Environmental
Justice Case Study: Texaco’s Oil Production in the Ecuadorian Rainforest
Ecuador-Kristi Jacques
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Table of Contents
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Background
The history of
petroleum development in Ecuador began in 1878 when the National Assembly of
Ecuador granted exclusive rights to M.G. Mier and Company for the extraction of
petroleum, tar, kerosene and other bituminous substances. Years later in 1937, the government of Ecuador
granted Shell Oil the first oil concession in the Oriente region of the Amazon
rainforest (“History of Operations,” 2000).
This area encompasses about 200 square miles in the northern part of the
Amazon region, one of the most fragile ecosystems in the world. It is inhabited by eight indigenous tribes
who live mostly in small villages along the river courses and it holds five
percent of all plant species on Earth (“El Oriente,” 2000; “Why a Lawsuit?”
2000). Many of the 10,000 species of
plants, fishes, and birds are now endangered (Press, 1999). It also contains enormous oil reserves, and
in 1964, a Texaco subsidiary called Texaco Petroleum Company was invited by the
government to explore for and produce oil in the region through a partnership
with the government (“History of Operations,” 2000).
Texaco’s role in
the operation was to design the wells, build the pipeline that would transport
the oil across the Andes Mountains to the Pacific Coast, and manage on behalf
of a consortium that included Petroecuador, Ecuador’s state-run oil company
(“Why a Lawsuit?” 2000). Texaco’s
involvement in the project was governed by a 28-year concession agreement and
by 1977 Petroecuador became the majority owner and Texaco Petroleum a minority
owner. Finally, in 1992, Texaco’s
concession ended and Petroecuador became the full owner. Over their years in Ecuador, Texaco provided
jobs for 840 employees and 2,000 contract workers. The amount of money generated by the consortium that was received
by the country represented more than 50 percent of their Gross National Product
(GNP) during that period (“History of Operations,” 2000).
Unfortunately,
oil drilling was not completely beneficial to the country. Ecuador had no experience in the oil
industry and relied heavily on Texaco to design and build the infrastructure
for the extraction of oil and transportation to the market. The governmental leaders trusted that Texaco
would use at least the minimum of technological standards it used drilling in
the United States and around the world.
However, Texaco decided to dispose of the byproducts of drilling, called
“production water,” by dumping it into unlined pits dug out of topsoil next to
each of the 300 wells (“Why a Lawsuit?” 2000; Talbot, 1999). “Production water” is water trapped in the
geological formation that is brought to the surface when oil is produced. This wastewater was highly toxic and
millions of gallons were dumped into the pits.
Texaco’s policy in other areas it operates is to reinject the wastewater
into the ground, where it cannot endanger the environment. The amount of savings Texaco achieved
through this procedure totaled $5 billion over the time of its operations in
Ecuador (“Why a Lawsuit?” 2000).
 |
Texaco Petroleum operated in Ecuador
from 1964 to 1992 in partnership with Petroecuador, Ecuador’s state-run
oil company. |
 |
This is one of the 300 open pits built by Texaco in the Ecuadorian Amazon to dump its wastewater and raw crude oil. This method of waste disposal was done instead of reinjecting the substances into the ground, which is less environmentally harmful. Lou Dematteis, 1999, www.texacorainforest.org |
Another
hazardous activity performed by Texaco was the burning of excess crude oil and
wastewater, resulting in the occurrence of what local people refer to as “black
rain.” The waste was dumped into
landfills and spread over dirt roads in order to maintain them and control dust
(“Yana Curi Report,” 2000; “Why a Lawsuit?” 2000). Texaco did not maintain the pipeline network properly, and this
resulted in further discharges of crude oil into the environment (“Why a
Lawsuit?” 2000). It is claimed that
more oil has been dumped into the rainforest than was spilled by the Exxon
Valdez into Prince William Sound (Talbot, 1999).
Texaco claims that
its savings were much smaller than $5 billion and that they complied with
environmental laws of Ecuador and international petroleum industry
standards. They also claim to have
developed new industry standards for operating in sensitive environments (“Residents
take Texaco…,” 2000; “History of Operations,” 2000). At the end of their concession, two audits were conducted to
assess the impact of Texaco on the local environment. The result of these audits was $40 million in remediation money
given by Texaco in 1995 (“Remediation,” 2000).
However, they failed to build water treatment plants, medical
facilities, and reforestation projects promised as part of the cleanup
agreement (Markels, 1999).
