Ecuador: Oil and Militarized Corporate Terrorism

Oil Security

When international companies perform jobs for the oil industry in Latin America, mercenaries and armed forces are often needed for protection. The oil companies use the military systematically to suppress popular resistance.

This article is part 5 in a series by Agneta Enström

(Part 1) (Part 2) (Part 3) (Part 4)

Oil Security

When international companies perform jobs for the oil industry in Latin America, mercenaries and armed forces are often needed for protection. The oil companies use the military systematically to suppress popular resistance. This applies particularly to criminal oil exploitation conducted without legal permits, as is often the case for Swedish construction company Skanska, in such areas as nature reserves and indigenous territories.

To maintain control over a local population fighting for its culture and environment, the oil companies often employs private security forces and a strategic militarization of the area around the oil fields. Militarization of oil regions has a number of social consequences, including violation of human rights, assassinations, abuse of women and institutionalized prostitution.

The Amazon regions of such countries as Ecuador, Peru and Bolivia in which Skanska is extracting oil are characterized by military terror against the local population. According to the international network Oilwatch, the military’s role in these oil countries is clear in that it is directly controlled by the oil industry through special contracts. Protecting the oil companies against local opposition is the national army’s primary assignment, and in exchange for this protection, the companies finance military operations.


Guards at Skanska & Repsol-YPF oil fields

In addition to protection by the armed forces, the oil companies also employ private and heavily armed security forces. According to Skanska’s manager in the Ecuadorian Amazon, Milton Diaz, both the military and the company’s own mercenaries are essential for being able to conduct any operations in the politically unstable area.

“In fact, we couldn’t do business here around without military protection,” Diaz says, in an interview with the Swedish media Yelah, which has been investigating Skanska’s operations in Latin America since 2005.

Ecuador – a militarized oil republic

Ecuador is the oil state in which a special security council was established in January 2006 called GESPETRO – Grupo Especial de Seguridad Petrolera (Special Group on Oil Security), which is charged with coordinating security for the companies involved with oil extraction. Ecuador also has special security agreements regulating cooperation between the military defense forces and the oil companies operating in the country. These agreements involve such oil companies as Repsol-YPF and Petrobras, which are Skanska’s customers.


Armed security guards

The contracts, which were negotiated in secret, include stipulations that the oil companies are to supply the military with fuel, infrastructure, food, living quarters and emergency medical care in exchange for protection. Similarly, the companies are obligated under the contracts to inform the military (via the US-supported military base Selva N:19 Napo) of community projects and programs through which they “support” the civilian population. The contracts are thus a means for the state to keep the civilian population under control. The difference between a military area and the oil companies’ private property is also very diffuse, as the army often uses the oil companies’ bases for internment of detainees from the civilian population.

Skanska has become notorious in Ecuador for its operations in partnership with the oil company Repsol-YPF in the Yasuni National Park and on the territory of the indigenous Waorani people. On this oil field (which is called block 16) in the middle of the tropical rain forest, this controversial oil exploitation can only take place through the use of military violence to crush local resistance from the indigenous people.


Repsol on Indigenous Land

Repsol-YPF has a special contract for block 16, for protection against “subversive elements,” which includes the indigenous people and small farmers. According to Oilwatch and the environmental organization Acción Ecológica, this contract is not only illegal, but also constitutes a threat to the survival of the Waorani people, since the company is granted the “right” to give orders to the military regarding whatever instructions or actions it deems necessary and also places responsibility on the oil company for relations with the indigenous population.

Attorney Bolivar Beltran, from  Fundación Lianas, explains that the contract violates Chapter V of Ecuador’s constitution, as well as the UN convention on the rights of indigenous and tribal people (ILO:169).


Waoroni Protest

Repsol-YPF’s controversial contract also places the oil company’s partners, such as Skanska, under obligation to execute and fulfill the company’s orders and directives. This unavoidably makes the relation between ethics and business practice, which Skanska professes to uphold, very problematic. Skanska’s noble and prized Code of Conduct, in which it states that consideration is taken to the local communities in which the company operates, stands out in this context as a hollow concept intended to promote an image of social responsibility.

When the political scientist Hanna Dahlström and I met Alicia Cahuiya from the Waorani women’s organization AMWAE, she related that land belonging to indigenous people in Yasuni and around block 16 is totally occupied by the companies’ oil fields and the military.


Repsol & Skanska burn gas

“Every step we take is watched, and if we voice a protest, Repsol turns the military on us,” says Cahuiya. “If we do not comply, they threaten or beat us. There have even been cases where the military have killed Waorani people and thrown the bodies in the river.”

No one except the Waoranis, whose territory includes the land on which the oil field is located, may pass the military roadblocks surrounding the operations without permission from the oil company. This prevents human rights organizations and sometimes even provincial authorities from investigating the conditions under which the indigenous people are forced to live with the oil fields right in their homes. The Waorani people’s constant cries for help, and attempts to report the injustices suffered from the companies and the military in recent years have been relatively fruitless, since outsiders are systematically stopped by the military controls.

Anthropologist José Proano from Acción Ecológica has worked with indigenous peoples in the oil region of the Ecuadorian Amazon for several years. He relates that human rights and environmental activists working with indigenous people are often persecuted and sometimes murdered, as was the fate of the well-know environmental activist Angel Shingre in the oil town of Coca, where Skanska has its regional base.

