Remarks by Amb. Cely - Day of Ecuador at Harvard

Day of Ecuador at Harvard: Breaking the Natural Resources Dependence.

Is It Possible? A Vision from the Middle of the World Her Excellency Ambassador Nathalie Cely Speech April 21, 2014 Good morning, Thank you to everybody who is here with us today. We are excited about the event we have prepared for you and hope you enjoy it. I would also like to give a special thanks to our speakers for joining us. We have here for you today a very distinguished group from Ecuador, Harvard, and Columbia University. Thank you also to our host and partner in today’s events, Harvard’s David Rockefeller Center for Latin American Studies, for your commitment in making this event happen and for recognizing the importance of the issues we are going to be discussing today; they are important not just to Ecuador, and Latin America, but to the whole world.

Being here today is very special for me for a few reasons. Earlier in my career, I had the pleasure of attending the JFK School of Government

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here at Harvard, and I received my Master’s here. Also, while studying here and for the following year I worked at the Center for International Development onan issue that is most close to my heart: how to foster growth and equality. It was an amazing and transformative experience, and one that has contributed greatly to all I have been able to accomplish for the people of Ecuador over the past several years.

Two weeks ago, I again had the opportunity to return to campus several times, both to meet with some of your leaders about this event and also to accompany the President of Ecuador, Rafael Correa, who you may have heard speak at the JFK Jr. Forum. Being here again reminded of the great times I had here as a student, and the many wonderful, smart, and kind people I met in Cambridge and Boston during my time here.

We all know that as we look to the future here in the greater Boston area that we also must remember what happened here one year ago. I have witnessed the amazing spirit of the people of Boston who I admire so much. I have seen the strength and compassion with which you have handled unspeakable adversity, and the sacrifices you have selflessly made to help your friends, neighbors, and strangers. I am truly in awe of this community, and I again extend the well wishes of my government and the people of Ecuador to everyone affected. I hope out of such tragedy, there can be some good that emerges, and I know Boston will always be strong.

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Friends and guests, what I want to talk to you about today is about how Ecuador is learning from the mistakes and challenges of the past to create a hopeful, vibrant, and sustainable future for the people of our country. And we hope the world can learn from these lessons and experiences.

As you may know, Ecuador is a country of about 15 million people, located on the equator and along the pacific coast of South America. We are one of the most bio diverse countries in the world, home to the Galapagos Islands, the Amazon Rainforest, the Andes mountains, and long coastal stretches. Our location by the equator, coupled with the Andean mountains, makes our climate especially fertile for all forms of flora and fauna. We have been identified as one of 17 “mega diverse� countries in the world. Just one of our national parks in the Amazon Rainforest has more species of frogs, toads, and trees than the entire continental US and Canada combined.

Ecuador is a country small in size, but truly rich in biodiversity and natural resources. This duality has led to a dilemma for our country: how do we find a balance between developing our society and taking care of the needs of our people on one hand and protecting our environment on the other. How do we best develop an alternative development model such as 3

the idea of “BuenVivir”, or Good Living in English, that places nature at the center of our society, not only protecting nature but also transitioning to a new path of development based on knowledge learned from our biodiversity? This is what we call a bio-knowledge, or bio-industry society/ These development dilemmas are also faced by many countries around the world, but Ecuador’s unique richness of biodiversity makes them much more acute.

Today, we believe we have found a better balance between development and protection of our people and environment. It is what we call a “Third Way” of development, highlighted in 2008 when the people of Ecuador ratified the first national constitution in the world to enshrine the Rights of Nature. This was more than a symbolic gesture. It reflected a national consensus that our whole approach to growing our country and protecting the environment–including ourselves–must change and adapt if we are going to make this planet a place where all can live freely and safely.

However, we did not arrive at this “Third Way” easily; the path to get to where we are today was long and costly on many levels. To fully understand the model of sustainable development Ecuador is pursuing today, it is necessary to understand the country’s complicated history with oil, which have been both a blessing and a curse.