Problem
Among the
consequences of Texaco’s drilling in Ecuador is an ongoing and critical health
crisis. Health workers have documented
an increase in problems such as a rise in cancer rates, miscarriages and birth
defects. A study conducted by the
Ecuadorian Union of Popular Health Promoters of the Amazon (UPPSAE) found
higher occurrences of spontaneous abortions, dermatitis, headaches, and nausea
in people of the Oriente. These serious
health effects are attributed to the results of the oil producing operations
conducted by Texaco (“Response to Claims,” 2000).
Another study,
performed in 1993 by The Center for Economic and Social Rights (CESR),
demonstrated that “residents of the Ecuadorian Amazon are exposed to levels of
oil-related contaminants that significantly exceed internationally-recognized
safety limits, and that dermatoses and other skin problems related to oil
contamination were found in residents near oil facilities. Such levels of exposure, of course, suggest
an increased risk of more serious health problems, including cancers (“Response
to Claims,” 2000).”
The Department
of Tropical Medicine and Hygiene of the University of London produced a study
that documented dramatically increased rates of cancer among the populations in
the areas where Texaco drilled (“Yana Curi Report,” 2000). Specifically, the study provides evidence
that residents in the oil zone experience suffer 30 times more larynx cancer,
18 times more bile duct cancer, 15 times more liver and skin cancer, and five
times more stomach cancer (Talbot, 1999).
In February of 1999, a community of 500 people where Texaco had operated
several wells reported 15 cases of cancer.
In another community, four women, all under 40, reported uterine
cancer. It is rare to find a child in
the region who does not have some type of skin rash due to exposure from toxic
chemicals (“Why a Lawsuit?” 2000).
Perhaps the
health effects can be better illustrated by the voices of the people from the
region. Hugo Urena of Shushufindi
believes that by drinking the local water, he is risking his life. “Everyone around here is dying (Press, 1999),”
he says and reports the names of neighbors suffering from chronic skin lesions,
headaches and a wave of cancer, the fate suffered by his father. Dr. Miguel San Sebastian, who lives in the
town of Coca, an hour south of Shushufindi, has been studying the health
patterns in Oriente communities affected by oil development. He reported that the cancer rate is four
times higher in San Carlos than for men of comparable age in Quito, the capital
of Ecuador (Press, 1999).
Humberto
Piyaguaje, a Secoya Indian from the Oriente, reported seeing his people suffer
from strange maladies that their culture had never seen until oil moved into
the region. “There are times when they
bathe in the river, their body gets full of rashes, and that never happened
before. Recently I went bathing in the
river, and my body got rashes. The
people have a lot of problems, but they don’t know (the causes) because they
don’t have doctors. Especially the ones
that have the most problems are the children, because they love to be in the
river. They have vomit and skin
problems and stomachaches and diarrhea a lot,” Piyaguaje recounted through a
translator (Markels, 1999).
Most
children in the region go barefoot as the walk along roads that have been
topped with crude oil. Most residents
wash the sludge with gasoline-soaked rags provided by the Ecuadorian
government. Lou Dematteis, 1999,
www.texacorainforest.org
Texaco’s oil
production in Ecuador has damaged the once relatively untouched rainforest
through deforestation, soil erosion, and reduced biodiversity (Gualinga,
1999). Three indigenous tribes were
almost eradicated-the Cofan (who inhabit the first place Texaco drilled), the
Secoya, and the Siona. The cultures and
traditions developed by these tribes are linked to the rainforest and its
abundance of resources. The toxic waste
dumped by Texaco has endangered their lives so seriously that extinction has
become a real threat. The Cofan
numbered approximately 15,000 when wells were first build on their land in
1971. Since then, their population has
been reduced to a few hundred due to disease and forced migration to find work
in the cities. The Secoya and the Siona
have seen similar decreases in their populations. All of these tribes depend on the rivers for their food, hygiene,
and transport. Due to the amount of
pollution, the rivers now have been rendered useless for any of the above three
activities. The pollution also flowed
down the Amazon and affected the livelihood and health of the residents that
live along the Napo River in Peru (“Q & A,” 2000).
These indigenous
groups and others have claimed that this is a case of environmental racism, and
that the pollution is a part of a history of racial discrimination at
Texaco. They site a 1996 lawsuit alleging
that Texaco discriminated against its minority employees, which was settled for
$176 million (Souter, 1999). Texaco
maintains that they have acted responsibly and have used standard industry
practice. They also believe that there
exists no reliable evidence in support of the above claims. “We have seen no credible scientific
evidence to support those allegations.
What we have seen in anecdotal,” says Faye Cox, a Texaco spokeswoman
(Talbot, 1999).
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Contents
Key Actors
- Cristobal Bonifaz
Lawyer,
born and raised in Ecuador who lives in Massachusetts, that launched a
class-action lawsuit on behalf of Oriente residents in U.S. District Court in
New York (Talbot, 1999).
