Ecuador vs Chevron

From ToxicLeaks

Few cases embody the image of David versus Goliath like the case of Ecuador vs Chevron. The indigenous people of the Lago Agrio have been trying for over two decades to get Chevron to clean up the pollution caused by oil fields and to take responsibility for the medical, environmental and cultural consequences of this pollution. Unsurprisingly, Chevron is using every bit of its sizeable resources to make sure they never have to face the music.

Texaco comes for Ecuadorian oil in the 1960’[edit | edit source]

The beginning of the story reaches back to the 1960’s, when the US government considered Ecuador as their private domain and the Ecuadorian government fully agreed. In all fairness, many Latin American countries in the 1960’s and 1970’s were sliding into military dictatorships, but as they were faithful allies of the oldest democracy in the world, no one seemed to care. And it gave American companies an open boulevard to invest and exploit the natural resources. That’s how Texaco came to Ecuador to try and find oil to collect. They explored the northeastern area of Lago Agrio and founded the city of Nueva Loja as their base camp. They eventually found oil and started production in the beginning of the 1970’s, nevermind the indigenous people that lived off the land in the area and whose habitat could be degraded by the drilling… The operation involved Texaco, but also Gulf Oil, another major American company in the sector, and the Ecuadorian state-owned oil company, CEPE. Eventually, Gulf Oil pulled out and CEPE became the majority owner of the consortium in 1976 even though Texaco still was in charge. Finally, Texaco’s concession expired in 1993, and the state owned company, which had become Petroecuador in 1989, became sole owner of the exploitation. Between 1964 and 1990, Texaco had drilled about 350 oil wells in an area of around 2,700 square miles of rainforest, and it reaped $30 billion in profit from that oil.

Oil drilling and environmental disaster[edit | edit source]

So far so good you might say ? American capital was generous enough to help poor Ecuadorians properly exploit their natural resources and when the infrastructure was operational they gallantly pulled out and left the exploitation of the oil to its rightful owners. The only thing is : during the two and a half decades Texaco called the shots in the Lago Agrio area, the oil drilling caused massive environmental degradation, and induced many dire health issues for the people that live in the area.Indeed Texaco came to an area that had a unique and perfectly preserved environment, and turned it into what experts have called the “Rainforest Chernobyl”. Texaco dumped crude oils and oil byproducts in around 1000 unlined waste pits. These hastily dug pits did not prevent the waste from seeping into the ground and into the water tables. And with every heavy rainfall, the overflow would carry waste into the surface streams. Texaco also spread oil on roads, to the effect of reducing dust, but this oil was also washed by the rain into the rivers. Another part of the waste was disposed of in gas flares, which produced thick toxic smoke that blackened the rain, thus contaminating the whole area. Last but not least, Texaco poured 18 billion gallons of produced water into the streams of the area. This water comes from the oil wells where it is pumped to the surface along with the oil. Therefore, this liquid is actually only part water, the other part being oil. Moreover, this produced water also contains heavy metal and a very high salt concentration. That’s why in the United States, laws forbade oil companies from pouring it into surface streams and forced them to use “reinjection”, thats is to say to bury it in deep underground wells where it can’t contaminate the clean water sources. But as you can guess, even though Texaco was no stranger to this technology, it chose the easiest way, the cheapest way, but unfortunately for the indigenous population, it was also the most destructive way for the environment and for their welfare.

Texaco’s fake cleanup of the contaminated areas[edit | edit source]

In 1993, Texaco agreed to clean up the areas it had polluted in exchange for the commitment that Ecuador would never sue the company for environmental damages. The company therefore conducted a very limited cleanup between 1995 and 1998, covering the pits with dirt instead of thoroughly cleaning up the oil and oil byproducts that contaminates the earth and water. And once it has done this almost inexistent cleanup, Texaco claimed that it had left the area cleaned of all the contamination it had caused, and that any subsequent discovery of pollution would have to be Petroecuador’s fault, because they continued to drill for oil. While Petroecuador’s responsibility in some of the pollution can’t be doubted, the cleanup was clearly a sham designed to pin all the contamination of Petroecuador and not have to face the consequences of the pollution. A case in point of corporate crimes combined with corporate cowardice.

Numerous social and health issues for the Lago Agrio people[edit | edit source]

The local population has been on the receiving end of that toxic stick. Not only have they witnessed their beloved rainforest environment fall prey to the massive pollution, but they also suffered countless health issues caused by the senseless actions of Texaco. The rates of miscarriages, birth defects and cancers have gone through the roof. The court appointed expert has confirmed that the oil contamination brought about by Texaco had caused an excess of 1400 cancer cases, mostly mouth, stomach and uterine. Other ailments such as headaches, stomachaches or skin rashes became commonplace within the local population. The water in their wells is now heavily polluted. The livestock was severely hit : beasts would fall into the pits, eat or drink food and water made toxic by the surrounding waste. Many of them died. The traditional way of life has been destroyed because the game and the fish the residents used to hunt and fish have disappeared, decimated or driven from the area. Thus millenary customs have been stamped out, as the indigenous population were forced into poverty and have had to find new means of living. The harshest loss is no doubt the destruction of the Tetetes and the Sansahuari, two nomadic groups that had never been in contact with the outside world, and that have all but disappeared since Texaco started drilling in the Lago Agrio area.

