OCTOBER 1996 · VOLUME 17 · NUMBER 10

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T H E    F R O N T

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QUITO, ECUADOR -- Members of the Siona and Secoya indigenous communities have denounced a July 16 agreement between Los Angeles-based Occidental Petroleum and indigenous communities in Ecuador, calling it the product of Occidental coercion.

Critics says Manuel Echeverria, the Occidental legal representative who negotiated with indigenous organizations, employed pressure tactics to get indigenous leaders to sign the agreement. "Echeverria told us that `if we didn't permit the company, the government would take our land,'" says Humberto Piaguaje, the president of the Secoya Indigenous Organization of Ecuador (OISE). As negotiations dragged on, Piaguaje says that Echeverria threatened that if the indigenous organizations "continued to make the situation difficult, they [Occidental] would come with the military." When the agreement was finally signed, Ecuadoran Army Major Hernan Altamirano was present as a "witness of honor."

The agreement is part of a full-court press mounted in the Amazon by U.S.-based Arco, Oryx, Maxxus and Occidental, as well as by France's Elf Aquitaine, the state-owned Petroecuador and other oil companies.

In neighboring Peru, where Occidental has its largest foreign operations, indigenous Candoshi people voted unanimously last summer to reject the company's bid to drill on their land, saying it had not lived up to the commitments it had made earlier.

In Colombia, indigenous Uwa people are threatening to commit collective suicide if Occidental is permitted to enter their territory. They are also pursuing legal action to block Occidental's efforts. While acknowledging that they signed an agreement with the company, they argue that they were tricked into signing the document, and they are against oil development on their land.

Although the Ecuadoran indigenous signatories to the agreement with Occidental understand it to permit only seismic testing activities (an exploratory stage during which swaths are cut through the jungle and explosions are set off), the terms of the deal are so vague that they can be interpreted as giving Occidental carte blanche in the jungle. "The Siona-Secoya communities promise to authorize the right of way to Occidental work groups and their contractors to carry out petroleum activities," reads one paragraph of the agreement.

In a classic "trinkets-and-beads" tale, Occidental's only requirements are to provide "five water pumps and their solar panels" and to offer short-term contract employment opportunities to the communities "to the extent possible." Some monetary compensation was also agreed upon, but Occidental claims that payment is contingent on oil reserves being found. "They told us that a farmer can't pay the rent on the land until he's harvested the corn," explains Piaguaje.

Upon learning of the agreement, three of the communities in the OISE federation strongly criticized the negotiations, accusing the company of manipulating community leaders. The Siona, who share territory with the Secoya, have also objected. "The Siona people wish to express, in the strongest terms, our rejection of the document," William Criollo, president of Ecuador's national organization of Siona indigenous people (ONISE) wrote in a July 26 letter.

Quito-based Ecological Action also denounced the agreement. "Using Occidental's own estimates of the existing reserves, the entire production of [the Occidental concession] will supply the equivalent of U.S. oil consumption for just 12.7 days," the group noted in a statement. The group is calling on the company to annul the agreement and conduct new negotiations free of coercion, to make better information available to the communities and to include better environmental safeguards, especially pollution remediation provisions, in any new agreement with Occidental.

Occidental Petroleum did not respond to repeated requests for comment.

-- Steve Kretzman and Aaron Freeman

Another NAFTA Nightmare

IN ONE OF THE MOST CREATIVE USES of the North American Free Trade Agreement (NAFTA) to date, the Richmond, Virginia-based Ethyl Corporation in September filed a notice of intent to sue the Canadian government over proposed legislation which would ban a potentially dangerous gasoline additive.

The cause of the threatened suit is a Canadian bill, known as C-29, which would outlaw MMT (methylcyclopentadienyl manganese tricarbonyl), a fuel additive designed to boost octane in gasoline.

The Canadian Parliament is considering the MMT ban because of fears that manganese may be neurotoxic and because of concerns that the additive will interfere with computerized pollution diagnostic systems installed in most North American cars beginning with the 1997 model year.

MMT has been used in Canada since the late 1970s. The U.S. Environmental Protection Agency refused to approve MMT until ordered to allow its use in a December 1995 court ruling.

