Case Studies

Ecuador – Legislative and Regulatory Reform for Social and Environmental Rights

Tags: Wellbeing Policy Design

The term and cultural understandings of “wellbeing” vary across communities with Ecuador developing a wellbeing vision based on their indigenous concept of “buen vivir”. Buen Vivir (meaning “ living well together”) is a term used by the Quechua peoples (Sumak Kawsay) of the Andes to describe a way of doing things that is rooted in community, ecology, culture, and spiritual connection to the land. The concept of Buen Vivir was integrated into the Ecuadorian constitution in 2008 and the Bolivian constitution in 2009; it aims for a new form of development which goes beyond economic growth by focusing on people’s wellbeing and respect for nature.

The concept of Buen Vivir has also been integrated into Ecuador’s national development plans, with the Ministry of Planning (SENPLADES) expressing their wellbeing vision in 2018 as follows:

The Citizens revolution is committed to Buen Vivir , for everyone. We want a society in which people can satisfy their needs, live and die worthily with social equality and justice, free of violence or discrimination and achieving individual, social and natural harmony

Painting of Buen Vivir
Along these lines, Ecuador has undertaken a series of constitutional and regulatory reforms to shift the direction of their development to achieve social and ecological wellbeing.

In Ecuador, nature is known as ‘Pachamama’. In 2008, the nation made history by becoming the first country in the world to ratify their constitution to include the right of nature. Article 71 of the revised constitution outlines that Pachamama has the right to exist and it’s “maintenance, regeneration of its life cycles, structures, functions and evolutionary processes” respected.

The rights of people and nature in Ecuador however was not only determined by national legislation, but was also strongly influenced by international agreements as well. Ecuador, like the majority of countries in the world, had signed trade and investment treaties which included a clause called the Investor-State Dispute Settlement (ISDS) system. This clause provides foreign corporations with the right to sue governments for any change in policy that would infringe on their expected profits.

In 2006, following indigenous and citizen protests, the Ecuadorian government halted foreign oil exploration in the Amazon. As a result of ISDS, Occidental Petroleum was able to sue the Ecuadorian government for 1.4 billion dollars (equivalent to the country’s health budget) as a result of this policy reform. The ISDS allows corporations to sue governments but not vice versa, which Ecuador found out when they sued Chevron for dumping billions of gallons of toxic water into the Amazon and poisoning 30,000 indigenous residents. Chevron went to the ISDS tribunal and had them order Ecuador to make taxpayers pay for the clean-up and violate its own constitution.

The capacity of Ecuador to develop and uphold policies to promote social and ecological wellbeing was therefore constrained by external forces. So in 2013, the government established an audit commission of government officials, academics, lawyers and civil society groups to analyze the costs and benefits of the country’s ISDS treaties and make recommendations.

The commission report was made public and argued that the treaties failed to deliver on the promised foreign investment and had undermined the development objectives outlined In Ecuador’s constitution. In 2017, following the commission’s advice, the Ecuadorian government terminated all existing trade and investment treaties which included the ISDS clause.

In moving forward, Ecuador joined countries such as South Africa and Indonesia (who have also terminated treaties with ISDS) at the United Nations Commission on International Trade Law in 2019, to advocate for reform of the ISDS so that it promotes sustainable development objectives, protects human rights and respects policy space and the rule of law.

In this way Ecuador has been undertaking a process of regulatory reform at home and abroad to redefine economic rights and responsibilities to achieve “buen vivir” for all.

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