Chevron in Ecuador

The archive of the Clean Up Ecuador campaign website

Ecuador Congressman Presses Criminal Investigation of Chevron for Fraud In Environmental Clean-up, Amazon Coalition Says

Amazon Defense Coalition

Amazon Defense Coalition
19 September 2007 - FOR IMMEDIATE RELEASE
Contact: Karen Hinton at +1.703.798.3109

Quito, Ecuador - A leading congressman in Ecuador this week asked the country's national prosecutor to re-open a criminal investigation of Chevron for committing fraud in a botched remediation of a large oil-related disaster in the Amazon rainforest, according to the Amazon Defense Coalition, a group of communities and indigenous groups in Ecuador that is pressing a multi-billion dollar legal case against the company.

The letter furthers increases Chevron's corporate governance problems in the oil-rich South American country, where a predecessor company (Texaco) was the exclusive operator of an oil consortium from 1964 to 1990. During this period, Texaco dumped more than 18 billion gallons of toxic waste into a 1,700 sq. mile are of the rainforest, purportedly to save $1 per barrel.

Chevron is currently a defendant in a class action lawsuit over the contamination, where plaintiffs estimate damages could top $10 billion. Four indigenous groups who have lived for centuries where Chevron operated claim their cultures have been decimated and that they are on the verge of extinction.

The Ecuadorian congressman, Raul Ilaquiche, is the chairperson of a congressional committee specializing in indigenous affairs. In a letter addressed to Jorge German Ramirez, Ecuador's national prosecutor, the congressman asked why evidence suggesting that Chevron committed a fraud was not being more vigorously pursued.

A previous national prosecutor, Dr. Jorge Montero, opened an investigation of Chevron two years ago but the status of the probe has never been announced publicly. Normally, Ecuador's prosecutor maintains a high degree of confidentiality over pending investigations, but at times announces investigations when there is a compelling public interest.

The letter follows a recent request by Ecuador's Attorney General to the U.S. Department of Justice seeking a criminal probe of Chevron based on evidence found in the environmental trial that shows hundreds of toxic waste pits were never remediated, despite Chevron's representations to the government that they were. Ricardo Reis Veiga, a top Chevron lawyer in Latin America, has been dubbed the "architect of fraud" by spokespersons for the affected communities for his role in certifying the allegedly fraudulent clean-up.

Despite the ethical cloud over Reis Veiga, Chevron continues to use him as the supervisor of its local legal counsel in Ecuador . Some Chevron shareholders have claimed a conflict of interest in allowing a Chevron lawyer who himself is the subject of fraud charges to oversee the very trial where his own conduct is at issue.

Chevron also has been contacted by the Securities and Exchange Commission over allegations it has violated securities laws by not disclosing its potential liability in Ecuador to shareholders.

The four-year trial has produced more than 54,000 independent laboratory results, with the vast majority of demonstrating toxic contamination in violation of both Ecuadorian and U.S. norms, said Pablo Fajardo, the lead lawyer for the plaintiffs.

"Chevron has major corporate governance and human rights issues in Ecuador that its management continues to ignore," said Luis Yanza, who coordinates the case for the plaintiffs. "In the meantime, thousands of Ecuadorians suffer with cancer and other oil-related diseases caused by Chevron's irresponsible drilling practices."

Yanza called on all Chevron shareholders to pressure company management to take action "to abide by the law in Ecuador and abide by human rights norms."

"It is becoming increasingly clear from the evidence at trial that Chevron operates as a rogue oil company in Ecuador," said Yanza.