Chevron Found Guilty In Amazon Pollution Case

Cross-posted from The San Francisco Chronicle's City Brights blog.

On Monday, after 17 years of intense legal battle, Chevron, the second largest oil company in the United States, was found guilty by Ecuadorian courts for massive environmental contamination of the Amazon and was ordered to pay a fine of $9 billion in damages. This represents the largest judgment ever against a U.S company for environmental contamination and marks the first time that indigenous and farmer communities have successfully won a judgment in foreign courts against an American company for environmental crimes abroad.

Background:

From 1964 to 1990 Chevron (formerly Texaco) operated a large oil concession in the northeastern region of the Ecuadorian Amazon, reaping billions of dollars in profits before pulling out of Ecuador in 1992.

Chevron has admitted during the long-running trial in both US and Ecuadorian courts that it created a system of oil extraction that led to the deliberate discharge of approximately 18 billion gallons of chemical-laden "water of formation" into the streams and rivers of Ecuador's Amazon, home to six indigenous groups.

Over the course of more than two decades of operations, Chevron abandoned more than 900 unlined waste pits gouged out of the jungle floor that leech toxins into soils and streams; contaminated the air by burning the waste pits; dumped oil along roads; and spilled millions of gallons of pure crude from ruptured pipelines. Internal company documents demonstrate that Chevron officials ordered field workers to destroy records of oil spills. The company refused to develop an environmental response plan or pipeline maintenance program, and Chevron never conducted a single health evaluation or environmental impact study despite the obvious harm it was causing.

Crude oil left by Texaco (now Chevron) in the Amazon rainforest.

As a result of Chevron's pollution, several indigenous groups in Ecuador have been decimated and more than 9,000 people are at significant risk of contracting cancer in the coming decades, according to reports submitted to the court. Scientific evidence submitted during the trial definitively proves that all of Chevron's 378 well and production sites, most of which were built in the 1970s, are extensively contaminated.

The Verdict in Ecuador

The historic multi-billion verdict against Chevron, which reported a net profit of $19 billion last year, is a tremendous step forward for the Ecuadorian communities who have been suffering for decades from Chevron's contamination. However, as expected, oil giant Chevron has vowed to appeal the decision and continue their scorched earth legal and public relations campaign, designed to exhaust the plaintiffs' resources, portray the case and the courts in Ecuador as corrupt, and, in the end, evade enforcement of the multi-billion verdict.

In the wake of the court ruling on Monday, the Goldman Environmental prize winning attorney Pablo Fajardo, who represents the indigenous and farmer communities of the Ecuadorian Amazon, released a statement highlighting Chevron's "intentional and unlawful contamination of Ecuador's rainforest." Here is a brief excerpt:

"Rather than accept responsibility, Chevron has launched a campaign of warfare against the Ecuadorian courts and the impoverished victims of its unfortunate practices. We call on the company to end its polemical attacks and search jointly with the plaintiffs for common solutions. We believe the evidence before the court deserves international respect and the plaintiffs will take whatever actions are appropriate consistent with the law to press the claims to a final conclusion."

Oil industry analysts and environmental law experts have weighed in on the precedent-setting nature of the historic ruling in Ecuador.

According to a story filed by the Los Angeles time, John van Schaik, an oil analyst at Medley Global Advisors in New York, said: "...the fact that the Lago Agrio court ruled in favor of the plaintiffs sends a signal to oil companies that, more than ever, they need to be good corporate citizens. The ruling shows that times have changed, and companies need to take environmental concerns seriously."

In a Bloomberg report, Robert Percival, a law professor and director of the environmental law program at the University of Maryland School of Law in Baltimore, said: "The case really sends a message that companies operating in the undeveloped world cannot rely on a compliant government or lax environmental rules as a way of permanently insulating themselves from liability."

Since acquiring Texaco in 2001, Chevron's legal and public relations strategy with respect to Ecuador, has been motivated not only by a desire to avoid a massive multi-billion payout, but also by the broader implications this case has for the future of the global extractives industry. More to the point, Chevron's scorched earth tactics have been designed to delay and disrupt the outcome of the long-running environmental trial in Ecuador, but also, and perhaps more importantly, to demonstrate clearly to communities around the world that the pursuit of justice against multinational corporations is futile.

But now the judgment is in. Chevron has been found guilty of massive environmental crimes in the Amazon. The San Ramon based oil giant has been ordered to pay a multi-billion dollar judgment.

Over the next weeks and months, the oil industry and right-wing press outlets will continue to laud Chevron's bravado, encouraging the oil major to undermine the rule of law in Ecuador and condemn the affected people of the Amazon to years of continued suffering.

