Ecuador government urged not to give in to pressure from the US oil giant Chevron to drop record $18 billion fine for its part in the "Chernobyl of the Amazon"
By Tom Levitt, The Ecologist
9 January 2012
In the north-east of Ecuador, bordering Columbia, the rainforest is still thick in places, lying as it does in the vast Amazon basin that stretches across nine countries.
But within this biodiverse-rich corner of the country there is an ecological disaster - compared by some to the legacy of the nuclear meltdown at Chernobyl.
Billions of gallons of toxic waste from oil drilling in the 1960s, 70s and 80s has polluted streams and rivers in the province of Sucumbios, used by indigenous communities for drinking water, bathing and fishing. More than 900 waste pits are reported to lie abandoned within the region, filled with oil sludge that continues to contaminate soils and groundwater and there is an ongoing legacy of higher cancer rates.
Unlike Chernobyl though, this was no accident.
According to a court judgement upheld this week, US oil company Texaco, bought by Chevron in 2001, ran a reckless cost-cutting operation in the country, disregarding the environmental and human impacts of its oil drilling.
After an arduous and volatile 18-year legal battle Chevron has this month been handed an $18 billion bill by an Ecuadorian court for cleaning up its contaminated legacy in the region.
As the US's third largest corporation with annual revenue almost twice the total economic output of Ecuador, many thought the company might be effectively immune to such an outcome.
But as well as re-affirming an earlier ruling, the latest judgement increased the fine from $8.5 billion to $18 billion to cover "moral damages" for threatening the court and repeatedly trying to delay the case.
Although celebrating the victory - the largest award for an environmental case in legal history - representatives of the communities affected say the battle for making Chevron pay has only just begun.
The company has long since sold all its remaining assets in the country. As such the affected communities and their lawyers have little choice but to try and push for a similar court verdict in a country where Chevron operates. A process both hugely complex and costly, say legal experts.
But, with rumours of a much-smaller settlement in the offering and of deals between the Ecuadorian government and Chevron to drop the fine, the oil giant may already be looking for an end to the saga.
Chevron can appeal to the Supreme Court (the highest legal authority in Ecuador) but that would entail paying a substantial bond. In its official response to the verdict, Chevron said the Ecuador courts were corrupt, that its subsidiary Texaco had already cleaned up its share of the environmental damage and that the responsibility now lay with the state to clean up the rest of the damage.
Chevron insist the case would not be enforceable in any court that "observes the rule of law".
Back in 2008, a Chevron lobbyist reportedly said: "We can't let little countries screw around with big companies like this. We're going to fight this until Hell freezes over - and then we'll fight it out on the ice."
Chevron looking for deal?
However, with news that it may be facing a $10 billion fine in Brazil for a recent oil spill and more significantly, an injunction against the company's activities in the country, the company's appetite for continuing what has already been a hugely costly legal battle may be waning.
"Chevron desperately want this case to end," says Kevin Koenig from the NGO AmazonWatch. "They are looking for any way to get government support in Ecuador to close the matter off."
There have recently been reports that the company would be willing to make a donation to Ecuador's groundbreaking Yasuni-ITT project, which, ironically, plans to halt the exploitation of billions of dollars worth of oil reserves in a pristine national park if the country can raise half of the potential lost revenue through international donors.
Such a scenario, if true, creates a dilemma for the affected communities.
Speaking to the Ecologist, Pablo Fajardo, the Ecuador-based lawyer representing 30,000 farmers and indigenous people bringing the case, says they would not settle for an amount less than required to clean up the affected area.
"Indigenous people, peasants, all of us involved in this fight have thrown off any individual interest; it is a collective fight. We are not looking for money for any particular person; we just want the company to repair the damage done," he says. "To clean the water, the land, rebuild the lives of indigenous people and help people affected by cancer due to the company's negligence".
However, legal experts warn attempts to seek a similar judgement internationally would undeniably become political, especially given Chevron's powerful international presence and size. This could make acceptance of a deal, such as a donation to the Yasuni-ITT project, more likely.
Fajardo urges the Ecuadorian government not to give in to Chevron.
"We have the right to justice and we cannot allow Chevron's attempts to prevent our full access to this basic human right. The Yasuni initiative is valid, we support it, but what can't be done is to sacrifice human rights in the name of that cause."
For others, donating to the Yasuni project is a non-starter. "We're talking about an internationally well-known legal case and a project that relies heavily on trust in the Ecuadorian government," says Mario Melo, a lawyer for the indigenous rights NGO Fundación Pachamama. "Starting negotiations with a company convicted for an environmental crime in the Amazon would be a death blow to that international trust."
Melo, who has been voluntarely helping out with the legal case against Chevron, says he does not expect the company to settle. In the US, Chevron has been accused of running a long and costly battle to undermine one of the key lawyers in the case, say campaigners, accusing the lawyer and other members of the Ecuador legal team of corruption.
"We expect the continuation and tightening of the same hostile attitude they have shown thus far in their defamation and media pressure against the Ecudorian authorities, plaintiffs and people supporting this cause," says Melo.
Forgotten oil spills
The biggest challenge may be to keep the corresponding pressure and publicity on Chevron. Unlike BP's gulf oil spill, this was not played out on TV.
Only last month Shell suffered a major oil spill off the coast of Nigeria - officially the worst in the oil-rich country in more than a decade - and just the latest in a series of oil spills in the region that campaigners say the company is yet to be held fully accountable for.
"With Shell’s Bonga spill there is no sign of pressure from the Nigerian government. Shell is simply coasting home on a resistance-free ride on the black gold train," says Nnimmo Bassey, from Friends of the Earth Nigeria.
Begonia Filgueira, an environmental lawyer, says the lack of oversight is not limited to Nigeria and that media pressure as well as government scrutiny is critically important. "Multinationals are able to act much more freely in countries that are not able to keep tabs on their behaviour."
In the Ecuadorian Amazon the toxic legacy of waste ponds and contaminated soils act as a reminder of the damage of unchecked oil exploration. "Just to go to the region where Texaco [now Chevron] operated is enough to find visible proof of the drastic way nature has been destroyed," says Melo.