'Sour Lake' Suit Finally Gets Trial

ChevronTexaco Accused of Amazon Dumping

By Jack Epstein, San Francisco Chronicle
1 May 2003

When Texaco quit drilling in Ecuador in 1992 after nearly 30 years, it left behind what critics describe as an enormous toxic dump of 1.8 million gallons of spilled crude oil -- almost twice the size of the Exxon Valdez spill.

But next Tuesday, 30,000 jungle residents of Ecuador and Peru whose natural surroundings were forever spoiled will finally get their day in court.

In an unprecedented hearing, a three-judge panel in a remote Amazon town called Lago Agrio -- or "Sour Lake," in reference to the oil dump -- will start hearing claims that the plaintiffs should be paid $1 billion by ChevronTexaco Corp. The behemoth oil company based in San Ramon inherited the lawsuit after merging with Texaco in 2001. ChevronTexaco was the Bay Area's No. 1 firm in revenue earnings last year, taking in $99 billion.

The case is remarkable not only for its endurance -- it has survived 10 years of legal wrangling over the matter of venue alone -- but because a landmark decision by a New York federal court last August stipulated that any financial penalty imposed on ChevronTexaco in Ecuador be recognized in the United States.

"It's a major shock for corporations that for the first time an environmental case is transferred to a foreign country where a judgment is enforceable in the United States," said Joseph Kohn, one of the plaintiffs' lead attorneys and a partner in Kohn, Swift & Graf, a class-action firm based in Philadelphia.

Even so, ChevronTexaco's position is that moving the case to Ecuador represents a victory for the firm.

"We have maintained all along that the Ecuadoran court system was the proper venue for this case," said Chris Gidez, a spokesman for ChevronTexaco, the world's second-largest oil company. "The plaintiffs fought for years for that not to happen."

The plaintiffs, mostly members of such Amazon tribes as the Cofan, Secoya and Siona, had struggled to get their case tried in White Plains, N.Y., the site of Texaco's pre-merger headquarters. They alleged that Texaco officials made the decision there to save billions of dollars by dumping contaminated water befouled by the drilling operation into 350 man-made waste pits rather than reinjecting this toxic waste back into the earth, as has been the industry's standard practice.

Kohn, however, argues that a shift in the political climate in Ecuador could work in his clients' favor. Ecuador "could come out like Brer Rabbit," he said, referring to the classic folk tale character who symbolizes victory of the weak over the powerful. " 'Don't send us to the briar patch,' but when we get there, we are glad we are there."

The original class-action lawsuit -- Maria Aguinda et al. vs. Texaco Inc. -- alleges that Texaco dumped nearly 20 billion gallons of toxic waste into the open pits, estuaries and rivers between 1964 and 1992, exposing residents to cancer-causing pollutants. It also alleges that Texaco polluted 2.5 million acres of pristine rain forest along the route of the pipelines and wells. Although Texaco's entire drilling operation took place in Ecuador, some of the pollution made its way across the nearby Peruvian border, contaminating waterways there as well, the lawsuit says.

Gidez says there is no substantiated scientific evidence to support the plaintiffs' claims that Texaco's operations caused cancer in Amazon residents. He also says the lawsuit never factored in oil spills from political sabotage, a 1987 earthquake that destroyed nearly 25 miles of pipeline, or environmental destruction caused by a government colonization program that opened up untouched lands to hundreds of thousands of poor Ecuadoran peasants. He also points out that ChevronTexaco was a minority partner with Petroecuador, the state-owned oil company, and spent $40 million in a three-year cleanup of their Amazon operations between 1995 and 1998.

"At every step of the way, the remediation program was monitored and certified by the Ministry of Energy and Mines," said Gidez.

Last August, the U.S. Court of Appeals in New York upheld a 2000 district court decision to dismiss the lawsuit in the United States for being an inconvenient venue (the legal term is forum non conveniens), since the plaintiffs live in Ecuador and Peru and sustained their alleged injuries there, and the court could not easily visit the contaminated sites.

Some legal scholars say American multinationals typically use forum non conveniens to avoid liability in U.S. courts.

"Large corporations want these cases kicked back to developing nations like Ecuador, where they have an advantage," said Alejandro Garro, professor of comparative and Latin American law at Columbia University in New York City. "These countries don't have a judicial system capable of handling thousands of plaintiffs and are not known for being efficient or independent. And in Ecuador, there is no power of discovery, which means ChevronTexaco doesn't have to turn over any document that it doesn't want to."

But Garro concedes that the new political climate in Ecuador will place "tremendous pressure on the court." The case has made front-page news in local newspapers and is a hot political issue in the impoverished Andean nation.

Ecuador's new leader, President Lucio Gutierrez, is a populist who co-governs with an indigenous party and has appointed two Indian leaders to his Cabinet who openly support the plaintiffs. Foreign Minister Nina Pacari is the first Indian ever to hold that post in Latin America, and Agricultural Minister Luis Macas is the former president of a leading indigenous organization.

A delegation of 12 rainforest Indians representing five Amazon tribes is expected to arrive in the Bay Area sometime this month to protest at ChevronTexaco headquarters and gas stations, and seek support at local community centers, schools and churches.

"People have been waiting for nearly 30 years for justice," said Leila Salazar, ChevronTexaco campaign organizer for Amazon Watch, a nonprofit environmental group in Oakland that will sponsor the delegation's trip. "I don't think an Ecuadoran court will let it slide easily."

© 2003 SF Chronicle

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