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True Gold Of Our Future

Costa Rica

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Oil pipelines / RESISTANCE

True gold of our future
Costa Ricans are saying 'No!' to oil exploration companies.
Mark Engler and Nadia Martinez join the growing
queue in Latin America to see how it is done.

For activists engaged in seemingly impossible struggles with transnational oil interests, the scene might seem surreal. In May 2002 newly elected Costa Rican President Abel Pacheco stood on stage for his inaugural address and declared that his country would ‘not be an oil enclave or land of open-pit mining’.

Pacheco promised that under new constitutional protections, such extraction would be banned. ‘The true fuel and the true gold of the future,’ he said, ‘will be water and oxygen, our aquifers and our forests.’

The declaration delivered a firm blow to Harken Energy, a Texas-based company with close ties to US President George W Bush. The company had its sights set on precisely the kind of resource exploitation that would be outlawed, and it no doubt expected the type of governmental subservience that has allowed the removal of natural resources to continue virtually unchecked in Latin America since the early days of colonialism.

But while President Pacheco’s opposition was perhaps the most public sign of defeat for the transnationals, it was only one of many.

For over three years a coalition of environmental advocates, community groups, unions and indigenous-rights organizations campaigned to end the extractions. In addition to making the mining and oil exploration into a delicate campaign issue – bolstering the new President’s environmentalist resolve – they battled in courts, galvanized international support and organized local opposition in order to sink Harken’s plans. In the process they secured a remarkable series of victories that reversed their country’s move toward unsustainable resource exploitation.

For much of its history Costa Rica has stood out as an exception among its Central American neighbours. The country’s lack of mineral resources, weak colonial institutions and early cultivation of coffee allowed stable democratic foundations to form. In 1949 a President who had recently faced a military coup took the extraordinary step of eliminating Costa Rica’s armed forces. Traditions of peace and social democracy insulated the country throughout the 1970s and 1980s, when the rest of the region was mired in conflict and the CIA was at its most active.

During that time Costa Rica built the thriving tourism industry that is now the backbone of its economy. National pride in the country’s extraordinary biodiversity, expansive beaches and system of parks – coupled with a limited supply of underground riches to exploit – laid necessary groundwork for an official stance against extractive resource industries.

But the Government was not always against mining and oil exploitation. Costa Rica, like most Latin American nations during the 1990s, felt the pressures of a sluggish economy, increasing unemployment and poverty. Many looked to neoliberal economics for solutions. The country began to explore new ways of attracting foreign investment. Despite its historical pro-environment policies, it passed a Law on Hydrocarbons in 1994 that divided the country into blocks for oil exploration.

Supporters sent the oil companies and the Costa Rican Government some 27,000 emails, faxes and letters of protest

When Miguel Angel Rodriguez, an economist and entrepreneur, became President in 1998 he brokered the concession of 10 of the 22 blocks to American and Canadian companies. MKJ Xplorations, based in Louisiana, bought up interests along the Caribbean coast and soon partnered with Harken Energy to begin exploration. Isaac Rojas, board member of Comunidades Ecológicas La Ceiba, a Costa Rican affiliate of Friends of the Earth, argues that the Environment Ministry in the Rodriguez Administration ‘took the country’s advances in the area of environment back about 30 years’.

The location that the Harken-MKJ group selected for its activities was the Talamanca region of southeastern Costa Rica: a pristine area resting between several protected wilderness areas. Among those who lived in the area there was an immediate awareness that oil rigs could threaten the sea-life offshore – including endangered sea turtles. Locals felt stunned by the lack of consultation involved in the deal. ‘We saw an announcement in the national newspaper saying that the Government had approved concessions for oil exploration,’ says Enrique Joseph, a 38-year-old tour guide and restauranteur who grew up in the area. ‘Within two or three days, we raised a red alert.’

Dozens of groups – ranging from farmers’ organizations and the fisherpeople’s union, to small-business owners, religious groups and marine biologists – came together in the following months to form Acción de Lucha Anti-Petrolera, or Anti-Petroleum Action (ADELA). In December 1999 they convened a meeting with about 250 people, which drafted a declaration opposing the concessions and advocating a moratorium in Talamanca.

Their declaration received national attention and the legal strategy they launched bore fruit. In September 2000 the Supreme Court ruled the oil concessions null and void because indigenous communities were not properly consulted.

