KITU, Ecuador. - "The indigenous peoples have said they will not recognize neither the reforms nor the law, and say these changes would be in clear violation of the country’s Constitution. Earlier this month both Ecuarunari and Conaie, the two most powerful indigenous groups, openly said they will resist the reforms.(2) Non-indigenous communities affected will also outright reject them since they are seen to be one-sided in favor of the companies. Environmental organizations will side with the communities and will present Constitutional injunctions to try to prevent them being applied. On the other hand, the national government will use all of its institutions to assure they are complied with. Local governments will be caught in the middle. And who will have to bear the brunt of the anger generated by their inevitable approval are the members of the National Assembly. Given that the president’s party has overwhelming majority in the Assembly there’s no question about their approval, even if some of the reforms violate hard-won rights for indigenous peoples and local communities, and present a worrying precedent. For example, the relaxing of the legislation could set in motion a “race to the bottom” scenario, with neighboring countries pressured into relaxing their legislation to be in line with what Ecuador is proposing in order to keep attracting mining investments." "One of the reforms Correa is asking the National Assembly to approve in a hurry (30 days maximum) seeks to practically do away with the windfall profit tax. Windfall taxes are normally applied when the price of commodities increase above an established base price so that the companies can share their unexpected fortunes with the countries they are extracting the resources from. With the reforms, which the companies asked for specifically, the companies can wait to start paying the taxes once they recuperate all their investments. In some cases, however, this can be nearly two decades, which is the life of many mines." "Another of the thirty-two reforms will reduce the annual exploitation and advanced exploration fees companies pay by as much as 80%. Besides making mining cheaper for companies, the deep cut in rents will likely curtail the government’s capacity to monitor the companies’ compliance with environmental and social legislation. This, in case you have any doubt, suits the transnationals just fine." "A little context may shine light on the unusual character of these steps: currently all around the world developing countries with mining economies are raising their taxes and fees that the mining companies must pay in order to keep mining metals. Ecuador is one of the very few that are lowering the taxes." "Other reforms eliminate what the companies see as bothersome red tape, such as the one asking the National Patrimony Institute to gauge the possible impacts of a mining project on the country’s archeological patrimony. With the reforms, the companies are left on their own to inform the government of such possible impacts. Another red tape removal, if approved, will do away with asking seven other state institutions (including local governments) to okay mining activities within their jurisdiction, or to gauge the activities’ impact on their public works (such as electric line transmission). The World Bank is smiling, I can tell!!"
Posted on: Thu, 20 Jun 2013 23:53:42 +0000
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