Mined out of Rights

International law has long recognised the right of Indigenous peoples to be consulted before extraction proceeds on their territories. But what happens when that right comes into conflict with a state’s fiscal obligations? This post argues that Ecuador’s recent legislative act implementing the International Monetary Fund’s (“IMF”) loan conditions is incompatible with both its domestic constitutional order and its obligations under international law. The post further demonstrates how the IMF’s Extended Fund Facility conditionality, which made Ecuador’s mining liberalisation a prerequisite for continued access to US$ 400 million in credit, contributed to that breach.

The act in question is the Ley Orgánica para el Fortalecimiento de los Sectores Estratégicos de Minería y Energía (hereinafter “the Act”). The Act was passed in February 2026 by Ecuador’s National Assembly by a narrow 77–70 margin. This legislation amended the existing legal framework and removed environmental licensing requirements for mining projects, thereby potentially putting the rich landscape of the Amazon forest at a higher risk of degradation. Furthermore, it also violates the constitutional commitments Ecuador was once celebrated for. Ecuador’s 2008 Constitution was celebrated internationally as a legal revolution. It was the first constitution in the world to grant Nature enforceable rights and to guarantee Indigenous communities the right to consultation before the state could approve any plans to exploit resources in their territories. For a brief moment, Ecuador looked like proof that extractive capitalism and Indigenous rights could coexist within a constitutional framework progressive enough to accommodate both. That moment, unfortunately, has passed.

What the Act Does and What It Undoes

The Act makes two amendments whose combined effect is to render Indigenous consultation inoperative in practice. The first is the administrative silence clause. Article 26 of Ecuador’s Mining Law required the Ministry of Environment to issue an affirmative environmental authorisation before any mining activity could proceed. The Act replaces that affirmative requirement with an 180-day deadline. Here is how the silence would impact Indigenous Peoples: if the Ministry receives a mining application and fails to respond within 180 days, whether due to bureaucratic delay, contested environmental assessments, or unresolved consultation disputes with affected communities, that inaction could be automatically treated as constructive approval. For instance, in the Loma Larga case, the project was suspended in 2022 for lack of prior consultation, yet the indigenous consultation process was only completed in May 2025, over three years later. Under the 180-day rule, the Ministry’s silence during that period would have converted the absence of consultation into authorisation before any meaningful process would have begun.

The second amendment that compounds the threat to Indigenous peoples is the security zone provision. The Act creates Strategic Security Protection Mining Areas (‘Áreas Mineras con Protección de Seguridad Estratégica’), defined as zones that, due to their location, economic importance, strategic character, or risks to the national interest, require Armed Forces protection. Where criminal groups are detected, the Armed Forces are authorised to act to neutralise the threat and protect mining personnel and infrastructure. The government frames this as a counter-crime measure. Crucially, the provision does not require the presence of criminal groups at all. It applies equally to any area of sufficient “economic importance” or “strategic character”, terms whose breadth permits their application to mining concession areas precisely because communities there oppose extraction. Legal experts and a former Environment Minister warned during legislative debates that the provision could be used to repress legitimate social protest. For Indigenous communities whose primary tool of resistance is territorial occupation pending consultation, it creates a legal architecture within which that resistance becomes suppressible. For instance, in Las Naves, residents set up a community checkpoint to protect their road and homes from damage caused by mining machinery. Under the security zone provision, a declaration of strategic importance over the Las Naves concession area would give the Armed Forces authority to “neutralise threats” in that zone.

The Act and Its Impact on Indigenous Consultation

The Act violates Ecuador’s obligations to Indigenous Peoples under both domestic and international law. Article 57(7) of Ecuador’s 2008 Constitution guarantees Indigenous communities free, prior and informed consultation before extraction proceeds. The Sinangoe ruling elevated this further, holding that consultation must aim to obtain consent. This requires genuine, good-faith dialogue to reach mutual consensus. The 2026 Act violates both: it provides that even where consultation occurs, a community’s refusal cannot stop a project once 180 days have passed. This does not satisfy the mutual consensus requirement at all.

Ecuador has been bound by ILO Convention 169 for almost three decades now. Article 6 of said Convention requires genuine, good-faith consultation with Indigenous peoples before legislative or administrative measures that lead to exploitation on their traditional lands, with the aim of achieving agreement or consent. Article 15 specifically protects Indigenous rights over resources in their territories and mandates consultation before any programme of exploration or exploitation is approved. The 2026 law’s administrative silence mechanism cannot satisfy either provision. Good-faith consultation is not a procedural formality that can be replaced by a government deadline. It requires that consultation actually occur, that communities have a meaningful opportunity to participate, and that their input can influence the outcome. A default-to-approval rule after 180 days of Ministry inaction satisfies none of these requirements. Silence, however, cannot be tantamount to consultation.

The UN Declaration on the Rights of Indigenous Peoples, which Ecuador voted in favour of in 2007, represents the customary international law standard of consultation that states are required to undertake before commencing a project. UNDRIP Article 32 requires free, prior and informed consent before approving any project affecting Indigenous lands, territories, or resources. The 2026 law moves the country further from the consent standard. The administrative silence clause, by converting ministerial inaction into constructive approval, eliminates the procedural conditions under which this standard could have been met.

