The Military and PetroEcuador

.... I hate the comment subjects of some blogs... Boz had posted a comment about Correa's putting the military in charge of PetroEcuador and I wrote long comment over on his blog, only to see it disappear when I went to post it. Oh, well, I should have written something about the same subject here, so here goes.

I should say that I approve of Correa's actions on PetroEcuador at the outset. As readers know, I don't particularly care for Correa's personal style and I disagree with some of his stances, but on this one, I'm with him.

Several factors have given rise to Correa's actions. In no particular order:

1. Disposition of oil revenues. Almost from the start, over 40 years ago, the GOE has extracted oil from the eastern provinces, Sucumbios, Orellana, Napo, Pastaza, y Morona, and its' given very little back to the poor, rural communities in and around the oil fields. Infrastructure and public services to those communities have mostly been poor to nil. Needless to say, resentment against the central government has always been strong, and over all of these same years, there have been repeated strikes, protests, road blockages and outright sabotage of production facilities to demand increased shares of central government oil revenues/benefits to the eastern provinces - and that's what's been happening now in the Orellana community of Dayuma, for the last three weeks or so. There have been acts of sabotage, attacks on the police, road blockages and consequent declines in oil production and revenues during those same weeks. My guess is that the timing of Dayuma incident is not coincidental, as I'll explain below.

2. Local governance and political conflict. Orellana is the home province of ex-President Lucio Gutierrez, one of Correa's principal political enemies, and the Prefect (an Ecuadorian Prefect is roughly analogous to an elected state governor in the States) of Orellana is a member of Gutierrez's political party. My guess (and mine only) is that this lady (the Prefect) chose - or was told to - stir up problems at Dayuma just before the Constituent Assmbly started in order to distract attention from the CA and of course, make Correa and Acuerdo Pais ineffectual in face of the Dayuma violence.

3. Petro Ecuador. It's an incompetent, ineffective, corrupt mess which is a disgrace to this country. (Am I being clear here? :)) Over the last, god knows, how many years, it's been controlled by its labor union, a corrupt and very powerful political cesspool which has siphoned off millions, if not billions of dollars for illicit uses, and which has resisted attempts by successive governments to bring it under control and increase production/revenues for public use. Think PEMEX or the PDVSA union before Chavez destroyed that oufit. I've always maintained that Correa, if he wanted to, has the political support necessary to do something about PetroEcuador and for that matter, UNE, the teachers' union (again, Mexico and its teacher union comes to mind as a parallel) which is another nest of political patronage and financial corruption instrumental in running the shambles that passes for a public eduation system.

PetroEcuador's most recent President, Correa appointee Carlos Pareja never seemed to be able to control or affect PetroEcuador in any way. During his tenure, oil production in Bloc 15, the one seized from Oxy in May 2006, went down as I predicted it would. The PE refinery in Esmeraldas is (in)famous for its poor output. In a widely seen video from earlier this year, Pareja made a unannounced 2:00am visit to the refinery and found the few staff that were present asleep in their office chairs or on the floors; this is all on tape. Later, the union complained that PE staff isn't supposed to make unannounced visits; Pareja said nothing.

4. When Correa came into office, he appointed Gustavo Larrea as his Minister of Government. MinGovernment runs the National Police and is responsible for internal security affairs. When the Dayuma affair broke out, Larrea was in charge of the cops charged with keeping the peace. His best efforts at doing that didn't work. Worse, for reasons not clear to me, Larrea and Pareja gave Correa the impression that they had gotten things under control in and around Dayuma when in fact things were headed south, as they say.

5. Correa finally got clear on what was going on mid-last week, and Thursday he moved in and fired Larrea and Pareja and appointed a Rear Admiral Zurita to take over management of PetroEcuador. As well, he had the military send in 500 regular troops to take over from the frazzled cops. At this writing, violence is still going on, with three dynamitings of production facilities reported today. Still, the local press reports that the government says that oil production is returning to normal.

6. As I said at the beginning of this post, I agree with Correa's actions on this whole mess. He needs to get the violence under control and if the military prove to be good managers (always a big if in a situation like this), that's fine with me. If Zurita and company can really take charge of the PE (and they're not corrupted themselves in the process), then I'd hope that they will clean out the Augean stable that passes for PE staff and union. There are several corrollary issues extant, like what to do with an elected Prefect who's not been helpful, to say the least, and there's also the issues of making the cops more effective and the chronic problem of not getting oil revenues to the very areas that produce the oil - but one or two things at a time, I say.

Finally, in response to Boz's implicit concern (I THINK he's concerned about it) about military involvement in PE and oil business, I can understand it. We've all seen the true military-industrial complexes at work down here in LA, and those arrangements still exist here in Ecuador in some areas, and I'm not a fan of the arreglo myself. Still, in the case of PE, I think we'll need some uniforms in there to show the union that Correa's not messing around. I'll go further and say that I think that Correa and the boots should crush the union and start building a new PE that's honest and competent. A tall order, I admit, but that's what I think needs doing.....