- Judge Jed Rakoff of Federal District
Court in Manhattan
Judge who ruled against the Ecuadorian people in their motion to have their case against Texaco tried in the United States instead of in Ecuador (“Q&A,” 2000).
- Amazon Communities, Indigenous and
Environmental Leaders, and Environmental Groups
These
are people affected by the activities of Texaco in the Oriente region of
Ecuador. They serve as plaintiffs on
the class-action lawsuit against Texaco, and have implemented many other
strategies in their fight against Texaco (“Q&A,” 2000).
- Texaco
Texaco
was the third largest U.S. oil company as of 1992, with 1992 revenues of $37
billion. They operate refineries,
petrochemical plants, and international trading and transportation network, and
service stations/convenience stores around the world as well as drilling for
oil in 24 countries. They operate
14,000 outlets in the United States alone (“Make an Example of Texaco,”
2000).
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Demographics
Ecuador is located
in western South America, bordering the Pacific Ocean at the Equator between
Columbia and Peru. Its total area is
283,560 km2 and the climate is tropical along the coast becoming
cooler inland. Natural resources the
area contains are petroleum, fish, and timber.
The environment is subject to frequent earthquakes, landslides, and
volcanic activity. It also experiences
deforestation, soil erosion, and periodic droughts (“Ecuador,” 2000).
The population
is 10,461,072 (estimated in July 1993) and the population growth rate is
2.07%. The birth rate is 26.54 births
per 1,000 population, and the death rate is 5.8 deaths per 1,000
population. The infant mortality rate
is 40.8 deaths per 1,000 live births.
The ethnic divisions are as follows: mestizo (mixed Indian and Spanish)
55%, Indian 25%, Spanish 10%, and black 10%.
The labor force by occupation is 35 % agriculture, 21% manufacturing,
16% commerce, and 28% services and other activities (“Ecuador, 2000).
Ecuador has
significant oil resources and rich agricultural areas. However, growth has been uneven due to
natural disasters, fluctuations in global oil prices, and government policies
designed to curb inflation. Sixto
Duran-Ballen, the new President, has had a more favorable attitude towards
foreign investment than the former President.
Ecuador has executed trade agreements with Colombia, Peru, Bolivia, and
Venezuela and has also applied for GATT membership. The GDP is $11.8 billion and the national product real growth
rate is 3% (1992). The inflation rate
is 70% (1992) and exports are $3.0 billion (1992). Petroleum constitutes 42% of commodities exported. Ecuador’s external debt is $12.7 billion
(1992; “Ecuador,” 2000).
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Contents
Strategies
Residents in the
oil production zones have been voicing their concerns about contamination from
the very beginning. The Indian
communities and farmers of the Oriente have complained to the different
governments and Texaco repeatedly about the situation. They have demanded a
better quality of life, attention to their basic needs, technical assistance
and cleaning up of the contamination (“Yana Curi Report,” 2000).
In 1991, a book
was published by Judith Kimerling, an American, called Amazon Crude. It detailed the problem of contamination by
oil in the Oriente and elevated the problem to the status of an international
environmental problem. This book was
the first time clear evidence was presented to the media, government and oil
companies that supported the claims of the communities. Kimerling showed that oil development can
have a negative impact on the land and the people in each phase of its life
cycle (“Yana Curi Report,” 2000).
Several health
studies have been undertaken by such organizations as the Ecuadorian Union of
Popular Health Promoters of the Amazon (UPPSAE), the Center of Economic and
Social Rights (CESR), and the Department of Tropical Medicine and Hygiene at
the University of London (“Response to Claims,” 2000).
In 1993 a group
of Amazon Indians and farmers representing 30,000 affected individuals took legal
action in New York against Texaco, claiming that Texaco saw the extraction of
more than 1 billion barrels of oil from the Oriente during its 20-year
partnership with Petroecuador. At the
same time, they alleged that Texaco also spilled half a million barrels of
crude into the rainforest and dumped billions of gallons of wastewater into the
rivers. They also created hundreds of
unlined waste pits to hold the sludge instead of reinjecting it into the Earth,
a more environmentally sound technology (Markels, 1999). They are asking for $1.5 billion in damages
(Lawrence, 1999).
Texaco has
disputed these claims, but the plaintiffs have used an 18th century
law in an effort to get the case tried in the United States instead of Ecuador
(Markels, 1999). The case is preferred
to be tried in the United States because Ecuador’s judicial system does not
even recognize the concept of a class-action lawsuit and has no history of any
environmental litigation (Press, 1999).
