ANALYSIS-In Ecuador's Amazon, scant progress after landmark oil vote

United Nations experts have also backed calls for action on the referendum result, urging the Ecuadorian government to "urgently implement the will of the people". "Ecuador should prioritise protecting the climate, the environment and Indigenous Peoples who depend on it and shift away from an economic model based on depleting natural resources and fossil fuel extraction," a group of U.N. experts said in a statement on Aug. 20.

* Scant progress halting drilling despite key vote

* End to oil in Yasuni rainforest to take years

* Indigenous people excluded from government commission

By Anastasia Moloney BOGOTA, Aug 30 (Thomson Reuters Foundation) - A year after Ecuador voted in a historic referendum to ban all oil drilling in a unique part of the Amazon rainforest, Indigenous leaders say the government has been slow to shut down wells in the oil-dependent South American nation.

On Aug. 20, 2023, more than 10 million people - almost 60% -voted to keep crude in the ground in the Yasuni national park in the Amazon. The referendum was hailed by environmentalists and Indigenous communities as a landmark victory to protect one of the world's most biodiverse regions and a rare example of the world shifting away from a fossil-fuel based economy.

Since the Amazon rainforest absorbs vast amounts of carbon dioxide, it is key in shaping the Earth's climate and is a vital weapon to slow climate change. The vote called on the state oil firm, Petroecuador, to dismantle and shut operations at its Yasuni '43-ITT' oil block in a "progressive and orderly" and then restore the area.

Ecuador's constitutional court ruled last year that Petroecuador had one year to remove infrastructure at the block. But oil is still being pumped in an area that produces some 58,000 barrels a day, and all the fulsome government pledges to act have yielded little progress, Indigenous leaders said.

"It's very worrying. The machinery is still there, so where's the commitment from the government?" said Nemonte Nenquimo, a leader of the Waorani Indigenous people, whose ancestral lands lie in the Yasuni rainforest. "It's been a year, and the government hasn't complied," Nenquimo told the Thomson Reuters Foundation.

The government is at pains to show it is stepping up its efforts to withdraw from all oil activity in the zone and said "its commitment to honour the (referendum) decision remains firm," according to an Aug. 20 government statement. The Energy Ministry said it had closed one of the 247 wells in the block earlier this week, part of a phase-out plan expected to take around five-and-a-half years.

Ecuador's Energy Minister Fernando Santos has estimated dismantling operations would cost $600 million. "The government is making a mockery of the public referendum by saying the process is complex and costly and could now take between three to five years," said Fernando Munoz, a spokesperson for Yasunidos, an Ecuadorian environmental group, which began pushing for the referendum a decade ago.

"We understand that it's not possible to shut the key and stop oil production overnight, but there's no timetable for a gradual and orderly shutdown," he said. The wells should all go offline by December 2029, the government has said, but removing all the infrastructure at the block could take until August 2030.

SECURITY CRISIS Ecuador produces about 500,000 barrels of crude a day, and oil revenue - vital to its stretched government - makes up nearly 3% of the country's gross domestic product.

Plans to shutter oil production could be hampered by urgent security challenges facing President Daniel Noboa, who in January declared Ecuador was at war with criminal gangs. Noboa has also floated the idea of postponing the closure, citing the need to fund his crackdown on drug-fuelled gang violence.

"As the country faces economic and security crises, the oil industry and its supporters in government have been pushing hard to disregard the popular vote," said Mitch Anderson, co-founder of advocacy group Amazon Frontlines. United Nations experts have also backed calls for action on the referendum result, urging the Ecuadorian government to "urgently implement the will of the people".

"Ecuador should prioritise protecting the climate, the environment and Indigenous Peoples who depend on it and shift away from an economic model based on depleting natural resources and fossil fuel extraction," a group of U.N. experts said in a statement on Aug. 20. HEALTHY RAINFOREST

Preserving the Amazon, the world's largest tropical rainforest, is vital to curbing runaway climate change. Scientists say climate change, deforestation and fires are all helping push the Amazon to a "tipping point" that threatens to alter the forest irreparably.

Indigenous groups have campaigned for decades to keep oil companies out of their home so as to protect local nature, along with several communities who live there in voluntary isolation. They say Indigenous communities have not benefited from oil and that building roads and rigs has led to deforestation and environmental damage, be it oil spills or air pollution.

"Yasuni is a territory of great biodiversity. What happens here affects the climate change crisis and the planet," said Ene Nenquimo, vice-president of the Waorani Nation of Ecuador, one of several Indigenous organisations demanding action. In May, the government set up a ministerial commission to oversee the closure; the panel includes Petroecuador, but Indigenous people were given no seat at the table.

"As owners of the land, the government should ask us Waorani what happens on our land," Ene Nenquimo said. But Ecuador relies on crude exports to prop up its economy.

Petroecuador has said ending exploration in Yasuni would cost Ecuador some $13.8 billion over two decades and cut 12% of the country's 480,000 barrels per day (bpd) oil production. Losses from oil revenue could be partly offset by comprehensive tax reform, "based on the principle that those who earn more should pay more tax," said Munoz, the academic.

"There should be an open public debate about the need to carry out a just transition and how to sustain an economy without oil as reserves run dry," he added. Indigenous organisations are considering taking the issue to the Inter-American Commission on Human Rights to ensure the government complies with the referendum result.

"We'll not sit with our arms crossed," said Ene Nenquimo.

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