Behind the debts, mines, and oil: the image and life of the Chinese business community in Ecuador

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“For these women, the important things are the nature, the water, and the well-being of their communities. And what is happening with these Chinese companies is that they are imposing a project that supports contamination and different ways of the abuse of power,” described Esperanza Martínez, an environmental activist in Acción Ecológica, an Ecuadorian non-governmental organization. When Martínez explained her concerns on the Plaza Grande–the country’s political center in Quito–groups of indigenous women were protesting against Chinese enterprises’ oil and mining projects in the Ecuadorian Amazon rainforest. “Chinese companies out of the Amazon! Audiences with the President!” cried several women. They are carrying babies under the torrid sun who need to take the motor boat, walk for two days, and then take the bus to get there.

Ecuador is a country with abundant natural resources, including petroleum, gas, and copper, and for several decades the Ecuadorian government has actively sought foreign investments in the mining industry to help fuel its economy. For Chinese foreign trade ventures that began entering the Ecuadorian mining market in the mid-2000s, Ecuador represents a land full of business opportunity. In the following years, China provided loans of US$15.2 billion to Ecuador and, as a result, was able to rise up and become the largest creditor within this South American country [1]. With 38.7% of its GDP equivalent to its debt to China [1], Ecuador is now undergoing a financial plight that necessitates a massive sale of oil and mineral resources to the Asian giant.

List of Chinese Mining Projects in Ecuador

Project Company Province Affected groups
Río Blanco Group Junefield, Hunan Jinxin Gold Group Ltd Azuay Kañari
Mirador Ecuacorriente S.A. (ECSA) Zamora Chinchipe Saraguro, Shuar
San Carlos Panantza China Explorcobres S.A Morona Santiago Achuar, Shuar

According to the report “China and the Ecuadorian Amazon” by Amazon Watch, a non-profit organization dedicated to preserving the Amazon rainforest, Chinese oil firms in Ecuador operate in the following areas:

List of Chinese Oil Firms Operating in Ecuador

Company Province Oil Block / Field Protected Areas Indigenous Territories
CNPC (China Petroleum Company) Sucumbios 11 Kichwa, Cofán
Chuanqing Drilling Engineering Company (CCDE) Sucumbios Sacha Field Kichwa, Siona, Secoya
PetroOriental Orellana 14 Yasuní National Parl Buffer Zone NO-GO Zone Kichwa, Waorani, Isolated Peoples
PetroOriental Pastaza 17 Yasuní National Park Waorani, Isolated Peoples
Andes Petroleum Pastaza 79, 83 UNESCO Protection for Sapara, IACHR protection for Sarayaku Sápara, Kichwa, Isolated Peoples
Andes Petroleum Sucumbios 62 Cuyabeno Reserve Secoya, Siona, Kichwa
SINOCHEM Orellana 16 Yasuní National Park Kichwa, Waorani, Isolated Peoples
SINOCHEM Orellana 67 Yasuní National Park Waorani, Kichwa

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José Salazar, the Director of the Confucius Institute at the University of San Francisco in Quito, states that there are currently about eighty thousand Chinese expatriates and more than ninety Chinese enterprises in Ecuador. While many Ecuadorians think that Chinese companies are destroying their natural environment, and many indigenous think Chinese companies are destroying their home including not only ecological environment but also their lives in the midst of this debt crisis, the cultural barrier between these two countries has created various political and social biases and misunderstandings as well—but has opened the door for both Chinese and Ecuadorian communities to improve communication and learn to adapt to each others’ interests and needs. But what exactly is the social image of the Chinese companies in Amazon communities in Ecuador? What do Chinese companies’ lives look like within Ecuadorian society? And how can Chinese people improve their relationship with the Ecuadorian public in the future?

Amazon communities in Ecuador: We have sold ourselves to China

According to numerous Ecuadorian environmental activists, Ecuadorians’ number one complaint against Chinese companies is that they are polluting the Ecuadorian Amazon rainforest and ruining indigenous communities through oil and mining exploitation; projects such as Mirador and San Carlos Panantza have deteriorated the Amazonian ecological environment. “Minings are polluting the land where we have crops, where we have cassavas and many other things to eat,” complained one of the female protesters on the Plaza Grande.

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Within indigenous belief, the Amazon rainforest symbolizes “La Pachamama,” or the venerable Mother Earth, where their lives both began and depend on and from where they glean spiritual richness. The arrival of foreign companies, however, has begun to decay this sanctity. “People used to call us the poor, but in fact, we are not the poor at all. We have the richness of the forest. Now the only thing that fifty-year oil project has brought is the increasing poverty, but never wealth and development.” Zoila Castillo, one of the representatives of Amazon indigenous communities, said calmly.

