New Internationalist

David vs. Goliath

June 2010

Judgment expected soon on historic environmental lawsuit

A dirty legacy: oil floats atop Lago Agrio’s waters. DOLORES OCHOA / AP

After 17 years of legal wrangling, a judge is expected to pronounce sentence soon on the largest environmental lawsuit in history. In the ultimate David and Goliath battle, 30,000 indigenous and mestizo (mixed ancestry) settlers in Ecuador’s oil-rich Amazonian region have accused petroleum company Texaco (owned since 2001 by Chevron) of causing what they call a ‘rainforest Chernobyl’.

They allege that Texaco dumped 18 billion gallons of toxic waste water and spilled 17 million gallons of crude oil into the rainforest during its operations in the Lago Agrio area, in northeast Ecuador, from 1964 to 1990. According to the class action lawsuit, Texaco’s inadequate waste management practices left the region’s soil and water contaminated, creating health problems such as cancer and birth defects.

But Chevron claims that Texaco complied with Ecuadorean law and that any damage was cleaned up between 1995 and 1998, when it invested $40 million in environmental remediation following an agreement with the Ecuadorean government. They insist that the responsibility falls entirely on Petroecuador, the state-owned oil company which took over operations from Texaco in the 1990s.

The plaintiffs’ response is that, while Petroecuador will also eventually have to undergo trial for environmental damages, Chevron has to pay up first.

A court-appointed expert fixed the sum for compensation at $27 billion. If Chevron is found guilty, this will be the largest damages award ever handed down in an environmental case – seven times the $3.9 billion awarded against ExxonMobil for the 1989 oil spill off the Alaska coast.

In 1993, lawyers filed the original lawsuit in the US, but after the court ruled that Ecuador had the jurisdiction, the case was transferred to Lago Agrio. Its judge, Juan Núñez, was due to rule by the end of 2009 but was taken off the case after Chevron released a video allegedly showing Núñez agreeing to bribes. New judge Leonardo Ordóñez is now working through 180,000 pages of evidence.

The stakes are high for everyone involved. Chevron – which has complained to the Permanent Court of Arbitration in The Hague that it cannot get a fair trial in Lago Agrio because of government interference – is loath to cough up billions of dollars and recognize responsibility for environmental damages. Ecuadorean President Rafael Correa has made this his flagship cause in his battle against foreign oil companies, whom he recently called ‘monsters that still believe we are their backyard, their colony, that think they can still trample all over our dignity and sovereignty’.

This highly charged environment worries Pablo Fajardo, the lead lawyer for the plaintiffs. At the headquarters of the Amazon Defense Coalition in the north of Quito, Fajardo says that mutual accusations of bribery have transformed what should have been a purely technical trial into a judicial saga.

He believes that Chevron’s tactic is to let the trial drag on, hoping that with time the plaintiffs will settle or won’t have enough resources to keep going – and that Correa’s public backing of the case might have complicated matters further. Ultimately, he says, the slowing down of the process further damages those in the Amazon who were directly affected by the ‘irresponsible acts’ of the oil company.

‘Chevron wants this trial never to come to an end. They are trying to get absolute impunity for a huge crime committed in the Ecuadorean Amazon,’ Fajardo concludes. ‘But we won’t let them. We hope to finish with this trial soon, and to start with a completely new lawsuit against Petroecuador. It’s our dream.’

Irene Caselli

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This column was published in the June 2010 issue of New Internationalist. To read more, buy this issue or subscribe.

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