Ecuadorian Network Denounces Possible Threat of Investment Arbitration Made by Canadian Company

MiningWatch Canada, Ecuador Decide

(Ottawa) On February 18th, the Ecuadorian network “Ecuador Decide - #mejorsinTLC” (Ecuador Decides #betterwithoutFTAs) wrote a letter to the Ecuadorian State Attorney General, Iñigo Salvador, expressing their concerns about recent statements made by INV Metals Ecuador’s Manager, Jorge Barreno.

INV Metals is a Canadian company, whose subsidiary INV Metals Ecuador, owns the contested Loma Larga project in Kimsakocha, Ecuador. The Loma Larga project is currently subject of public consultation process called by the National Electoral Council (CNE, for its abbreviation in Spanish), where residents of the Girón canton will vote “yes” or “no” to the question “Are you in agreement that there be mining activities in the paramos or water sources of the hydrological system of Kimsakocha,” on March 24, 2019.

In light of the ongoing consultation, the company has made public statements to the press that they do not agree with the CNE’s decision to call a consultation vote. “Ecuador Decide” denounces the company’s statements on this issue.

They write:

It is clear that the Canadian mining company threatens to initiate an international arbitration against the Ecuadorian State.

On February 8, 2019, the note of the newspaper El Comercio entitled "Popular Consultation will settle differences on Mining" includes these statements by the manager of the Canadian company INV Minerals Ecuador, Jorge Barreno: "This is just beginning. There is a long way to enforce the law, without ruling out an international demand”. His statement coincides with those of the president of the Chamber of Mining of Azuay, Patricio Vargas:" to win the “no”, the State must pay a large compensation. Representatives from INV assured that more than USD 70 million has been invested in technical work, environmental improvement, community relations, tax payments and purchase of services.

The letter goes on to remind the attorney general that Ecuador withdrew from the Bilateral Investment Treaty signed between Canada and Ecuador in 2017 (but it includes a “survival clause” of 15 years), and emphasizes the fact that the Ecuadorian Constitution should have ultimate jurisdiction to decide about water, health, environment, and uphold any decisions that are made locally about those resources, beyond any investment treaty.

The organizations urge him to make a “sovereign decision” about the future of this project, in light of the ongoing consultation process in Girón.

Mr. Attorney General, your central responsibility is to defend the sovereignty of the State. Faced with the threat of a company like INV Minerals Ecuador, it is only necessary to guarantee the full exercise of the democratic rights of the population of Girón.

MiningWatch will be following up on this situation.

Ecuador Decide is a social network composed of Indigenous, peasant, neighbourhood, environmentalist, youth, womens, and cultural organizations. They formed in 2004 to organize around the US-Ecuador Free-Trade Agreement.