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Ecuador’s Suspension of Environmental Consultations Paralyzes $2 Billion in Investments

Ecuador’s Suspension of Environmental Consultations Paralyzes $2 Billion in Investments

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Ecuador’s top court has suspended a decree that would have allowed environmental consultations prior to the licensing of industrial and mining projects. This has paralyzed investments worth $2 billion, according to business associations.

The decree was issued in May and allowed consultations with communities in areas close to industrial and extractive projects to be used to obtain environmental licenses. This was intended to speed up the permitting process.

However, the Constitutional Court suspended the decree last month after Indigenous group CONAIE argued that the process favored development of mining projects over local communities.

María Eulalia Silva, president of the Ecuadorean Chamber of Mining, said that the suspension of the decree has “frozen $2 billion in investments for a series of projects.” She called on the court to allow the decree to go into effect so that businesses can resume their activities.

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The environment ministry has said that at least 176 environmental consultation processes are currently suspended. These include projects such as mining, waste treatment plants, and dams.

The Chamber of Industries and Production (CIP) said that the lack of environmental consultations prevents new investments. “This has made the country unattractive to foreign investors,” said Maria Paz Jervis, president of the CIP. “Without a doubt one of the economic and productive consequences (…) is the paralysis of employment in formal companies.”

The suspension of the decree is the latest setback for the mining industry in Ecuador. In recent years, the government has imposed a number of restrictions on mining, including a moratorium on new mining concessions. This has led to a decline in investment in the sector.

The suspension of the decree is likely to further delay the development of mining projects in Ecuador. This could have a negative impact on the country’s economy, as mining is a major source of revenue.

Source: Reuters


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