To indigenous groups like Shuar or Sápara, the massive extraction of petroleum in the Amazon is like drawing blood from the Earth’s vein, which irritates many who care about their communities’ welfare. Moreover, with the expansion of oil blocks divided by Chinese companies, indigenous people have begun to be plagued with health-related epidemics, prostitution, and alcohol addiction. To counteract these negative effects, indigenous people have begun to appeal to the President to remove foreign enterprises from the Ecuadorian Amazonian region.

Much to the indigenous groups’ indignation, the former administration led by Rafael Correa shielded Chinese enterprises from legal accountability and indirectly worsened the environmental destruction. During his second term in office, Correa significantly strengthened the country’s economic, social, and political ties with China as a means of drawing in more investment from the Asian giant’s citizens. Many Ecuadorians believe his reliance on China was excessive, and that the economy became hooked to business loans from China. This was especially true after the failure of the Yasuní-ITT Initiative in 2013 [2]. “The government said they consulted people,” indicated Leila Salazar-López, Executive Director of Amazon Watch. “No, they did not consult. They came and told the people that they were going to do this project.”

Because of its preference for Chinese enterprises, the Correa administration not only protected the interests of Chinese oil companies like the Andes Petroleum but also punished those who protested against the companies’ oil production. For the Correa administration, the Chinese enterprises’ exploitation of petroleum and mining means development. The mining and oil projects have created economic growth as well as jobs for local residents.  In that case, government agencies are willing to help Chinese companies in many aspects, causing public suspicions on them. The people’s dissatisfaction reaches the peak when Chinese enterprises have done various inappropriate behaviors in Ecuador.

For example, the way that Chinese companies handle conflicts with protestors is a symbol of disrespect from the perspective of local NGOs. Ivonne Yánez, a member of Acción Ecológica, suggested that only Chinese companies are different from other foreign firms who traditionally sought help from the authorities that can be an intermediary of the coordination, in that Chinese corporations “directly use the legal measure” and “put people in jail.” Especially when the imperfect justice system is questioned by local NGOs, such acts of Chinese companies are more widely considered as a disrespect of human rights. “It’s not a question about laws, but a question about legitimacy to defend the rights,” she said. These kinds of political strategies have directly led to the deterioration of the Ecuadorian Amazon jungle, resulting in the negative social effect of the local people’s mistrust of Chinese ventures.

Meanwhile, western companies surpass their Chinese counterparts in communication with native communities and compliance with environmental legislation. American firms, for example, know the situation in Ecuador far better than the Chinese due to their constant contact with Latin America in the history. “The Constitution of the Republic of Ecuador protects the environment a lot,” explained a former Vice Minister of Mining. “This legislation even imposes punishment for those who cause damage to the environment.” As a result, with higher emission standards, western enterprises are more preferred by the Ecuadorian populace that pays close attention to environmental protection standards. Some Canadian companies, for instance, receive wide approval for their respect for indigenous culture and high wages to native workers.

The Chinese, on the other hand, do not always follow the Ecuadorian legal norms. Their lack of understanding of the corporate responsibility to mitigate ecological damage has generated numerous grave pollution issues in Mirador. Even though China is Ecuador’s largest partner today, the situation in the Amazon has caused the current government headed by Lenín Moreno to embrace more western investments.

Perhaps more seriously, the deficiency of knowledge of local culture and policies among Chinese companies has led to their failure of fulfilling the environmental responsibility in Ecuador. During the interview, the former Vice Minister of Mining also pointed out that the Chinese “need to understand better the culture and policies of Ecuador to continue their works.” Several governmental functionaries spoke highly of Chinese oil companies. However, compared to the Americans who have stayed in Latin America for hundreds of years, the Chinese still fall behind the in environmental regulation.

Because the country’s 2008 Constitution explicitly sets articles on environmental protection, the Ecuadorian people are quite alert to any damage to their natural environment. As a result, Chinese companies’ mining and oil projects that disregard local concerns can notably impact their public image and reputation in Ecuador.

