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In Ecuador, High Stakes in Case Against Chevron

After 16 years, attorneys are wrapping up a landmark pollution lawsuit brought by Ecuadoran Indians against U.S. oil company Chevron Texaco.

Last April, Correa called for criminal investigations of former government officials who had signed off on Texaco's cleanup in 1998. In September, the attorney general indicted two Chevron attorneys and seven former government officials -- two years after prosecutors had dismissed a similar criminal complaint against the same people.

That is not the way Chevron had hoped events would unfold when its lawyers filed motions in federal court in New York earlier this decade vouching for the professionalism of the Ecuadoran judicial system and asking that the trial be moved here. In 2003, proceedings began, alternating between Lago Agrio's ramshackle courthouse and visits to oil production sites and waste pits. But nearly six years later, Chevron's rosy assessment has given way to a sobering recognition that it may lose the case.

"We're concerned that no court in Ecuador is going to be able to hear or rule freely," said James Craig, a Chevron spokesman. "Clearly, the thumbs of politics are weighing heavily on the scales of justice in Ecuador, and the president has played a major part in that."

During the trial's latest stage, the "judicial inspections" of aging waste sites, local Cofan Indians in traditional garb and residents who say Texaco's operations left them ill showed up to watch the opposing lawyers spar. Judge Nuñez, a baseball cap worn low over his forehead, listened intently.

Among those who came on a recent day was Gabriel Ruales, who recounted how his family used to bathe and fish in a nearby river. He had brought along a 15-year-old son who suffers from a mental disorder and was seated in a wheelchair. "The water was completely salty, poisoned," Ruales said.

Carmen Isabel Bone, a nurse's assistant, also said the local drinking water had been poisoned. "I ask the authorities to give us justice," she said, blaming Texaco for ailments ranging from the flu and skin rashes to cervical cancer.

Diego Larrea, a Quito-based lawyer for Chevron, argued that no medical or scientific evidence has been presented to back such claims. "What we have here is the myth of the jungle," he told Nuñez.

Fajardo shot back, reading from a 1977 letter to state energy officials in which Texaco admitted to a serious leak from a waste pit. An internal 1972 memo, also in Nuñez's hands, instructed Texaco officials in Ecuador to report only spills that attracted the attention of the news media or regulators.

In another letter submitted in court, from 1980, Texaco officials told state energy officials that lining pits -- a precaution against leaks that is common in the United States -- would be prohibitively expensive. "It was cheaper to pay the fines than make the improvements," Fajardo told the judge.

Chevron says such documents were taken out of context and has submitted its own documentation to show that Texaco responded to accidents.

If there is a rare point of agreement in the trial, it is that Petroecuador is not blameless. Company and government officials acknowledge that the state firm also dumped waste into waterways after it assumed control, and that there were spills from its pipelines.

But for 26 years, Texaco was the sole operator, and the plaintiffs say that the waste the company left behind continues to leach into groundwater. The plaintiffs and the Ecuadoran government also argue that Petroecuador has upgraded equipment left by Texaco and modernized disposal of waste, for instance re-injecting wastewater into the ground.

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