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Ecuador mining prohibition

26 September 2019 Arthur Dhont

The Constitutional Court on 18 September turned down a request by Yaku Pérez Guartam, the newly elected prefect of Azuay province, to hold a referendum on whether to prohibit mining activity in the province. The question proposed asked if voters agreed with a prohibition on mining activity in certain environmentally sensitive areas, including those with water sources and basins, moorlands, and protected forests. The court ruled that this was unconstitutional and failed to guarantee the rights of the electorate.

Thousands of protesters from Azuay had marched in the streets of Quito on 17 September ahead of the court's decision. The ruling continues a trend of Constitutional Court decisions rejecting referendum requests. On 20 June it turned down a request by communities in the vicinity of SolGold's Cascabel gold and copper project in Imbabura and Carchi on technical grounds.

In contrast, when the National Electoral Council adjudicated on a local referendum requested by communities near INV Metals' Loma Larga project in Azuay Province in the absence of the court in March 2019, it ruled in favor of the referendum. The subsequent vote to prohibit mining activity, while never confirmed as legally binding, nevertheless prompted the firm to begin new engineering studies to relocate all planned work outside of the referendum area.


The Constitutional Court's ruling denying the referendum indicates the court is likely to apply restrictive criteria when considering future referendum requests. However, legal uncertainty will continue if there is a lack of clarity on whether a local referendum can be held and whether a vote in favor of prohibition is legally binding. The anti-mining lobby in Azuay, with support of the prefecture, is unlikely to back down from attempts to prohibit mining.

The submission of a new referendum question to the Constitutional Court with more narrow definitions of mining activities or attempts by Pérez Guartam to initiate a national referendum (he would need to submit a petition signed by 5% of the electorate) would bring the issue back before the judiciary. This would open the possibility of a referendum being approved and test whether such a vote would be binding and retroactive and, therefore, lead to the cancellation of existing projects as well as prohibiting future mining activity.

Posted 26 September 2019 by Arthur Dhont, Senior Analyst – Americas, Country Risk, IHS Markit


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