Indigenous Lawsuit Targets Texaco

A lawsuit demanding Texaco clean up the region in Ecuador where it operated from 1972 to 1990 is a new model for international legal battles

By Mike Ceasar, Miami Herald
19 April 2006

LAGO AGRIO, Ecuador - For years, Jose Garcia and his wife, Maria, drank, bathed and washed their clothes in river waters amidst the jungle, plantations and oil wells of eastern Ecuador.

Today, Garcia, 36, a slender, sun-baked farmer, blames Texaco for his wife's uterine cancer and his own skin fungus infections.

''I've got nothing left, from caring for my wife's health, but I think [curing her] is impossible,'' Garcia told a judge at a March inspection of an oil well set amidst verdant jungle and palm plantations.

That inspection, and more than 100 similar ones, are being carried out in connection with a lawsuit by an indigenous group demanding that Texaco -- now part of ChevronTexaco -- clean up the region where it operated from 1972 to 1990. The cost of the cleanup is estimated at $6 billion to $10 billion.

The company disputes the allegations in the case, which is being heard under a novel arrangement that could make it a milestone in the way U.S. corporations deal with legal challenges in the developing world.

Plaintiffs alleging abuses by U.S. companies in poor countries generally file suit in U.S. courts, which have the power to enforce their rulings. Corporate defendants, in turn, try to have the cases moved to the nations where the events occurred, where legal systems are often slow and a judgment may be meaningless.

The Texaco case was filed in New York in 1993. In 2002, an appeals court sent the case back to Ecuador, but the U.S. judge promised to oversee enforcement of the Ecuadorian court's ruling.

If the plaintiffs win, it will show corporations that ''if they engage in practices that are obsolete in the countries they come from, they will be held to account for the environmental damage,'' said Marcos Orellana, a senior attorney with the Washington-based Center for International Environmental Law.

ChevronTexaco denies it is to blame for any health problems in the sweltering and sparsely populated Oriente region that makes up most of eastern Ecuador.

The company notes that it operated here as the minority partner of state-owned Petroecuador, which had final say on policy decisions.

It says its waste disposal methods were standard practice for the era, and that the government approved its $40 million remediation program, completed in 1998 after it ceased operations, to clean up polluted sites.

CANCER RATES

Company lawyer Diego Larrea also disputes plaintiffs' contentions that petroleum pollution has made the Oriente region unhealthier than other parts of the country. For example, ''The cancer rates for this area aren't different from other regions,'' he said.

The company says that any health problems that do plague residents stem from poor sanitation, pesticide use and pollution that has taken place since 1992, when Petroecuador began operating the oil fields alone.

A recent Ecuadorian government study that found illegally high concentrations of chromium, chlorides and hydrocarbons in waters from Petroecuador's operations. Near the site of the March inspection, local residents pointed out two recent, uncleaned oil spills by Petroecuador.

The indigenous groups suing ChevronTexaco, however, allege that a major cause of the region's sicknesses was the company's practice of disposing of millions of gallons of waste water from oil operations -- known as ''produced waters'' -- in rivers and streams.

Such waters' qualities vary widely, but they sometimes can make land infertile and rivers too salty for fish. Since 1969, Texas has required, with narrow exceptions, that oil companies inject produced waters back underground.

Two former Texaco engineers said in interviews that even though the state oil company nominally held authority, Texaco, a much larger and older company, set the consortium's operating policies.

''The operation was managed by Texaco,'' said Gustavo Pinto, a Texaco petroleum engineer during the mid-1980s and now a professor at Quito's Central University.

The engineers described the Oriente in the 1970s and 1980s as a frontier region to which the government gave little attention except to extract natural resources. While Texaco did use settling ponds to remove much of the petroleum from the produced waters, neither the government nor the oil industry showed much concern for environmental impacts, the men said.

''Under the laws that existed there was no control'' of environmental quality, said Pedro Espin, who worked for Texaco from 1969 to 1989, rising to chief of exploration. He now teaches geology at Central University.

RAVAGED REGION

Few dispute the sorry state of Ecuador's Oriente region today. Since the oil boom began here in the 1970s, some of the region's lands and waters have been polluted, rain forests have been chopped down and indigenous peoples have lost land.

Despite the region's tremendous petroleum wealth, many communities today lack potable water, sewage systems and health services.

The same complaints are heard across Ecuador despite its riches as South America's second-largest oil exporter.

Guillermo Muñoz, prefect of the Lago Agrio area, estimates that 85 percent of rural residents live in poverty and lack basic education, healthcare and nutrition. Such chronic poverty and resentment have fueled repeated protests across Ecuador, toppling presidents and threatening its democratic system.