Ecuador

[old man]

I had an interesting phone call from someone that used to have a salvage permit in Ecuador. According to the call he was in the process of applying for an extension on his permit and was told that Ecuador signed the UNESCO agreement and was canceling some permits and that if a current permit holder wanted to continue with their permits. That Ecuador was going to keep all artifacts recovered and only let the salvor keep 25% of any gold or silver and that the 25% would be based on the current market value of gold or silver not the real value of the coins.
Can anyone with any knowledge of this shed any light on this or was I given bad information

 

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[Consolación Diver]

Hi,

I am in Ecuador and can shed a little light on your question. I am not the best person to answer the question because I am not always kept up to date by the lawyers, so keep in mind that there could have been significant improvements in the situation that I don't know about yet.

Everything that you heard is true. In July a decree was passed by the Ecuadorian Government which basically says what you wrote. The decree is number 1208 and can be found at the government website: http://www.sigob.gov.ec/decretos/

It is only in Spanish…I translated it into English but it is like 7 or 8 pages long so I won’t post it here.

After we were informed of the decree, our lawyers teamed up with several other lawyers who were representing the other salvage companies in Ecuador and they started a process to write a new law which they hope to get passed which would make things better for the Government. (They have always received 50%) We are very optimistic that they will come to some type of agreement. Most of the companies down here are on “standby” until we see what happens.

This new decree was a complete surprise to all of us working down here because we have had a great relationship with the government people who supervise our work. Last Nov. UNESCO held their Underwater Cultural Heritage meeting here in Quito and that must have swayed some of the people who voted for this decree. http://portal.unesco.org/geography/es/ev.php-URL_ID=7778&URL_DO=DO_TOPIC&URL_SECTION=201.html
But don’t get too excited, like I said we are pretty confident some type of an agreement will be worked out that will allow us to go back to work.

 

[Mackaydon]

Consolacion:
Let me clarify one small point. The Ec. government has not always taken 50%. Before we had the law changed in about '97, the law was totally adverse to treasure hunters. We had the law changed to a 50/50 division of the "Capitana" artifacts (coins, etc.); and that 'relaxation' of the law--to make it more workable--was the reason why Ec. treasure hunting finds have been in the news for the last ten years.
Don.....

 

[Consolación Diver]

Hey Don,

Sorry, i didn't literally mean "always".

I really don't know what the law was before the Capitana discovery, I was under the impression that the Capitana was the first major discovery in Ecuador and that your group was instrumental in getting the salvage laws written so that you could salvage it legally.

Either way, I certainly give you guys credit for making salvage work legal and profitable down here.

Bill

 

[Mackaydon]

Hello Bill:
Before we were instrumental in getting the Ec. law on 'treasure' changed, this was the law:
The finder was entitled to 50% of the intrinsic value of the finds. Payment would be given in the form of 10-year Ecuadorian bonds. (Note the obvious 'red-flagged words: 'intrinsic' and 'bonds'.)

Getting over that hurdle, legally, was our first challenge.
Don....

 

[Patrimony]

I have spent the past 15 months in Ecuador and until early July my companys held 196 square miles of coastal leases in Ecuador which stretched from the extreme north of the country to the extreme south and so as one of the owner/managers I am very current with what has been and is going on with the change of laws in this country.

Regarding the so called lawyers who are supposedly busy working on setting things straight again: I am sorry to report that this group of lawyers which some people keep referring to who are supposedly currently trying to remedy the situation in Ecuador completely struck out back in late August. Their initiative is dead. Actually was DOA. In fact when that particular group went up to Quito to basically attempt to have decree 1208 revoked and replaced with something resembling what had previously existed, but which in reality consisted of a document even more self serving and detrimental to the State than the previous one and therefore was totally unacceptable, they were not even given the customary courtesy of even a ten minute hearing by members the legal department at the Presidential Palace.

In fact the presidential attorney's came downstairs to the outside courtyard to see what these guys wanted and then after finding out, never invited them inside any offices to further negotiate or talk. They have not invited them to come back either. At the time however, besides tooting their horns, collecting fat fees and promising distraught ex lease holders miracles, all they did was then basically hand over a copy of their new proposed reglamento and left empty handed. Since that day absolutely no action has been taken on the document they submitted and won't be. There are reasons for this which I can not devulge at this time, but read between the lines.

In the old days attorneys wanting favors would simply present themselves to government and would pass some money around and could get anyone to sign anything and that is how deals and laws were negotiated during the bad old days. Unfortuately such attitudes and lack of ethics still persist today within segments of the legal profession in that country but are not making inroads within the current government which, at least at the highest levels, is not corrupt and can not be bought. Whatever else it is, it is not corrupt while instead has a genuine interest in structuring future and current public/private sector relationships along lines which are genuinely fair to both partners and which are honest and serve the best interests of the state. The UNESCO treaty as such has actually had little to do with the curent situation and, while it was cited in decree 1208, that was not the reason why decree 1208 was even signed. Instead, it was rather more due to the malfeasances of a few of the previous lease holders who, according to highly placed sources, have done some "very bad things."

