My lovely Aunt Cathie, who lives in New York City, recently sent me a copy of the January 9, 2012 issue of The New Yorker, because it contained an article about the ongoing nineteen-year lawsuit over Texaco’s oil drilling in Ecuador. Since I studied abroad in Quito, Ecuador’s capital city, for a semester my junior year of college, she knows I care about the issues the country is facing.
Recently, an Ecuadorian appellate court upheld an $8.6 billion ruling in the matter, but the legal battle will undoubtedly wage on, as the ruling is sure to be appealed once again. Interestingly enough, during my stay in Ecuador, I traveled extensively throughout the country, and I even made a visit to the Amazon, where I saw the damage from the oil drilling for my own eyes. The New Yorker article brought back memories of the black, tar-like substance scattered throughout the fields of the Amazon, of the sick people who just wanted to be left alone, and of the terrible injustice caused by this international oil company in collusion with the dysfunctional Ecuadorian government of the day.
Starting in 1967, a consortium of companies led by Texaco spent twenty-three years drilling for oil in the Amazon. Today, what remains is a vast array of environmental damage that has altered the face of the treasured rain forest and harmed the health of the populations who once enjoyed life there.
As The New Yorker article explains, one challenge with drilling oil is deciding how to handle the additional residue that comes from the ground in the process. This heavy-metal fortified liquid is called “produced water,” and it is separated as much as possible from the crude oil at the site of drilling. In the United States, it is common practice to re-inject this liquid deep underground into wells designated for this purpose. In Ecuador, however, Texaco used the far less costly method of dumping the liquid into large pits dug into the earth, each about the size of a typical swimming pool. Various organizations have attempted to quantify the scale of this dumping, and the consensus seems to be that there are at least eight hundred of these pits dotting the rain forest, with total estimates in the billions of gallons for the amount of toxic waste involved.
In 1993, a group of Ecuadorians began a legal battle against Texaco for the environmental and community destruction caused by the oil drilling. When Texaco was purchased by Chevron in 2001, Chevron inherited the lawsuit. The plaintiffs have produced study after study showing the higher rates of cancer, miscarriage, birth defects, dead livestock, and sick fish in the area. Of course, for each study produced along the way, Texaco hired ecological consultants, who provided their own counter studies showing the opposite effects.
To Chevron’s credit, a lawsuit does not hold much water if the company did not actually break any laws. Consequently, Ecuador had virtually no environmental protection laws in place during the time of the drilling. At the time, oil earnings constituted about a third of the Ecuadorian government’s revenue, so one can imagine that corruption and self-interest may have played a role in the government's lack of regulation surrounding Texaco’s activities. Texaco has long claimed that their operations were in line with the standards of the time. In addition, Texaco was part of an oil consortium, which included the government-owned oil company, Petroecuador. Provided that Texaco truly did remain within the boundaries of Ecuadorian law at the time, and provided they did not intentionally mislead the government about their practices, I am not sure there is a strong legal case to be made. (I am not a lawyer, however, so perhaps I am missing something here.)
Further complicating the situation is the problem that lawyers on both sides of the lawsuit have engaged in ethically questionable behaviors, which are reported in great depth in The New Yorker article. I will not go into those details in this post, but the important point is that this has brought the entire basis of the lawsuit into question on a number of occasions.
In 1995, Chevron finally admitted that Texaco had made a mess in the Amazon and spent forty million dollars on cleanup. However, because Texaco had only held a 37% share in the oil consortium, they determined to clean up only 37% of the reported pits. This is despite the fact that Texaco had been the sole operator overseeing work in the Amazon, drilling 100% of the oil wells and physically creating 100% of the produced water pits. After this cleanup effort, Chevron left the rest of the cleanup to the nationally owned Petroecuador – with the Ecuadorian government officially releasing Chevron from any further responsibility in 1998. Of course, given the other pressing issues of the country, it is unlikely the government will be able to produce the funds to undertake the rest of the cleanup effort in the near future.
From Chevron’s perspective, as expressed by a Chevron lawyer, “This is not about dirt in Ecuador. It is about a contract and how to interpret it.” In other words, they have met what they believe to be their minimum legal obligation, and that means they are done.
But that’s just it! While the lawsuit may not ultimately hold up in a court of law and is arguably “not about the dirt in Ecuador,” the ethical issue of who should claim responsibility is precisely about that dirt!
What about doing the right thing for the right reason, period?
While Chevron may not be held to a precise legal obligation to do any further cleanup, I cannot help but be disconcerted that they are clinging to legal technicalities to neglect what I would consider their greater moral obligation. I do believe that the government of Ecuador should be held responsible for its egregious failure to pass laws to protect its own citizens or to monitor the activities of large corporations. At the same time, I know that the government of Ecuador does not have the experience or the funds to undergo such a large-scale cleanup effort in the wake of the devastation left by Texaco.
I understand that companies like Chevron are primarily concerned with making money, and I know they have little fiscal incentive to take responsibility above the bare minimum required by the law, but it is still outrageous that they are willing to ignore a major public health issue for the sake of money. These are real people suffering real life-threatening consequences from Texaco's real mistakes!
I found a few quotes from The New Yorker article especially enlightening. At one point, the article cites a Chevron lobbyist in Washington as stating to Newsweek in 2008, “We can’t let little countries screw around with big companies like this.”
If that is not corporate arrogance at its finest, I don’t know what is.
Another section of the article reads, “In Quito, I met a woman named Margarita Yepez, who spent eighteen years as a social worker for Texaco. In the early days, she said, gringo oilmen told the Lago Agrio locals, in jest, that oil was good for one’s health; a coffee can full of crude could cure arthritis or male-pattern baldness – just rub some on the affected area. ‘They were the authority, so we trusted them,’ she said. ‘We were dumb.’” (Read a few paragraphs down to find out the real effects of human exposure to crude oil.)
