Chevron vs. Petroecuador's Responsibility

At its 2008 annual shareholder meeting, Chevron did something that might seem surprising: it aired a video presentation to attendees about the environmental catastrophe in the Ecuadorian Amazon, complete with shocking footage of oil spills, pools of toxic waste and open flaring of noxious gases. The catch? Chevron attributes all of this, and indeed, all the environmental damage in its former concession in Ecuador, to the state-owned oil company, Petroecuador. Chevron insists it is being wrongfully targeted because of its deep pockets.

In reality, Chevron's effort to scapegoat Petroecuador is a shameless attempt to rewrite 40 years of history. From 1964 to 1990, Texaco (now Chevron) designed, built, and operated an oil production system done on the cheap. Rather than see its profits diminish, Texaco used outdated (and illegal in major oil producing states in the U.S.) technology intended to pollute. During this time, Texaco was the sole operator of its oil concession in Ecuador and made all relevant operating decisions, including to dump produced water and to store waste in unlined pits. By the 1980s, the area was internationally recognized as an environmental disaster zone, due to Texaco's negligent practices – in fact, Brazilian petroleum engineers were at one point sent to Ecuador to learn exactly what not to do in a sensitive rainforest environment.

In 1991 Texaco was in the process of leaving Ecuador, and leaving behind what is now considered one of the worst oil related disasters on the planet.

By 1993, based on the overwhelming level of environmental contamination throughout Texaco's former concession area, the Aguinda v. Texaco case was filed in the state of New York, then home to Texaco's corporate headquarters. Petroecuador had just begun to take over the company's former operations. In other words, the concession area was an environmental disaster zone comprised of thousands of what would be Superfund sites in the U.S., before Petroecuador even began operating.

This mess still exists today. A $40 million remediation conducted by Texaco in the mid-1990s was pathetically inadequate. Waste pits buried or left standing by Texaco continue to leak crude oil, and the health effects of 26 years of Texaco operations continue to multiply, among people who have lived for decades amid appalling pollution.

Petroecuador has operated the concession for nearly two decades, and we readily admit it has a poor environmental track record, including many oil spills. Part of this is due to the fact that the company inherited utterly inadequate infrastructure and technology from Texaco: technology that was obsolete in the 1970s, let alone now. Nonetheless, Petroecuador has made some, although insufficient, steps over the years to clean up its operation and finally catch up to industry standards. For example, it now reinjects nearly 100% of its produced water. For 26 years, Texaco never reinjected any.

Chevron claims it is being targeted while plaintiffs and environmental activists allow Petroecuador to escape blameless. This is hardly the case. Petroecuador deserves to share in the blame for the disaster in the Oriente. However, it is not the responsibility of plaintiffs in the trial to identify every actor that may be responsible for environmental damage, or to decide how to apportion the damages. According to the legal theory of joint and several liability, plaintiffs need only sue Chevron, which as the designer of the system and the sole operator for 26 years is clearly principally responsible for the harm they have suffered. Chevron, in turn, is free to sue Petroecuador for a portion of the damages, and in fact has made preparations to do so.

It is utterly false for Chevron to claim that it bears no responsibility for the continuing crisis in the Oriente, and equally false to say that the plaintiffs, by suing Chevron, are letting Petroecuador escape blameless. This argument is an attempt to sidestep responsibility and whitewash history.

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