December 6, 2010

Ecuador's Fickle Friend

Canada waffles in its support for Latin American democracies

by Jennifer Moore

The Dominion - http://www.dominionpaper.ca

CUENCA, ECUADOR—Ecuador awoke on September 30, 2010 to police protests. Across several highland and coastal cities, police burned tires, shut down access routes and neglected their posts. They said they were protesting the Public Service Law passed the night before, which would affect economic bonuses based on promotion.

By midday, however, efforts to destabilize the Ecuadorian administration became evident. The security detail at the National Assembly closed various entries to the legislature, while a small contingent from the air force shut down the Quito airport.

The focal point of international attention, however, was on President Rafael Correa, holed up for more than twelve hours in a police hospital after personally confronting police in the capital city of Quito. Police shot tear gas at and roughed up the President who, recovering from recent knee surgery, was escorted to the nearby hospital. Rebel police surrounded the building, at which point the president reported that he was under threat and sounded the alarm on an attempted coup.

With memories of the 2009 Honduran coup fresh in collective memory, Spain, France, more than 10 Latin American countries and several regional organizations were quick to issue declarations of support for the small Andean nation's democratically-elected president, and its constitutional order. Spain, a key investor in Ecuador and home to hundreds of thousands of Ecuadorian immigrants, gave further assurance through its foreign affairs minister that it “would mobilize all of its diplomatic arsenal...so that this revolt stops.”

Canada—another top investor in Ecuador, frequently having high level meetings with the Correa government—responded differently. Canada co-sponsored a mid-afternoon resolution at the Organization of American States (OAS). But it was only after the Ecuadorian military joint command declared its loyalty to Correa, the US State Department issued its own statement of support for the President, and just over an hour before a special military and police operation rescued Correa, that Canadian Minister of State of Foreign Affairs for the Americas Peter Kent circulated an independent statement.

“Canada is concerned about the growing unrest in Ecuador and is monitoring the situation closely,” the statement read. “We call on all parties to refrain from violence and any other actions that could imperil the rule of law and the country’s democratic institutions.”

Critics of Canadian foreign policy see Canada's delayed response as a sign of uneasy relations. Despite Correa's public support for Canadian economic interests in recent years, they suggest Canada's backing is by no means guaranteed. They pinpoint geopolitical and economic concerns as potential culprits.

As Latin America has become a foreign policy priority, Canada has shown conditional support for constitutional democracy and national sovereignty in left-leaning countries aspiring to even moderate change. The Canadian government's hand in facilitating a coup against the popularly elected government of President Jean Bertrand Aristide in Haiti in 2004, and its failure to push for the return of President Manuel Zelaya to Honduras in 2009, are notable examples.

Todd Gordon, Associate Professor in Political Science at York University and author of the forthcoming book Imperial Canada, sees parallels between Canada's response to the coup d'etat in Honduras and the statement regarding Ecuador. Canada's statement on the Honduran coup came fairly late the same day, after other countries and bodies had responded, he notes. Despite largely peaceful protests by the coup opposition, Canada in effect laid some blame on Zelaya and his supporters.

“From the time that [then Honduran President] Zelaya [was] deposed until Lobo [was] elected, Canada consistently [called] on all parties, not just the government and the coup plotters [that were the principle source of aggression and human rights violations], to avoid violence and remain peaceful,” Gordon said.

Gordon points to similar language in Canada's statement on Ecuador when it called “on all parties” to show restraint, not specifying that police were the main aggressors.

“They don't want to come out and say we're pro-coup, but Canada's response is a diplomatic way, I think, to say they're not actually that excited about the government that's being threatened,” he said.

Gordon questions if Ecuador's participation in efforts for more independent regional integration, such as the Bolivarian Alternative for Latin America and the Caribbean (ALBA), unsettles Canada.

Department of Foreign Affairs Spokesperson Priya Sinha, however, says Canada's statement should be interpreted as unequivocal support for Correa and says its position at the OAS backs this up.

“

Canada reacted swiftly and strongly in support of the legitimate government of the Republic of Ecuador when it co-sponsored a resolution at the OAS on the afternoon of September 30th,” stated Sinha by email to The Dominion.

The OAS resolution “repudiated” any attempt to oust the Correa administration and called on governments and multilateral institutions in the region to "stop the coup d'etat from becoming a reality.”