And the question to all of us is: How far have we come as a people? Will the 21st century be a time where the greed of a few tramples the hopes of the many? Or will justice trample greed?

What we can be sure of is that the indigenous and farmer communities of the Ecuadorian Amazon will continue, against all odds, in their heroic struggle for clean water, health and a brighter future.

– Mitch

Mitch Anderson is the Corporate Campaigns Director at Amazon Watch

More Fireworks as Lawyers for Ecuador Plaintiffs Fire Back at Chevron

It feels more and more like a cliché to even note, but there have been more fireworks in the monumental, marathon litigation over Chevron's contamination in the Amazon.

Only days after Chevron turned around and sued the victims of its abuses in Ecuador's rainforest, accusing them of racketeering and extortion for demanding cleanup, lawyers for the Ecuadorian plaintiffs fired back. Patton Boggs, the high-profile DC law firm now representing the plaintiffs filed its own suit yesterday, accusing Chevron and its lawyers at Gibson Dunn of "tortiously interfering" with the firm's representation of the Ecuadorians. Tortious interference is a matter of common law and is also referred to as intentional interference with contractual relations.

This is exactly where it gets into a bunch of legalistic mumbo-jumbo for most people (including yours truly) but Patton Boggs' press release announcing the filing of its suit lays bare Chevron's legal manipulations for the sideshow they are. The Complaint referred to in the beginning is Chevron's latest legal assault on the Ecuadorians, their preposterous RICO suit:

What is clear from the Complaint is that Chevron has little interest in litigating the merits of the claims, brought by the indigenous people of Ecuador, that its predecessor Texaco’s conduct has caused an ecological disaster in an environmentally sensitive rainforest the size of the State of Rhode Island. Rather, Chevron wants to litigate about the behavior of the lawyers, consultants, and spokespersons who have dared to represent these people during the past 18 years. Chevron simply cannot escape three glaring facts: (1) the trial is in Ecuador, under Ecuadorian law and procedure, because Chevron fought for seven years to have the case moved from a federal court in New York to an Ecuadorian court; (2) Chevron’s attacks on the relationship between certain representatives of the plaintiffs and an expert appointed by the Ecuadorian court ignore the reality that ex parte communications are permitted in Ecuador, and that the Ecuadorian court, by written order, allowed both sides to submit additional expert reports -- confirming the court’s right to consider or not consider the report of the questioned expert; (3) Chevron succeeded in its demand that a new judge be appointed in the Ecuadorian proceeding. Therefore, Chevron’s liability will be determined in the court of its choosing, after having a complete right to submit additional expert reports in September (Chevron submitted twelve), and before a new and impartial judge appointed at Chevron’s request. It is in this context that Chevron now seeks to derail the Ecuadorian trial with the aid of the very American courts that it previously asked not to hear the case.

Of course, getting lost in all this -- as usual -- is the reality for thousands of men, women, and children in the Ecuadorian Amazon who lack water that won't make them ill (or possibly kill them). Their decades-long struggle for justice, dignity, and a better future is treated increasingly like a sideshow to the courtroom battles on which their fate may rest.

Members of the Kichwa indigenous community of Rumipamba listen to their names being read on the complaint from the lawsuit Chevron filed against them last week, accusing them of racketeering and extortion for their efforts to hold the company accountable. Photo by Kevin Koenig/Amazon Watch

– Han

Han Shan is the Coordinator of Amazon Watch's Clean Up Ecuador Campaign

Chevron's 'Kitchen Sink Defense' in Ecuador Includes Suing Victims of its Pollution

As you may have learned from my article here on Wednesday, Chevron's legal attacks reached new heights of outrageousness this week. With appalling arrogance, Chevron is suing the victims of its contamination in Ecuador in the same U.S. court from which it argued successfully to remove the original environmental lawsuit some ten years ago.

As Pablo Fajardo, lawyer for the plaintiffs in Ecuador, said:

“This is what a corporation does when it feels cornered and trapped. It lashes out against everyone in its way. The Ecuadorian plaintiffs have been treated as if they don’t exist or have a voice by Chevron’s endless discovery of core litigation strategy in U.S. courts.”

Pablo was named in the RICO lawsuit along with other colleagues, and the 47 "named plaintiffs" in the environmental lawsuit.

