LA Times Editorial Part 1 - "Oil, Ecuador and Its People"

From LA Times Aug 28 2009

Today, a swath of the Ecuadorean Amazon remains contaminated beyond imagining. Neither side disputes the devastation, only who should pay for it. Chevron says it is the state oil company's responsibility.

In a small, spare courtroom in the Amazon region of Ecuador, Chevron Corp., California's largest company and one of the world's largest oil producers, will soon face a day of reckoning. After 16 years of litigation, a case the company inherited in a merger, Aguinda vs. Texaco Inc., is nearing an end. The legal battle that began in the United States in 1993 and resumed in Ecuador in 2003 has pitted the multinational against an unlikely adversary, a coalition of indigenous tribes and communities. A verdict is expected early next year. The plaintiffs are poised to prevail, and Chevron acknowledges that it is likely to lose.

The case is historic by several measures. Never before have indigenous peoples brought a multinational oil corporation to trial in their own country. Moreover, a victory would mark a turning point in the relations between native populations around the world and the foreign corporations that do business in their homelands. And the potential damages are staggering: A court-appointed expert has determined that they could run to $27 billion, almost 10 times that initially awarded to plaintiffs after the Exxon Valdez oil spill. Today, a swath of the Ecuadorean Amazon the size of Rhode Island remains contaminated beyond imagining. At one site after another, oil hangs in the air, slides on the water's surface and saturates the land. Pipelines and waste pits left behind years ago still drip and ooze. Advocates for the plaintiffs have called the former Texaco concession area the "Amazon Chernobyl."Were it in the United States, it would easily qualify as a Superfund site. Neither side in the case disputes the devastation, only who should pay for it. Chevron says it is the state-owned oil company's responsibility; the plaintiffs say it is Chevron's.

The plaintiffs are seeking unspecified damages for environmental cleanup, reforestation and healthcare. (Under Ecuador's legal system, they cannot receive individual compensation.) In addition to reams of documents and hundreds of soil and water samples, the case has generated abundant ill will. Chevron maintains that it's the victim of a scheme to plunder its deep pockets and make it pay for pollution caused by Petroecuador, the state oil company, which took over after Texaco's operations ended. The plaintiffs contend that the pollution was caused by the faulty infrastructure Petroecuador inherited from Texaco; as with a faulty car, to use their analogy, it is the manufacturer, not the driver, who is to blame. Entire communities, they say, have been plagued with devastating illnesses as a result of oil waste in their drinking and bathing water, and their suffering has fallen on deaf corporate ears. Their resentment runs as deep as the oil Texaco once drilled.

Assessing the damage

Texaco Petroleum and Ecuadorean Gulf Oil Co. began exploring for oil in the Ecuadorean Amazon in 1964, found it three years later and, from 1972 to 1992, produced 1.7 billion barrels of crude. Texaco held a 37.5% interest in the consortium, but it designed and constructed the wells, pipelines and waste pits, and it was the sole operator of the 1,700-square-mile concession area.

In 1992, after the government did not renew its contract, Texaco turned over its infrastructure to Petroecuador and left the country. One year later, five indigenous tribes and 80 communities filed a class-action lawsuit in federal court in New York, then Texaco's headquarters. The suit alleged that Texaco discharged more than 18 billion gallons of waste water into rivers and streams, burned millions of cubic meters of natural gas without proper emissions controls and spilled millions of gallons of crude oil directly into the earth, polluting the region's only sources of water, sickening inhabitants and even contributing to the extinction of one small tribe, the Tetete.

In a report submitted last year, the court- appointed expert, geologist Richard Cabrera, estimated that 1,400 people in the region had died of cancer caused by toxic chemicals involved in oil extraction. That calculation accounts for $2.9 billion of the damages assessment. Chevron contends that Cabrera is not qualified to make such a determination and that neither science nor medicine supports his assertion; he has not presented the medical records of any victims. As for remediation, the company says Texaco already did that.

Chevron disputes the scientific methods used to determine its culpability, but the heart of its defense is its assertion that the case never should have been permitted to go forward. The company maintains that it is the victim of the retroactive application of environmental laws that did not apply when Texaco was operating the concession area, and that Texaco fulfilled its clean-up obligations.

After the suit was filed in New York, Texaco entered into a remediation agreement with the Ecuadorean government. As part of that agreement, the company spent about $40 million cleaning up oil field waste pits and funding socioeconomic projects in local communities. In 1998, after years of government oversight and periodic approvals, the Ministry of Energy and Mines and Petroecuador certified that Texaco's remediation met the country's standards, and the government issued a waiver releasing the company from further liability. Chevron, which merged with Texaco in 2001, maintains that the waiver not only immunized it against any action by the government but obviated all other claims. Yet the waiver says nothing about third parties. It releases Texaco "forever, from any liability and claims by the Government of the Republic of Ecuador, Petroecuador and its Affiliates."