Ethyl, the world's leading manufacturer of highly toxic lead additive for gasoline until it recently stopped producing the substance, is the world's only maker of MMT. The corporation claims the proposed Canadian ban is discriminatory against foreign producers and constitutes an expropriation of its property in Canada, and that the global bad publicity stemming from the proposed Canadian ban has harmed its good will worldwide.

Suing under seldom-used NAFTA provisions that allow an investor to sue a government directly for NAFTA violations that harm its interests, Ethyl is demanding $201 million from the Canadian government.

Central to the Ethyl claim is the fact that C-29 proposes to outlaw MMT not through an explicit ban, but through a ban on the import and interprovincial trade in the fuel additive.

While Ethyl cannot import MMT, says David Wilson, president of Ethyl Canada, "the government is not proposing to ban MMT -- it is proposing to prevent its importation and interprovincial trade." The importance of this apparent distinction without a difference, he says, is that, "theoretically, in order to continue operating as a business, Ethyl is being required to build manufacturing and blending facilities in each of the provinces and territories in Canada. This is a local content preference that violates Canada's NAFTA obligations."

In reality, however, the ban on interprovincial trade effectively precludes Ethyl or any other potential manufacturer from selling domestically manufactured MMT in Canada, and Bill C-29 constitutes a de facto ban of MMT.

The alleged discriminatory action against Ethyl "constitutes a substantial interference with Ethyl Corporation's control and enjoyment of its investment in Ethyl Canada [the Canadian subsidiary]," the company's notice of intent to sue states. "This interference is a measure tantamount to the expropriation of Ethyl Canada," another NAFTA violation, asserts the notice of intent to sue.

As the other component of its damage claim, the company asserts in its notice of intent to sue that the government's proposed ban has damaged the company's accumulated goodwill. "As the only manufacturer and distributor of MMT, Ethyl has had its national and international reputation damaged by the government's contention that MMT is harmful to the environment or human health," says Chris Hicks, Ethyl's vice president for government relations.

Both components of the alliance that has emerged to support Bill C-29 -- public health and environmental groups, as well as the auto industry -- immediately denounced the Ethyl threatened suit.

The public health and environmental organizations dismiss Ethyl's contention that the danger of MMT has not been scientifically established. "Manganese, like lead, is neurotoxic and at high doses has been found to cause disabling neurological impairments in speech and movement," says Barbara McElgunn, health liaison officer with the Learning Disabilities Association of Canada, a member of the Coalition for Bill C-29. "There is scientific concern that the inhaled form of manganese is particularly neurotoxic."

Acknowledging that scientific evidence on the safety of MMT is inconclusive, the public interest supporters of Bill C-29 insist that the burden of proof should rest on Ethyl to show it is safe. "Adequate studies on MMT's health effects at low doses over long time periods have not been conducted, despite the use of MMT in Canadian gasoline for the past 19 years," says the Canadian environmental group Pollution Probe in a statement. "It is time to stop the experiment!"

The issue of who should bear the burden of proving a product's safety or hazards may ultimately be one of the most important issues raised by Ethyl's action.

The Ethyl case could establish a precedent in determining whether the precautionary principle -- the notion that a product should be proved safe before being introduced on the market -- can survive the intrusive scrutiny applied to government regulations under NAFTA, the General Agreement on Tariffs and Trade (GATT) and other trade agreements.

For Canadian opponents of NAFTA, the Ethyl announcement illustrates the perils of subordinating national regulatory sovereignty to the trade agreement.

"It is absolutely outrageous that the government has allowed an American corporation to advance its commercial interests in Canada through a trade agreement it signed," says Maude Barlow, chairperson of the Council of Canadians.

Prime Minister "Jean Chretien said he would tear up the deal if it hurt his government's ability to protect the health of Canadians or the environment," she says. "Well, here's his chance."

-- Robert Weissman

Production vs. Reproduction

IN THE UNITED STATES, "choice" in the reproductive rights arena is generally understood as referring to a woman's right to choose whether or not to carry her pregnancy to term. In the Mexican maquiladoras, the factories assembling for export to the United States, however, choice has a different meaning. There women factory workers face the unusual choice between their jobs and their reproductive rights.