Human rights lawyer Marco Simons of EarthRights International wrote an article providing some analysis of this extraordinary and abusive legal attack by Chevron. He calls Chevron's tactics "The Kitchen Sink Defense"

He writes:

But three extraordinary things jumped out from my quick look at Chevron's complaint. First, while Chevron seeks orders that would prevent the plaintiffs from enforcing any judgment against them, nothing in their complaint establishes that Chevron is not responsible for environmental damage in the Ecuadorian Amazon. What Chevron is trying to do is to use alleged misconduct by the plaintiffs' lawyers to absolve them of any responsibility; a sort of judicial get-out-of-jail-free card. In fact, Chevron probably can't ask the US court to decide whether they're responsible for the environmental damage--the plaintiffs filed that case in New York fifteen years ago, and it was Chevron (or Texaco, at the time) that successfully moved it to Ecuador.

Actually, the original lawsuit was filed in 1993. And in arguing to have the case dismissed under forum non conveniens, Chevron submitted fourteen affidavits attesting to the competency, independence, and transparency of the Ecuadorian courts and judicial system. The company then promised to submit to jurisdiction in Ecuador, where the plaintiffs re-filed the suit in 2003, and also promised to abide by any verdict in the case, subject only to standard appeals process.

But I digress. Marco continues his analysis of Chevron's RICO complaint:

One telling fact here is that Chevron only sued some of the plaintiffs' lawyers--they did not, for example, sue Patton Boggs, which is now heading up the U.S. team supporting the Lago Agrio litigation. That seems like an acknowledgment that the Lago Agrio litigation itself is not fraudulent, even if Chevron thinks some of the tactics employed by some of the lawyers have been.

Read the rest of Marco's analysis of Chevron's latest legal attacks at the EarthRights International blog, and stay tuned for more as this develops.

– Han

Han Shan is the Coordinator of Amazon Watch's Clean Up Ecuador Campaign

Chevron Adds Insult to Injury with Latest Attacks on Victims of Company's Pollution in Ecuador

On Tuesday, February 2nd, Chevron filed a lawsuit in the Southern District of New York accusing the 47 named plaintiffs in a monumental environmental lawsuit against the company of engaging in racketeering and extortion in their efforts to demand cleanup of the company's contamination of their land in Ecuador's Amazon region. Several of their lawyers and consultants on the case are also named as defendants. Chevron names Amazon Watch as well as our founder and Executive Director Atossa Soltani as "non-party co-conspirators" in the complaint.

Amazon Watch issues the following statement in response to Chevron's outrageous accusations:

Chevron is adding insult to injury with its heinous attacks on the indigenous and campesino communities who have already suffered for decades from the company's criminal misconduct in Ecuador.

More than 17 years after the Ecuadorians sued to demand cleanup of one of history's worst oil disasters, Chevron is now persecuting the victims of its pollution in the same U.S. court from which the company successfully removed the case nearly a decade ago.

We are appalled to be named in Chevron's legal assault, but will not be intimated by this corporate bullying. We stand in solidarity with the victims of Chevron's ongoing and apparently escalating abuse, and will stand with them until they get the justice they have sought for too long.

This attack by Chevron is merely the latest in a pattern of abusive legal tactics by the company. Chevron can no longer deny the mountain of unassailable scientific evidence that the company is guilty of massive contamination of the rainforest environment, which has caused an epidemic of cancer and other illnesses for local residents. Facing an imminent verdict from Ecuador's courts in the environmental lawsuit, Chevron is lashing out against the plaintiffs and their allies in Ecuador and the U.S. with increasingly desperate attacks.

Once again, we call on Chevron's management and Board of Directors to put an end to its abusive tactics in this case. Until Chevron takes responsibility for its oil disaster in the Amazon, it will remain an indelible stain on the oil giant and the legacy of those who work to deny justice to the communities suffering from the company's abuses.

Above: some of the people Chevron is accusing of racketeering & extortion for daring to demand the company clean up its toxic mess in their ancestral territory. Photo by Lou Dematteis

Watch for reactions from the Ecuadorians named in Chevron's suit, as well as analysis from activists, the media, and law experts, in future posts.

– Han

Han Shan is Coordinator of Amazon Watch's Clean Up Ecuador Campaign

"Overwhelming and unassailable" evidence of Chevron's crimes in Ecuador laid out in plaintiffs' final arguments

Today represents another milestone in the monumental legal case to hold oil giant Chevron (formerly Texaco) accountable for its devastation in Ecuador's Amazon rainforest. After more than 17 years of litigation, lawyers representing tens of thousands of Ecuadorians living amidst Chevron's widespread oil contamination have filed the first part of their final arguments in the case.

Recently submitted to the judge presiding over the trial in the Amazonian town of Lago Agrio, the final written argument – called an "alegato" in Ecuador - outlines in detail the case against Chevron, which lawyer for the plaintiffs Pablo Fajardo calls "overwhelming and unassailable" in the introduction to the 116-page document.