But two months later, after Harken-MKJ appealed the ruling, the Court allowed the oil interests to continue their activities in the offshore blocks where no indigenous communities exist. The corporate executives were pleased with this outcome because their main targets for exploration were offshore, near Puerto Moin. As Harken Vice-President Stephen Voss explained months earlier: ‘The Moin prospect is the largest structure that the company has ever tested and it offers great exposure to Harken shareholders for the discovery of significant reserves.’

Unfortunately the project’s prospects for environmental sustainability were not nearly so promising as its anticipated profits. ADELA set out to amplify the message that, as Rojas says, ‘local people had declared firm opposition to extractive activity. They said that this could not be done.’

Their organizing faced several difficulties. First off, they were clearly out-funded. ‘We discovered that the talks we would give on the radio weren’t very effective, because the oil companies bought up most of the space available,’ explains Joseph. ‘Or, if we drove around in a truck with a megaphone, we’d later see the company rent three cars to do the same.’

Activists complained of the compadrazgo – the sense of comraderie – that seemed to exist between executives and government officials. And they saw some communities, particularly in the city of Limon, come to advocate the economic benefit of resource exploration. ‘The companies promise clouds of gold,’ Rojas says of his experience with extraction projects, ‘and some people believe them.’

‘Seeing our brothers in Limon against us, because of their false expectations,’ adds Joseph, ‘that was the hardest part of the campaign.’

By January 2001 groups like Natural Resources Defense Council (NRDC) and the Environmental Law Alliance Worldwide (E-LAW) began to bolster the local organizing with financial support, research, legal resources and international exposure. In what Jacob Scherr, director of NRDC’s International Programme, describes as ‘probably one of the largest deluges of mail they’d ever seen’, supporters sent the oil companies and the Costa Rican Government some 27,000 emails, faxes and letters of protest.

That same year ADELA’s campaign to raise public awareness made it politically risky for presidential hopefuls to support oil exploration. President Rodriguez wanted concessions to go forward. But he muted his enthusiasm when it appeared that the stance might hurt his party in the elections. The opposition candidate, Abel Pacheco, was outspoken on the issue and had drafted a proposal to repeal the hydrocarbons law while serving in the Legislative Assembly.

According to Enrique Joseph things shifted in Talamanca at a meeting between ADELA and Harken officials. ‘People were offended to see the oil executives come in and act rudely toward residents who were well respected. Many people started to doubt the companies’ promises.’

Victory came soon afterwards. In February 2002 the national technical secretariat, SETENA, rejected Harken-MKJ’s plans for offshore drilling. Several months later the Environment Ministry denied an appeal from the oil companies. Its decision noted over 50 reasons why the environmental-impact statement for the project was insufficient – a list that mirrored the meticulous documentation presented by ADELA and its international allies.

Upon his inauguration Pacheco vowed to add environmental guarantees to the Costa Rican Constitution. And on 5 June he signed a presidential decree banning open-pit mining.

For activists the fight is not over. In the past year several challenges have emerged that may determine whether Costa Rica’s bans will remain intact as emblems of the country’s exceptionalism, and whether it might become a model for resistance elsewhere.

According to the National Law Journal, Harken is not only demanding millions in payment for the money it spent on the exploration – it is trying to use the provisions of a bilateral investment treaty to win $57 billion from Costa Rica in lost profits that it had projected. Although the State Department denies it, ADELA believes that the US Government has lobbied on the oil companies’ behalf and that it is pushing Costa Rica to ease its bans on resource extraction. ‘Sources in Costa Rica have told us that the US Embassy there has been putting pressure on the new Pacheco Government to open its coast to US oil companies,’ said Scherr at the NRDC.

A broader concern for activists is that treaties under negotiation, like the Central American Free Trade Agreement (CAFTA), may endanger Costa Rica’s protections. Although the Pacheco Administration has defended environmental rights, it has also enthusiastically pursued a neoliberal ‘free trade’ agenda.

In North America, Chapter 11 of NAFTA has allowed companies to sue localities whose environmental laws interfere with their business. The challenge for Costa Rica is to guard against similar outcomes.

