Environmental Engineering Reference
In-Depth Information
companies in Ecuador observed that for the Chinese company, Ecuador
“is a test case on how to become an international player, how to become
a major, big oil company.”
17
This is not to say that the community or environmental standards are
ideal in North or South America—rarely is that the case with the oil
sector—but there were early indications that in the Ecuadorian case the
Chinese consortium was imitating the standards of the Canadian
company. According to the same consultant, “With the Chinese, [their
environmental awareness is] more of a reaction to what they perceive as
to what they need to do to operate internationally in an international
world,”
18
which points anecdotally to China's desire to identify and to
meet global norms. In the past, for example, American multinationals
have been described as “exporting environmentalism” to Brazilian and
Mexican chemical companies (Garcia-Johnson 2000). Yet these more
recent experiences in Ecuador also imply that Northern fi rms may trans-
fer standards, and even consultants, to Chinese competitors when Chinese
and Northern companies are operating in a third country with minimal
standards of its own.
Whether Northern practices will be maintained, advanced, or weak-
ened over time remains uncertain. By 2009, standards began to slide
downward in the Ecuadorian case, according to some in the industry
who witnessed the transition from Northern fi rms to Chinese ones. By
then, some of the fi rst- and second-tier managers had left their post to
third-tier managers with limited skill and vision relative to their predeces-
sors and to the requirements of the position.
19
Those interviewed in
Ecuador suggested that one of the critical differences was how large
private companies invested in preventing problems in the oil fi elds,
whether technically, environmentally, or socially, before the problems
arrived, while the Chinese, and perhaps state-owned operators in general,
adopted a fi refi ghting mentality, of putting out the confl icts as they arose.
In this case, the president of Ecuador, Rafael Correa, may have enabled
the slippage of standards when he took offi ce in 2007. As an outspoken
leftist leader, Correa, much like Venezuela's leader Hugo Chávez, was
committed to oil-fi nanced, social justice initiatives. Correa renegotiated
oil contracts to increase the state's share of oil revenues and streamlined
the oil bidding process to expand operations, while also shifting state
preference toward state-owned oil companies.
20
China's Andes Petro-
leum heeded Correa's demands, and renegotiated its contracts to main-
tain operations and friendly relations with the government. However,
these changes also signaled to foreign oil companies, whether private or
