The Environmental, Social And Ethical Aspects
Of Multinational Corporations Exploiting
Oil Resources In Ecuador
Author(s)
A. Newcombe, A. Evangelio, P. Revilla, T. Laranjeiro
& S. F. Hansen
Abstract
Extraction of oil promises economic growth in many developing countries but
almost inevitably brings environmental and social degradation with it. In this
paper we explore the environmental, social and ethical aspects of multinational
companies’ (MNCs) oil exploration and production in Ecuador and we analyze
several different protective regulatory management strategies that could help
eliminate negative impacts. We use Drivers Pressures State Impacts Responses
(DPSIR)-analysis to understand the interconnectivity of the current situation
whereas we use stakeholder analysis to identify the most appropriate regulatory
response. We find that there is scientific consensus that pollution from oil
production by MNCs has caused an environmental disaster, a widespread health
emergency and serious detrimental social impacts. This raises fundamental
questions about whether it is ethically justifiable that MNCs disregard legal rules
from their country of origin to profit from limited and ineffective environmental
law in developing countries. A number of regulatory strategies exist that could
resolve the situation including; the temporary banning of MNCs to extract oil,
expansion of the Yasuní-ITT initiative, which allows the Ecuadorian government
to receive funds from the international community for refraining from oil
exploitation, compensation and remediation and the development of
environmental law and policy. Selecting the most appropriate strategies requires
stakeholder involvement and consideration of their interests. Through our
stakeholder analysis we identified a wide range of stakeholders ranging from the
indigenous people to MNCs such as Chevron. The interests, influence and
political and economical power of the identified stakeholders differ substantially
and unfortunately it was found that the most impacted stakeholders were quite
Keywords
oil extraction, developing countries, DPSIR, stakeholder analysis, precautionary principle, public participation
Related Book
Other papers in this volume
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