Chevron in Ecuador

The archive of the Clean Up Ecuador campaign website

The Millennium Development Goals: Environmental Sustainability at Stake in Aguinda v. Chevron

By Emily Sullivan, EarthZine
2 October 2009

In the fight for achieving environmental sustainability, eyes are currently fixed on Lago Agrio, Ecuador, where a ruling in one of the world's largest environmental lawsuits will be decided. It is a veritable David and Goliath battle pitting the inhabitants of the eastern section of Ecuador's Amazon rainforest known as the Oriente against American oil giant Chevron. At stake is the clean up of one of Earth's most delicate and important ecosystems.

Achieving environmental sustainability, one of the United Nation's eight Millennium Development Goals, adopted in 2000, requires the cooperation of the entire world - a seemingly daunting task. However, this $27 billion lawsuit could have priceless implications on the future of the Oriente.

Commonly known as the "Lungs of the World", the Amazon rainforest is home to 20% of the Earth's animal and plant species. The Amazon stores 70 billion tons of carbon in its biomass, which helps combat global warming. However, deforestation and biodiversity loss as a result of logging, mining, and oil extraction puts further stress on an already overburdened climate. According to the Woods Hole Research Center: "Carbon stocks equivalent to more than a decade of global fossil fuel emissions are stored in the wood of its trees. Even slight climate-induced changes in the forest's metabolism could undo the modest gains of the Kyoto Protocol in slowing global warming." With scientists claiming that we are approaching the tipping point on climate change, any step backward could be disastrous.

The United Nation's main target for achieving environmental sustainability calls for countries–their governments, citizens, NGOs, and private business sector– to integrate principles for sustainable development into their policies and programs that reverse the loss of resources. In the case of the Oriente, it is unlikely that a total reversal of damage is even possible: "No amount of money can restore the area to the pristine rainforest it once was," explains Daniel Herriges, a program assistant at Amazon Watch, a non-profit organization that works to protect the rainforest and the rights of indigenous peoples in the Amazon Basin.

Herriges graduated from Stanford University with a B.A. in human biology, and a focus in conservation and sustainable development. While in college he conducted research on ecotourism in an indigenous community in the Peruvian Amazon.

The Oriente is home to eight different indigenous tribes and contains one of the most diverse collections of plant and animal life in the world, including over 2,700 species of wildlife, of which around 10% are considered threatened. But, in addition to 32 million acres of tropical rainforest, the Oriente also has oil—4.6 billion barrels of proven reserve. Around 2 billion barrels of oil have been extracted so far, while billions more of untreated waste, gas, and crude oil have been dumped into the environment by oil companies. In Amazonian rainforests like the Oriente, this kind of damage can have dramatic implications for climate change. The plaintiffs' witnesses said it is already having a significant impact on the lives of the people who live there.

In the 1960s U.S. oil giant Texaco began working with state oil company Petroecuador, when Ecuador was still under military rule. The partnership soured, however, and Texaco left the operation to Petroecuador in the 1990s. But before leaving, Texaco submitted to a $40 million agreement with Ecuador to clean up a portion of the 300 well sites and 1,000 waste pits scattered across the Oriente.

The villagers claim that the clean up was a sham and blamed Texaco for illnesses they believe are caused from the practice of depositing untreated wastes into open pits, which then contaminate water sources used for drinking, bathing, and fishing. The extent of the damage is so pervasive that a 1994 study of the region conducted by the Center for Economic and Social Rights (CESR) stated: "Crude oil may enter the human body through three primary routes: skin absorption, ingestion of food and drink and inhalation of oil on dust or soot particles. Residents of the Oriente face potential exposure from all three routes." The effects of such exposure can range from a runny nose and teary eyes to esophageal cancer. A 2004 article published in the peer-reviewed Pan-American Journal of Public Health cites various studies conducted since 1993 on the health of communities living in the Oriente where oil exploration had taken place. Each found that residents suffered from a higher than average rate of various skin diseases, birth defects, and spontaneous abortions as well as "a significantly higher overall incidence of cancer in both men and women."

