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German Money In Ecuador’s Rainforests

A German bank is financing a highly-controversial pipeline project in Ecuador, which will run through the country’s rainforests. A government delegation has now visited the site.


The planned pipeline could destroy large parts of Ecuador's rainforests.

The dispute surrounding the Oleoducto de Crudos Pesados (OCP) or Heavy-Crude Pipeline in Ecuador has not just caused local resistance. Thousands of kilometers away, in the German state of North Rhine-Westphalia (NRW), the OCP project is also a hot topic of discussion.

The credit institute Westdeutsche Landesbank (WestLB) has granted over $1 billion in loans to finance the pipeline. It is facing strong criticism in Germany for violating its own lending policies by financing a project that fails to comply with the World Bank's environmental standards.

Since WestLB is 50% state-owned, the NRW government came under strong pressure to get involved.

Under-secretary Harald Noack from the NRW Finance Ministry was in Ecuador last week to review the situation. He was accompanied by the geophysicist, Gustav Brose, and his spokesman, Norbert Greß.

"We spoke with representatives from both sides," Greß told DW-WORLD. They also looked at the proposed route of the 500-kilometers long pipeline.

"We collected a large amount of information on the environmental viability and technical aspects of the project," Greß explains. Brose is now putting together an expert’s summary of the findings. It is expected by mid-May.

Pipeline will still be built

But Brose’s results will not halt WestLB’s financing or the construction itself. "The contracts for the loans have been signed, and they are legally binding," says Greß.

Should Brose find fault with the proposed route, Greß says one possible solution would be having a consultant on-the-spot. "He would then monitor every instance of the pipeline project."

This could ensure that it would be completed with less negative impact on the surrounding ecosystems.

An environmentally-harmful economic boost

The OCP project is backed by the Ecuadorian government and a consortium of multinational oil companies. The pipeline would transport heavy crude from the country's eastern rainforest region to the Pacific Coast.

The proposed route also runs through Mindo-Nambillo, part of a humid forest region known as Chocó Andino. It extends to Colombia and is considered one of the areas with the greatest bird diversity in the world.

Local environmentalists in Mindo say the pipeline will bring untold damage to the area. It will also pollute drinking water supplies, and cause further soil erosion.

Government officials, on the other hand, say the project will give the country's economy a much-needed boost. And they insist that environmental standards will be upheld.

But environmental group Greenpeace does not share this opinion. "Once you've been over there and seen the project with your own eyes, it's very difficult to believe that any kind of standards are going to be adhered to," says Sandra Pfotenhauer. "The local environment is going to be severely harmed, without doubt."

She points out that the pipeline is going to be built across the Andes, at an altitude of 4000 meters, in an earthquake-prone region. "The old pipeline was already constantly suffering fractures, and leaking oil," she says.

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