New Results Suggest Chevron Faces Mounting Liability
13 September 2006 - FOR IMMEDIATE RELEASE
Contact: Karen Hinton at +1.703.798.3109
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Quito, Ecuador – As the historic $6 billion pollution trial against Chevron in Ecuador nears its final phase, the latest scientific results demonstrate that the company faces a massive potential liability for creating levels of toxicity in the rainforest up to thousands of times higher than permitted by Ecuadorian and U.S. law.
One soil sample at a Chevron well-site inspected by the Ecuadorian court, for example, contains life-threatening toxins that exceed maximum amounts permitted by U.S. law by 3,250 times. Tragically, the result it is typical. Cancer rates are the highest in the region where Chevron operated in Ecuador and the pollution has cost hundreds of people their lives, contributing to the extinction of one indigenous group and the endangerment of two others.
The trial results are the latest dose of bad news for Chevron over its Ecuador operations. The government of Ecuador has charged the company with fraud in U.S. federal court over a botched remediation, and the SEC has launched an investigation of Chevron for its failure to disclose its potential Ecuador liability to shareholders.
The trial court in Lago Agrio, Ecuador has inspected 42 former Chevron production sites, results for 35 of which have been reported to the court. A summary demonstrates that:
- At 100% of the 35 sites reported to the court, scientists for both Chevron and the plaintiffs found levels of life-threatening carcinogens significantly higher, in some cases thousands of times higher, than maximum amounts permitted by both Ecuadorian and U.S. law. Actual results can be seen at www.chevrontoxico.com.
- Some of the findings are simply shocking. At the Chevron well-site Lago 2, TPHs were found at 325,000 parts per million – 3,250 times higher than permitted in California, Chevron's home state, and 325 times the maximum level of toxicity permitted by Ecuadorian law. At another site (Sacha Norte 2), Chevron itself reported a TPH sample at 91,800 ppm – or 918 times higher than U.S. law.
- Chevron's own evidence is actually proving the plaintiffs' case. Of 252 water samples taken by Chevron, 249 (99%) exceed maximum limits permissible under Ecuadorian envioronmental laws, which are considered far more lax than those in the U.S. Chevron's consultants simply ignore the law and proclaim without any basis that the samples pose no harm.
- At several inspected sites, levels of toxicity in the soil greatly exceed amounts that Chevron reported in the mid 1990s after performing a supposed remediation in order to secure a release from liability from Ecuador's government. As a result, Ecuador's Attorney General has charged Chevron with fraud in a U.S. federal court in New York, and the country's top law enforcement officer has launched a criminal investigation into what was obviously a sham clean-up.
Chevron is accused in the lawsuit of dumping more than 18 billion gallons of toxic waste, containing 30 times more crude oil than the Exxon Valdez spill, into Ecuador's rainforest between 1964 and 1992. The suit charges that the dumping of toxic waste and abandonment of roughly 1,000 toxic waste pits threatens the lives and livelihoods of tens of thousands of residents and would cost at least $6 billion to remediate. Dr. Ann Maest, a Princeton-educated and widely-published chemist who has testified for the U.S. Department of Justice in environmental cases, considers the area in Ecuador where Chevron operated – roughly the size of Rhode Island – to be unfit for human habitation.
The judge presiding over the trial, German Yanez, recently denied Chevron's motion to conduct an additional 64 site inspections. Lawyers for the affected communities believe they have proved their case, and that the move to continue the inspections was intended by Chevron's lawyers to delay the rendering of a final judgment.
Once the inspections end, the plaintiffs will conduct an overall cost assessment of the damage in the final evidentiary phase of the trial. That phase is expected to start in a matter of weeks.
Chevron recently insisted in a press release that the toxic contamination poses no risk to public health. But Chevron uses several questionable methodologies that plaintiffs claim amount to a coordinated scientific fraud. For example:
- Chevron generally only takes samples in areas far away from the contamination source, such as high elevations, to obtain lower reporting results. Even so, the company is reporting illegal levels of toxic contamination at every site inspected.
- Chevron refuses to test its samples for the most carcingoenic toxins that the company used to build its wells. For example, Chevron does not test for the deadly chemical Chromium 6 – used to perforate the ground when drilling – which has been found by the plaintiffs in dangerously large quantities in the soil.
- Chevron conducts irrelevant tests to distract attention from the real issues. For example, the company tests for coliforms (feces), but coliforms are found in the water in rural areas throughout Ecuador and do not cause cancer.
- Chevron cherry-picks lax legal standards from around the world and presents them to the court as the governing law. For example, Chevron cites an obscure rule from Louisiana to justify its high TPHs, but fails to mention that the rule is only applied in Louisiana when waste pits are closed using concrete liners ensuring that drinking water cannot be contaminated. Chevron used unlined waste pits in Ecuador and the toxins leeched into rivers and streams that local populations still depend on for drinking, bathing, watering their crops and nourishing their animals.
"Chevron's entire clean-up was a sham, and the fraud is continuing in the Lago trial," said Pablo Fajardo, a lawyer for the plaintiffs.
Chevron's legal team also may be creating additional liability for the company by making misleading public statements that claim the contamination poses no public health risk.
These highly suspect claims have prompted the SEC to open a probe into whether Chevron management is deliberately hiding its Ecuador liability from shareholders. An independent expert has estimated a clean-up would cost $6.1 billion, not including personal damages to the thousands of residents in the region.