Quito Claims Oil Giant Misrepresented Test Results In Rainforest Clean-Up
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Washington, D.C. - Ecuador has taken the unusual step of formally requesting the U.S. Justice Department investigate Chevron over a possible fraud to cover up what experts believe could be the largest oil-related contamination in the world. - one 30 times larger than the Exxon Valdez spill.
Chevron (formerly Texaco) is currently a defendant in a class-action civil lawsuit in Ecuador over the contamination, which includes the abandonment of roughly 1,000 open-air toxic waste pits in an inhabited area of rainforest and the dumping of 18 billion gallons of toxic wastewater across an area the size of Rhode Island. The plaintiffs estimate clean-up to cost at least $6 billion, with the total liability significantly higher if health and economic damages to an estimated 30,000 affected people are also included.
Jose Maria Borja, Ecuador's top legal official, asked for the investigation in a letter to U.S. Attorney General Alberto R. Gonzales. Borja cited an 18-page report written by a team of lawyers for the organization of indigenous groups and towns that brought the civil lawsuit, which is currently on trial in the Ecuadorian town of Lago Agrio.
In the letter to Gonzales, Borja writes "the people of Ecuador would appreciate DOJ conducting a thorough investigation of the allegations" made in Rainforest Catastrophe: Chevron's Fraud and Deceit In Ecuador, available at www.chevrontoxico.com. The report alleges various examples of fraud committed by Chevron to cover up the contamination, including:
- Chevron lied to Ecuador's government by claiming it cleaned up hundreds of toxic waste pits in the mid-1990s when life-threatening levels of carcinogens remain, according to independent laboratory analyses.
- Chevron deliberately hid the existence of approximately 200 toxic waste pits by covering them with dirt to avoid remediating them.
- Via its fraud, Chevron ended up paying less than 1% of the true cost of a clean-up and then convinced Ecuador's government to "release" it from further liability by using false test results.
- In an ongoing cover-up, Chevron has proposed that Ecuador's court adopt a law that allows concentrations of toxins in the soil 100 times greater than in the U.S.
Borja indicated in the letter that his office was unable to conduct an investigation of Chevron because it is involved in litigation against the company in U.S. federal court in New York. In that case, Chevron and the government of Ecuador are fighting over who should pay for the liability stemming from the Lago Agrio trial in Ecuador.
Chevron is accused of causing the pollution as the exclusive operator of an oil concession in Ecuador's Amazon from 1964 to 1990. The concession included roughly 350 wells and was built on the ancestral land of five indigenous groups, two of which are on the verge of extinction because of lost territory and fouled soil and rivers. Various academic studies show significantly elevated rates of leukemia in the region compared to other parts of the country.
Ecuador's state oil company, Petroecuador, currently operates Texaco's old concession in Ecuador. The Lago Agrio trial is expected to end in 2007, while the New York litigation is scheduled for trial in March.
Chevron is also under investigation from the Securities and Exchange Commission for allegedly failing to disclose the potential Ecuador liability to shareholders. Ecuador's lead national prosecutor (or Fiscalia, an office independent of the Attorney General) is also investigating the company on possible criminal violations.