I believe that Texaco not only took advantage of inadequate environmental regulations, as many companies have done throughout the world, but also exploited a vulnerable population that they regarded as inferior, treating them with a lack of empathy and outright disrespect.
When I visited the Amazon, I heard and observed some additional information that was not published in The New Yorker article. Most of this came from local sources in the region, so of course it is likely to reflect the biases of the storytellers. But it is still worth sharing.
The first piece of information was that even though the pit-dumping method was not the preferred one for getting rid of produced water, there were still industry standards for constructing these pits. The standards were designed to keep the produced water confined to the pits, so that it did not leak into ground water. Unfortunately, the produced water (as well as patches of the crude oil that remained in the produced water) can be found strewn throughout the Amazon, not just constrained to these pits. In other words, it has found its way out of the designated areas over the years. I was told by local sources that Texaco cut corners constructing the pits, neglecting safety and environmental norms, which caused these problems. Regardless of whether or not they actually intentionally mis-constructed the pits, the evidence on the bottom of my shoes spoke for itself that something went terribly wrong with the quarantine plan.
The second piece of information I was given was that Texaco had been under legal obligation to report all of the constructed pits to the Ecuadorian government. However, it is believed that they only reported a fraction of the total number of pits. This is another reason why it is hard to determine the precise environmental impact – new pits continued to be discovered years after Texaco discontinued operations in the region.
The third piece of additional information was that Chevron’s forty million dollar cleanup job of 37% of the pits also consisted of shoddy work, primarily involving the removal of the top layers of sludge from the soil and planting grasses and shrubs on the affected areas. Unfortunately, I visited these “cleaned-up” areas and saw with my own eyes that in just a few short years of normal erosion, the soil had turned up more sludge, which is clearly visible among the shrubs and grasses.
Chevron has claimed that locals intentionally plant contamination in rivers, fields, etc. to support their case of environmental damage. I can see this happening in a few isolated instances, but I find this hard to believe on a consistent basis, given the large scale of the problems I personally witnessed.
In a rather humorous story in The New Yorker article, which illustrates Chevron's state of denial, the author tells of his visit to an oil pit with a Chevron spokesman. He writes, "A few miles outside Lago Agrio, we stood on the lip of a waste pit, and Craig [the Chevron spokesman] told me that the vile-looking residue on its surface was only a few inches thick. To illustrate this point, he picked up a rock and lobbed it into the pit. It landed, with a sickly thud, on the surface. 'If we had a bigger rock...' he said, and threw a much larger one. It, too, failed to sink." Just prior to recounting this experience, the author shares that a local showed him how he was actually able to stand completely on top of the crust, and when he shifted his weight from foot to foot, the surface undulated beneath him. That sounds like a bigger problem than a few inches of filth.
Chevron also continues to claim that “there is no corroborating evidence” of adverse health effects related to oil development in the region and complains that those who live there blame Texaco for every problem they experience. As Sylvia Garro, Chevron’s global issues executive said, “If their cow dies, it’s Texaco. If their wife has diabetes, it’s Texaco.”
Yet consider the dramatic concerns over the approximately two hundred million gallons of oil spilled into the Gulf of Mexico in 2010. Would BP have dared to call the fearful people of the Gulf Coast towns paranoid or ignorant locals? No! We would have considered that disingenuous, at best. (Not to mention, that would be criticizing American citizens, rather than indigenous peoples of a third world country. So of course, this would invoke more anger, because it is us and not someone else.)
But let's consider the plight of these "someone else's." Multiply the Gulf Oil Spill by one hundred, and you will have an estimate of how much toxic oil waste is believed to pollute the Amazon after Texaco’s tenure.
According to the Utah Department of Health, the prolonged effects of crude oil exposure include “lung, liver, and kidney damage, infertility, immune system suppression, disruption of hormone levels, blood disorders, gene mutations, and cancer.” Produced water, the black sludge found in the Amazon, has been shown in countless scientific studies to contain significant traces of the crude oil from which it is separated. How, then, can Texaco/Chevron in good conscience claim that “produced water” has no health effects?
It is easy to sit in an executive office and claim that the public health threat is not real, but entire tribes of people have been nearly wiped out from the area, locals can no longer drink the water, and many of their traditional healing herbs can no longer be found or used. Babies are being born with a wide range of birth defects, and entire families are dying of cancer. I can tell you from my own travels that I would be hesitant to eat even one salad grown from the soil I saw in these Amazon villages, never mind subsisting entirely on what is grown there. I would love to see a Chevron executive back up the company’s claims by eating the produce from the affected areas for a year or more. I think you would be hard pressed to find one who would consider doing it for even one week.
As mentioned at the beginning of my post, on January 4 of this year, an Ecuadorian appeals court upheld an $8.6 billion ruling against Chevron. The ruling also indicates that Chevron must apologize to Ecuador, or the fine will be doubled. Chevron has said they will appeal this latest ruling to the next level, Ecuador’s National Court of Justice, as they maintain that they have done nothing illegal, that the ruling is politicized, that the judgment cannot be enforced, and that corruption has tainted the case as the justice system has been inappropriately conspiring with the plaintiffs’ counsel.
Perhaps Chevron is right that they should no longer have a legal obligation to clean up the Amazon.
However, the more important question, in my mind, is whether they should take that as the green light to leave the rain forest in a state of environmental disaster, and more importantly, to ignore the heart-wrenching plight of real, live people? In the absence of a legal obligation, does that mean it is right for Chevron to walk away?
I think not.
Note: The above photos were actually taken by my friends when we traveled to the Amazon together.