Tuesday, April 19, 2011

Miami Herald Exposes Chevron's Lies in Ecuador

Left: Donald Moncayo searches for contamination at polluted sites Chevron claims it remediated in Ecuador. Photo by Brandon Wu

In the wake of a ruling against Chevron in Ecuador, demanding the company pay $9.5 billion in damages, Miami Herald reporter Jim Wyss visited a waste pit that Chevron claims to have remediated. Digging just beneath the surface of Chevron's lies, he discovers the crude truth:

Within a few inches the dirt gives off the pungent odor of petroleum. Within a few feet the dirt glistens with oil residue. When a few handfuls of the soil are dropped into a bucket of water, a thick oil-slick coats the surface.

Over the years that Chevron has tried to evade accountability for the environmental and human catastrophe it caused in Ecuador's Amazon rainforest, the oil giant has changed its tune so many times, it's hard to keep track. For instance, after the courts in Ecuador found Chevron guilty of massive contamination in February, many recent articles have pointed out that when when it was arguing to remove the environmental lawsuit against the company from U.S. courts (where it was originally filed), Chevron submitted 14 different affidavits attesting to the fairness and impartiality of Ecuador's courts.

Chevron's lawyers and spokespeople have a handful of different arguments they like to make when attempting to defend themselves against charges that the company is responsible for massive contamination in Ecuador. Some of them have been laughed out of court. Others have been proven to be untrue, or only work based on some other premise that doesn't hold up.

Sometimes Chevron's representatives actually claim that they did no damage in Ecuador over the course of more than two decades of operations there. But if they're talking to someone who actually has a clue, one of their favorites goes something like this… I'm paraphrasing here:

okay, there may have been a little mess here and there around some of our drilling rigs – nothing to worry about, really – but we were but a small minority partner in an oil concession with other companies and when we left Ecuador, we cleaned up our share of any pollution and got some government officials at the time to sign a piece of paper releasing us of any liability… done and done!

Now, first of all, Chevron –– in the form of its predecessor company Texaco –– was the sole and exclusive operator of the oil concession, covering thousands of square miles of formerly-pristine Amazon rainforest in Ecuador. Texaco made all the operational decisions, and ultimately, they chose to cut corners, ignore basic safety and health concerns, and put people's lives at risk (Chevron spokesperson Silvia Garrego reluctantly admits so in 60 Minutes' report 'Amazon Crude' - watch it here).

Regardless, the release of liability they secured from the Ecuadorian Government –– based on cleaning up a small percentage of toxic waste pits, and not dealing with the systemic soil and water contamination caused by spills and deliberate dumping of billions of gallons of toxic wastewater directly into streams and rivers for years –– never released the company from claims by private citizens. Of course, it's those private citizens who have persevered over nearly 18 years of legal battles, fighting to hold the company accountable while also suffering a severe public health crisis. And of course, as we've been saying for years, their so-called "remediation" was a fraud anyway.

The recent Miami Herald article begins with an activist who himself lost family members to the pollution himself:

Donald Moncayo walks to the edge of a flat grassy field that once held two large pits that brimmed with a stew of water and crude from an oil-drilling operation. He lifts a heavy auger above his head and prepares to plunge it into the ground.

“They always show you the shirt the coat and the tie,” he said of the area, called Sacha 53, which is now pastureland and spindly trees. “They never show you the tumor underneath the shirt.”

For almost a decade, celebrities, journalists and shareholders have tromped through Ecuador’s jungles on competing excursions that have become a routine part of what could be the world’s most expensive environmental case.

The “Toxic Tour” — led by Moncayo — is held on behalf of some 30,000 Ecuadorian villagers who claim Chevron’s predecessor poisoned their environment with shoddy environmental practices that included pumping millions of gallons of oil-tainted wastewater into creeks and streams.

The other tour is led by Chevron. The oil giant shows idyllic agrarian landscapes — like Sacha 53 — where Texpet, a subsidiary of Texaco, helped pump crude from the 1960s to 1992 when it was a minority partner of the state-run oil company.