More than legal interpretation is at issue. Cabrera concluded that soil samples even from areas Texaco said it remediated are contaminated, which prompted the government to take action against the company as well. Declaring the original remediation a fraud, it indicted two Chevron officials and seven former government officials. And just recently, the court agreed to turn over Cabrera's damages assessment to the office of the federal prosecutor. As a result, Chevron is battling not just the plaintiffs but Ecuador itself. It has tried to pressure the government to assume responsibility for remediations by urging the United States to revoke the country's preferential trade status. So far, that effort has failed.

In Lago Agrio

Such tactics represent a remarkable break in a long relationship between American oil companies and the Ecuadorean government. Indeed, so comfortable was Texaco with the country's government and judicial system that soon after the lawsuit was filed in New York, it argued to move the case to Ecuador. In support of that motion, it filed affidavits attesting to the transparency and fairness of the Ecuadorean court system, pleadings it would come to regret.

At the time, moving the trial was the last thing the plaintiffs wanted. Historical collusion between government officials and oil executives, coupled with the racism and discrimination faced by indigenous peoples in their homeland, made a fair trial inconceivable, they argued. Plaintiffs' advocates likened it to African Americans in the pre-civil rights South obtaining justice from a court in, say, Mississippi -- not impossible, but unlikely. The New York judge sided with Chevron and agreed to dismiss the case as long as the company promised to abide by the Ecuadorean judge's verdict. Chevron promised it would, and in 2003 the fight started over again in a jungle-adjacent courtroom in Lago Agrio.

There, in the grimy oil town named after Texaco's birthplace in Sour Lake, Texas, the two sides await a verdict in a case with echoes and implications around the world. From Nigeria to Peru, native peoples are challenging with new force the destructive legacies of multinationals. In that, Aguinda vs. Texaco is a legal landmark -- one we hope, whatever its outcome, will enable multinational corporations to better navigate the changing world in which they do business and thus encourage a new era of corporate responsibility.

For its part, Chevron has ample reason to be anxious. The company succeeded in having the trial moved to Ecuador, where American oil companies once held great sway. But the country's politics, environmental ethos and regard for its native peoples were about to evolve in dramatic, unforeseen ways. The new Ecuador has turned out to be a far less hospitable place for Chevron than the old Ecuador had been for Texaco.

– Nick

Protest Chevon's Crimes In Their Own Backyard

Join allies in the fight to clean up Chevron’s dirty operations world-wide. Please come with us this Saturday as we take this message to the gates of Chevron’s Refinery in Richmond CA!

WHERE: Richmond, CA BART. 16th St. & Macdonald Ave Richmond, CA

WHEN: Saturday, August 15th, 11:30am

WHAT: Festival and Rally – 11:30am March on Chevron Refinery – 1:00pm

We are turning up the “Street Heat”

As described in "The True Cost of Chevron", instead of cleaning up their messes, reducing oil production and shifting to sustainable industries, Chevron and other Big Oil corporations are expanding their refineries, pipelines and extraction projects. Richmond and Bay Area environmental and climate justice groups are leading a precedent-setting fight against this expansion. A fierce, local grassroots campaign has been fighting Chevron’s strategies to expand their Richmond refinery.

On August 15th, stand with the environmental justice movement that has stopped Chevron’s refinery expansion in Richmond. Chevron already produces two million pounds of air pollution, water pollution, and greenhouse gases each year. The expansion would create much more greenhouse gas and toxic air pollution.

Join the growing alliance of groups and people creating “street heat” for climate justice in the lead up to the December 2009 Copenhagen Climate Talks.

For more information on the mobilization and the events happening after Saturday's festival visit west.actforclimatejustice.org

– Nick

More lipstick on Chevron's pig

Sooner of later, no matter how much you try to pretty it up, the neighbors are going to smell that tremendous mountain of decaying garbage you've been hiding in the backyard for more than three decades. Nowadays everyone seems to be smelling Chevron’s trash, as more criticism surfaces about their attempts to mislead the public with fake "reports". This time it’s the Columbia Journalism Review calling out former CNN correspondent Gene Randall for shilling for Chevron (as did the National Journal Online).

The New York Times published an article in May exposing Chevron's attempt to pass off its corporate propaganda as legitimate news and using YouTube to spread it - an attempt which is failing miserably, as the video has been viewed fewer than 6,000 times in several weeks (follow this link to watch it if you like, but be warned, Chevron won’t let you comment on it there). Perhaps Chevron should have considered hiring one of Jon Stewart’s “correspondents” instead; the news would be just as fake, but they would have gotten more hits.

