Ecuador: landmark victory over oil barons

Historic ruling as Chevron are fined for deliberately contaminating the Amazon basin.

Seventeen years after litigation was originally filed against the corporation, Chevron has been ordered to pay $9.5bn for environmental damage caused to the Amazon basin of Ecuador. This ruling represents one of the largest environmental damages awards in history and sets a strong precedent for other cases against large-scale polluters.

On 14 February 2011 Judge Nicolas Zambrano of the Superior Court of Sucumbios, Lago Agrio, found Chevron guilty of causing widespread contamination between 1964 and 1992, when it operated as Texaco in the region. The fine was extended by a further $8.5bn in punitive damages if Chevron failed to apologise in public for its wrongdoings within 15 days.

Despite this landmark ruling, however, the battle is not yet won. Even before the sentence was announced by Judge Zambrano, Chevron had successfully sought a temporary ban on enforcement of any ruling from the Permanent Court of Arbitration in The Hague, as well as in the New York federal court. The company is now appealing the ruling and has even taken out a lawsuit in the US against 47 of the plaintiffs and their legal team on grounds of corruption and conspiring to extort and defraud Chevron.

Meanwhile, the 30,000 plaintiffs, including campesinos (peasants) and indigenous peoples, are also appealing the ruling on grounds that the compensation is nowhere near sufficient enough to cover the extent of the contamination.

The case: deliberate contamination

Eighteen years ago, in 1993 the plaintiffs filed a lawsuit in New York’s federal court accusing Texaco of polluting the environment and negatively impacting their health by using outdated technology.

“This trial is not about accidental damages. We’re talking about harm to people and the environment that was done in a deliberate manner,” says Luis Yanza, president of the Amazon Defence Front. (‘Ecuador: Chevron strikes back’ by Luis Ángel Saavedra, Latinamerica Press, 24 February 2011)

Texaco started operating in Ecuador in 1964 and within three years struck oil. It began pumping in 1972 when it formed a consortium with the state oil company Petroecuador. Texaco was the sole operator in the consortium and designed, built and maintained an oil production system of over 300 wells in 15 oil fields on a concession of 6,900 sq km near the Colombian border.

Evidence has shown that Texaco used antiquated technology and violated standard industry practices throughout its operations in Ecuador. It was responsible for dumping 18.5bn gallons of toxic waste water into rivers and streams, spilling 17m gallons of crude oil and leaving behind hundreds of pools of waste that continue to leech toxins into surrounding soil and water.

This pollution has devastated crops and livestock, affecting thousands of people, as well as contaminating the water supply they rely on for drinking, bathing and washing. It has caused a spike in cancer rates and will leave a legacy in the region for decades to come.

The documentary film Crude, produced by Joe Berlinger, shows the extent of the damage caused by Texaco’s operations in Ecuador. It also highlights the long and bitter struggle the plaintiffs and their legal team have had to wage to get a verdict against Chevron.

ChevronTexaco delay tactics

In 2001 Chevron took over Texaco and with it the litigation. Almost ten years into the case Chevron filed for the hearing to be transferred to Ecuador, and in 2003 it was moved to a court in Lago Agrio, a town at the epicentre of Texaco’s former concession.

Throughout the trial Chevron systematically delayed the case, from cancelling site inspections and inundating the court with motions to blocking the gathering of scientific evidence. In 2009 it even went as far as mounting an unlawful sting operation against the presiding judge to entrap him in a bribery scandal. Although the scheme was discredited Chevron were never held accountable and the case was delayed by a further two years.

In the last months of the trial, the corporation started to see the writing on the wall and, despite having earlier filed affidavits praising Ecuador’s judicial system, Chevron’s attitude toward the court and any ruling it might make changed significantly. Finally, on hearing the ruling, latin-american spokesperson for Chevron James Craig called it “corrupt, illegitimate, unenforceable, and the product of a fraud”. (Quoted in ‘The trial against Chevron is totally corrupt’ by Gonzalo Ortiz, Terramerica, 7 March 2011)

Chevron’s desire to move the case to Ecuador was no doubt due to an expectation that the law in Ecuador would be less stringent and its courts would be more receptive to pressure from big business. How wrong they were!

As Ecuadorian attorney Juan Pablo Saenz aptly summed up: “it is crystal clear that Chevron wanted this case to be heard in Ecuador because it believed that Ecuadorian judiciary was too weak to handle these claims … In other words, corruption is now less of an issue in Ecuador than it was back in 2001, when Chevron seemed to like the country.” (Extract from his written declaration to US Judge Lewis Kaplan in relation to Chevron’s case against the 47 plaintiffs, quoted in ‘Court affidavit exposes 18 years of Chevron’s unethical conduct’,, 7 March 2011)

This is clearly connected to the fact that Ecuador’s former corrupt, repressive and pro-US regimes have been replaced by a democratic, anti-imperialist government that puts national sovereignty and people’s rights first.

The struggle continues

It is no surprise that companies like ChevronTexaco act with such disregard for human life and the environment. As monopoly capitalists they are striving for maximum profit, and invariably that means minimum concern for protocols that are designed to minimise the impact of their operations on the population, the environment and future generations.

The success of this ruling, however, is a testament to the determination of the plaintiffs and their legal team in the face of massive pressure from Chevron and its multimillion-dollar legal team.

The battle now is to get the ruling enforced. With Chevron holding no assets in Ecuador and continuing to hide behind legal proceedings it is likely that enforcement is still a number of years away. However, Pablo Fajardo, a lawyer for the plaintiffs, is undaunted and considers Chevron’s latest lawsuits just another in a list of failed attempts to avoid payment and responsibility.

He considers that: “While the fine is insignificant compared to the damage caused by Texaco, this ruling includes advanced case law on environmental rights and corporate responsibility with respect to nature; this is what makes the decision a historic step in defence of life.” (Quoted in ‘Chevron strikes back’, op cit)