In turn, the protesters agreed to call a permanent end to the series of attacks they have launched on oil wells in eastern Ecuador in return for the increased support. Up to now, negotiations had been bogged down over a demand by the militants that they are not prosecuted for dynamiting pipelines and vandalizing pumping equipment earlier. The final settlement document is understood not to have addressed these issue of immunity, other than to say the protesters, the government, and the private oil companies would maintain a “good neighbour” relationship henceforward.
Oil companies including Occidental Petroleum, Petrobras, and EnCana, will pave 260km of new roads in the Amazon provinces of Sucumbios and Orellana under the deal, and around 66% of the 25% income tax paid by the companies would be steered toward local health, environment, and development projects.
Following the agreement, output from state oil firm Petroecuador immediately increased to 158,080brl/d, although still less than the 201,000-brl/d average before the attacks.
Selected leaders of the protests that shut down Ecuador’s oil industry on 15 August were freed from jail on 20 August after agreeing to halt the attacks and negotiate with the government. However, on 25 August the protesters who blocked Ecuadorean oil exports threatened to launch a hunger strike to pressure the government into granting them immunity, as settlement talks headed into a fourth day. About 60 protest leaders met in Quito for negotiations aimed at ending the crisis. They warned that members of their group remain on alert near the oilfields of eastern Ecuador, ready to attack again if the talks fail. “The issue of immunity is the sticking point,” said mediator Ramiro Gonzalez, prefect of the Pichincha province, in which the capital city Quito is located.
On 17 August, Ecuador’s government declared a state of emergency in the two Amazon provinces in which the protesters had cut crude oil production. The protesters stood by on alert following the protest leaders’ release, while both sides decided on a time and place to start talks; many of those released from prison are mayors and other elected officials in the region. However, General Gonzalo Mesa, in charge of army operations in the area, said dozens of protesters remained jailed pending outcome of the talks.
Following this, Ecuador, with only an eight-day supply of reserves left, was promised a loan of oil by Venezuelan President Hugo Chavez on 20 August. The Venezuelan Foreign Minister, Ali Rodriguez, said a meeting would be held in Caracas to study the request and the availability of Venezuelan crude. Chavez said the loan to cover exports crippled by protests will be cost-free, and he announced the deal on his weekly television show, which was aired live from the town of Sandino with Cuban President Fidel Castro standing by his side. Ecuador also plans to import fuel for domestic use and is seeking a $400-million loan from the Latin American Reserve Fund to avoid balance-of-payment problems from the oil stoppages.
Petroecuador suspended exports in response to the protests, in which protesters invaded oilfields, smashing equipment and blocking highways, and demanding that foreign oil companies pay for infrastructure and provide more jobs. The demonstrators smashed Petroecuador’s generators and computers, a spokesman said, and isolated acts of vandalism – including attacks on small pipelines – continued after 20 August. The army and the police began restoring order after the government declared the state of emergency. The government arrested the highest-profile protest leader, the elected prefect of Sucumbios, Guillermo Munoz, on 19 August, by which time most roads to the oilfields were blocked with tyres, stones, machinery, and holes smashed in the road surface.
The state of emergency declared by President Alfredo Palacio restricts rights of free association and expression, and allowed security forces to retake control of the oilfields. It also allows the government to censure news media working in the area hit by the protest.