Good for mining but bad for democracy? Why Indigenous groups in Ecuador oppose free trade deal with Canada

Ecuador’s largest Indigenous organization is vowing to fight a now-concluded free trade agreement with Canada, warning it could encourage human rights abuses in the ecologically and culturally diverse South American country.

“It is very concerning, this news,” said Zenaida Yasacama, acting president of the Confederation of Indigenous Nationalities of Ecuador (CONAIE), which represents 10,000 communities, in a teleconference interview from Quito. 

“We’ve not been consulted as Indigenous Peoples, and we believe that this process is a violation of our rights,” she told CBC Indigenous in Spanish.

Canada and Ecuador announced the end of negotiations last week. Amid threats of crushing tariffs from the United States, Global Affairs Canada is touting the elimination of trade barriers on $1.4 billion in bilateral merchandise and the diversification of partnerships.

Opponents, however, say that explanation is opportunistic, arguing the arrangement would mainly benefit Canada’s mining sector, the main source of $4.4 billion in direct Canadian investment in Ecuador in 2023.

“This trade agreement is, in our view, focused on expanding mining activity in Ecuador, and this will have many destructive impacts,” said Yasacama, who belongs to the Kichwa people of Pakayaku in the Ecuadorian Amazon.

“This is our huge concern and this is why we will resist, as we have for more than 500 years. We believe that there will be more assassinations and criminalization as we engage in resistance.”

The deal still needs to be ratified. 

In Ecuador, general elections were held on Sunday but failed to deliver a clear winner, prompting a runoff vote slated for April. CONAIE has opposed what it calls “extractive and neoliberal policies” from the conservative-leaning incumbent, Daniel Noboa.

Noboa, the son of a wealthy banana exporting magnate, has sought to entice foreign investment shore up security, declaring an internal armed conflict against organized crime groups, prompting reports of serious human rights violations.

“It’s very sad and it’s lamentable, in fact, that this agreement has been negotiated,” said Hortencia Zhagüi by Zoom from her home in the Azuay province in southern Ecuador.

“Our rights have been violated, our rights under our own constitution. The president has gone over our heads, behind our backs, negotiated secretly, in a hidden way.”

Zhagüi is a representative of the Board of Potable Water Administrators of Victoria del Portete and Tarqui. The group is concerned about mining operations potentially leaching arsenic into groundwater in the high-altitude wetland area in Azuay province.

“It’s very sad to say that Canada is respecting Indigenous rights, Indigenous peoples and human rights. It’s false because we are living another reality,” said Zhagüi.

Yasacama and Zhagüi were part of an Ecuadorian women’s delegation that toured Canada last fall, though they remain uncertain whether Canadian leaders acted on their concerns. A spokesperson for Trade Minister Mary Ng didn’t respond to requests for comment.

In a statement, Global Affairs said the agreement includes a chapter on Indigenous Peoples and trade “that aims to uphold and advance the rights of Indigenous Peoples under applicable law.”

The deal also includes clauses committing Canada and Ecuador not to weaken or reduce the rights of workers, women or Indigenous people, the statement said.

Concerns with arbitration

Civil society groups are also raising red flags about the inclusion of a controversial system of international arbitration used in the past by Canadian firms, even some accused of human rights abuses.

“We are outraged,” said Viviana Herrera, Latin American program co-ordinator at Mining Watch Canada.

“What is reflected in the document that they published is very clear: that this agreement is about protecting investment and not protecting people.”

Known as investor-state dispute settlement, or ISDS, the arbitration system would allow Canadian companies to sue Ecuador at private tribunals rather than in the domestic courts. 

Ecuador banned this system in 2008 and rejected it again in a 2024 popular referendum. The system is seen as biased and unjust in Ecuador following a string of bad experiences, said Stuart Trew, a trade researcher at the Canadian Centre for Policy Alternatives.

“It really is an anti-democratic, very unaccountable system and it needs to go,” he said in an interview, calling it disappointing that Canada would agree to it.

“It puts a thumb on the scales on behalf of the companies in the event that there is resistance — which of course there is in Ecuador. There’s massive resistance to mining. This can only go badly. This can only go badly for the states. It’s going to result in massive, massive lawsuits.”

In the late 2000s, for instance, the Ecuadorian government revoked Vancouver-headquartered Copper Mesa Mining’s licence, after it was accused of trying to advance a project through intimidation, violence and subterfuge.

Copper Mesa then sued Ecuador through the arbitration system. Despite concluding senior personnel in Quito were guilty of directing an organized campaign of criminal violence against anti-mining groups, a tribunal awarded the company $24 million USD  in compensation in 2016.

In another case, Ecuador cancelled a contract with U.S-based Occidental Petroleum Corp., alleging it had illegally sold a large stake in the project to a Canadian company. Occidental sued for arbitration, securing $1.77 billion USD in 2012.

Trew said the threat of these enormous, damaging lawsuits would give Canadian companies great leverage when projects don’t go their way.