The jurisprudence of the Inter-American Court of Human Rights (IACtHR) further illustrates the extent of Ecuador’s violation. Ecuador has been a party to the American Convention on Human Rights (ACHR) since December 28, 1977, and accepted the Court’s binding jurisdiction on July 24, 1984. The IACtHR’s 2012 ruling in Sarayaku v. Ecuador established that large-scale projects with significant impact on Indigenous territory require Free, Prior, and Informed Consent (“FPIC”), and that permitting extraction without prior consultation constitutes a violation of the ACHR. That ruling is binding on Ecuador by virtue of its acceptance of the Court’s jurisdiction. Then, in March 2025, the IACtHR ruled again in Tagaeri and Taromenane v. Ecuador, finding Ecuador internationally responsible for violating the rights of peoples living in voluntary isolation in the Amazon and ordering the suspension of oil operations in the Yasuní block. By the time the 2026 Mining Law was passed, President Noboa had not complied with either judgment. The law was enacted despite two binding IACtHR rulings that remained unimplemented.

The IMF Benchmark Behind the Breach

The IMF structures its lending through programme arrangements that disburse funds in tranches contingent on a borrowing state meeting agreed policy benchmarks, a practice known as conditionality. Scholars have criticised the fact that the IMF’s Articles of Agreement contain no explicit human rights clause, even though, as a UN specialised agency, the IMF is expected to act in consonance with the UN Charter’s human rights purposes. A 2024 empirical study found that IMF conditionality undermines human rights by constraining the fiscal space available to sovereign governments. Ecuador’s new law appears to confirm this critique.

Ecuador’s mining law must be read against the background of its relationship with the IMF. Since May 2024, the relationship has been governed by a 48-month Extended Fund Facility arrangement (“EFF”) augmented in July 2025 to approximately US$400 million. Under the EFF, funds are not disbursed as a lump sum. The IMF disburses funds in tranches, each conditional on the IMF completing a periodic review of Ecuador’s performance against agreed benchmarks. Miss a benchmark, lose the tranche. The arrangement is therefore not a loan in the conventional sense; rather, it is a continuous disciplinary relationship in which Ecuador’s access to credit is contingent on its legislative and regulatory behaviour meeting IMF-defined targets at regular intervals.

The mining sector sits at the centre of that target architecture. The IMF’s own Second Review Country Report (July 2025) lists two explicit structural benchmarks related to extraction: reopening the mining cadastre by end-June 2026 and, with IMF technical assistance, developing a new fiscal framework for the mining sector by end-December 2025. The mining cadastre had been closed since 2018 under an environmental review moratorium, meaning no new concessions could be granted. Reopening it required legislative action to remove the regulatory barriers that had kept it closed, including the environmental licensing requirements the Act eliminates.

Structural benchmarks are the most demanding aspect of IMF conditionality. Structural benchmarks are reform measures the Fund treats as critical markers of programme implementation, assessed at each periodic review. Their non-observance is weighed in the Fund’s overall assessment of programme performance at each review, and each tranche is released only upon a review’s completion. A government dependent on continued financing, therefore, would face sustained pressure to comply in order to retain disbursements.

This is the fiscal architecture within which Ecuador’s legislature operated when it voted on the 2026 amendment. The question of whether to maintain meaningful environmental licensing requirements was not decided in isolation. It was decided by a government that needed to reopen the mining cadastre by June 2026 to meet a structural benchmark, that had already received millions in disbursements by December 2025 contingent on programme performance, and whose return to international capital markets in January 2026 had been explicitly facilitated by the EFF arrangement.

The government itself removed any ambiguity about its motivations. The bill was submitted as an económico urgente, i.e., an urgent economic bill, which requires a vote within 30 days. The urgency was to meet benchmarks and eliminate regulatory barriers that were delaying fiscal revenue generation. The timing makes the connection explicit. The IMF’s Fifth Review staff mission opened discussions in Quito on 26 February 2026. The same day, the National Assembly passed the mining law. The Fifth Review confirmed both mining benchmarks were on track. Ecuador passed the law and received confirmation of benchmark compliance simultaneously.

Therefore, Indigenous Peoples’ ability to delay or veto extraction through consultation disputes would impose a structural obstacle that would have threatened Ecuador’s capacity to meet a hard conditionality deadline, with direct financial consequences. In that context, the Confederation of Indigenous Nationalities of Ecuador (‘CONAIE’) described the law as reducing prior consultation “to a formality rather than a genuine process of free, prior and informed consent” and called it “a danger to the country.” The seven Indigenous nations of Pastaza, the Achuar, Andwa, Kichwa, Shuar, Shiwiar, Sápara, and Waorani, signed a joint statement rejecting the bill two days before the vote, warning it would open their territories to extraction for commercial profit without their consent.

Conclusion

The IMF has no formal mechanism requiring structural benchmarks to be screened against a borrowing state’s existing international human rights obligations. IMF conditionality is built around a single test: whether a measure is critical to the programme’s macroeconomic objectives. Nothing in that test looks outward to the borrowing state’s other legal obligations. It has no safeguard that would have flagged Ecuador’s non-compliance with two IACtHR rulings before the mining cadastre reopening was made a pass/fail condition of disbursement. As scholarship on IMF conditionality has consistently noted, the Fund continues to lag behind other multilateral institutions in integrating human rights considerations, and its programme design remains insufficiently aligned with the UN human rights architecture within which its borrowing states operate. Therefore, until the IMF programme design requires screening structural benchmarks against member states’ international human rights obligations, the Sarayaku precedent will remain exactly what it has been for thirteen years: a monument without a mechanism, celebrated in judgment, ignored in practice.