LATEST NEWS IN THE ECUADORIAN MINING INDUSTRY
On Friday September 10th, 2022, delegates of the National Government and Indigenous Groups concluded a dialogue process on mining and oil policies as part of the agreement reached by the parties to end last June´s a national strike.
In parallel, the President requested the Constitutional Court to assess the relevance of eight questions in light of the Constitution, that it intends to submit for a National Referendum.
In this regard, this document will be divided as follows:
- Points of Agreement of the Dialogue Process
- Questions submitted by the President related to environment and water protection.
- Referendum process.
A. POINTS OF AGREEMENT OF THE DIALOGUE PROCESS
- Temporary moratorium of at least 12 months of 15 oil blocks, including “Ronda Sur Oriente”, until the necessary regulations on the Free, Prior, Informed, Consent Consultation are approved.
- No new mining concessions will be granted until the National Government enacts the Free, Prior, Informed, Consent Consultation regulation. On this point, the parties have agreed to review a regulation proposal on October 25th, 2022. It should be noted that the Constitutional Court, in several rulings, has ordered the National Assembly to enact an Organic Law on Prior, Free and Informed Consent Consultation, in order to guarantee the rights of Indigenous People as provided by the Constitution. Added to that, the Minister of Energy and Mines emphasized on the need to have such regulation in place as soon as possible. Therefore, we foresee that the opening of the mining cadastre announced for December will be deferred.
- No environmental licenses will be granted until regulations for environmental consultation are in place. It is necessary to point out that there are already regulations to address the environmental consultation for environmental licenses but not for environmental registries since it was not a legal requirement . Since the ruling by the Constitutional Court in “Los Cedros” case, all environmental permits, including environmental registries, have to go through an environmental consultation process. In conclusion, there is no legal effect on the environmental registries that have been obtained to date in order to perform initial exploration activities.
- A follow up process to discuss possible reforms to the Mining Law and the Hydrocarbons Law to implement the agreements reached.
B. QUESTIONS SUBMITTED BY THE PRESIDENT RELATED TO ENVIRONMENT AND WATER PROTECTION
The President announced his desire to activate a Referendum, regarding several questions related to issues of national interest and which are summarized in the following areas:
- Institutions & Rule of Law
- Environment and Water protection
This section will address the questions related to the protection of environment and water.
Do you agree with incorporating a subsystem of water protection into the National System of Protected Areas by amending the Constitution in accordance with Annex 7?
- Areas of Water Protection ( in Spanish, “APH”) are already incorporated as part of the National System of Protected Areas (in Spanish “SNAP”) in the Organic Law of Water Resources, Uses and Development of Water (in Spanish “LORHUA”). However, the LORHUA has recently been declared “unconstitutional” by the Constitutional Court.
- This question seeks that the Constitution (Art. 407) includes the APH as part of the SNAP.
- In the Annex to this question, a map of 16 existing APH to date is incorporated and if this question is qualified by the Constitutional Court and the result is favorable in the voting, mining activity would be prohibited in those areas.
- Unfortunately, neither the question nor its annexes have considered the treatment of pre-acquired rights in the areas mentioned above. For this reason, we are optimistic that the evaluation of the Constitutional Court will surely reinforce respect for the principle of non-retroactivity, regarding acquired rights and the qualification process of an area as APH.
Do you agree that individuals, communities, peoples, and nationalities, can be beneficiaries of compensations duly regularized by the State, for their support of the generation of environmental services, amending the Constitution in accordance with Annex 8?
According to environmental regulations, the maintenance and generation of ecological functions, as well as the dynamics of ecosystems, generate environmental services needed for maintenance of the life cycle. In this regard, current regulations define 4 types of environmental services: provisioning, regulation, habitat and cultural.
The Constitution does not provide any compensations to those who support the generation and maintenance of environmental services. Therefore, the proposal considers the amendment of Article 74 of the Constitution with the purpose of having the State define the guidelines and mechanisms for compensation, which should be reflected in the Organic Environmental Code (in Spanish, “CODA”).
In sum, the purpose of this question is to establish standard criteria in the regulation of payments for environmental services.
C. REFERENDUM PROCESS
According to the Constitution, the legal process for carrying out a Referendum at the initiative of the Executive Branch consists on three stages:
- Prepare the questions and their annexes and defining whether the appropriate way is amendment or reform of the Constitution. This happened on September 12 when these document was sent to the Constitutional Court for their legal assessment. The Constitutional Court has 20 days to issue a ruling.
- In the event that the pronouncement of the Constitutional Court is favorable, the National Electoral Council must be requested to call the
- The Executive Branch intends that the Referendum be carried out before to the February 2023 elections.