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Article

22 Jun 2015

Author:
Rebecca Ray and Adam Chimienti, BU Global Economic Initiative

“A Line in the Equatorial Forests: Chinese Investment and the Environmental and Social Impacts of Extractive Industries in Ecuador”

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…After an examination of the Ecuadoran economy and its general engagement with China, this paper performs a case study on the experiences of Chinese state-owned Andes Petroleum and PetroOriental, in order to draw lessons for future Chinese investments for the upcoming expansion of Andes Petroleum’s concessions into the Ecuadoran Amazon that may test both Ecuador’s legal framework and Andes’ corporate goodwill. We find that the record of Andes Petroleum and PetroOriental have had relatively positive experiences in Ecuador to date when compared to other domestic and foreign-owned firms in the sector. However…this expansion is the first new concession under Ecuador’s recent law on prior consultation, and problems have already arisen in how the law has been applied. How the government, Andes Petroleum, and civil society handle this situation will determine whether the Ecuador-China relationship becomes a model of responsible oil production or whether it will betray the vision behind the country’s impressive legal framework. Special attention should be paid to transparency and public accountability for all actors involved: government, civil society, and the oil companies themselves.