When Renee Arevalo purchased a small plot of land just off the main road to Shushifindi several years ago, it seemed like a great opportunity. A rectangular block of freshly plowed dirt off the well-traveled route toward one of Ecuador’s oldest oilfields, the sizable lot looked like the perfect spot to build a small house for his family that would double as a tire repair shop. But then the rains came. The hard, driving rains of Ecuador’s Amazon basin have made this rainforest region one of the most ecologically spectacular places on the planet. But at Arevalo’s new home, the rains brought only a foul smell, sort of like a gas station. Then Arevalo noticed that the puddles of water that blotched his dirt yard had thick, multicolored swirls on top. When he poked a wooden stick a few feet down, thick black sludge bubbled to the surface.

Arevalo has a wide, square face that looks permanently creased from worry. He’s lived here with his family for five years now, he told me when I met him outside his home recently. They drink from a nearby well. But the family is always sick, he said. His children have constant stomachaches. And recently, his mother-in-law died of liver cancer. I asked him what he thought was the cause. “Of course it’s from the oil,” he said. A bony white cow curled up in the mud flicked away the circling flies with his tail. “But what can I do? Who can I complain to?”

Arevalo is just one of thousands of Ecuadorians left angry in the wake of decades of oil exploration that began in the 1960s and continues, albeit in a more modern form, today. He’s also part of a growing force of poor and indigenous people across the country, from the peaks of the Andes to the lowlands of the Oriente, who have grown suspicious of Ecuador’s government. Famous for its backroom dealings with oil companies and international financial institutions, the national leadership is widely seen as having enriched the elite at the expense of more than half the population, which struggles to get by on less than a dollar a day. In fact, among the indigenous, poverty is far worse–87 percent, according to the World Bank. And since 2000, when the country adopted the American dollar as its official currency to curb runaway inflation, that dollar has bought them a lot less than it used to.

The combination of the sorts of economic reforms pressed by the United States, World Bank and IMF in the 1990s and the failure of the region’s tremendous oil and gas wealth to benefit the poor and indigenous have led to a broad backlash against globalization across much of Latin America–illustrated by the rise of Hugo Chávez in Venezuela, the fall of Bolivian President Carlos Mesa in June and the elections of a range of leftists, from “Lula” in Brazil to Néstor Kirchner in Argentina, who’ve vowed to reject the old Washington Consensus and do more for the poor. (Whether they’ve delivered on those promises is debatable.) And the developed world’s addiction to oil has fueled oil companies’ aggressive push into the most remote parts of the world, which until recently were largely undisturbed by Western-style modernization.

The resulting clash of interests and cultures reached a breaking point in Ecuador this past spring, when thousands of protesters crammed the capital demanding the resignation of President Lucio Gutiérrez. Although elected with the backing of the leading indigenous party, Gutiérrez lost indigenous support soon after meeting with George W. Bush and IMF officials, when he abandoned much of his pro-poor rhetoric and vowed to expand oil production–even if it meant using the military to do it. His attempts to consolidate power and shut out the opposition by, for example, sacking the Supreme Court and stacking it with his supporters finally led to his downfall.

Former Vice President Alfredo Palacio has now assumed the presidency. But it’s unlikely that the longstanding conflict over who’s helped and hurt by Ecuador’s vast oil reserves, and what should be done about it, will be resolved anytime soon.

A drive along the Via Auca helps explain why. Built and named in the early 1970s by the California oil giant Texaco, then the dominant oil company operating in Ecuador, the Via Auca, or “Road of Savages,” is responsible for the first incursions by oil companies into traditional indigenous life. Stretching from Coca–a crumbling city of tin-roofed shacks, sleazy nightclubs and burly oil workers–it cuts deep into what just thirty years ago was pristine Amazon rainforest. Now spaghetti-like rows of exposed rusty pipelines snake along the road and across the doorsteps of the shacks of colonos, as the settlers who work for the oil companies are called. Drilling stations, gas flares, military camps and strip clubs line the oil-slicked blacktop, which is crowded with Caterpillar tractors, Halliburton trucks and diesel-spewing Petrolera buses, which shuttle oil workers from Coca and back. Just off the road behind the pumping stations, lakes of viscous black waste sink into unlined pits.

