By Brian Ellsworth, The New York Times
27 August 2004
Hidalgo Zurita watched as half a dozen technicians in white hazardous-materials suits used a motorized drill to search for oil -- in his yard in this small Amazon town.
To his dismay, Mr. Zurita, 46, a cattle trader, has readily found oil. ''I've dug five wells in that yard looking for drinking water -- four of them came up with oil,'' he says. ''I've been drinking contaminated water, and it's Texaco's fault.'' Company representatives vehemently deny the accusation.
August has brought the start of judicial inspections by Ecuadorean authorities of sites that residents contend were polluted by a subsidiary of what is now ChevronTexaco. It is the latest wrinkle in an 11-year legal battle over whether the company should pay an estimated $6 billion to clean up a swath of the Ecuadorean Amazon.
With the help of a team of American and Ecuadorean lawyers, the suit was brought by 88 residents representing roughly 30,000 others, including 5,000 members of five Amazon indigenous peoples.
This phase of the trial, which moves from one testing site to another, opened here in a makeshift court set up with portable plastic furniture sheltered from the Amazon sun by two collapsible blue nylon tents.
When Mr. Zurita moved into his small concrete house 10 years ago, he says, he noticed a smell of oil and saw black tarlike patches in the yard, but it was too late to move. About 30 feet away was a pit where Texaco once dumped mud, laden with crude oil. It is now covered by a patch of shoulder-high weeds.
Over the next six months, experts will analyze soil samples at 122 sites in the jungle to determine if a subsidiary, the Texaco Petroleum Company, left behind toxins that could be fouling the drinking water of some 30,000 residents like Mr. Zurita. The case, which went to United States Court of Appeals for the Second Circuit, only to be sent to Ecuadorean courts, could change the way American companies do business abroad.
''Companies have for years used low environmental standards in the third world as a legal defense for practices they know would be unacceptable in their own countries,'' said Eric Dannenmaier, director of the Institute for Environmental Law and Policy at Tulane University. ''This case may cause that legal defense to crumble.''
Plaintiffs in the case say that drilling by Texaco Petroleum polluted the soil and groundwater in 11,000 acres of the Ecuadorean Amazon from 1974 to 1990, when the company was the primary operator of Ecuador's oil industry.
They say the company dumped toxic waters into rivers and streams instead of reinjecting it into oil reservoirs as was standard industry practice at the time; left more than 600 open pits of crude oil; and spilled 16 millions gallons of crude oil -- the equivalent of more than half of the Exxon Valdez spill -- into the Amazon.
The company denies that reinjection was standard practice. In a section on its Web site about Texaco in Ecuador, a document, ''Response to Claims,'' states, ''Examples of oil producing nations that today allow the discharge of produced water rather than injection into the ground are the U.S., Mexico, Brazil, Colombia, Indonesia, Kuwait, Angola and Nigeria, along with Ecuador.''
ChevronTexaco acknowledges that the unit deposited residual wastes from oil drilling, but denies that it polluted the area and insists it followed all Ecuadorean environmental standards at the time. Company representatives also point out that as instructed by the Ecuadorean government, ChevronTexaco carried out a $40 million program completed in 1998 that covered some 200 open oil pits. The company says that exonerates it of any further responsibility for cleanup.
Hearing the case, Judge EfraÃn Novillo, 53, on the bench only since January, sat in a button-down shirt and blue jeans listening to hours of often aggressive arguments from lawyers for each side.
''This is the first time I've worked on such a transcendental case,'' Judge Novillo said. He ordered the inspection of Mr. Zurita's yard after six hours of arcane deliberation by lawyers from each side.
Although the suit asks only for cleanup, residents contend that as a result of hydrocarbon contamination in potable water, they suffer from pulmonary diseases, digestive problems and high rates of miscarriage and cancer. Farmers say crops wilt and cattle become sick after drinking from contaminated pools.
ChevronTexaco says it has seen no credible evidence to link such problems to oil exposure and cites reports by American experts who take issue with health reports presented by the plaintiffs.
The company also insists that its tests show no presence of hydrocarbon contamination in drinking water and argues that cancer rates in the areas at issue are lower than in other parts of the country.
''Their defense is a lot like the tobacco industry saying there is no evidence linking smoking and lung cancer,'' said Charles Calmbacher, a certified industrial hygienist who works as an expert for the plaintiffs.
ChevronTexaco also says that the state oil company PetroEcuador was the lead investor in all Texaco Petroleum's operations in the area and insists that PetroEcuador has carried out environmentally unsound practices -- including poor spill prevention and inadequate maintenance -- for more than 10 years, since taking over operation of the fields. But, ChevronTexaco argues, the plaintiffs are ignoring PetroEcuador to go after the deeper pockets of ChevronTexaco.
''These environmental damages are PetroEcuador's responsibility,'' said Chris Gidez, public and government affairs representative for ChevronTexaco, leafing through color pictures of pits of burning oil and contaminated streams at PetroEcuador sites. ''We may be an easy target, but that doesn't make us the right target.''
In June, ChevronTexaco filed a claim with the American Arbitration Association requesting that Ecuador be held liable for cleanup costs and legal fees if the court rules against it. The government says it will ignore any such arbitration ruling.
One resident, Marcia Jaramillo, 24, who watched the trial proceedings from her wooden clapboard house across the street from the ad hoc court, says she does not much care about the judicial Ping-Pong over whose fault it is.
''I just know we can't keep drinking and bathing in this water,'' Ms. Jaramillo said, pointing to a brown rash of specks that now cover most of her body and those of her two children as well. ''Someone needs to clean this up.''