“In Ecuador, those who oppose the oil industry are terrorized to the extent that many are forced to flee and give up the fight,” says Proano. “The oil regions in the Amazon are like corporate colonies, where the national defense forces are just another of the industry’s own paramilitary bandit forces.”

Repsol-YPF, however, is not the only one of Skanska’s customers that employs military protection. The Brazilian oil company Petrobras, which also operates in Ecuador’s Amazon region, is another company known for its dubious contracts with the national forces. In another part of the Yasuni National Park (in what is called Block 31) and area where Petrobras and Skanska had their permits revoked in 2005 due to illegal operations, Petrobras had a secret contact with the military that remains classified to this day.

Violence as the norm

According to the Oilwatch network, use of military and paramilitary forces is the oil industry’s general method for controlling the local population in the Amazon. In Latin American oil republics, the security agreements between the military and the industry have created a culture of fear in which people are terrorized and killed so that industrial operations may continue without interruptions. With the military as a guarantor against the local population, there is an atmosphere of company immunity with respect to constitutional law and human rights.


Oswald Contreras

For the Skanska managers, Milton Diaz and Osvaldo Contreras in Ecuador’s Amazon region, it is self-evident that Skanska’s operations require military protection and private security forces. In their world of gas and oil, it is completely natural to arm themselves against “uncivilized barbarians”, to use Oswaldo Contreras own words, to gain access to the rain forest’s underground riches.

When Hanna Dahlström and I met Skanska’s managers in the Amazon’s lacerated countryside and at the company’s base in Coca, they explained why their operations could never be carried out without weapons.

“People here are slightly backward,” says Diaz, referring to the indigenous people. “You never know when the barbarians are going to start shooting arrows from the bushes. At Skanska, we also have a strict security culture. Personally, I never go unarmed in the bush.”

Milton Diaz, together with several of Skanska’s more senior employees, sees no problem in business practices that demand arming themselves against the civilian society, in this case the indigenous people and small farmers. For the lawyers and human rights activists that work in the region, however, the oil industry’s culture of violence is deeply unacceptable. Pablo Fajardo, the head lawyer in the case against Chevron-Texaco, believes that the oil industry is completely dependent on military intervention and confirms the reports from the local population on how opposition is countered with threats, violence and murder on a daily basis.


House destroyed by spill

 "A state of emergency often prevails due to the political unrest arising from oil operations,” says Fajardo, explaining that Ecuador’s Amazon region is considered one of the world’s most dangerous places with respect to military and paramilitary violations of human rights. Like several other lawyers with whom we have spoken, Fajardo confirms that the oil companies for which Skanska works in the region are constantly associated with injustices and violence toward the local population.

Assassinations in Colombia

However, the link between Skanska and military forces in Latin America is not new. According to the Swedish reporter Dick Emanuelsson, Skanska was known for cooperating with the military as early as the late 1980s when the company built the main base for the Colombian Marine Corps in Bahia Malaga on the Pacific coast.

“I stumbled on this story completely by accident in Bogota 1988,” relates Emanuelsson. “The whole business developed into a minor scandal when it became known that Skanska had received SEK 1.5 billion in export credit guaranties from Sweden’s Export Credits Guarantee Board (EKN) to build a military base in a country in which there was a long-standing armed conflict.”

Emanuelsson told how the former member of the Swedish Parliament, Bo Hammar, raised the issue in an interpellation debate but that the Board’s chairman at that time, Harry Schein, defended the credit guarantees with the argument that they were partially related to a military base intended to combat Panamanian smugglers.

Another notorious case with Skanska in Colombia involved the company’s dam construction project in Urra in the 1990s when dozens of Indians were murdered, including Kimy Pernia Domico, who was one of the Embera tribe’s leaders. The bloody accounts of the dam construction received the most attention in Sweden in 1999, when two of the company’s Swedish employees were kidnapped and held captive for five months by the FARC guerrilla. In a communiqué, FARC stated that the Swedes had been kidnapped “to focus the country’s and the world’s attention on the dam’s catastrophic impact on the environment, the eradication of fauna, the destruction of traditional cultures that are forced to abandon the flooded land without any guarantees whatsoever of obtaining a new home and livelihood and the interruption of river transports that since prehistoric times have been used by the indigenous Embera-Katio people and small farmers.”

Even in Bolivia and Peru, Skanska operates under similar circumstances. People are being murdered, ecosystems destroyed and indigenous cultures eradicated. In Peru, Skanska began its operations during the first period of dictatorship in the 1970s, when the company conducted expensive projects that were added to the country’s national debt. Today, Skanska is involved in the gigantic gas and oil project Camisea (in partnership with the Argentinean corruption scandal company Techint) in which Skanska will build a pipeline through the country’s last remaining virgin rainforest. Several indigenous peoples have already lost their culture, and many are now losing their lives as a result of the companies’ inconsiderate rampaging.

Today, there is important local resistance against looting and destruction taken place all over the Amazon rainforest and on indigenous territories. Some international networks, fighting together with indigenous people, are the international Oilwatch, the Ecuadorian Accion Ecologica, and 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:

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