Negative Servitude To Not Drill For Oil Doesn’t Pan Out in Ecuador Rainforest

August 18th, 2013

When you think of servitudes in property law, you usually think of  positive servitudes. Person A paying Person B to do something harmful to Person B’s land–such as pollute on it, cross it (easement), or do something else. But, often you pay someone not to do something to their land. Roughly (terminology is wildly inconsistent in property law) these are negative servitudes. For example, you pay someone not to farm on their land, or not to emit smoke, or not to sell it to certain people (restrictive covenants).

The President of Ecuador, who was sitting on massive oil reserves underneath an Amazonian Jungle, tried to do something different. He urged the countries of the world to pay his country $3.6 billion not to drill for it. This is something roughly approaching a negative easement, I suppose (not sure how it was structured).

Did it work? Nope.

Six years ago, President Rafael Correa of Ecuador offered the world what he considered an enticing deal: donate $3.6 billion to a trust fund intended to protect nearly 4,000 square miles of the Amazon jungle and his country would refrain from oil drilling in the rain forest.

The plan won applause from environmentalists, and international luminaries like Bo Derek and Leonardo DiCaprio opened their wallets. The plan was backed by the United Nations, but governments generally balked at contributing, and only $13 million was collected.

“The world has failed us,” President Correa said as he withdrew the offer in a nationally televised news conference on Thursday night. “With deep sadness but also with absolute responsibility to our people and history, I have had to take one of the hardest decisions of my government.”

Putting aside the merits of the idea, there is a severe collection action problem. Unlike most negative easements, where a landowner pays the owner of an adjacent piece of land to do, or not do something, the benefits are close and tangible. Who wants smoke trickling over the fence? Here, countries around the world have no direct interest in this land, but instead only a general interest in conservation. So, it didn’t work.