Sens. Leahy and Obama Ask USTR Not To Let Chevron Interfere In Ecuador Trade Talks
14 February 2006 - FOR IMMEDIATE RELEASE
Contact: Karen Hinton at +1.703.798.3109
Washington D.C - Already under fire for its record profits, Chevron is coming under increasing scrutiny in the nation's capital over its attempts to use U.S. trade negotiations with Ecuador to undermine a historic environmental lawsuit brought against the oil giant by residents of Ecuador's rainforest.
Chevron faces a potential multi-billion dollar liability in the Ecuador case for clean-up of what experts believe is the worst oil-related contamination in the world, affecting an estimated 30,000 people, including the members of five indigenous groups. The tab for personal damages and health costs could double its liability, according to the plaintiff's legal team, which has been litigating against the company since 2003.
Now, Senators Barack Obama (D-Ill) and Patrick Leahy (D-Vt) have stepped up the pressure on Chevron, sending a letter to U.S. Trade Representative Rob Portman urging him to ignore the company's campaign to improperly exclude Ecuador from trade negotiations until the Ecuadorian government shuts down the lawsuit.
The senators write: "We are writing to seek your assurances that the U.S. Trade Representative will not allow negotiations over the Andean Free Trade Agreement to interfere with a case involving Chevron that is under consideration by the Ecuadorian judiciary, particularly one involving environmental, health and human rights issues that have regional importance. While we are not prejudging the outcome of the case, we do believe the 30,000 indigenous residents of Ecuador deserve their day in court."
Since the trial began in 2003, the forensic evidence of widespread toxic contamination has steadily mounted; all 22 sites inspected by the court so far have been found to be contaminated, and one site had levels of Total Petroleum Hydrocarbons at 900,000 parts per million, or 9,000 times higher than allowed in most U.S. states.
This staggering potential liability is real. In recent weeks, Chevron has been pulling out all the stops in an attempt to derail the lawsuit, lobbying the U.S. Congress in a shadowy but intense campaign, distributing misleading and inaccurate press releases about the Ecuador trial, and refusing to disclose details of its potential multi-billion loss to shareholders. But Chevron has run into major roadblocks in the beltway.
Texaco, which was bought by Chevron in 2001, operated a concession in Ecuador's rainforest from 1964 to 1992. During that time, it dumped more than 18 billion gallons of toxic waste water into the pristine Amazon rainforest and reaped profits of close to $30 billion. Local residents call the contamination the "Rainforest Chernobyl" and two of the indigenous tribes say they are nearing extinction.
Chevron's lobbying of Congress to undermine the legal case has sparked outrage in Ecuador because Chevron argued for years before a U.S. federal court that the case should be tried in Ecuador, and stipulated it would recognize the jurisdiction of the Ecuador court and abide by any judgment.
"This campaign is morally reprehensible and violates a promise Chevron made to the U.S. court," said Luis Yanza, a representative of the affected communities. "Our people are dying, and they are spending millions to deny us the chance to be heard in court."
Steven Donziger, an American attorney on the plaintiffs' legal team, added: "Chevron's lobbying is a blatant attempt to hijack U.S. foreign policy to serve its petty interests. This trade agreement should be about national interests, not Chevron's interests."
Other recent roadblocks hit by Chevron in the U.S. include:
- A formal complaint filed by Amazon Watch to the Securities and Exchange Commission, accusing Chevron of committing fraud by hiding its multi-billion dollar liability from shareholders. The company has never mentioned the potential liability in its public filings, even though the judgment could be the largest in history against an oil company;
- A letter to members of the House Ways and Means Committee by the plaintiff's group, the Amazon Defense Coalition, accusing Chevron of "inappropriate" lobbying to undermine the rule of law in Ecuador;
- The filing of three separate shareholder resolutions on Chevron's environmental and human rights policies, one specifically asking Chevron to address its Ecuador problem so the potential liability does not increase further. In the past, several large institutional shareholders, including public pension funds in New York and California, have supported similar resolutions. The resolutions will be voted on at the annual shareholders meeting, to be held in April.
Studies have found markedly higher rates of cancer in the region in Ecuador where the contamination exists, including rates of leukemia in young children three times higher than in the rest of the country. In addition, rates of birth defects and miscarriages are significantly higher than in other parts of Ecuador.
The pressure against Chevron comes as the company enjoys record profits, raking in $27.5 billion in 2005. This was the highest profit in Chevron's 126-year history, and it comes at a time when Americans are paying record prices at the gas pump.