Reposted from The Chevron Pit
Chevron's $9.5 billion environmental liability in Ecuador, affirmed by eight separate appellate judges, has been haunting company CEO John Watson and his shareholders for years. In a new book on the litigation – one replete with factual errors and lacking even a single footnote – Businessweek reporter Paul Barrett largely adopts the myopically narrow perspective of the U.S. business community.
Barrett's analysis in the book, called Law of the Jungle, falls far short of a balanced assessment of the dispute even though it has one good chapter on the company's extensive contamination of Ecuador's rainforest. (For a summary of the overwhelming evidence against Chevron relied on by Ecuador's courts, see here.)
That's not suprising given Barrett's sympathies. He recently testified in favor of Chevron's litigation position before Congress. He also spent only ten days in Ecuador "researching" two decades of litigation. It is clear that he cribbed much of his material from Chevron's legal briefs. He also failed to convince a single lawyer involved in the litigation to grant him an on the record interview.
Barrett does not speak Spanish nor the languages of the affected indigenous groups. Not surprisingly, he talked to virtually nobody in the 80 or so rainforest communities devastated by the oil pollution.
Barrett clearly wants to cash in on the high-profile case and become the resident "expert" on the issues involved. But he does this by giving Chevron every benefit of the doubt. He also adopts almost wholesale the company's narrative that it was the victim of the indigenous groups and their lawyers.
Aside from its many factual errors – outlined in a "notice of defamation" letter cited below – the fundamental problem with Barrett's book is its obsessive focus on American human rights lawyer Steven Donziger rather than on Chevron's systematic toxic dumping and fraudulent remediation.
Chevron's top legal representative in Ecuador, Rodrigo Perez Pallares, admitted openly during the eight-year trial in Ecuador that the company deliberately and systematically discharged more than 15 billion gallons of bezene-laden toxic oil waste into the rainforest during roughly two decades of operations. It would be hard to find such a frank admission by a major American corporation of industral homicide on a mass scale. Multiple peer-reviewed health studies – largely ignored by Barrett – confirm dramatically high rates of cancer in the region where Chevron operated.
Yet Barrett suggests Chevron should not pay the $9.5 billion Ecuador court judgment even though it insisted the trial take place in that venue. In contrast, back in his home country, Barrett seems totally unbothered by BP's $46 billion liability for its far smaller and accidental spill in the Gulf of Mexico. (For an analysis of Chevron's stingy behavior in Ecuador compared to BP's large payouts in the U.S. for its Gulf spill, see here.)
Making indigenous persons invisible or treating them as second class citizens is the sort of colonial mentality that got Chevron in trouble in Ecuador. Barrett falls into the same trap. He continues Chevron's pattern of arrogance by conceding he never read the 220,000-page Ecuador evidentiary record. Nor did he attend a single day of the Ecuador trial from its start in 2003 to its finish in 2011. But that did not stop Barrett from issuing "reports" from the trial in his book by describing scenes from the documentary film Crude without citation in the text.
Even the book's title suggests Barrett runs too easily in the world of stereotypes. In his mind, it appears most Ecuadorians are little more than savages incapable of running their own affairs who are constantly being manipulated by gringos, be they oil companies or lawyers.
Barrett's overwrought focus on Donziger undermines the upside from his one decent chapter on Chevron's contamination. Yet even this chapter – where Barrett interviews Cofan indigenous leader Emergildo Criollo – serves as little more than a foil for the author's later assault on Donziger's integrity and his distortion of the scientific evidence.
Donziger was hardly alone in battling Chevron. But you would never know it from Barrett's account, where Ecuadorians simply disappear.
Donziger worked closely with lead lawyer Pablo Fajardo and a team of Ecuadorian scientists, lawyers, and community leaders whose names don't make it in to Barrett's book. Two of the local leaders – Fajardo and Luis Yanza – were recipients in San Francisco of the prestigious Goldman Environmental Prize and its $150,000 cash prize. The award, considered the “Nobel” of the environment, so angered Chevron that it took out full-page newspaper ads in the San Francisco Chronicle accusing the Goldman jury of being duped by the villagers.
