Ecuador's Attack on Foreign Companies

The April 28 news story on Ecuador's suit against Chevron- Texaco ["In Ecuador, High Stakes in Case Against Chevron"] omitted a crucial factor: President Rafael Correa's "permanent campaign" style of governing. As political scientist César Montúfar has noted, "A key component of this strategy is constant confrontation of political parties, local government, private banks and corporations, the media, and multilateral lenders."

In 2007, Mr. Correa raised Ecuador's 50 percent windfall profits tax to 99 percent, though he later lowered it to 70 percent. Some firms are currently seeking redress in international courts for their losses. Mr. Correa has been unrelenting with Chevron, ordering a criminal probe of two Chevron executives and seven former government officials for allegedly falsifying documents that endorsed the Texaco environmental remediation effort described in this article, according to the Associated Press.

Chevron is correct to argue that it won't be treated fairly as long as Mr. Correa runs Ecuador. In fact, fewer and fewer firms will. Mr. Correa has halted foreign mining operations, raised telecommunication firms' fees, attacked the media and defaulted on the country's external debt. His recent reelection should allow him to put aside his "permanent campaign" style and play fair with foreign companies. Whether he actually will do so remains to be seen.

SILVIA SANTACRUZ

Warren Brookes Journalism Fellow

Competitive Enterprise Institute

Arlington

The writer is an editor and writer for the Ecuador Mining News Web site.