Boiling Oil

ChevronTexaco faces Ecuador's courts

by Lou Dematteis and Suzana Sawyer

In These Times magazine, December 2003

High-level corporate lawyers from ChevronTexaco sat in the same packed muggy courtroom as barebreasted Amazonian men and women on October 21, the start of what the national media referred to as The Trial of the Century. In this ramshackle Amazonian town, ChevronTexaco stands accused of severely contaminating the surrounding region during 20 years of oil drilling and production in what once was untouched rainforest with pristine rivers and lakes.

At stake is not only whether the San Ramon-based corporate giant will have to pay more than $1 billion to clean up pollution left behind by its oil production from 1972 to 1992, but whether the case will bring fundamental change to the way U.S. corporations do business around the world.

The case already has set precedent. It was first filed in the United States in 1993 on behalf of 30,000 plaintiffs in the Ecuadorean Amazon for environmental and health damages but bounced around until a federal appeals court dismissed it nine years later. As part of the dismissal, the court sent the case to Ecuador under the condition that ChevronTexaco abide by the Ecuadorean court's ruling. "The case is historic," said Steven Donziger, a U.S. Iawyer representing the Ecuadorean plaintiffs. "This is the first time a U.S. oil company has been forced to submit to jurisdiction in a Latin American court in an environmental case with damages of this magnitude."

No one is denying that the region is polluted-ChevronTexaco even admits to some damage. But the company claims that any damage caused by drilling was "minimal" and "normal for any operation," according to company vice-president and legal counsel Ricardo Reis Vega. The plaintiffs claim that in order to save money, Texaco dumped 18.5 billion gallons of waste into open, unlined pits, instead of the common practice of reinjecting it into the ground. Now the Ecuadoreans want the pits cleaned up.

Reis Vega added that Texaco violated no Ecuadorean environmental laws and that its $40 million agreement with the government to clean up the pits released the corporation from future liability.

According to Cristobal Bonifuz, lead attorney for the plaintiffs, any cleanup work Texaco claimed to do was either incomplete or not done at all. "Look," says Bonifaz, "we think it is a fraudulent contract-fraudulent for the simple reason that the pits were never cleaned up." Evidence found in an hours-long trip into the countryside seems to support Bonifaz's assertion. Pipelines snake along oil-slicked roads, and dark pools of oily waste are easy to find. Some of Texaco's pits are covered with dirt, but digging down a foot or so brings oily deposits gurgling to the surface.

Farmer Benigno Martinez agrees with Bonifaz, who had a Texaco waste pit outside his house near Lago Agrio. "I complained for a long, long time, and six years ago Texaco finally came and covered the pit with dirt. But they didn't take the oil away," Martinez says, pointing to oil seeping from the dirt-covered pit and polluting a nearby stream. "I've lost eight of my nine horses from drinking the polluted water." And that's not the worst part. Hydrocarbon seepage contaminated the household's water, making his wife, Maria Villasis, chronically ill.

A crowd of hundreds that included members of several Indian tribes, peasants and environmentalists marched to the courthouse the first day of the trial and held a rally on the steps.

The crowd represented an impressive social movement that worked 10 years to transform Ecuador's laws so they respected citizen rights and protected the environment. Most important is the Law of Environmental Management, passed in 1999. This law offers a process by which citizens can gather as a class and demand that their constitutional right "to live in a clean environment free from contamination" be upheld. The Amazon Defense Front, the indigenous-peasant organization that represents the plaintiffs, is the first to file a suit under this law.

A victory would set precedent. "Bringing a case of this magnitude before the Ecuadorean courts deserves to be watched closely," says Alejandro Garro, an expert in Latin American law at Columbia University in New York. "If the courts were to determine the existence of liability and the ensuing remedies were to meet standards of fairness expected in a globalized economy, then the ensuing judgment would amount to a real breakthrough." He added that the plaintiffs would be quick to go the United States to enforce the judgment.

A decision in the case is still a ways off. Testimony for the plaintiffs and the defense ended October 29. The judge still must inspect alleged damage and can ask for additional testimony and evidence. Experts predict a verdict in about six months. Expected appeals to the Ecuadorean Superior and Supreme courts could take an additional two or three years.

Any positive judgment likely will come too late for Villasis. Like many in the region, she has been diagnosed with cancer as a result of hydrocarbon exposure. "The doctor says I am totally contaminated. It's the oil," she says.

"This case is an attempt to globalize justice," says Bonifaz. "If justice were globalized, people wouldn't be so against globalized trade." The lawyer believes that global justice will be achieved when its standards are raised worldwide. "Protection must come from within," he says, noting Ecuador's recently passed Law of Environmental Management. "We want to open the eyes of Latin America and the world to create better tort and environmental law to better deal with problems and provide true justice."

Bruce Rich, a senior attorney for Environmental Defense, also sees larger implications in the trial. "A victory for the plaintiffs would increase the worldwide perception of potential liability for environmental negligence by multinational corporations. And it will be an incentive for greater environmental and social diligence."

Already that is the case in Ecuador. As a result of the lawsuit, no oil company is polluting the environment at the rate Texaco is charged.

Bonifaz believes their chances of winning are excellent: "I have total confidence in the transparency of the court and its ability to rise to the occasion. We're going to win the case."

Writer/photographer Lou Dematteis has published two books: Nicaragua: A Decade of Revolution (Norton, 1991) and A Portrait of Viet Nam (Norton, 1996) . Suzana Sawyer is a professor of anthropology at U.C. Davis and author of Crude Chronicles: Conflicts Over Oil Development to be published this spring.

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