The article continues:

Texpet operated the well until 1989, when it handed it over to the government. During those years, Sacha 53 produced almost 3 million barrels of oil. In the process, Texpet dug two large pits to hold the drill-bit lubricant, or drilling mud, and to catch the initial spurts of crude that gurgled up during the extraction process.

The pits were among the 162 that company was required to cleanup under the government agreement.

Chevron said the site was typical of its remediation efforts. It vacuumed up the oil, dug out the tainted dirt, used chemical stabilizers, refilled the pit with clean soil and replanted the area. The company has photographs detailing the process, and the government’s report approving the remediation. The surrounding pastureland seems to speak for the area’s ecological health.

But then Moncayo plunges his auger into the ground. Within a few inches the dirt gives off the pungent odor of petroleum. Within a few feet the dirt glistens with oil residue. When a few handfuls of the soil are dropped into a bucket of water, a thick oil-slick coats the surface.

“This is their remediation effort,” Moncayo says. “They’re no better than animals.’’

The plaintiffs say it’s proof that Chevron lied about the cleanup and then got compliant government officials to sign-off on its shoddy work.

Chevron spokesman and tour leader, James Craig, said it’s not surprising to find degraded crude at the site. It might be naturally occurring, Moncayo might have dug outside the boundaries of the remediation area, or the plaintiffs might have spiked the ground with oil to discredit Chevron, he said.

Reading the second part of the article, I was taken aback by Donald calling those that lied about the remediation being "no better than animals." Then again, he speaks from profound grief sometimes, having lost his mother to toxic poisoning. Then, there's James Craig, well-paid American Chevron spokesman, visiting the scene of the company's crimes and accusing the plaintiffs of "spiking" the ground with oil to fool a journalist.

Wow. To make such accusations against people who have lost loved ones to oil-related illness and who suffer daily for a lack of clean water to offer their children represents the height of callousness.

I could almost agree with Donald's assessment, but I'm going to assume the best.

In the wake of the guilty ruling from an Ecuadorian court, James Craig has been forced to work overtime trying to spin the company's (losing) side of the story. Maybe he's just been spending far too much time out in the contaminated sites around Chevron's former oil operations and was simply overcome by the fumes.

Mr. Craig, get yourself a breath of fresh air. Maybe a drink of (bottled) water. And then try telling the truth. I understand it's therapeutic.

Donald Moncayo shows the contamination just beneath the surface of a site that Chevron claims it remediated. The site, at oil well Sacha 57, was operated exclusively by Texaco. It was one of the sites that Chevron certified to the Ecuadorian government in exchange for a release of liability, which nonetheless did not cover claims from private individuals. Testing during the pollution trial revealed significant toxic contamination still there. All photos by Brandon Wu

Contamination from another site Chevron claims it remediated, called Atacapi 5. Testing at this site during the trial showed 21,976 parts per million of total petroleum hydrocarbons, 21 times higher than the maximum 1,000 PPM TPH allowed under Ecuadorian law.

Oil can be clearly seen in this soil core sample taken from the Atacapi 5 site.

– Han

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

Friday, April 1, 2011

Will the Ecuadorian Court Judgment Drive Down Chevron's Stock Price?

The title of the article from The Street says it all: "Chevron Could Take Big Hit From Potential Payout in Ecuador."

Stock analysts who track Chevron are waking up to the fact that the company stands to pay out billions of dollars in compensation for its pollution of communities in Ecuador. Will that start to drive down the price of Chevron's stock?

Stock research company, Trefis, just estimated the potential impact on Chevron's stock valuation should the company pay the maximum penalty recently ordered by the Ecuadorian court. Assuming a payout by Chevron of the full $9.5 billion, Trefis predicted a decline in Chevron’s stock valuation of approximately 5% (from $104/share to $99/share).

Trefis bases its stock valuations on a model that analyzes the value of each part of a company's business using forecasts of fundamental business drivers, such as pricing, market share, and profit margins.

At close of business today, Chevron's stock traded at $108/share. Is Chevron stock heading for a fall?