Chinese companies in Ecuador: We even have to report when we go outside

In recent years, China’s overseas influence has expanded drastically, yet it does not bring many opportunities for intercultural communication to its state-run enterprises. In Ecuador, employees of such companies can hardly interact with local citizens due to the harsh restriction in their management system. “We have to report details such as reasons, durations, places, partners as soon as we go outside,” mentioned an unnamed employee in a Chinese company. David Shan, an engineer of a state-owned electric corporation who worked at a hydraulic construction project near Guayaquil for 25 days, illustrated his company’s prohibition of going out alone for “security reasons.” Speaking about western enterprises in Ecuador, he indicated that although their construction progress was slower than his company’s, their employees had more frequent daily contact with the Ecuadorians.

Viewed from the perspective of social communication, the dearth of mutual understanding between the Chinese and Ecuadorian people is particularly obvious in linguistic and cultural fields. Without adequate language training, most expatriate employees of state-owned ventures lack the ability to closely interact with the local community. An anonymous employee from a Chinese railway company showed that as technicians, many of his colleagues do not really focus on the communication and publicity to Ecuadorian society because of the enormous cultural barrier. “… what we often did for leisure were merely playing cards and tennis at the camp,” explained he.

Martin Jiang, a high-level administrator of a Chinese oil firm, has realized the importance of the communication. He also admitted that the essence of misunderstanding between China and Ecuador is their huge cultural difference. However, in Ecuador, Chinese state-owned companies are still following typical Chinese rules in their operation and ways of thinking, which is instituted by some company superiors in China who do not even understand why their employees need to deal with indigenous peoples and NGOs.

When referring to public relations, Mr. Jiang said that the person in charge of his company “does not speak Spanish at all and can only speak a little English.” The lack of contact with the local community among Chinese enterprises may easily lead to biased thoughts against indigenous groups. Besides, the intrinsic stereotype also strengthens the misunderstanding between the Chinese and Ecuadorians. The tension between Chinese companies and indigenous groups seems irreconcilable.

Groundbreakers: Cultural influences need time

Nevertheless, civil society and educational institutes are still striving to improve the Chinese social image in Ecuador and contribute to the two countries’ cultural exchange. The Confucius Institute, for instance, is dedicated to spread Chinese culture and values to foreign populations through teaching Mandarin Chinese and promote cultural blending among different countries. “From being completely ignorant to having strong interests, our students have become real transmitters of Chinese culture,” suggested the director of a branch in Quito.

According to the data from a Chinese language school in Quito, more Ecuadorian people are eager to learn Chinese with the increasing global influence of China. Their motives vary from commercial purposes to a personal enthusiasm for traditional Chinese culture to a wish to study in China. Jack Mao, a professional Chinese educator, is the principal of a private Chinese language school in Quito. Different from many of his overseas contemporaries, Mao has managed to employ language education as a vehicle to facilitate the cultural interaction between the Chinese and Ecuadorian people.

For fifteen years, Mao has devoted himself to building a bridge of communication. In addition to teaching Mandarin Chinese, he often organizes activities of cultural exchange, such as Chinese New Year galas and reunions at Mid-Autumn Festivals, attracting many Chinese and Ecuadorians to participate in. These folk cultural exchanges gradually become popular among the Ecuadorian public and have effectively promoted the mutual understanding between citizens of China and Ecuador.

Throughout Mao’s educational career, his effort on the spread of Chinese culture has greatly changed the Ecuadorian people’s impression of the Chinese. “In the past when we walked on the street, people would throw stones at us and scream, ‘Go home to sell your chaulafán (an Ecuadorian version of Chinese fried rice)!’ because the communication was limited at that time. But now many local citizens can even greet us with ‘ni hao’ (hello) in Chinese because their impressions of China have been changed by generations of Chinese people,” explained Mao over tea.

On the other hand, numerous Chinese enterprises are building up localization strategies in order to integrate into the Ecuadorian market nowadays when local Chinese are attempting to assimilate into Ecuadorian society. In the meantime, by bringing cultural training programs to both their Chinese and local employees, by offering donations to local organizations, and by building infrastructures for communication with local communities, they can effectively better their public image in Ecuador. Even some big oil companies choose to hire native doctors for community hospitals as bridges of communication.

“Being influential takes time,” pointed out Principal Mao. “During my fifteen years of teaching, for example, the number of my students has grown from only three to today’s 1800. More and more Ecuadorians are willing to learn about China and even fall in love with Chinese culture.”

The article was written by Yuchen Ge and Yunan Liu.


[1] https://www.chinadialogue.net/article/show/single/en/9651-Amazon-threatened-by-China-Ecuador-loans-for-oil

[2] http://amazonwatch.org/news/2014/0317-beijing-banks-and-barrels-china-and-oil-in-the-ecuadorian-amazon

 

 

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