However, without going into specifics, I can report at this time that in some quarters there remains genuine interest in a new law to govern wreck hunting and, if it ever manifests, it will do so under an entirely higher set of standards than have ever previously existed. Unfortunately that is not going to make some of the previous lease holders very happy. In fact under a regimen of higher standards many of them would probably not even qualify to for leases anymore.

However, this will be a good thing for the industry which in the past has been sloppy, lacked standard work procedures and was almost totaly unregulated and allowed any person who applied to obtain a lease whether they were actually capable of performing the work or not. If anything, and some of my fellow ex lease holders will probably hiss in disapproval, the recent shut down was long overdue and a real house cleaning and reorganization of the standards of practice is what has long been needed.

For example, under the old regulation persons without experience, no technical ability, no historical documentation and no proof of financial responsibility were allowed to have leases. Sometimes the sites were even taken over by professional con artists who in turn raised millions of dollars from gullible foreign investors who were readily sold lines of bull by hired boiler room brokers about potentially rich sites and finds when in reality the sites had either already been worked out or the so called mag hits and sonar images were nothing more than pieces of modern junk or pipes tossed in the ocean by the oil and gas exploration companies years ago. However, even knowing that they had dead sites or modern junk did not inhibit some of them from still raising money and bilking the gullible. Don Johnson and Ronny Almeida are just a few of the names that come to mind although those two are not by all means the only individuals whom under a higher standard of qualification should be and would be restricted in the future from obtaining leases.

Meanwhile, the jury is still out and how events in Ecuador will ultimately turn remains to be decided. One thing is certain however, the bad old days are over and will not be returning while anything new in the future which evolves from this situation will be far more discriminating about who and what is allowed in. It will also come with requisites with higher standards of integrity and professionalism attached to it, when and if it ever comes.

J Ruth General Mgr Exdelmar SA, President SSE, Inc.

 

[old man]

How can the below post be a good thing for the Industry if Ecuador is only allowing the salvor 25% of the current metal price of anything salvaged?? That wouldn't even pay the expenses of a salvage operation, let alone a profit for anyone but the Government of Ecuador!! Personally, I know a guy that has a bridge for sale in Brooklyn. That might be a good deal too !!

"However, this will be a good thing for the industry which in the past has been sloppy, lacked standard work procedures and was almost totaly unregulated and allowed any person who applied to obtain a lease whether they were actually capable of performing the work or not. If anything, and some of my fellow ex lease holders will probably hiss in disapproval, the recent shut down was long overdue and a real house cleaning and reorganization of the standards of practice is what has long been needed."

 

[Mackaydon]

From my viewpoint, treasure hunting in Ecuador by commercial enterprises is now a thing of the past. Pity, since future commercial TH activity, if any in that area, will now be illegal--once current permits expire--perhaps even current contracts have been superceded by the UNESCO agreement; I don't know.
And that made me think of the division we gave the government years ago. I wonder if anyone has seen that material in any Ecu. museum?

 

[Consolación Diver]

Hey Don,

There is a nice little display of Capitana artifacts at the small museum in Salinas. Most of the coins aren't cleaned, but a few are. I understand that the major bulk of Ecuador's cut is held in a vault at the Banco Central where nobody can see or study it.

This museum also has a small display set up for the Consolacion, but the only coins they have on display are featureless "Gillette's".

 

[Mackaydon]

Thanks, Bill.
If that display is from a 'private' collection, do you know who belongs to those items; or is the display a 'government' display?

 

[Consolación Diver]

I'm quite certain that these artifacts belong to the people of Ecuador (Patrimonio Cultural) and were obtained from divisions with you guys and from our company, ROBCAR. As far as I know, these are the only artifacts which are on public display. The last picture is obviously a display of Consolacion coins.

Bill

 

[Patrimony]

Those are shipwreck division items from Santa Clara Island and the first Capitana salvage project on display in the naval history museum in Salinas. The building was also constructed with funds donated by Roberto Aguirre of a treasure hunting company, ROBCAR and other companies, which also flies in the face of the accusation from purists that treasure hunters contribute nothing to public history nor to the diffusion of cultural knowledge. Conversely, there are no marine artifacts on display that were found by and then contributed to the museum by cultural patrimony.

Most of the remaining artifacts are held at the Central Bank in Guayaquil although there is a wonderful coin exhibit with pieces dating back to mid 1500 s at the old mint building in Quito and which is now a numismatic museum.

 

[Mackaydon]

Bill and Joel:
Many thanks for those answers.
Don...