Friday, March 25, 2011

Journey to the Amazon, A Forest Worth Fighting For

The article below is cross-posted from the new official blog of Amazon Watch, Eye on the Amazon (check it out!).

The post is by AW's Development Associate Jenny O'Connor. By the way, when she's not helping to raise money and build support for our work throughout the Amazon Basin, Jenny is one of the directors of an inspiring grassroots organization with an international reach called Groundwork Opportunities.

This month a group of Amazon Watch supporters embarked on a journey to the heart of the Ecuadorian rainforest. From the contaminated rivers and pits of Chevron-Texaco's former operations to the pristine and breathtaking Napo wildlife lodge in Yasuni National Forest, the trip offered a new perspective on the true human and environmental cost of oil extraction, as well as the beauty that is worth saving.

It was a huge experience for [my son David]. It's so important for young people to meet others who inspire them and I know he really felt that way about [Amazon Watch campaigner] Mitch, Michael Mullady (the documentary photographer) and the people he met in Ecuador such as Pablo and Donald. My mother had a poster in our kitchen for years that said, "Through our great good fortune, in our youth our hearts were touched with fire". It was given to us to learn, at the outset, that life is a profound and passionate thing. Something like that happened for David.
– Julie Zuckman who traveled with her son David, upon returning from the delegation

From 1964 to 1990, Texaco (now Chevron) turned the pristine rainforest of northeastern Ecuador into an energy sacrifice zone. Hundreds of unlined open waste pits filled with crude oil, poisonous drilling muds, industrial solvents, acids, and heavy metals, leaching into the rivers and streams. After two days of visiting pit after pit, we drove along an old dusty road near the oil boom town of Lago Agrio, the smell and taste of oil burning the throat. We were headed to meet with the leaders of the Cofan people and listen to stories of death and destruction in their ancestral territory. In the somber canoe ride back to the car, a fellow traveler whispered, "What would possess men to destroy the earth like this?"

A day later, we found ourselves deep in the Yasuni national forest, slowly edging along a quiet river under the forest's canopy until the river opened up into a magical black water lagoon. We had arrived at the Napo Wildlife Center, and ecotourism lodge operated by the Quichua community. It is 82 square miles (53,500 acres - over 21,400 hectares) of the most pristine Amazon Rain Forest anyone has ever seen, an important UNESCO Biosphere Reserve, and the largest tract of tropical rain forest in Ecuador. Two days here and we all leave knowing that there is beauty on this earth...and it is worth fighting for.

Click here to view the full gallery of beautiful photos from this trip.

Thursday, March 17, 2011

Rigging the System? RT TV's No-Holds-Barred Report on Chevron's Hypocrisy in Ecuador Case [VIDEO]

"Well, we have yet another example of a major corporation -– an oil giant, in fact –– that has shown the world it intends to play by the rules only when it suits them."

That's how gutsy news anchor Kristine Frazao opened international cable news network RT TV's no-holds-barred segment yesterday on Chevron's latest legal tactics to evade accountability for its disaster in Ecuador.

Following a report analyzing the latest twists in the nearly 18-year legal battle, I was interviewed. Watch:

Here is the report at RT.com.

– Han

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

Tuesday, March 15, 2011

Is Chevron Paying Hush Money to Ecuador 'Dirty Tricks' Guy?

Diego Borja, self-proclaimed 'dirty tricks' operative for Chevron in Ecuador is scheduled to appear in a San Francisco courtroom today to answer questions about his attempts to entrap a judge overseeing the monumental trial against the oil company.

But already, court documents filed in connection with the case seem to confirm what we've been alleging for many months – that Chevron is paying Borja big bucks to keep quiet about his activities aimed at disrupting the trial over Chevron's contamination in Ecuador.

As California legal newspaper the Daily Journal reported:

Since August 2009, Chevron paid Borja each month: a stipend of at least $5,000; more than $1,600 for rent and at least $700 in automobile payments. The company also apparently paid more than $45,000 in taxes for Borja and it has continued to pay the Berkeley law firm Arguedas, Cassman & Headley LLP to defend Borja in proceedings related to the litigation. It is unclear from the documents if Borja also received a monthly stipend of $10,000, which would bring the total to nearly $340,000.

