Ecuador: exchange of external debt for protection of nature in the Galapagos Islands is proposed

by Doménica Montaño on April 3, 2021

  • Scientists and environmentalists propose a foreign debt swap to create a new marine reserve in Galapagos, which would be three times larger than the current one and would protect both migratory routes and more endemic species.
  • Despite the ecological benefits, various sectors oppose the initiative and say that jobs and Ecuador’s sovereignty will be lost.

* This report is a journalistic alliance between  Mongabay Latam  and  GK  from Ecuador.

The Galapagos Marine Reserve is one of the most important marine protected areas in the world: 133 thousand square kilometers (km2) of sea – equivalent to almost 50% of the surface of continental Ecuador – where more than 3,500 species live. Several scientists, however, believe that this protection is not enough; for several years these [advocates] have been working on a proposal to create a new reserve, which was presented to the President of the Republic, Lenín Moreno, in January 2021. In February, The experts proposed a debt-for-nature swap that will serve to finance the maintenance costs of the new area and that does not remain “on paper”, that is, to guarantee that it has a sufficient budget and the necessary vigilance [to make the expanded reserve a reality].

A debt-for-nature swap is a mechanism that makes it easier for a country to invest in conservation projects in exchange for reducing its external debt. With this transaction, experts agree, the sustainability of the new area will be ensured and the existing reserve will also be strengthened.

This proposal was presented by Más Galapagos , a citizen collective for the protection and conservation of the Galapagos Marine Reserve. According to Eliecer Cruz, biologist and spokesperson for the initiative, the project was supported by Galapagos citizens, the tourism sector, a part of the fishing sector and also by the scientific community. In addition, there is support from several national and international non-governmental organizations such as Marine Conservation Institute , the World Wide Fund for Nature (WWF) Ecuador , The Nature Conservancy , Mission Blue , Conservation International Ecuador , Blue Marine Foundation , among others.

The scientists and activists who presented the proposal, and the leaders of some organizations that support it, say that creating a new reserve with sufficient and stable funding is necessary to protect all of the Galapagos marine resources. They believe that the current reserve is not large enough despite the fact that it is a Natural Heritage of Humanity, declared by UNESCO in 2001. It is estimated that about 20% of the species that inhabit its waters are endemic and cannot be found anywhere else on the planet.

The debt swap proposal

A debt for nature swap or Debt for Nature Swap is when a part of the foreign debt of a country is bought in exchange for promoting the care of the environment. The concept was born in 1984  when biologist Thomas Lovejoy proposed using the foreign debt crisis of developing countries to help solve the environmental problems facing these nations. Lovejoy suggested that countries which wanted to take care of nature could exchange some bonds of their debt for projects or programs of environmental conservation. This means that an external organization buys a percentage of the debt so that the country uses part of the money it was going to pay [towards these restructured debts] for conservation purposes.

According to the Food and Agriculture Organization of the United Nations (FAO) , the debt swap has allowed several countries to invest in projects for the conservation of wild areas, surveillance systems, forestry projects, among others. Ecuador was one of the first in the world to do so.

In 1987, Fundación Natura – a nongovernmental organization that focused on environmental issues and closed operations in the country in 2014 – organized a proposal for a debt-for-nature swap. The idea came to fruition a year later: in 1988, the World Wide Fund for Nature (WWF) and the organization The Nature Conservancy bought a total of 10 million dollars of foreign debt . They did so in exchange for the Ecuadorian government agreeing to deliver the equivalent in sucres – the Ecuadorian currency of the time – to Fundación Natura so that it could use it for the conservation of the country’s protected areas.

Darwin Island, Galapagos. Photo: Pelayo Salinas de León.

Roque Sevilla, one of the founders of Fundación Natura and president of the organization when the transaction was made, says that this exchange “was incredible.” Seville explains that thanks to this, the care of all protected areas was ensured for more than 35 years.

This was very important because according to Tarsicio Granizo, director of WWF Ecuador and former Minister of the Environment, in the country there is a problem with “protected areas on paper”: new areas which are created with the idea of ​​protecting them, but in practice this [protection] is not done owing to lack of resources. For this reason, he considers that a foreign debt swap would be an excellent mechanism to guarantee true conservation in the case of the proposal to create a new marine reserve in Galapagos.

In this case, what is proposed is the purchase of 1,000 million Ecuadorian foreign debt bonds, equivalent to about 600 million dollars, in exchange for creating and conserving a new marine area that complements the current Galapagos Reserve and is already part of the country’s system of protected areas.

