In Ecuador, High Stakes in Case Against Chevron
Tuesday, April 28, 2009
LAGO AGRIO, Ecuador -- Deep in the northern Ecuadoran rain forest, next to pits filled with noxious sludge, a lawyer on his very first case argued that a U.S. oil company had deliberately fouled a swath of jungle nearly the size of Delaware during two decades of production.
Wearing a straw hat for the recent outdoor hearing, Pablo Fajardo was delivering the final arguments in a lawsuit that began in New York in 1993 against Texaco but is wrapping up here against Chevron, which bought Texaco in 2001. The stakes are high -- and so tinged with nationalism that Ecuador's President Rafael Correa has openly sided with the plaintiffs, 48 individuals representing tens of thousands of people in the region.
If the judge rules against Chevron, the company could face the largest damages award ever handed down in an environmental case, dwarfing the $3.9 billion awarded against ExxonMobil for the 1989 spill in Alaska.
A report by a court-appointed team last year concluded that pollution caused mainly by Texaco's Ecuadoran affiliate, Texaco Petroleum, had led to 1,401 cancer deaths in this stretch of Amazonian jungle. The team's leader, Ecuadoran geologist Richard Cabrera, reported finding high levels of toxins in soil and water samples near Texaco's production sites and assessed damages at up to $27.3 billion.
"This is a simple case," said Fajardo, 37, a former oil worker. "We ask, is there damage or not? If there is damage, who pays? And if there is payment, how much and to whom?"
For Fajardo and his team, two 20-something lawyers financed by a Philadelphia law firm, the blame rests squarely with Texaco and, now, Chevron. They say that for 18 years, from the time Texaco started full-scale production in Ecuador in 1972, the company unloaded drilling mud and wastewater into hundreds of unlined pits or directly into waterways. They accuse Texaco of choosing savings over safety, and say the company botched a highly publicized cleanup of its production sites in the 1990s.
Chevron argues that Texaco complied with Ecuadoran law and that the case is driven more by emotion than science. A cornerstone of its defense is that Ecuador's government relieved Texaco of responsibility after the $40 million, three-year cleanup, which ended in 1998. Chevron also blames Texaco's successor and former partner, Petroecuador, saying that the state oil company is responsible for hundreds of oil spills since it took over operations in 1990.
Attorneys for Chevron call Cabrera's report a sham and say he was cozy with the plaintiffs. The company has issued its own expert reports to support its assertion that there is no link between oil and cancer in this swath of jungle.
Judge Juan Nuñez said he will begin reviewing about 145,000 pages of evidence after reports on the effects of the discharges on fishing and agriculture are completed.
"This trial should finish this year," he said, speaking in his bare office here in Lago Agrio, a dusty oil town named for Sour Lake, Texas, where Texaco got its start in 1903. "This has taken too long."
The case has attracted the attention of energy companies worldwide and, closer to home, the interest of Ecuador's 46-year-old populist president.
Correa, who took office in 2007 and has frequently tangled with oil companies, has said that Texaco's "savage exploitation" of oil "killed and poisoned people." He has also called Texaco's cleanup a charade, in which the company simply covered polluted sites with dirt, and labeled Chevron's Ecuadoran attorneys "sellouts."