At least some of the payments have been facilitated by Jones Day, one of the firms representing Chevron in litigation stemming from the Ecuadorean case. Information about the payments was revealed as the plaintiffs battle against a New York federal judge's order barring them from enforcing the $8.6 billion judgment they won against Chevron last month, which has grown to $9.5 billion to include an award to the plaintiffs' team.

The Daily Journal article continues:

"Generally fact witnesses can only be minimally compensated for their time and reasonable expenses in providing testimony," said Catherine A. Rogers, a professor at The Dickinson School of Law at Pennsylvania State University and an expert in international arbitration and professional ethics. "Rent does not seem to be at all within the boundaries of those parameters."

One of Chevron's attorneys, Robert A. Mittelstaedt, partner-in-charge of Jones Day's San Francisco office, declined to comment. Mittelstaedt has been one of the partners facilitating Chevron's payments to Borja.

Attorneys for the Ecuadorean plaintiffs obtained the information about the payments in response to discovery requests connected with their efforts to depose Borja in San Francisco federal court.

"Chevron and its attorneys apparently have taken Mr. Borja's threats to expose their apparent misdeeds very seriously," wrote New York attorney Julio C. Gomez and New Orleans attorney Carlos A. Zelaya II. "Based upon the documents obtained from Mr. Borja on March 3, Mr. Borja's personal happiness appears to be priority number one for Chevron and its lawyers at Jones Day."

The court documents cited by reporter Rebecca Beyer in her Daily Journal story were apparently briefly available through the court's website, but have now been placed under seal. The protective order in place will also surely cover transcripts of Borja's deposition today.

In September 2010, Judge Chen said that Chevron had "implicated" Borja as a witness to its claims against the courts in Ecuador, and ordered Borja to sit for a deposition by attorneys for the Republic of Ecuador, which is fighting Chevron's attempts to force the country into a binding arbitration. As I write this, I'm frankly unclear about whether that deposition has happened.

But if these official proceedings reveal the dirty tricks that Borja has bragged about in other contexts, the plaintiffs will likely ask Judge Chen to remove the protective order and unseal the documents showing Chevron's payments and other details, making it all publicly available.

And of course, if Borja implicates Chevron executives in his schemes, this deposition could create some very serious legal waves for people like current General Counsel Hewitt Pate and Charles James, who was Chevron's GC at the time Borja was concocting the sting operation, and Chevron's lawyers at Jones Day Tim Cullen and Robert Mittelstaedt, at whose San Francisco offices Borja had a meeting in the midst of his video-taping operation.

Borja was caught on tape talking about his dirty tricks operation –– including tampering with evidence, offering bribes, and attempts at entrapping a judge –– on behalf of his "bosses" at Chevron. A friend-turned-whistleblower named Santiago Escobar made recordings of Borja talking about how the company "cooked evidence" in the trial. In the recordings, Borja is heard explaining that if Chevron didn't take care of him, he would "immediately go to the other side... I have correspondence that talks about things you cannot even imagine, dude... I can't talk about them here, dude, because I'm afraid, but they're things that can make the [plaintiffs] win this just like that."

Escobar turned over the recordings to Ecuador's Prosecutor General's office and testified about Borja's admissions. The Prosecutor General's office is conducting its own investigation.

In the most infamous of Borja's operations to disrupt the trial – secretly videotaping the judge then presiding over the environmental trial – Borja collaborated with an American man named Wayne Hansen. When releasing the videos, Chevron described Hansen as an American businessman interested in securing contracts to remediate the oil contamination in the Ecuadorian Amazon. But an investigation by the plaintiffs revealed that Hansen had no experience in remediation and was in fact a convicted felon and drug trafficker with a long history as a scam artist.

Last month, after more than 17 years of litigation, an Ecuadorian court found Chevron liable for massive oil contamination of Ecuador's northeastern Amazon rainforest. The court ordered the oil giant to pay $9.5 billion for environmental cleanup, and to provide clean water and health care for the communities ravaged by the company's years of misconduct in the region.

– Han

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