Consider a few more of the shortcomings in Barrett's account:
- There is nothing in the book about the scientific evidence against Chevron in its two internal environmental audits that confirm the company's extensive contamination at 158 of 163 well sites inspected. These reports – both paid for by Texaco, Chevron's predecessor company – are readily available in the trial record but were ignored by Barrett.
- There is nothing about how Chevron scientists John Conner and Sarah McMillan designed and executed a plan to cheat Ecuador's courts by secretly pre-inspecting contaminated sites to identify “clean” sampling areas. When the judge showed up later for the official judicial inspection, the company would act like it was engaging in random sampling. In reality, it was lifting soil from places it knew would turn up clean.
- Barrett also ignores the entirely inappropriate – it not outright corrupt – attempts by Chevron lawyers Ricardo Reis Veiga and Jaime Varela to use the U.S. embassy Quito to float various bribe offers to Ecuador's government to coax it to illegally kill off the case. This has been confirmed by wikileaks cables and Chevron's own internal documents. (Reis Veiga was later indicted by Ecuador's government for fraud on a sham remediation.)
- Barrett also ignores the appeal by the Ecuadorians and Donziger of the deeply flawed RICO decision by U.S. Judge Lewis A. Kaplan that purports to overturn a unanimous decision by Ecuador's Supreme Court affirming Chevron's liability. (Donziger's brief appealing that decision, which shreds Chevron's fallacious factual arguments, can be seen here).
- Barrett is silent on the fact that 43 prominent U.S. civil society organizations have blasted Chevron for abusing the racketeering statute to target the human rights advocates defending the Ecuadorian communities. He tries to leave the false impression that Donziger and his colleagues lack support, when in fact support for the case and its lawyers is strong and growing stronger.
- Finally, Barrett appears to have a myopically provincial perspective. He barely acknowledges that the final decision on recovery will be made not in the U.S., but by courts in various enforcement jurisdictions (including Canada, Brazil and Argentina) that are being asked to seize Chevron's assets to pay for the court-mandated clean up. There is no evidence Barrett traveled to those countries or read the relevant legal papers.
- Barrett also ignores or mischaracterizes the intense pressure Chevron's management is under from its own shareholders to settle the Ecuador case, given the huge risk of business disruption around the world. Chevron CEO Watson has been strongly rebuked over the case by a series of shareholder resolutions.
Boiled to its essence, Barrett's book is a corporate perspective on a successful American plaintiff's lawyer who with his Ecuadorian colleagues pioneered a new model of funding for a mass-scale human rights litigation. The fact the lawyers had the trial judgment affirmed unanimously by two separate appellate courts in Ecuador – including by the country's highest court – only seems to infuriate Barrett all the more.
Even worse for Barrett is that Chevron's 60 law firms and 2,000 legal personnel have been unable to halt the march toward recovery. Barrett's genetic code as a longtime business reporter does not account for even the possibility that indigenous groups could amass scientific evidence and use it to humble America's third largest corporation in court.
We might add that while BP already paid out billions in the U.S., Chevron continues to seek a taxpayer-funded bailout of its clean-up costs by suing Ecuador's government in international arbitration. Imagine the outcry from U.S. citizens if BP did the same to the Obama Administration.
Again, you won't hear this perspective from Barrett.
(For more background on the flaws in Barrett's book, see this critique and Donziger's “notice of defamation” letter to the author and his publisher. For balanced reporting on the case, we recommend this recent article by Alexander Zaitchik in Rolling Stone, this 2007 article about Fajardo by William Langeweische in Vanity Fair, or this segment about Chevron's deliberate toxic dumping in Ecuador on 60 Minutes. For the human impact, see this compelling photo essay by Lou Dematteis in The Huffington Post documenting Chevron's cancer epidemic in the affected area.)