Investigation Cites Seven Examples of Chevron Fraud in Ecuador Rainforest

Indicates Oil Giant Paid Less Than 1% of Actual Cost Of Clean-Up, Then Lied About Results

Amazon Watch

Amazon Watch
15 November 2006 - FOR IMMEDIATE RELEASE
Contact: Paul Paz y MiƱo: +1 510.281.9020 x302,

Click here to read the full memo on Chevron's Fraud and Deceit in Ecuador.

Quito - A new investigative report on Chevron's controversial operations in Ecuador's Amazon rainforest details seven examples of fraud committed by the oil giant to hide a potential multi-billion dollar liability from shareholders and the financial markets.

The 19-page report, titled Rainforest Catastrophe: Chevron's Fraud and Deceit In Ecuador, was written by lawyers representing 30,000 rainforest residents who are suing the company for clean-up of their ancestral lands. Chevron is accused in the lawsuit of dumping more than 18 billion gallons of toxic waste into Ecuador's rainforest between 1964 and 1992, containing 30 times more crude oil than that spilled in the Exxon Valdez disaster. Some experts believe it is the largest oil-related contamination on the planet.

The lawsuit charges the dumping and the abandonment of roughly 1,000 toxic waste pits threatens five indigenous groups and would cost at least $6.14 billion to remediate. Dr. Ann Maest, a noted American 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 frauds committed by Chevron that are cited in the report include:

  • Chevron paid only $40 million for a clean-up to secure a legal release, or less than 1% of the real $6 billion cost of a comprehensive remediation;
  • Chevron illegally hid the existence of dozens of open-air toxic waste pits during negotiations with Ecuador's government over its clean-up obligations;
  • Chevron used an illegal laboratory test to falsely lower levels of toxic contamination to deceive Ecuador's government into granting it a legal release;
    Chevron used a clean-up standard in Ecuador that allowed 50 times more toxic contamination in the soil than the standard in the U.S. at the same time;
  • Chevron has not disclosed that it has employees targeted by an ongoing criminal investigation in Ecuador into the company's fraud;
  • Chevron is violating its social responsibility and governance policies in Ecuador but not respecting local communities that are suffering cancers and other oil-related diseases;
  • Chevron's fraud is continuing today during the trial against the oil giant in Ecuador, as company scientists try to hide actual levels of contamination to deceive the court.

In addition to the burden of the civil trial in Ecuador, Chevron is facing increasing pressure from various regulatory bodies with jurisdiction over the company. Already, Ecuador's lead national prosecutor is investigating Chevron on possible fraud charges while in the U.S. the Securities and Exchange Commission is probing whether the company violated regulations by misleading shareholders as to the extent of its liability.

Embattled Chevron executive, Richard Reis Veiga, the Chevron Vice President who negotiated and supervised the controversial remediation in Ecuador, was put under oath on Nov. 8 by Ecuador's government as part of a multi-billon dollar civil case in U.S. federal court between the company and Ecuador's Attorney General. Reis Veiga is also reportedly the target of the criminal investigation in Ecuador.

The Ecuador trial is to determine how large the contamination liability is, while the U.S. case between Chevron and Ecuador's government is to determine who pays the liability.

The investigative report is available in English at, and in Spanish at The trial in Ecuador is expected to end in the latter part of 2007, while the U.S. case is scheduled for trial in March of next year.


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