A class action lawsuit, Aguinda v. Chevron, was filed in 1993 and since then, the case has traveled from New York to Lago Agrio, Ecuador, where a decision has yet to be announced. In the meantime, Chevron, which bought Texaco in 2001, has inherited the lawsuit and heavily disputes the charges, as evidenced on its website linked above. Among the evidence they dispute, a report by court-appointed expert and geologist Richard Cabrera that estimates the cost of the damage at $27 billion, with $2.9 billion assigned just for excess cancer deaths. Cabrera claims that over 1,400 people have died from cancer caused by the oil contamination. The plaintiffs also charge that Chevron should be held responsible for all of the damage done by Texaco up until the present, because the systems they put in place allowed Petroecuador to keep polluting for years.

In May 2009, the New York Times reported that "Nearly every other detail in the case is disputed […] save one: Chevron and the plaintiffs agree that the expansion of oil exploration in northeastern Ecuador spoiled what had once been a pristine jungle."

But while Chevron doesn't dispute the fact that oil exploration into the region caused irreparable harm, it maintains it cannot be held accountable for the damage caused by Petroecuador after Texaco left.

On September 23, Chevron Corp. filed an international arbitration claim against the government of Ecuador citing violations of the country's obligations under the United States-Ecuador Bilateral Investment Treaty, investment agreements, and international law. According to Chevron's press release, "The complaint stems from the government of Ecuador's exploitation of the ongoing lawsuit against Chevron in Ecuador, as well as the government's failure to uphold its duties under decade-old contracts. The arbitration proceeding has been commenced before the Permanent Court of Arbitration in The Hague under the Rules of the United Nations Commission on International Trade Law.

"As has been widely recognized, the government of Ecuador has seriously diminished the independence and integrity of its own judiciary. The government is using the legal process in Lago Agrio to avoid the environmental obligations of its state-owned oil company," said Hewitt Pate, Chevron's vice president and general counsel in the press release. "Because Ecuador's judicial system is incapable of functioning independently of political influence, Chevron has no choice but to seek relief under the treaty between the United States and Ecuador."

Beyond the litigious details, this case can set a precedent for the importance of environmental preservation - whatever the outcome may be. Herriges states: "Even if Chevron wins the case, the fact that it's gotten this far is already historically unprecedented."

Here in the U.S., laws are in place to prevent the dumping of produced water and oil wastes. But in Ecuador, the lack of infrastructure allowed companies like Texaco to pollute unchecked for decades without any consequences - until now. "Just the realization that multinationals can be brought to trial for behavior that, while abhorrent, was more or less "business as usual" for decades, is already making a powerful impression on industry leaders."

Indeed, Chevron has received a good deal of media criticism as the case drags on. A 60 Minutes piece in May 2009 and CRUDE a feature-length film released in theaters September 25 continue to keep this case in the public eye.

Unfortunately, plaintiff's advocates like Amazon Watch argue that the $27 billion will be necessary for the area to move forward - a sum that still hangs in the balance as complications continue to arise. Recently, Juan Nunez, the judge assigned to hear the case in Ecuador faced bribery allegations made by Chevron. The involvement of Ecuador's government in the case has also been called into question. Leftist President Rafael Correa has made no secret of his feelings toward Chevron, calling the company's behavior in Ecuador "a crime against humanity." Lost in political lobbying and corporate bottom lines are the victims, who still await a verdict. The plaintiffs have released an amicus brief asking that the delaying tactics be stopped.

As the CESR stated: "A small segment of the population has disproportionately enjoyed the benefits of oil development; few of the profits have been reinvested in the Oriente."

A ruling in the case is expected to be made in 2010, five years from the MDGs 2015 deadline. Even with a favorable ruling, Herriges said, there would still be a long way to go toward achieving environmental sustainability: "No amount of money can restore the area to the pristine rainforest it once was, but with a genuine environmental clean-up, and funding for health and potable water services, the residents of the area will at least be able to pursue sustainable development. Put another way, cleaning up the oil mess probably isn't sufficient in itself to achieve the MDGs for this region, but it's definitely necessary if there's going to be any hope of getting there."