The widespread oil contamination in the northern Oriente, as this rainforest region east of the Andes is known, is the subject of a twelve-year long lawsuit against Texaco (now merged into Chevron). Over the course of about twenty years, Texaco dumped some 18 billion gallons of oil and toxic waste into Ecuador’s lakes and streams, contaminating groundwater, rivers and fisheries and causing hundreds of Ecuadorians to die of strange cancers, according to the plaintiffs. Their lawyers and scientific experts insist it’s the worst oil-related contamination in the world today–thirty times larger than the Exxon Valdez spill. Texaco, which denies any link between oil exposure and health problems, claims it followed standard industry practices of the time and that Ecuador’s government, to which it sold its interests in the late 1980s, is responsible for any problems today. Originally filed in New York, the case was transferred to Ecuador and is now in trial. Although much of the emerging evidence supports the plaintiffs’ claims, Chevron has vowed that if it loses, it will demand in arbitration that the government cover all costs.

But regardless of the legal outcome, what’s happened to this once-spectacular area–renowned as one of the most biodiverse places in the world–has transformed this country’s national consciousness. For many Ecuadorians, especially the poor and indigenous, oil is now seen as a weapon of the powerful–a corrupt government working with foreign companies and international financial institutions–wielded at their expense. And while the failure of oil income to help the poor is nothing new in the developing world, the reaction to that failure in Ecuador–and, increasingly, across Latin America–is.

From North to South, indigenous communities who live in the Ecuadorian rainforest are refusing to allow oil companies to operate on their land. Although years ago some signed long-term oil-exploration contracts they can’t go back on, the growing resistance has left this ecological land of plenty a landscape of striking contrasts.

At the rusty metal bridge where the Via Auca intersects with the Shiripuno River, I met Moi Enomenga, a Huaorani Indian with long black hair, dressed in beads and boxer shorts. A charismatic 40-year-old who’s alternately playful and warriorlike, Moi, as he’s generally known, has become a de facto spokesman for the Huaorani. Although he’s spent most of his life in the rainforest, in recent years he’s addressed the United Nations and other international organizations to press the indigenous cause.

Moi poled our dugout canoe upriver, and after four hours traveling through the thickening rainforest we arrived at Nenkepare, his family home. A ten-minute hike through tangled brush and towering trees brought us to a small clearing surrounded by a few simple houses of wood planks and thatched roofs. In a makeshift courtyard, Moi’s parents sat by an open fire. His mother, the huge holes in her earlobes filled with large wood-and-feather earrings, stirred a pot of chiche, the homemade manioc beer that’s a staple of the local diet. His father, whose leathery face and hound-dog eyes deceptively suggest a certain weariness, jumped up to greet us. Soon the village children streamed in, offering bracelets woven from reeds and leaves. Moi showed off his blowgun and the skeletal jaw of a wild pig he’d speared for dinner the day before.

Like many Huaorani upriver, Moi’s family leads a centuries-old way of life completely dependent on an unspoiled rainforest. In the midst of an amazing array of wild birds, monkeys, insects and snakes, they live in hand-hewn huts, eat what they can find or kill with a blowgun in the forest and carry home in a basket woven on the spot from palm leaves. They cure their ills with the milk from trees and the ancient spells of shamans. While many of the Huaorani downriver abandoned these traditions after oil companies started building roads through their territory, others, like Moi’s family, are holding on.

When I ask Moi why, he says it’s because they now see that the communities that cut deals with the oil companies years ago didn’t understand what they were giving up. In hindsight, that’s not surprising: Pitting a multinational oil company against a premodern society in contract negotiations isn’t exactly an even match. Company officials came to the rainforest expecting to purchase Manhattan for a handful of beads. For the rights to drill on their land, the communities did get some things in return–motors for their canoes, chain saws to build houses, soccer balls for the children, even a school. Some can now call the oil companies for emergency transportation and modern healthcare, which is otherwise nonexistent in the rainforest.

“In the beginning, we accepted whatever the oil company offered,” says Moi. “But after a while, we realized we didn’t get any benefit. The gifts don’t last. We can have everything–an airplane, a helicopter–but we can’t maintain it.” Indeed, it’s the Huaoranis’ growing dependence on the companies and their increased alienation from the rainforest that’s steadily destroying their way of life. “Now we want a moratorium on oil drilling so we can organize as a community and decide what to do.”

Down south, the Achuar, with 5,000 members spread over more than 2 million acres of roadless rainforest, have already decided. Their answer is a resounding no: no to the oil industry, and no to the trappings of modernity that come with it. Although some individuals may feel differently, the Achuar federation is so adamant about its position that it’s not only refused oil companies permission to enter their territory but has gone so far as to kidnap company workers who have ventured there.

