The logic behind Chevron’s take-no-prisoners strategy, say observers, has less to do with the company’s belief in its innocence in Ecuador than the sector-wide implications of conceding culpability and defeat. The decision handed down by Ecuadorean courts was a victory for a novel arrangement in environmental class-action law: a group of poor indigenous plaintiffs backed by a sophisticated coalition of U.S. lawyers, global finance, and foreign enforcement litigators. The success of this strategy jolted the entire oil and gas industry, whose players big and small face the same potential liabilities as Chevron.
the company can’t outlive the decades of toxic waste it dumped into northern ecuador
“Chevron’s RICO case was aimed at discouraging poor communities and their advocates from trying to hold corporations accountable,” says Ginger Cassady of the Rainforest Action Network. “It sets a precedent for other corporations to follow when they want to beat back a challenge.” Donziger says the paradigm he pioneered “provided a path to success for communities around the globe who have billions in legal claims, but no resources.” Corporate America, he says, “is counting on Chevron to kill off this model for the future. Each time we get closer, they launch some other attack and move the goal posts back. They are trying to purchase impunity by running out the clock.”
Chevron can afford more than time. It can afford to buy the companies that make the clocks. If it succeeds in keeping the wheels of justice grinding in low gear until most of the plaintiffs are dead, it won’t be the first oil company to do this.
The one thing the company can’t outlive is the decades of toxic waste it dumped into the loams and waterways of northern Ecuador. Chevron does not dispute the presence of toxins—which are traceable to Texaco’s operation in the region, only their responsibility for them. While the layers of legal argument pile up, the scientific and ethical issues get drowned out, as do the voices of the indigenous communities living in toxic zones. “What gets lost in the twists and turns of this lawsuit is the only thing that matters,” says Mitch Anderson of GiveClearWater, a NGO that works to provide clean water to the affected communities. “The people of the Amazon continue to grow crops out of contaminated soil and bathe in contaminated rivers.”
To avoid what has become a perennial face-to-face confrontation with these tribes-people and their supporters, Chevron this year relocated its Spring shareholder’s meeting from San Francisco to a petroleum museum in the oil and gas town of Midland, Texas — ground zero of America’s fracking boom and a solid desert in every direction away from the nearest city. Midland is a fittingly remote bolthole for Chevron to hide from challengers to its power and arrogance. Ecuador’s first encounter with this arrogance began in an even more remote location: the formerly pristine rainforest region that Ecuadoreans call El Oriente. The encounter started like so many oil stories, with a military dictatorship newly installed and hungry for hard currency and development at any cost.
In the mid-1960s, the Texaco Petroleum Company partnered with Ecuador’s military junta to drill for oil in the raw jungle of the country’s northeast, near the Colombian border. For more than three decades, a Texaco subsidiary called TexPet built and managed more than 350 drill sites on land populated by five local tribes and a smattering of migrant farmers. Along with a lot of oil, these wells produced an estimated 16 billion gallons of toxic runoff, including so-called “formation waters” rich in heavy metals and carcinogens like arsenic, chromium and benzene. TexPet took full advantage of lax laws and oversight. Some of the waste was funneled into shallow pits; much more was dumped directly into rivers and the jungle floor. As for the crude itself, a Texaco memo from 1972 instructed workers to report only spills that “attract attention of the press and/or regulatory authorities.”
Texaco ended its Ecuador operation in 1992. When it handed management of some of its drill sites over to the state oil company, Petroecuador, the region was dotted with an estimated 1,000 waste pits near drinking and fishing waters. Two internal audits prepared during Texaco’s departure painted a dismal and unapologetic picture of its environmental legacy.
It was around then that Donziger first visited the area. A former Central America UPI correspondent and a newly minted lawyer, he toured TexPet’s former sites with an American-born Ecuadorean lawyer who was then exploring possible legal action. “I simply couldn’t believe that an American company could treat people the way Texaco had,” says Donziger. “I couldn’t shake the images from my mind.” In 1993, the Ecuadorean-American lawyer filed a class-action suit in New York. Donziger joined a legal team of three.
Texaco argued that the trial should be moved to Ecuador, where its partners were still in power and the company had reason to expect a sympathetic hearing. Donziger’s team argued the trial belonged in New York, where Chevron is publically traded and where both sides could expect a fair trial. It would take a Southern District judge in New York nearly a decade to decide the jurisdiction question. While the court deliberated, Texaco attempted to cover itself. It spent $40 million cleaning up a portion of its drill sites in exchange for a settlement agreement with Ecuador that protected against future government claims. Those living in the contaminated area watched as Texaco tried to cover its tracks, literally in some cases, by sprinkling dirt over shallow oil pits. An Ecuadorian government agency later found contamination in 85 percent of the supposedly “remediated” sites. Two Quito-based Texaco executives and seven Ecuadorean officials were eventually indicted on fraud charges.