The swap, according to the spokespersons of Más Galapagos, would have the support of the Dutch Development Bank (FMO) and the International Development Finance Corporation (DFC) , but the funds will be administered solely by the Ecuadorian government.

Galapagos lobster conservation.  This photo shows an ovate lobster that is returned alive to its natural habitat to ensure its reproduction.  Photo: Esteban Barrera ©
This photo shows an ovate lobster that is returned alive to its natural habitat to ensure its reproduction in the Galapagos Islands. Photo: Esteban Barrera ©

A new marine reserve

The main objective of the Más Galapagos collective is to contribute, through a new protected area, to the conservation of marine species and ecosystems that the current reserve has not been able to cover. Alberto Andrade, spokesman for the civil society organization Frente Insular de la Reserva Marina de Galapagos, says that public interest in strengthening conservation in the reserve intensified in 2017 after the case of the ship Fu Yuan Yu Leng 999. On August 13 of that year, the Ecuadorian Navy detained this Chinese ship within the marine reserve with 300 tons of illegal fishing , among which there were several species of sharks in danger of extinction.

Alex Hearn, a marine biologist and researcher at the San Francisco de Quito University (USFQ) , says that the foreign debt swap strategy may be a good alternative. According to Hearn, when the Galapagos reserve was created in 1998, there was very little knowledge about the biology and ecology of marine species.

However, in the last 20 years several scientific studies have found that there are at least 20 migratory species that are not being fully protected by the current reserve. That is why Hearn, together with several national and international scientists and biologists, carried out a spatial study of the Insular Exclusive Economic Zone (IEEZ) – an area that surrounds the Galapagos Reserve and in which the Ecuadorian State has sovereign rights for the purposes of exploration, exploitation and conservation. [The study was conducted in order] to determine which areas need special attention for their protection and which areas are the most productive in terms of fishing.

Based on their research, experts suggest creating a new marine reserve because, logistically, it is more practical and faster than expanding the current one. If an expansion is made, the National Assembly would have to reform the Organic Law of the Special Regime of the Galapagos Province, while creating a new reserve only requires an Executive Decree.

Conservation of the Galapagos petrel.  Beach in the Galapagos Islands.  Photo: Belén García - Jocotoco Foundation.
Beach in the Galapagos Islands. Photo: Belén García – Jocotoco Foundation.

The researchers argue that the new area should “minimize the impact on the most important fishing areas” and at the same time protect several areas that are important for the care of endangered marine species. This proposal contemplates that the [new] reserve have an area of ​​435 thousand km2 – 1.5 times the area of ​​continental Ecuador and more than 3 times the area of ​​the current reserve.

In addition to those 435 thousand km2, the project includes a responsible fishing area of ​​more than 200 thousand km2 that will be free of Fish Aggregating Devices (FAD) that industrial fishermen use to identify schools through GPS. The proposal also considers the establishment of a buffer zone of 33 thousand km2, in order to counteract the negative effects that the El Niño Phenomenon usually brings: in this zone, fishing will be prohibited in the years that this climatic event is declared.

The advantages of conservation

“In terms of biological and ecological conservation, the reserve will be fundamental,” says Luis Suárez, Executive Director of Conservation International Ecuador. According to Suárez, the new reserve will help expand the protection of the islands, their species and their marine ecosystems. For his part, Alex Hearn, says that it is expected to conserve endangered species such as the hammerhead shark, the whale shark, the waved albatross, the leatherback turtle, the green turtle, among other [migratory species] that are particularly vulnerable since move in areas that they are not protected by the current reserve; one such example is the migratory route between the Galapagos Islands and Cocos Island in Costa Rica.

Eliécer Cruz, manager for Latin America at Island Conservation and spokesperson for the Más Galapagos collective, assures that vulnerable marine ecosystems – such as seamounts = can be protected. These ecosystems of volcanic origin are very important because they allow the formation of coral reef communities that are the food source for hundreds of species, as well as also being highly nutrient-rich areas.

Release of iguanas on Santiago Island in the Galapagos Archipelago.  Photo: Galapagos National Park.
Release of iguanas on Santiago Island in the Galapagos Archipelago. Photo: Galapagos National Park.

Activists and scientists believe that a new reserve is valuable because it will help fulfill the 2030 Agenda that Ecuador signed in 2015. Verónica Arias, Executive Director of the Coalition of Capital Cities of the Americas against Climate Change (CC35) , explains that the Ecuadorian government must conserve and sustainably use the oceans and marine resources as part of the agreement. For her, a new reserve is an advance toward complying with the Agenda.