When I visited an Achuar community last winter, I was led down a long dirt path, past lush fields of banana, manioc and pineapple, to meet Vicente Jimpikit, a stoic-looking 35-year-old in jeans, a number 13 soccer shirt and red warrior face paint. Seated on a wooden stool in the front room of a two-room palm house, his thick bare feet planted firmly on the dirt, he explained the Achuar position. “If the companies enter, they will destroy the entire forest,” he said. “The forest is like a supermarket. It’s where we collect things to build our houses and make our food. It is where we get our medicine. The companies will contaminate the water and bring diseases. We saw what happened in Coca, and we don’t want that here. We want to live quietly, without trouble, with our own culture.”

It’s not clear how long they’ll be able to maintain that position. Although the Achuar have legal title to their land, the government has already leased the subsoil rights to a consortium of oil companies led by Houston-based Burlington Resources. Burlington says it won’t enter Achuar territory without the federation’s permission. But as company spokeswoman Ellen DeSanctis told me firmly, “Bear in mind: We have the right to go in and explore. The government has given us the right to proceed with oil-exploration activities.” Instead of using the military to do so, DeSanctis says, the company will try to convince the Achuar leaders that it’s in their best interests. “At the end of the day they will have to make some very difficult decisions,” says DeSanctis, from her office in Houston. “I understand how they feel. I don’t like what’s happening to my way of life either. Two blocks away from me they’re tearing down a tall building with a view and building a mall. We’re all trying to preserve a way of life. The modern world is encroaching on us everywhere.”

Perhaps, but the stakes in downtown Houston aren’t as high as in the Amazon rainforest. And Houston long ago made its decision. The Amazon’s Indians are now pitted against some of the world’s most powerful interests in a bitter struggle to defend theirs.

The upside of modernization, of course, is that it can make oil drilling far less destructive today than it was in the days of Texaco. But that’s only if companies use the best available technology. They usually don’t, because it costs more. Continued indigenous resistance, however, could force that calculation to change.

That would still leave the question of who gains. Even Burlington acknowledges that in the past, the poor and indigenous have not reaped the benefits of petroleum production. “If we could figure out how to work with the government so that some of the economic benefits actually get to the people, that would be quite remarkable,” says DeSanctis.

So far, neither Burlington nor any other oil company in Ecuador has managed to do that. And while from Houston working with the government might seem like a plausible goal, most Ecuadorians long ago lost faith in their government’s willingness to regulate companies to insure the people’s well-being. If anything is to change, it will have to come from an evolution in the complex and historically dicey relationship between the oil companies and the indigenous groups who live in the country’s oil-rich regions.

Burlington, for its part, hopes the Achuar will eventually allow the Texas company to drill for oil on their territory. And it’s hired local Ecuadorians, including a member of the Achuar tribe, to help persuade them. That could be a cynical exercise in manipulation, or it could be a sign of incipient change. “There’s a slow realization among some companies that they have to start taking community concerns more seriously than they have in the past,” says Keith Slack, an extractive industries expert and senior policy adviser for Oxfam America, based in Washington.

Already, small successes are fueling sparks of optimism. Randy Borman is one surprising source of it. The son of missionary parents, Borman was born and raised among the Cofan Indians in the far northeast Oriente. Eventually elected a Cofan chief, he led several armed rebellions against the state oil company, Petroecuador, to force it to stop drilling or testing for oil on Cofan territory. Borman has since relinquished his warrior ways. At 49 he’s pale and slight. But he continues to battle, from a spare office in downtown Quito, to preserve what’s left of Cofan land. Now devoted to land conservation, he believes the oil industry can change its ways. “We need to insist that better work is done,” he told me, describing how one oil company built a drilling station in the rainforest without roads, accessible only by helicopter and monorails. “It’s more cost-effective in the long run. There’s a lot of fear because of the Texaco experience, but there are countercurrents. We can force them to change.”

Would he recommend the Cofan accept oil companies on their territory? I asked him. “We would look at it very closely, keep tabs on it and expect a fair share of the profit, not just a payoff,” he said. “We would want to come in as shareholders. The budget would have to include patrol money for independent monitoring. That we could deal with.”

“Many people see conservationists as against everything,” he continued. Indeed, some eco-activists–many based in California–militantly oppose oil operations in Ecuador altogether. “I can’t see having that position when the world uses oil for everything,” says Borman. “But I can see holding them to the highest standards possible.” As North Americans do in the UnitStates, he added. “When I visited Texas a few years ago with my family, I was driving along and seeing one oil well after another, and not a speck of oil anywhere on the ground. No big infrastructure. In the desert. There’s no dirt. There’s no uncleanliness. It’s amazing. It’s the corporate motivation: If it’s not against the law you do it the cheapest way possible. But if there’s someone to stop you, you do it better.”

If recent events in Ecuador are any indication, there may well be someone–tens of thousands of people, even–ready to stop those who do business the old way. That leaves it up to the oil companies to prove that they can do better.