One expects more savvy from the company that produced the overly-slick Will You Join Us? commercials. However those ads seem to have more people joining the communities fighting Chevron’s toxic operations than joining in Chevron's greenwashing efforts. In fact, Chevron's PR efforts seem to backfire every time. Another apparent Chevron tactic: Shower sponsorship money on PBS' Newshour and see what coverage surfaces with Chevron’s spin in it (or settle for no coverage on the issue at all).

In 2008, Chevron took out a full-page ad in the San Francisco Chronicle attacking Goldman Environmental Prize winners Pablo Fajardo and Luis Yanza. The result: Every news station in the Bay Area and many national outlets ran stories about the Ecuador disaster and Chevron was doing damage control once again. The New York Times, Washington Post, CBS News, Bloomberg, and many other mainstream news outlets have since reported on the case, but never in the way Chevron wants you to hear it (as if they bore no responsibility in the disaster).

We know a sure-fire way for Chevron to finally get some good press: Do the right thing and clean up their toxic mess and restore a clean and healthy environment to the 30,000 Ecuadorians suffering from their irresponsible actions.

– Paul

Paul Paz y Miño is the Managing Director at Amazon Watch and supervisor of the Clean Up Ecuador Campaign. Paul has an MA in International Affairs from George Washington University, is currently an Associate Fellow at the Institute for Policy Studies and for over 14 years has been a Colombia Country Specialist for Amnesty International USA. Paul was the Guatemala/Chiapas Program Director at the Seva Foundation for seven years and has lived in Chiapas, Mexico, and Quito, Ecuador, promoting human rights and community development and working directly with indigenous communities.

Just how does one hide a $27 billion Ecuadorian "elephant in the room" at the Commonwealth Club? (hint: you can't.)

There was more evidence on Wednesday that the future of Chevron is inexorably tied to how it handles its growing environmental problem in Ecuador. Last week at the Commonwealth Club in San Francisco, David O'Reilly, the CEO of Chevron, debated Carl Pope, the president of the Sierra Club, ostensibly about America's energy future. However, questions about Chevron's potential $27 billion liability for environmental damage in Ecuador became a topic for exclusive discussion. This was all the more significant given that O'Reilly had insisted the Ecuador issue be taken off the table as a discussion topic.

Just minutes into the debate, the moderator departed from the evening's focus on the energy future of America to question O'Reilly about Chevron's past in Ecuador. O'Reilly's internally inconsistent responses were painfully predictable: Chevron is not responsible for the pollution even though there is no danger from pollution, Texaco cleaned up the pollution even though it never polluted, and we were released by Ecuador's government even though the release does not apply to private claims. And then this whopper – Chevron is being held "hostage" by American trial lawyers even though Chevron has admitted Texaco deliberately dumped more than 18 billion gallons of toxin-laden water of formation into Amazon waterways. O'Reilly's canards held little sway over the audience, and he looked unnerved about Ecuador. He had no answer for Pope's common-sense call that "it is important for Chevron to come to the table with the local communities who have been harmed by oil extraction."

Beyond all of the drama at the debate, one thing is abundantly clear: before Chevron is able to realize its vision of a new energy future, the company is going to be forced to deal with its past. Though Chevron has been trying to ignore its responsibilities to the indigenous communities in Ecuador, the company has been pummeled over this issue recently as shareholders, activists, and the general public has become aware of the enormous financial and reputational risk faced by Chevron in Ecuador. In recent weeks Chevron has faced a number of distractions stemming from the company's human rights problems: a shareholder revolt as more than $37 billion worth of Chevron stock voted against company management on the issue, an inquiry by NY Attorney General Andrew Cuomo into potential violations of securities laws, a slate of media stories exposing the company's potential Ecuador liability, and a rising tide of concerns about a lack of independent oversight from the Chevron Board of Directors.

David O'Reilly's response to questions about the company's exposure in Ecuador is a perfect example of Chevron's response to its huge problem in Ecuador: he stammered through his talking points and scoffed when as a member of the audience, I invited him to go to Ecuador and see the damage for himself. Instead, O'Reilly stuck his head in the sand and hoped that his talking points would be enough to stall long enough that he wouldn't have to be the guy who actually has to deal with Chevron's responsibility for the worst oil-related environmental disaster in the world. One thing is clear: Chevron cannot be a part of a cleaner, greener future until it owns up to its complicated past as a polluter of the Amazon in Ecuador.

– Mitch

Mitchell Anderson is a lead advocate in the Clean Up Ecuador Campaign as the Corporate Accountability Campaigner at Amazon Watch. Mitch works closely with organizational partners on the ground in Ecuador and has first-hand knowledge of the devastation left by Texaco in the Amazon. Prior to joining Amazon Watch, Mitch worked in Chiapas, Mexico, coordinating a regional human rights investigation, which sought to document and expose the effects of militarization on the collective human rights of indigenous communities. Mitchell has also worked as a freelance journalist and is a certified Spanish-English interpreter.