On the national front in Ecuador, Canada wields economic clout. But despite the headway that Canada's corporate and diplomatic lobby appeared to be making to secure investments in mining, oil and infrastructure during Correa's administration, Jeffrey Webber, a researcher and lecturer at Queen Mary University of London, believes Correa has never been Canada's ideal option.

“Correa was not the preferred candidate of the Canadian state,” Webber said. “Canada has been happy to see Correa's trajectory to the right, but is nonetheless concerned about his vulnerability to the bases that put him into office.”

Correa was elected on his promise to bring an end to Ecuador's “long neoliberal night.” With regard to mining, a key sector for Canadian investment, pre-existing disputes with affected communities gave rise to a national movement urging Correa's administration to look at alternatives to gold and copper extraction. At the time, no large-scale project had reached production.

After 40 years of oil production that left in its wake environmental destruction and social upheaval, Indigenous and non-Indigenous organizations demanded their country be off-limits to mostly Canadian companies dominating the nascent sector—companies that arrived in Ecuador under favourable conditions created by earlier World Bank-sponsored reforms.

In April 2008, Ecuador's National Constituent Assembly, which was rewriting the country's constitution, decreed that all large-scale mining be suspended and that most mineral concessions be revoked without compensation, because they overlapped with water supplies and protected areas, and because companies failed to consult with affected communities.

The decision represented an important—albeit short-lived—victory for the anti-mining social movement.

Canadian companies fought back with a well-financed public relations campaign in which they promised Ecuadorians “a fair deal.”

According to one company executive, companies also received “tireless” support from the Canadian Embassy to arrange high-level meetings and influence the new mining law. As large scale mining was suspended, President Correa granted Canadian businessmen a privileged seat during mining law negotiations. The mining mandate was not applied to key holdings of many Canadian companies.

Correa, who has made it clear that he intends to make metal mining a source of future state revenue through bolstered state participation, also abruptly distanced himself from Indigenous, campesino (peasant) and environmental groups critical of such policies. He called them infantile, foolish and the greatest threat to his political project, and helped foment rumours about links between such organizations and imperial interests.

This delegitimization campaign, however, did not quash local resistance. Important mobilizations against mining have taken place over the last year in areas where companies such as Toronto-based Iamgold and Kinross Gold are exploring.

But Priya Sinha says Canada looks favourably upon recent mining reforms and makes no mention of social tensions.

“Canada is encouraged by improvements in the environment for mining investments in Ecuador,” the Foreign Affairs representative stated.

Sinha did add that companies want to know how the government will apply new tax rules.

“Clarity in the tax regime with regard to future investments would allow companies to assess the tax implications for their projects and determine whether they remain economically viable,” he stated.

The new mining law restored royalty payments on mining to a minimum of five percent and established a windfall tax of seventy percent on profits made above a base price.

Canadian diplomats have also indicated concern regarding the future of Canada's bilateral investment agreement with Ecuador.

Reforms passed in Ecuador's 2008 constitution mandate that the government will not enter into agreements that defer to international arbitration, unless the arbitration body is in Latin America. In 2009, Canada's bilateral agreement came up for review.

Canada's Ambassador to Ecuador, Andrew Shisko, indicated that this did not sit well with Ottawa. Revision of Canada's bilateral investment agreement “is causing profound concern in Canada. A stable and transparent investment environment is fundamental for the success of Canadian investment in Ecuador,” he stated in a written message to the Ecuadorian-Canadian Chamber of Commerce in Guayaquil.

This could still be a concern. During an in-person meeting in Quito in August, Ecuadorian Foreign Affairs Minister Ricardo Patino told Foreign Affairs Minister for the Americas Peter Kent that “Ecuador will not maintain bilateral investment treaties.”

The National Assembly voted in September to denounce similar pacts with the UK and Germany for not being in line with the new constitution.

Challenges for Canadian interests on the domestic front, together with Ecuador's commitment to more independent regional integration efforts, lead Webber to believe that Canada would not be upset to see different leadership in Ecuador.

“Correa has aligned himself with very fickle friends, who are going to abandon him at the first turn because he's not the preferred candidate of transnational capital,” said Webber.

Any potential destabilization on September 30th was averted. But as political tensions persist in Ecuador, it remains to be seen how the uncertain relations will unfold.

From 2007 to 2010, Jennifer Moore reported from Ecuador as a freelance print and broadcast journalist.

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