Destruction and Corruption: The Jungle Adventures of an Oil Company in Ecuador

Amazon Oil Spill

In spite of being plagued by scandals in several areas of Latin America recently, the Swedish construction company Skanska shows no tendency toward discontinuing its shady operations.

This article is part 2 in a series by Agneta Enstrom (Part 1)


Local people clean up the mess that companies leave

In spite of being plagued by scandals in several areas of Latin America recently, the Swedish construction company Skanska shows no tendency toward discontinuing its shady operations.

On the contrary: Skanska continues its oil drilling in cooperation with unscrupulous oil companies like Petrobras in the Ecuadorian Amazon basin. Due to shortage of environmental licenses, the companies lost the legal right to their activities in the UNESCO-recognized national park, Yasuni, effective June 2005. Today, however, they continue to drill in oil fields in the vicinity, although the environment suffers and the indigenous cultures are threatened by the industrial occupation.

In August 2004, in conjunction with a state visit by Brazilian president Lula da Silva, the Petrobras oil company obtained a controversial permit to drill oil in the Ecuadorian national park, Yasuni (Oil Block 31). The national park, which is in the Amazon region, was declared a biosphere reserve by UNESCO in 1989, the same year the oil industry began to lay claim to the region’s subterranean riches.

Yasuni, considered to be the most important of Ecuador’s national parks, is home to world-class biological diversity. Yet the country was not able to rescue it from oil companies, which today control around 70% of the area (often illegally and with military help), according to the international network Oilwatch. The area is home to three indigenous peoples, including the Waorani people, whose existence is seriously threatened by oil exploration and the pollution it causes. Nevertheless, the Swedish construction company could not find any ethical problems in working with the oil industry in the region.

Skanska was initially engaged by Petrobras to perform various infrastructure and civil engineering works on the outer edges of Yasuni. Construction of a harbor along the edge of the Napo River began in March of 2005. However, due to national pressures, the construction had to be halted after only a few months. Petrobras´ permit was recalled at the same time, and following further investigation, the project was interrupted until such time as an environmental feasibility study would be completed. This was followed by the disclosure of a large number of improprieties, seriously flawed circumstances and illegalities in the recently launched operations.

Pollution and sanitary carelessness


Toxic water at oil field

Since 2005, Skanska and Petrobras´ joint operations have been sharply criticized by environmental organizations, government authorities and local populations in Ecuador. This refers particularly to the activities in the Yasuni park, where local informants from the original villages of Sani Isla and Ciru Isla have reported that Skanska has polluted watercourses with toxic substances.

Inspections in Chiru Isla, made by the Acción Ecológica and the environmental authority for the Amazonian province of Orellana, Skanska´s environmental considerations were found to be seriously flawed. Five families in Chiru Isla reported to Acción Ecológica that they experienced poisoning and became seriously ill from the emissions. In addition, the inspection found that Skanska´s construction site latrines and waste had been dumped onto the surrounding land, which is against the sanitary laws in Ecuador, and could also be a serious health hazard for the local population, which depends on the local water sources.

Free labor

According to inhabitants of Chiru Isla, Skanska also exploited local people as free labor. In cooperation with Petrobras and a third partner, the Argentina-based company Alesco, the company is reported to have engaged the local population to perform dangerous jobs – however, the wages for these tasks were not forthcoming. Beside that, the companies are accused of having purchased bananas and yucca in the villages, also without paying. Skanska´s behavior in Ecuador contrasts sharply with the company’s own Code of Conduct.

“We do not use forced labor, slave labor or other forms of involuntary labor at our work sites. We do not allow any practice that would restrict free movement of employees… A strong and consistent relationship to all employees, built on mutual respect and dignity, is of vital concern to Skanska.” (Skanska Code of Conduct)

Exploiting the local population as free labor, like any other unpaid or underpaid service, is common among the companies operating in the oil industry in the Amazon region, according to lawyers from the network Frente de Defensa de la Amazonia (FDA). “In the oil sector, and particularly in the southern hemisphere, the companies notoriously ignore human rights and environmental legislation,” explains anthropologist and ecologist José Proano from Acción Ecológica, “and Skanska is no exception.”

The fact that Skanska´s behavior is customary in the context of oil drilling in the global South does not help, nor does it relieve Skanska of the responsibility for its actions. However, the mechanisms and the desire to counteract social and ecological disasters caused by Skanska´s activities are apparently missing in both the company and in political bodies.

A context of crimes and corruption


Crude in the rainforest

After Petrobras and Skanska were forced to relinquish Yasuni national park for a certain period while studies were being completed, the duo has continued to focus on drilling in Oil Block 18, also situated in the Amazon region. Human rights and environmental groups currently aim sharp criticism against the operations in this block, as well. According to legal experts at the FDA, reports on human rights violations are received on a daily basis in the area. And these reports are also being followed by investigations and inspections that confirm the reports given by the local population.

FDA Lawyer Pablo Fajardo claims that current conditions in the Amazonian oil region are miserable. According to him, the situation can be compared to a type of low-intensity war against the civil population, where the companies try to split, manipulate, threaten, or even remove those considered inconvenient to the industry.

“The population is being exposed to serious health hazards and illness related to oil spills and deliberate waste dumping,” says Fajardo, “while they often live in fear of the companies, whose power is expressed through threats and violence. By using armed private forces, the companies try to control and stifle local resistance at any price. This is what it’s like in the entire region, and all companies working with oil are forced to deal with this reality.”

In its code of conduct and on its website, Skanska boasts extensively of its ethical responsibility and the fantastic consideration it practices in all countries in which it operates. Apparently, their sterling corporate ethics do not apply in a country like Ecuador, nor in other Latin American countries.

Skanska – one of Sweden’s most important companies – means a great deal to the Swedish economy. And politically, Skanska has enjoyed significant support from the Swedish government. Galo Abril, that works at the Swedish consulate in Ecuador’s capital, Quito, is one of the uneasy republic’s former oil ministers. But today, Abril is a Swedish consul, despite previous involvement in an extensive network of corruption in the Texaco case, as the country’s oil minister in the 1990s. This fact is apparently not of concern to the Swedish state, which focuses mainly on ensuring that Swedish companies have diplomatic contacts for business undertakings. Perhaps it is similar circumstances that are contributing factors in Skanska’s successful avoidance of criticism in Swedish media, after numerous scandals in Latin America.

Networks fighting against the devastating industry in Latin America are the international Oilwatch, the Ecuadorian Accion Ecologica and Frente de Defensa de la Amazonia (FDA). An organisation that works together with tribal people in affected areas is Survival International.

Agneta Enström is an editor and reporter at Yelah is a Swedish independent media group, uncovering activism and politics worldwide. She has recently worked in Ecuador, researching Skanska and oil exploration on indigenous land. Contact Agneta Enström at

Oilwatch –
Accion Ecológica:
Frente de defensa de la Amazonia (FDA):
Survival International: