ECUADOR - Land Tenure and Property Rights Portal

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In Ecuador, national policy overwhelmingly supports petroleum extraction. Oil is Ecuador‘s largest grossingnational product, and national interest in ensuring its development is critical in light of the country‘s considerableforeign debt (USDOS 2006; USDOS 2009).LEGAL FRAMEWORKUnder Ecuadorian law, minerals are the property of the state. Any zone may be reserved by the state for itsexploitation or exploration. Certain areas, including hydrocarbons, radioactive substances, and mineral water areregulated by special laws beyond those generally applicable to mining. Environmental regulations for miningactivities are established by Decree No. 625 of 1997 (Martindale Hubbell 2008).In early 2009, a new mining law was approved by Congress. The law: (1) establishes a state-owned miningcompany that will have exclusive rights for four years to develop certain ―special mining areas;‖ (2) requires salesroyalties to be 5% or higher; (3) provides foreign investors with treatment equal to that of domestic investors; (4)calls for the adoption of tougher environmental and social protections; and (5) creates a new government miningregulator (Kueffner 2009).The new law also allows for the expansion of copper, silver, and gold mining in Ecuador‘s Amazonian andhighland regions. It restricts the involvement of indigenous and affected communities by only allowing for theright to consultation in relation to mining activities in their communities. Indigenous and environmental activistshave been campaigning against the mining law since it was drafted, and have sought to have it amended (Fertl2009).The 2009 law has yet to take effect because the National Assembly needs to approve implementing regulations.The law has been challenged in court by the Confederation of Indigenous Nationalities of Ecuador (CONAIE) onthe grounds that it is inconsistent with certain provisions of the 2008 Constitution (Santacruz 2009; Kueffner2009; Earthworks 2009).TENURE ISSUESThe GOE owns all mineral rights and controls all mineral activities, either directly or by granting rights to thirdparties. The GOE has a monopoly over the salt mining industry. The state contracts with private developers forthe exploration and exploitation of petroleum and other minerals, with each contract specifying a specificgeographical area and time period for exploration or exploitation. If oil is found, the company can enter into atwenty-year exploitation agreement, renewable according to ‗public interest‘ (as determined by the state). Whilethose granted concessions have been guaranteed the right to exploitation, the concessions under privately orpublicly owned land are insecure as the government has changed the laws and periodically imposed halts or otherlimitations (Martindale Hubbell 2008; USDOS 2009; Hite 2004; Kueffner 2009).Foreign investors require approval of the President and the National Security Council of the Armed Forces toobtain mining rights in zones adjacent to international boundaries. In 2000 and 2001, the government eliminatedpublic royalties, reduced the payment of surface rights per hectare, approved mining titles valid for all miningprocesses for 30 years, and streamlined the concession process. However, the validity of similarly situatedconcessions was called into question after the Ministry of Energy and Mines unexpectedly canceled some of theconcessions in 2003 (USDOS 2009).The constitution recognizes the collective rights of indigenous communities located in mining areas, including theright to own property legally and without charge. However, the state can claim, in the national interest, its ownrights over all natural non-renewable resources, all subsoil resources including minerals, and any other substancesbelow the surface. The link between extractive industries in indigenous territories and the violation of indigenouspeoples‘ basic rights, including land tenure and property rights, has been illuminated at the national andinternational levels by Ecuadorian indigenous organizations and federations (UN-Habitat and OHCHR 2005; Fertl2009).GOVERNMENT ADMINISTRATION AND INSTITUTIONSThe National Directorate of Mining has authority over the mining sector. The Geological Mining andMetallurgical Research and Development Corporation charged with implementation of mining policy (MartindaleHubbell 2008).16 ECUADOR—PROPERTY RIGHTS AND RESOURCE GOVERNANCE PROFILE
GOVERNMENT REFORMS, INTERVENTIONS, AND INVESTMENTSIn 2005, President Palacio issued a decree requiring that all petroleum exploration and production contracts berenegotiated. Foreign investment in petroleum has been moribund for several years. Making matters worse forEcuador, state-owned Petroecuador‘s production continues to decline (USDOS 2009).In 2006 the government enacted a ‗windfall revenues‘ law effectively increasing the government‘s share of oilrevenues when prices exceed a certain level (Anderson 2009).In April 2008, Ecuador revoked nearly 80% of the country‘s mining concessions. This was done in order toenforce stricter environmental controls and increased royalty payments (Earthworks 2009).DONOR INTERVENTIONS AND INVESTMENTSNone.5. DATA SOURCES (SHORT LIST)EC. 2007. Ecuador Country Strategy Paper 2007–2013. http://www.eeas.europa.eu/ecuador/csp/07_13_en.pdf (accessed 8October 2010).FAO. 2006. Andean Countries: A Strategy for Forestry. ftp://ftp.fao.org/docrep/fao/011/k1395e/k1395e00.pdf (accessed 8October 2010).Lanjouw, Jean and Philip Levy. 2002. Untitled: A Study of Formal and Informal Property Rights in Urban Ecuador. TheEconomic Journal, 112 (482): 986–1019.Martindale Hubbell. 2008. Ecuador Law Digest. Martindale-Hubbell International Law Digest.http://support.lexis-nexis.com/lexiscom/record.asp?ArticleID=lexiscom_marhub_intdig (accessed 30 May 2011;subscription required).Ramazotti, Marco. 2008. Customary Water Rights and Contemporary Water Legislation: Mapping Out the Interface. FAOLegal Papers Online #76, December 2008. FAO, Rome. http://www.fao.org/legal/prs-ol/lpo76.pdf (accessed 8October 2010).USAID. 2006. Ecuador Conservation and Indigenous Projects. Washington DC: USAID.6. DATA SOURCES (COMPLETE LIST)Accra Caucus. 2010. Realising Rights, Protecting Forests: An Alternative Vision for Reducing Deforestation. http://www.careclimatechange.org/files/reports/Accra_Report_English.pdf (accessed 4 October 2010).Aguilar, Francisco and Richard Vlosky. 2005. The Forest Sector in Ecuador: The Current Situation and a Framework forSustainable Development. Louisiana Forest Products Development Center Working Paper No. 69. http://www.lsuagcenter.com/NR/rdonlyres/79952725-9B7F-41E9-9C33-F0C89AE696AD/53417/wp69.pdf (accessed 8 October2010).Becker, C. Dustin and Clark C. Gibson. 1998. Lack of Institutional Supply: Why a Strong Local Community in WesternEcuador Fails to Protect Its Forest. Community Forestry Working Papers No.3. FAO, Rome. http://www.fao.org/docrep/006/x2104e/X2104E07.htm#P1736_283310 (accessed 8 October 2010).Bremner, Jason and Flora Lu. 2006. Common Property among Indigenous Peoples of the Ecuadorian Amazon, Conservationand Society, 4 (4): 499–521.Caponera, Dante Augusto. 1992. Principles of Water Law and Administration: National and International. London: Taylorand Francis.ECUADOR—PROPERTY RIGHTS AND RESOURCE GOVERNANCE PROFILE 17
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