From 1964-1990, Texaco was the sole operator of the oil fields in Ecuador's Amazon. The environmental lawsuit was originally filed against Texaco in 1993, a year after the company left Ecuador. The company abandoned hundreds of toxic waste pits and widespread pollution through the Amazon rainforest region in the country's northeast, turning its operations over to Ecuador's state-owned oil company Petroecuador. In 2001, Chevron absorbed Texaco – taking on liability for the company's misconduct in the Amazon – and the case was re-filed in Ecuador in 2003 after Chevron succeeded in transferring the case out of U.S. courts. Finally, in December 2010, the judge closed the evidentiary phase of the trial, paving the way for the submission of the final arguments.

The plaintiffs' lead lawyer in Ecuador Pablo Fajardo, named a CNN Hero and awarded the Goldman Environmental Prize for his advocacy on behalf of the indigenous and campesino communities taking on Chevron, writes in an opening letter to the judge:

This is a simple case supported by scientific evidence. It is essentially based on thousands of sampling results taken at hundreds of former Texaco drilling sites that unequivocally reveal the presence of dangerous toxins in the soil and in the water. It is also about Texaco’s adoption of woefully substandard processes leading to the deliberate release of those toxins into the environment, where they remain today – practices designed to maximize profit at the expense of the environment and the public health in Ecuador. Chevron has tried to twist this case, diverting the attention of the public and of this Court towards anything and everything other than these core issues, resulting in a record exceeding 180,000 pages largely comprised of nothing more than “noise” intended to distract you, Sr. Presidente, from what really matters. Throughout the present legal report, we will cut through the noise, and focus on those issues that lie at the very heart of this case: Texaco’s deliberate misconduct, the environmental contamination resulting from that misconduct, and the legal basis for Chevron’s liability for the damages.

In a press release from the Amazon Defense Coalition, Karen Hinton, spokesperson for the plaintiffs, says:

"The voluminous scientific evidence in the case is summarized clearly in this historic document. This evidence proves overwhelmingly that Chevron is responsible for what is widely regarded as the world's worst oil-related disaster. We encourage all interested persons to read the alegato and judge for themselves whether Chevron is telling the truth about its deliberate misconduct in Ecuador."

This filing is the first of a three part submission of final arguments. As the press release explains, "the second and third parts - which deal with damages and issues relating to due process -- will be released in the coming days."

Hinton calls the document "historic" and it is indeed. When the indigenous communities and poor farmers living amidst the Chevron's toxic legacy first organized to file suit against then-Texaco in New York federal court (Texaco was based in White Plains, NY), many people said that they would never be able to hold the company accountable. When Texaco managed to get the suit removed from U.S. courts under forum non conveniens, Texaco's lawyers and many allies of the Ecuadorians thought it was over. When Chevron absorbed Texaco, the Amazonian communities had a mammoth new adversary that countless people said couldn't be brought to justice. And since Chevron brought on Gibson Dunn and kicked off its no-holds-barred, scorched earth legal and PR strategy, many more have jumped on the pessimists' bandwagon.

But here we are with the final arguments, and the judge deliberating on a decision that is widely expected to be delivered this year. The plaintiffs have brought on DC mega law firm Patton Boggs and high-profile lawyer James Tyrrell, who vows that the plaintiffs will be able to enforce a judgment against Chevron and win major damages to be put to environmental cleanup and healthcare in their communities.

Now, because of the critical, historic nature of these legal filings, I will quote the narrative introduction at length (though I encourage you to click through to the actual final argument filing if you want to see the case laid out in irrefutable, exacting detail)

Lawyer Pablo Fajardo continues in an introduction to the evidence:

The evidence against Chevron is overwhelming and unassailable. Any visitor to the region can see the evidence in striking terms: old Texaco barrels mired in hundreds of giant, unlined, open-air pits of oily sludge that leach their contents via overflow pipes built by the oil company into nearby streams and rivers. Evidence demonstrates that the company never conducted a single environmental impact study or health evaluation in the decades it operated in the Amazon, even though thousands of people lived in and around its oil production facilities and relied on rivers and streams that the company used to discharge toxic waste. Hundreds of waste pits left by Texpet [blog editor: Texpet is Texas Petroleum Company, the name under which Texaco, Inc. operated in Ecuador] have been tested extensively by experts hired by Chevron and the plaintiffs, and by various third party scientists, revealing levels of total petroleum hydrocarbons and heavy metals hundreds and sometimes thousands of times higher than allowable norms in Ecuador and the U.S. Chevron’s own documents prove that, as the Amazon communities have long alleged, Texaco never re-injected or safely disposed of “produced water,” and instead dumped it into surrounding streams and rivers which local residents still use for drinking, cooking, and bathing. The company also engaged in outright fraud: a 1972 memo from Texaco’s head of Latin American production issued a blunt directive to the company’s acting manager in Ecuador to destroy previous reports of oil spills and to forego documenting future spills in writing unless they were already known to the press or regulatory authorities, and, incredibly, not to produce any new reports that met these criteria.