In addition, Arias assures that, contrary to what can be believed, several studies at a global level have found that protected marine reserves are actually positive for the fishing sector. As she says, they create a kind of seedbed that causes a condition called “overflow” or a spillover effect. This means that when species are protected within an area, they grow and reproduce without any threat and then “spill over” into unprotected areas where they can be caught in larger numbers and larger sizes.

However, the project is not only important for nature and for the fishing sector. Ecuador’s economy would also benefit, especially with the proposed swap of external debt for nature protections. According to the most recent data from the Ministry of Economy and Finance from January 2021, Ecuador has an external debt of more than 45 billion dollars, of which more than 17 billion correspond to bonds. The debt swap that is being proposed involves the purchase [and restructuring] of 1 billion of those bonds.

Tarsicio Granizo from WWF Ecuador believes that the resources obtained with the exchange should be used for five specific purposes: to encourage scientific research, guarantee good management of the area, create support mechanisms for the fishing sector, support micro-enterprises of the spouses of the fishermen and strengthen the Ecuadorian Navy so that it can better monitor the area.

Invasive Rodent Eradication in North Seymour. Photo: Galapagos National Park.

Challenges and opponents

Experts assure that the new marine reserve will be positive for the country, but there are those who oppose the project. In a news item in the newspaper El Universo , spokespersons for the industrial fishing sector said that the proposal had “no technical support.” Representatives of the tuna industry are opposed and argue that if the reserve is expanded “the national fishing fleet will be seriously affected” and there will be an “inevitable loss of many jobs.” Luigi Benincasa, Executive Director of Atunec, Ecuador’s tuna fishing association , told The Guardian that the plan was like “punishing” the local fishermen. “We must understand that tomorrow we will not have a third of our catch; how is this beneficial?” Benincasa questioned.

We sent a request for an interview and a request for information to the National Fisheries Chamber to find out in detail their position, but we have not received a response as of this reporting.

However, the biologist Eliécer Cruz, from Más Galapagos, assures that it is false that the industry is going bankrupt. Cruz says that in 1998, when the current Galapagos Marine Reserve was created, they said exactly the same thing, and it never happened. In fact, a study on the impact of the reserve on industrial pelagic tuna fisheries revealed that its creation increased fishing productivity both within the marine reserve and in the Galapagos Exclusive Economic Zone (EEZ) that surrounds it.

Despite opposition from industrial fisheries, Tomás Córdova, representative of the Galápagos Artisanal Fisheries Production Cooperative (Copropag) , says he has nothing against the initiative. According to the fisherman, who has more than 25 years of experience, the reserve will be “extremely beneficial” because it will prevent devices such as FADs from damaging artisanal fishing. In addition, Córdova assures that “many colleagues do not understand” but the project will allow fish catches will be much better than now, in 5 or 10 years.

Shoal of young hammerhead sharks in Galapagos.  Photo: CDF / Pelayo Salinas de León
Shoal of young hammerhead sharks in Galapagos. Photo: CDF / Pelayo Salinas de León

Walter Borbor, an artisanal fisherman for more than 22 years and a native of the port city of Manta, used to oppose the creation of the reserve but today he no longer thinks the same. He says that he has seen how on the coasts of mainland Ecuador “there is hardly any fishing anymore” because nothing has been done to conserve the species. According to Borbor, if the reserve is not created, the same will happen in Galapagos and this will leave them without their source of work.

In the midst of all this, experts are concerned about the silence of the Ministry of Environment and Water (MAAE). If the reserve were to be created, the participation of the MAAE would be essential but, until now, no authority of the institution has ruled on the initiative. We asked the press area why the institution has not spoken and in a WhatsApp message, they replied that they have not done so because the “issue is with the Galapagos Governing Council and the Foreign Ministry.” They did not provide further details.

The decision to accept or not the creation of a new reserve for the conservation of Galapagos marine resources is in the hands of the national government. In January 2021, representatives of the collective and scientists gave the Executive an official proposal, which is still under analysis .

Elena Mejía, a specialist in socioeconomic and environmental dynamics and co  founder of the Bitácora Ambiental portal , assures that the expansion of the reserve is very important, whether or not the debt swap is accepted. Mejía explains that with the increase in the human population, the demand for resources grows and climate change advances. For her, if marine resources are not taken care of, food security can be put at risk. “This is not only an environmental responsibility, but also a social one,” he concludes.

Read the original coverage from Mongabay at

Informing and sharing news on marine life, flora, fauna and conservation in the Galápagos Islands since 2017
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