Environmental Engineering Reference
In-Depth Information
According to Carlos Espinosa, President of the Ecuadorian Chamber ofMines, rep-
resenting pro-mining economic concerns, the mining lawof the 2000s was a progressive
law that benefitted the country in two ways: the abolition of royalties curtailed corrup-
tion by default, and international investment would come to the country (Santacruz
2007). Others, however, argue that the law was too permissive, that it undermined
indigenous people´s rights, and that it would engender conflict (Ortiz 2011). In fact,
few constraints for companies were enforced by self-regulatory systems without any
penalties for non-compliance (De Echave 2007). Indeed, the World Bank reviewed the
cases of mining in Peru, Tanzania and Indonesia (where regulations were remarkably
similar to the ones in Ecuador) and concluded that, “In spite of the World Bank's
efforts to improve the social and environmental performance of extractive sectors, the
expansion of these sectors within structural reform programs has resulted in unnec-
essarily high social and environmental costs, and in some cases, the exacerbation of
macroeconomic vulnerabilities'' (2010: 5).
7.5.1 A comparative analysis of the 2000 and 2009 mining acts
In this section we provide a comparison of the mining acts of 2000 and 2009, together
with the provisions on mining contained in the new Constitution enacted in 2008. We
will start by describing the legislation approved in 2000 and then contrast it with the
changes that have occurred since 2006.
The mining law of 2000 eliminated all existing royalties on extracted values, and
mining companies started to pay for licenses according to the number of years they held
concessions and the number of hectares in the concession. Apart from the simplicity of
the rule and its attractiveness for investors, the rationale of this measure was to avoid
collusion between the mining companies and state officials in charge of estimating the
value of extracted resources. In addition, concessions were afforded an extension for
up to 30 years, but were eligible for renewal. Taken together, these provisions meant
that mining concerns could operate in the country for long periods of time and that
the Ecuadorian government would only receive minimal revenues from these activities
(Varela 2010). Furthermore, when the Correa administration initiated a study on the
state of concessions in 2007, a preliminary report showed that this mining law had
allowed for concessions to be granted very liberally, even within national parks. As a
result, nearly 4,000 mining concessions were under investigation (Arteaga and Jijón
2007).
A major breakthrough in this situation came with the approval of the new consti-
tution in 2008. The new Constitution explicitly states that strategic sectors, including
non-renewable natural resources, especially mineral resources, are under exclusive
state control and management. The National Plan for Mining Development 2011-
2015 (Ecuador. Plan Nacional de Desarrollo del Sector Minero 2011-2015), a plan
operationalizing the constitutional provisions in the mining sector, establishes the
importance of its role by stating that its purpose is to make the mining sector more
important in the economy, contemplating clear procedures to promote exploration and
exploitation (Plan Nacional 2011: 43).
Despite his anti-neoliberal and anti-multinational domination rhetoric, the Correa
administration remained wayward about its stance on mining from the beginning. In
fact, when Correa took office in 2006, mining stock prices of companies operating
Search WWH ::
Custom Search