Decision Should Move $6 Billion Case Toward Faster Conclusion, Say Indigenous Groups and Lawyers
25 August 2006 - FOR IMMEDIATE RELEASE
Contact: Karen Hinton at +1.703.798.3109
Quito, Ecuador - In a major blow to Chevron in its $6 billion class-action pollution trial in Ecuador, a judge this week canceled almost all of the remaining judicial inspections sought by the parties in a move to speed the case toward a final decision.
Chevron is accused in the lawsuit of dumping more than 18 billion gallons of toxic waste into Ecuador's rainforest between 1964 and 1992, or 30 times more oil than was spilled during the Exxon Valdez disaster. The suit charges the dumping and the abandonment of roughly 1,000 toxic waste pits threatens five indigenous groups and has produced cancers and other oil-related health problems.
Clean-up is estimated at $6.1 billion and some experts, such as noted chemist Ann Maest, consider the area where Chevron operated in Ecuador unfit for human habitation.
The evidence in the lawsuit, the first by rainforest residents against a U.S. oil company in their own court system, is based largely on field inspections of former Chevron well sites where scientists from both sides take water and soil samples to determine the presence of toxic contamination. Thus far, both Chevron and the plaintiffs are reporting extensive and life-threatening levels of contamination at 100% of the 42 sites inspected, often at levels hundreds of times higher than those permitted by U.S. and Ecuadorian environmental norms.
Lawyers for the plaintiffs believe the 42 inspections are more than enough to prove the case against the company and that Chevron's motion to conduct 64 additional inspections was intended to delay a final decision. If accepted, the motion would have added at least three years to the trial.
The Ecuador judge, German Yanez, issued the order Wednesday. Lawyers for the class, which includes 30,000 people, praised the decision.
"Chevron wanted the trial to drag on endlessly because it fears the outcome, and this attempt to add dozens of unnecessary inspections was the centerpiece of its delay strategy," said Alejandro Ponce, a member of the legal team.
"Chevron has determined that it is cheaper to pay lawyers to litigate for several years than to fund a clean-up that could save hundreds of lives and protect the company from further liability and reputational harm," he added. "We urge the responsible leadership of Chevron to change course because shareholders and management are at substantial risk in Ecuador, as this decision makes clear."
Ponce said if further delays by Chevron can be forestalled, the case could be decided in 2007. Chevron still has the right to inspect ten additional sites that it requested at the beginning of the trial, but the company has failed to ask the court to schedule those inspections. The plaintiffs are thinking of filing a motion to cancel them if no action is taken soon.
The final phase of the trial is an overall damage assessment, which the plaintiffs are currently preparing. Once the inspections are complete and the damage assessment is submitted, the court will hear final arguments and make a decision.
"The court has now completed inspections of a statistically significant sample of sites," said Pablo Fajardo, another lawyer for the plaintiffs. "At each site inspected, scientists on both sides have found high levels of toxic contamination so there is no serious factual dispute relating to the core issue of the case. The court does not need more site inspections to make a decision."
To illustrate a typical example of the proof at the trial, a Chevron well site (Lago 2) reported Total Petroleum Hydrocarbons (a benchmark measure of chemicals in petroleum contamination) in the soil at 325,000 parts per million (ppm), or 3,250 times higher than the typical U.S. standard of 100 ppm. Chevron reported to Ecuador's government in 1998 that Lago 2 had fewer than 5,000 ppm after a purported $40 million remediation. Similar discrepancies are being found at several sites as part of the inspections process.
The decision denying the 64 inspections is the latest setback for Chevron in Ecuador. In addition to facing a fraud lawsuit filed by Ecuador's Attorney General in the U.S., Chevron faces an investigation by the Securities and Exchange Commission into the company's failure to disclose its Ecuador liability to shareholders. Ecuador's national prosecutor has launched a criminal investigation into the fraud charges that could ensnare the high-level Chevron executive who oversaw the remediation.
Amnesty International also has criticized the company following a series of threats and robberies of members of the plaintiff's legal team in the Ecuador case.
Chevron, which recently reported record quarterly profits on revenue of $53 billion, claims the toxic dumping in Ecuador caused no harm and that a release from Ecuador's government protects it from liability. The company earned an estimated $30 billion in profits in Ecuador over the course of its operations.