Fajardo continues:

When it became clear that the evidence against Chevron was building, a Chevron spokesman announced to the Wall Street Journal: “We’re not paying and we’re going to fight this for years if not decades into the future.” The company put out a press release promising the plaintiffs a “lifetime of litigation” if they persisted. Chevron’s General Counsel said he expected to lose the case, but vowed that Chevron would “fight until hell freezes over and then fight it out on the ice.” These statements clearly contradicted Chevron’s earlier promises to abide by a judgment in Ecuador’s courts – promises it made to the American courts in order to secure a forum non conveniens (lack of jurisdiction) dismissal of a previously filed class action there. Throughout the course of the trial, it became clear that Chevron intended to play by a new set of rules. Chevron seeks not only to quash this case, but also to destroy very idea that indigenous communities can empower themselves to vindicate their legal rights. In a startling moment of candor, a Chevron lobbyist interviewed about the lawsuit admitted to Newsweek magazine: “We can’t let little countries screw around with big companies like this – companies that have made big investments around the world.”

Concluding the introduction before enumerating the evidence, he finally writes:

In the ultimate insult to indigenous peoples, Chevron has even gone so far as to suggest to courts in the United States and even to this Court that the Plaintiffs are not real – the mere figment of unscrupulous lawyers’ collective imaginations. But despite Chevron’s efforts to wish them away – the plaintiffs are real. They are as real as Chevron’s decimation of the rainforest on which these people rely for every facet of their existence – from their drinking water to their very culture and way of life. They are as real as the specter of disease that looms over the affected communities every day, while a litany of illnesses in their majority unknown to this region – continue to proliferate through the population at an alarming rate. The Plaintiffs are indeed very real, and much to Chevron’s chagrin, intimidation has not made them disappear. Chevron miscalculated – the company’s belief that it could simply outlast the indigenous people of the Oriente and drain them of their will to persevere has failed.

Incredibly, Chevron claims that it is being denied due process in this case, while it is the affected communities who have been forced to wait seventeen years for justice, thanks to the dangerous combination that is Chevron’s limitless appetite for litigation and its utter disregard for candor and for the rule of law. Indeed, in the face of Chevron’s relentless efforts to assure that this day never came, it is nothing short of a miracle that the case now stands on the precipice of judgment. The time for Chevron’s excuses, its finger-pointing, its international side-shows, and its extra-judicial mischief is over – this case will now be judged on the merits, as it should be. And as will be made plain herein, there is a very good reason Chevron has moved heaven and earth to avoid a decision on the merits, even at the expense of the company’s international reputation. When we strip away the artifice and focus instead on what matters – what exactly is in the ground and water and who put it there – Chevron simply cannot prevail.

What follows after the narrative introduction is a detailed outline numbering more than a hundred pages that provides all of the evidence proving the disastrous impacts of what Chevron/Texaco did in Ecuador, the rigorous testing showing how the company's activities poisoned the environment, and subsequently, local residents.

The alegato cites two painstaking internal audits commissioned by Texaco as it was preparing to depart Ecuador, explaining exactly how these studies prove the plaintiffs' case on their own. But to add to the mountain of evidence, the document lays out how Chevron's own testing results of contaminated oil well sites, abandoned waste pits, and surrounding water and soil prove the plaintiffs case for them.

It goes on to outline Chevron's legal culpability, and deconstruct all of the various defenses that the oil giant asserts, which run from legally ridiculous to morally reprehensible.

But enough of my thoughts. Whether concerned about human rights or the rainforest or the environment in general, I know many people have followed this case partly for its historic potential to set a powerful precedent to hold corporations accountable for their crimes against some of the most vulnerable people and sensitive ecosystems on our planet. If you are one of those people, if you care about this case, about justice, about the future of the planet, read this historic document. The case against Chevron. The case for justice in Ecuador. The case for a future in which another such tragedy is unthinkable.

Visit www.ChevronToxico.com to view the historic filing, see the press release, and more.

– Han

Han Shan is the Coordinator of the Clean Up Ecuador Campaign