In mid-June ADELA struck a deal with the Government regarding the repeal of the hydrocarbons law. Activists agreed to leave in place parts of the law that enable the Environment Ministry to regulate oil refineries. Their agreement insists that a government commission will continue to review trade agreements to ensure that no provisions will invalidate local environmental laws.

But lawsuits have already affected the battle over the mining ban. The President’s ban applies only to future mining projects. It allows companies that had been granted concessions prior to the ban to continue their activities. The Constitutional Chamber decided in October 2002 that Vanessa Ventures, a Canadian mining interest, was exempt from the ban on these grounds. A court decision in June ruled against the Environment Ministry for delaying approval of Vanessa’s Las Crucitas project. The company is threatening to sue for $200 million under the Foreign Investment Promotion and Protection agreement if the mining does not go forward soon.

While it may prove impossible to stop this existing concession, Costa Ricans have moved to strengthen future protections. ‘We need to make the presidential decree into a law, since the decree can be modified or repealed – it’s not permanent,’ argues Rojas.

Nicaraguan activists have called for their government to institute a moratorium on oil concessions In Ecuador environmental activists are pushing for the Costa Rican example President Pacheco sent his Environmental Bill of Rights to the legislature in September 2002, and politicians are currently negotiating the text of the legislation.

Developments on the international scene are also promising. ‘I always hoped that our country would not be an exception,’ says Joseph, ‘that people would see it as a model of what can be done.’ In several countries this has already taken place.

In Ecuador environmental activists are pushing to replicate the Costa Rican example. In June they presented the new government of Lucio Gutierrez with a proposed prohibition on expansion of the oil frontier. But securing a ban in Ecuador is admittedly a difficult task. Oil exploitation, which began here over 30 years ago, has polluted not only the environment but also the politics of the country. As Terry Karl, professor of political science at Stanford University, explained in an interview with the Environmental News Network: ‘Once oil exploitation begins you get what I call the petrolization of politics, and where this is in place you would never get a Costa Rica-type situation.’

More hopeful is Nicaragua. The Nicaraguan Government recently granted exploration licenses to several US-based companies, among them MKJ Xplorations. In May Nicaraguan activists in the Oilwatch network called for their government to institute a moratorium on oil concessions.

Costa Rican activists can now take satisfaction from what has been accomplished. ‘This is a step toward achieving a deeper change,’ says Isaac Rojas. ‘Of course it brings a certain joy. It shows that we were right.’

Enrique Joseph agrees. ‘Latin Americans have endured much suffering. At least this is a guarantee that, at my age, I can continue living in a beautiful place. I want my children and their children to run on the beaches and see the trees.’

Mark Engler [image, unknown] Mark Engler a writer based in New York City, can be reached via the website – www.DemocracyUprising.com

Nadia Martinez [image, unknown] Nadia Martinez is a Research Associate with the Sustainable Energy and Economy Network, a project of the Institute for Policy Studies in Washington DC. – www.seen.org

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Kicking the oil-habit
On the campaign trail

If we have to have pipelines, they must be made less destructive to people and the environment. Between now and the time when countries move away from oil development, NGOs are making a number of recommendations. They include:

[image, unknown] In future, pipelines should not be built through regions where they are likely to fuel conflict. Military forces should not be employed on pipeline protection. This may mean more money must be spent to get oil from one part of the world to another, and therefore increase the cost of oil. However, such a move is essential to reduce the death-toll that pipeline violence now causes.

[image, unknown] A better way of using revenues is needed to ensure that oil becomes more of a blessing than a curse in oil-producing countries. An international commission should be established to draw up a detailed plan.

[image, unknown] To increase the potential for governments in oil-producing countries to use oil revenues for their people, instead of buying arms or lining their own pockets, agreements between oil companies and governments need to be more transparent. There is a range of suggestions. Company laws should require disclosure by transnational corporations in their annual reports of payments that they make to oil-producing governments. Oil-producing governments should be required to show how the money they receive is spent. And the World Bank Group, the International Monetary Fund and export-credit agencies should withhold financial assistance if these disclosures are not made.

[image, unknown] A system of certifying the origin of oil should be devised in order to give traders and consumers confidence that they are buying a product that is not ‘blood oil’.

Want to read more? Visit:
Friends of the Earthwww.foei.org;
Project Undergroundwww.moles.org/index.html;
Christian Aidwww.christian-aid.org; and

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