November 7, 2003

Analysis

Pollution Suit in Ecuador Puts Big Oil on Edge

By Lou Dematteis and Suzana Sawyer

LAGO AGRIO, Ecuador—In this ramshackle Amazonian town, high-level corporate lawyers from ChevronTexaco recently sat in a packed, muggy courtroom together with bare-breasted local men and women at the start of what the national media calls “The Trial of the Century.”

ChevronTexaco stands accused of severely contaminating the surrounding region during more than two decades of oil drilling in what was once an untouched rain-forest with pristine rivers and crystal-clear lakes.

The trial’s outcome could affect the way U.S. corporations do business around the world. More immediately, the San Ramon, California-based corporate giant could end up paying more than $1 billion to clean up waste and pollution locals say it left behind.

First filed in the United States in 1993 to seek compensation for environmental and health damages on behalf of 30,000 plaintiffs in the Ecuadoran Amazon, the case bounced around the U.S. legal system until a federal appeals court dismissed it in 2002. As part of the dismissal, however, the court sent the case to Ecuador under the condition that ChevronTexaco abide by the Ecuadoran court’s ruling.

“This is historic,” says Steven Donziger, a U.S. lawyer representing the Ecuadoran 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.”

Company vice president and legal counsel Ricardo Reis Vega claims that damage caused by drilling was “minimal” and “normal for any operation.”

The plaintiffs, however, claim that from 1972 to 1992, Texaco dumped 18.5 billion gallons of waste into open, unlined pits to save money, instead of reinjecting it back into the ground, which is the common industry practice. Texaco and Chevron merged in 2001.

Reis Vega insists Texaco violated no Ecuadoran environmental laws and that the $40 million it spent to clean up the pits, based on a re-mediation contract it negotiated with the government in 1995, released the corporation from responsibility.

But Cristobal Bonifaz, lead attorney for the plaintiffs, argues that any cleanup work Texaco claimed to have done was either incomplete or not done at all. “Look,” Bonifaz says, “we think it is a fraudulent contract. Fraudulent for the simple reason that the pits were never cleaned up.”

A day’s observation trip into the countryside seems to bear out Bonifaz’s claim. Pipelines snake along oil-slicked roads and dark pools of oily waste are easy to find. Some of Texaco’s old pits are covered with dirt, but merely digging into them a foot or so brings oily deposits gurgling to the surface.

Local farmer Benigno Martinez says a huge Texaco waste pit used to sit in front of his house in the countryside 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 that has polluted the small stream near his house.

“I’ve lost eight of my nine horses — they drank the polluted water.” Worse, he says, hydrocarbon seepage has contaminated the household’s water sources, and his wife, Maria, has been ill for several years.

Several Indian tribes as well as peasants and environmentalists marched to the courthouse in the hundreds and protested on its steps on the day the trial started. The crowd reflected a growing social movement that for 10 years has fought to make Ecuador’s laws respect citizens’ environmental rights.

The Law of Environmental Management, passed in 1999, is their key tool. Through this law, citizens can act as a class to demand the implementation of their constitutional right “to live in a clean environment free from contamination.” The Amazon Defense Front, the indigenous-peasant organization that represents the plaintiffs, is the first to file a suit under the new law.

“Bringing a case of this magnitude before the Ecuadoran courts deserves to be watched closely,” says Alejandro Garro, an expert in Latin American law at Columbia University in New York. “If the courts say Chevron is liable and the ensuing remedies were to meet standards of fairness expected in a globalized economy, then the favorable judgment would amount to a real breakthrough.”

Experts predict a verdict in six months. Appeals to the Ecuadoran Superior Court and then the Supreme Court could take two to three years more.

A victory for the plaintiffs will come too late for Benigno Martinez’s wife, Maria Villa-sis. Her doctor says she suffers from liver cancer as a result of her exposure to toxic hydrocarbons. Doctors recently removed her gall bladder and part of her liver. “It’s the oil,” she laments. Benigno, a member of the Amazonian Defense Front, will testify during the trial, and says he hopes the world will hear his story.

The world beyond Ecuador is also on the mind of attorney Bonifaz. “This case is an attempt to globalize justice,” he says. “If justice were globalized, people wouldn’t be so against globalized trade.” Bonifaz believes that global justice can be achieved when the legal standards are raised within individual countries.

A victory by the plaintiffs would increase a global perception of multinational corporations’ liability for environmental negligence, other experts say.

Lou Dematteis’ is a photographer and writer whose most recent book is “A Portrait of Vietnam” (Norton Books, 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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