at its exclusion from events, lifted the state of emergency, hours before it could be raised through negotiation between the oil companies and the strikers. Eventually the local authorities and the multinationals agreed to act as ‘good neighbours’ in developing the region, with the Catholic church and civil rights organisations also signing the final agreement, which the workers’ leaders took to mean no legal action against them. Limited production began again on the weekend of 20/21 August. Repairs will take until November.
Now 64% of the 25% tax on profits paid by the local oil companies will go to the two provinces. This presents a problem for the state, since this previously went to pay foreign debt. The corporations have also agreed to surface 260km of roads, employ more workers, and buy more local goods and services. Of course the oil corporations lose nothing, and can claim to be ‘socially responsible’ in their annual reports to shareholders in north America and Europe. Yet now there is less to share out among the foreign bankers and Ecuador’s ruling groups, and if the price of oil falls back down this temporary arrangement will collapse, forcing the workers once again to face the task of seizing state power.
Alvaro Michaels
FRFI 187 October / November 2005