For women workers in the maquiladoras, being pregnant or expressing an intention to become pregnant is tantamount to declaring themselves unemployable, according to an August Human Rights Watch report, "Sex Discrimination in Mexico's Maquiladora Sector."

The maquiladora sector relies heavily on Mexico's female labor force, who employers believe work harder for less money, are more docile and less likely to unionize and are physically more qualified for factory work.

But pregnancy can raise the cost of women workers. Mexican law requires employers to provide women with 12 weeks of paid maternity leave (6 weeks before birth and six after) and an option for an additional 60 days at 50 percent salary. Employers are also legally required to protect pregnant women from performing tasks that would endanger their health or that of their fetus.

As a result, the Human Rights Watch report finds, maquiladora employers attempt to weed out "pregnant female employees, or women who might become pregnant (women of childbearing age, sexually active women, women who use contraceptives) from the applicant pool or soon after beginning work."

Human Rights Watch found that pregnancy-based discrimination is a widespread practice by subsidiaries of U.S.- and Japanese-owned corporations including Zenith, General Electric, Sanyo, Carlisle Plastics and electronics company American Zettler.

"Every corporation in the maquiladoras screens for pregnancy, even those who claim they're not aware of it," Zenith spokesperson John Simley told Multinational Monitor.

Simley says he regrets the practice, but blames the social structure in Mexico for it. "The Mexican government implicitly encourages companies to discourage pregnancy, I think as a form of population control; population is a problem there, you know." Simley also claims that many women not eligible for government social security seek employment in the maquiladoras as a way to obtain insurance when they are pregnant.

The Mexican government, according to Simley, should discourage pregnancy screening "by providing full coverage for all women." Meanwhile, he contends, "pre-employment examinations including pregnancy screening is vital for maquiladora employers to avert financial liability for any pre-existing medical condition including pregnancy" when hiring a new employee.

American Zettler Vice President of Operations Rainier Moegling says he is not aware of any pregnancy testing. There are no medical facilities or doctors on the firm's Mexican premises, he says, and the company does not pay any bills for pregnancy testing. Moegling did not respond to direct questions as to whether prospective employees might have to submit their own certified pregnancy test results to be considered for employment, however.

Other companies mentioned in the Human Rights Watch report did not respond to requests for comment from Multinational Monitor. But in a letter to Human Rights Watch, Carlisle CEO Clifford Deupree denied that pre-employment physical examinations required by the company of prospective maquiladora applicants were solely to determine pregnancy status. "No female employee has ever been fired for becoming pregnant," he added. In response to the Human Rights Watch report, Deupree wrote that Carlisle's Plastico Bajacal subsidiary would cease asking about pregnancy status in its application form and committed that "any knowledge of a pregnancy that is revealed during the medical examination will be used only to determine the applicant's physical ability to perform the job."

Corporate denials notwithstanding, women applicants in the maquiladora sector are often asked intrusive questions to determine their pregnancy status, according to the Human Rights Watch report. Questions about women applicants' menstrual schedule, whether they are sexually active or what type of birth control they use are routine parts of job eligibility screening. The report also points to several instances where maquiladora employers require women to submit to pregnancy tests as a condition of employment. Women discovered to be pregnant are routinely denied work.

Even after being hired, says the report, women continue to be monitored for their pregnancy status. Some maquiladora managers attempt to reassign pregnant women to more physically difficult work, with the result that pregnant women workers are forced to resign their positions.

"Women workers are very reluctant to challenge pregnancy-based discrimination because of their own `economic desperation,'" the report notes. Outside the maquiladoras, the only employment option for urbanized Mexican women is low-paid domestic work.

Human Rights Watch sharply criticizes the Mexican government's complicity with pregnancy-based discrimination, saying it is a violation of recognized standards specifically delineated in various human rights instruments.

The report calls on the Mexican government to take its obligation to Mexican women more seriously by enforcing laws to protect the rights of women from pregnancy-based discrimination and other forms of abuse.

The report also urges U.S. and Japanese corporations to act more responsibly toward women by prohibiting pregnancy screening and other discriminatory practices unique to women.

-- Cece Modupé Fadopé