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When oil was first discovered in Ecuador in the 1950’s and 1960’s, our country was lacking in strong institutions, standards, and oversight. For decades, transnational corporations took advantage of our country’s institutional weakness as related to the public sector and lax international standards for business compliance with human rights protections and regulations.

Oil companies took advantage of this dynamic. Irresponsible extraction of natural resources, inadequate methods of remediation, and lack of financial compensation for victims of corporate irresponsibility harmed not only human life but also the environment.

Arguably the most egregious example is that of Texaco-Chevron’s almost 25-year operation in Ecuador. Beginning in 1964, Texaco was part of a consortium of oil companies in Ecuador, and was the sole operator with exclusive responsibility for exploring, extracting and managing the oil operations in our Amazon rainforest. Texaco (which later to merge with Chevron in 2001) operated in Ecuador using methods and technology that were obsolete and non-environmentally friendly, contrary to the technologies used by the same company in other parts of the world.

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Texaco operated all three-hundred fifty-six wells that were drilled by the consortium, and it is estimated that more than 800 pits were excavated to bury the sludge and contaminated material produced in the drilling process. Millions of gallons of wastewater and produced water were dumped into the rivers proximate to the oil well operations.

As a result of these practices, there have been multiple legal actions presented in courts around the world. For more than a decade, a group of indigenous plaintiffs from the affected rainforest region were embroiled in a private legal battle with Texaco-Chevron. Despite a legal labyrinth that stretched from Ecuador, to New York, to California, back to Ecuador, Canada, Brazil, Argentina and even The Hague, Chevron still refuses to pay the remediation and is continuously seeking legal refuges to avoid assuming responsibility.

This legal battle has now embroiled the Government of Ecuador, via the terms of the Bilateral Investment Treaty between Ecuador and the United States. In September 2009, Ecuador received notice for an arbitration process before the Permanent Court of Arbitration of The Hague, under the UNCITRAL arbitration rules, in which Chevron claimed denial of justice, unfair and unequal treatment, and discrimination by Ecuador. This case is currently expected to run until at least April 2015. If

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Chevron wins, the Government—and people—of Ecuador may be liable in the amount of $9 billion to Chevron.

Although the final results of these cases and related appeals are still pending, the history of Ecuador’s relationship with Texaco-Chevron, and how the Bilateral Investment Treaty has been used in ways never originally foreseen, have taught Ecuador many lessons about how to balance development and sustainability.

These lessons have helped Ecuador find a “Third Way” of development that I mentioned earlier.

Today, Ecuador has set out on an irreversible path towards a stronger and more inclusive democracy with solid institutions that protect all, including vulnerable indigenous populations and the natural environment.

Where the international community has lagged, we have stepped up and created our own framework to protect our environment and set standards for responsible and sustainable economic growth and development.

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Ecuadorians are now aware of the enormous responsibility they have in order to protect biodiversity for future generations, which is why we are implementing a new development model called “Buen Vivir”, or “Good Living”, based on the ancestral Quechua philosophy of balancing the satisfaction of our needs with nature.

Based on this philosophy, Ecuador took the unprecedented step in 2008 of providing constitutional rights to nature. This was not an easy task, but it is showing results. In 2013, the National Judicial Council registered 570 cases filed in connection with crimes against nature, of which 278 were resolved.

As part of this new model of development, Ecuador has also been implementing reform around three principles: 1) institutional reform, 2) managing for results, and 3) training of human talent in the public sector.

In this case one important reform is to separate policy making, from regulatory and control bodies, in order to ensure appropriate balances and independence from executive in the bodies.

But perhaps most importantly, Ecuador has focused on transitioning to a knowledge-based economy and energy matrix, not dependent on oil and resources. This is a long-term process, but we are actively building pathways that allow further technological development, investment in 8

human talent and strengthening of the research capacity needed to change our production and energy matrixes.