Los Afectados file suit in New York to demand justice[edit | edit source]

This has driven 30000 local residents to court, to demand that Texaco take responsibility, clean up the polluted areas and compensate the damage that they have suffered on the environmental level, but also on the health level and on the social level. This lawsuit has been going for over 20 years and it’s a truly appalling story, with Texaco and then Chevron stopping at nothing to escape responsibility. At first the plaintiffs filed suit in New York, in 1993. During the procedure, Chevron bought out Texaco and inherited the lawsuit. Their strategy was simple, argue that the trial should not take place in the United States since the facts had happened in a foreign country. This was a clever way to avoid having to answer the actual accusations made by the plaintiffs and limit the bad press of a trial held in the economic heart of the United States. No doubt Texaco/Chevron also expected the lawsuit to lose momentum, because of the lack of resources of the plaintiffs. This delay strategy worked to some extent because the lawsuit was thrown out in 2001 for “improper venue”. However, “Los afectados”, as the residents call themselves, were not cowed and renewed their lawsuit in Ecuadorian courts.

Chevron’s strategy to disrupt the Ecuadorian trial[edit | edit source]

In this second trial, Chevron’s strategy got dirtier and dirtier. First of all, they exerted great efforts to balk the effect of the expertise conducted in the polluted areas between 2004 and 2007. Whereas the court-appointed independent expert concluded in 2008 that the pollution was extensive and that it exceeded legal limits in numerous places and therefore estimated the damage at $27 billion, Chevron sent its own “experts” to minimize the extent of the pollution. These hired guns used every trick in the book : they sampled soil and water from high ground, that had been washed clean(ish) by heavy rains, they mixed together soil from different spots in order to produce average and therefore lower levels of pollution, and they used very heavily the Toxic Characteristic Leaching Procedure (TCLP) which is deemed by the EPA unsuited for cases such as the Lago Agrio one. Unsuccessful in its attempt to falsify the expertise findings, Chevron launched another offensive, this time to smear the judge in charge of the trial. In 2009, videos revealed the corruption of Ecuadorians officials and possibly the judge of the case. However, this “game changer” soon proved to be a pathetic attempt to disrupt the trail as the two men who recorded the tapes happened to be on Chevron’s payroll ! One of the two was a convicted drug dealer, he has vanished, the other was a long-time employee of Chevron and since this event, he has been living with his family in a $6000/month house, with a leased car, security and a comfortable monthly allowance, courtesy of Chevron of course.

A historical ruling that recognizes Texaco/Chevron’s crimes[edit | edit source]

However, Chevron’s efforts didn’t pay off. Judge Nicolas Zambrano ruled that Chevron was responsible for polluting the environment of the Lago Agrio area and sentenced the company to pay $9.5 billion in damages. The plaintiffs celebrated the legal recognition of what they suffered but they appealed the ruling nonetheless, as the damages was well beneath the amount they were asking for, around $113 billion, and it was also lower than the estimated amount established by the 2008 report of the independent expert. Chevron also appealed the ruling, but on the grounds that the trail has been fraught with fraud and that therefore the verdict was illegitimate. Now that kind of argument takes a serious amount of nerve… as Chevron is the one who refused to have the issue ruled in the United States in the first place !

Chevron uses RICO “mobster” law to silence accusers[edit | edit source]

Instead of recognizing this decision and reaching out to the Ecuadorian victims, Chevron has become even more aggressive in its drive to crush those who dare to demand justice. It has tried to use the arbitration procedure created by the US-Ecuador Bilateral Investment Treaty to overturn the ruling, despite the fact that holding the trial in Ecuador was Chevron’s idea. Moreover, the treaty was signed in 1993, long after the facts of this case occurred, it’s therefore quite shocking to suggest that it could rule in this matter. Furthermore, Chevron used the Racketeer Influenced and Corrupt Organizations Act (RICO), an act created to sue mobsters, in order to accuse the plaintiffs and their attorneys of extortion. Basically, Chevron tried to criminalize the work of all those who worked for “Los Afectados”. Independent journalists have been asked to surrender material, such as footage, to Chevron. Investors that had agreed to support and advise the plaintiffs were intimidated into backing out and even give information to Chevron about the strategy of the plaintiffs’ attorney. Basically, Chevron has tried to stamp out the lawsuit by making sure the accusers ran out of resources to fight this multiple front war.

A growing global support for Los Afectados and against corporate crime[edit | edit source]

So what now ? Will Chevron finally prevail and manage to prevent the damages from being collected ? Indeed the two sides are dramatically unequal. Paul Paz y Mino from Amazon Watch estimates that Chevron has paid $2 billion for this case, and has hired 2000 lawyers from 60 different firms. The population of the Lago Agrio area don’t have that kind of money. They have been represented by one of their own, Pablo Fajardo, who went to night school to get his law degree, and by Steven Donzinger, a Harvard Law school graduate that has accepted to lower his pay for this case. Fortunately, energies are coming together throughout the world to support Los Afectados and provide the social pressure that can bring Chevron to take responsibility and end this “scorched earth” legal strategy. Many different NGOs have spoken out in support of the victims of the Lago Agrio pollution and to condemn Chevron’s actions. In 2014, Sierra Club, Greenpeace, Avaaz.org, Friends of the Earth and other environmentalist groups have written an open letter to denounce the retaliatory lawsuits Chevron launched against the plaintiffs. This corporate assault on the rule of law brought non environmentalist NGO, such as Amnesty into the fray. Finally, world celebrities such as Cher, Sting or Mia Farrow have visited Ecuador to support the cause of “Los Afectados” and shed light on their dire situation, to force Chevron to finally face the facts and fix the damages it’s responsible for.