Our economic and innovative revolution has focused on promoting education, science and technology to generate knowledge and human talent.

To that end, we have undertaken a thorough reform of higher education and educational restructuring in order to promote the formation of advanced human talent and the development of research, innovation, and technology transfer.

This commitment is reflected in the increase of public investment in education from 2.3% of GDP in 2006 to 4.6% in 2011, and in science and technology, which has increased 108% in relation to GDP from 2007 to 2010.

Since 2007, the Government has invested $1.6 billion on education, five times more than previous governments. Between 2013 and 2017, Ecuador will invest $8 billion in the sector of knowledge and human talent.

Access to higher education has also increased. More young people aged 18-24 have access to higher education than ever before. The economic barriers to higher education have been cut almost in half. The

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entry of minorities and Afro-Ecuadoreans has almost doubled. The standardized admission test implemented allows fair access to education.

We also develop talent by providing high-performing students with funding to study abroad, including at Ivy League institutions in the US such as Harvard. Scholarships for study abroad have tripled, reaching over 7000 students in 2013. About 600 researchers have come to Ecuador through the Prometheus program, involving about 300 research projects.

Not only are we looking to educate more people but to have a worldclass quality education system. Reforms have been implemented to ensure the quality of education with a new Education Act. In the last 6 years scholar research has doubled. Ecuador is recognized as the fastest growing in the innovation index.

University teachers are key to the process of research and teaching.

The number of researchers in Ecuador has increased by over 70 % since 2009. We have increased up to 400% the salaries of university professors.

Science and technology exchange is also among our government’s top priorities.

We have built and just opened the Yachay City of Knowledge. Yachay is bringing together international partners from high-tech areas, including 10

innovation centers by CISCO, China Telecom, and the Bioscience and Biotechnology Research Korean Institute, coupled with higher education partnerships to teach students in the fields of technology, sciences, engineering, research, medicine, and related fields.

We have also launched IKIAM, a groundbreaking new university in the Amazon region dedicated to strengthening research in biodiversity as well as geological and mining sciences, and to producing specialized human talent in life sciences, earth sciences and human settlements. Because of its strategic location and design, it will become one of the most important living laboratories in the world and we are sure that it will bring important benefits to practitioners and researchers from the national and international academic communities

Today, Ecuador has charted a difficult course, but one that is necessary and mindful of the complexity of our goals—building our country, economy, and investment environment and elevating the quality of life for our citizens—all while holding as equally important our duty to be the best stewards we can of the earth and the space we have been given.

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We intend to prove through our example that profitable and responsible are not mutually exclusive and the first fruits of these efforts are beginning to show.

The hard lessons we learned in Ecuador must not be forgotten; they are instructive to countries in every region of the world. But more importantly, our ambitious path forward cannot be completed alone. It requires strategic international allies and partners, who share our vision and who will partner with us in this challenging process.

We believe that in the areas of education, science, and technology, exchange and cooperation between the U.S. and Ecuador can deliver benefits for both our countries. Such partnerships can help all of us create jobs, strengthen our economies, protect our environments, and pave a path to prosperity for the millions of families whom we serve.

Ecuador welcomes further dialogue to find areas of cooperation.

Together, we can share and create innovative and effective solutions to tackling our generation’s most daunting challenges.

I am looking forward to the discussions we will have to today. There are no easy answers; we still have many unresolved questions, many models still being evaluated to find the best way to bring international private 12

investors and partners into our transition to a bio-knowledge based economy. Other questions remain. For instance, would a scanning model to search for the most effective bio-genetic material to cure disease be more effective than the bio-engineering approach that many are taking in United States? How can we conduct this research more effectively? How can we achieve a critical mass of bio engineers and scientists in our society?

I am pretty sure that the discussions today will be of great value to finetuning these models.

Thank you for your time today and I hope that I can one day welcome you all to Ecuador – a uniquely beautiful country that is committed to progress, equality and prosperity.

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