The law being referred to is the Alien Claims Tort Act (ATCA) of 1770,
which was enacted by Congress in part to prosecute pirates of the high seas who
sought refuge on the shores of the United States. It was revived in the early 1980s to allow foreigners to go after
human rights abusers that had fled from their home countries into the United
States. If the decision were to be made
in favor of Ecuador, it would encourage other foreigners to sue U.S. based
multinational corporations here in the United States (Markels, 1999). The judge deciding the venue, Jed Rakoff,
dismissed the cases in 1996 and 1997.
The appeals court overturned his decision, and he reheard the case in
February of 1999 (Lawrence, 1999 and Souter, 1999). Currently, he has not made a decision as to where the case will
be tried. However, he cannot dismiss
the case again; it either must be tried in the United States or in Ecuador
(Bonifaz, 2000).
Other legal
wrangling included a motion filed against the judge deciding on the venue of
the case, Jed Rakoff (“Judge Keeps…,” 2000).
The lawyers for Ecuador Indians requested that he recuse himself from
the case because he attended an expenses-paid seminar on environmental issues
held by a foundation receiving regular donations from Texaco (Revkin,
2000). This motion is still pending in
the courts (Bonifaz, 2000).
The Committee
for the Defense of the Amazon, a group that represents 55,000 indigenous people
in Ecuador and Peru, launched an aggressive advertising campaign against
Texaco. The ads say that Texaco showed
a “cavalier disregard” for the well- being of the local population. One ad reads as follows: “It’s time that
Texaco learns that devaluing the lives and well-being of people because of the
color of their skin is no longer accepted for any American company (Souter,
1999).” The ads ran in The New York
Times newspaper, on the Cable News Network, and on WQXR-FM radio in New York in
October of 1999. The amount of money
being spent on the ads was not revealed, although the lawyers for the case are
paying for it (Souter, 1999). Texaco
officials said that the campaign was “an unfortunate and sensationalist attempt
to manipulate the legal process (Durgin, 1999).”
Lawyers for the
case have also launched a website (http://www.texacorainforest.org/) that
contains a great deal of information on the case, including a photo essay,
links to news stories, and a page describing why a lawsuit was initiated.
Return to the Table of Contents
Solutions
Due to the
enormous and still-growing amount of attention paid to this problem, many
people are aware of the situation and are working to improve it. The media campaigns as well as the book that
was written about the problem helped focus this attention.
Although the
legal process is a lengthy and tedious one, the lawsuits that have been brought
against Texaco have also helped to generate attention. The consequences of the precedence being set
by the lawsuits are far-reaching, and this assists in creating awareness as
well. Even if the lawsuits do not
result in a judgment in favor of the Ecuadorians, they still have options open
to them to draw negative attention to Texaco, including more media
campaigns. Perhaps this negative
attention will cause Texaco to rethink their operations in the future.
Recommendations
According to personal communication with Cristobal Bonifaz,
the lawyer that brought the original case against Texaco, people working on the
case against Texaco are waiting for the Judge Rakoff’s decision about where to
try the case. They are also waiting to
see the results of the motion to have Judge Rakoff recuse himself from the
case. Currently there are no media
campaigns that are being run. The
website for the describing the status of the case and its background is being
continually updated and many people have visited it (Bonifaz, 2000). This translates into the recommendation that
people need to wait for the judge’s decision before taking further action.
Key
Contacts
Lawyers
for the Plaintiffs
Steven Donziger: 212-369-6181
Cristobal Bonifaz: 413-253-5626
Joseph C. Kohn and Martin D'Urso:
215-238-1700
John Bonifaz: 617-441-3770
Spokespersons
for Texaco
Chris Gidez: 914-251-7600,
914-253-4000
Faye Cox: 914-251-7600, 914-253-4000
American
Lawyers for the Government of Ecuador
Ronald Minkoff: 212-490-0400
Jonathon Abady: 212-759-2111
Environmental
Lawyers Active in the Case
J. Martin Wagner (Environmental
Defense Fund): 415-627-6700, ext. 216
Prof. Arthur Berney (Boston College Law
Clinic): 617-552-8551
References
“Ad Warns About
Texaco Liabilities.” Environmental News Network. 28 May 1999.
Bonifaz,
Cristobal. Personal Communication. 8 December 2000.
“Chronology of
Events.” Texaco and Ecuador Information Pack.
http://www.texaco.com/asp/frameit.asp?tn=sr_t_nav.html&bn=sr_b_nav.html&cn=/shared/position/docs/chron_overview.html.
Accessed 28 November 2000.
Durgin, Hillary.
“Texaco Facing Campaign Over Amazon Waste.” The Financial Times
(London). 25 September 1999: International, 6.
“Ecuador.” CIA
World Factbook.
http://portal.research.bell-labs.com/cgi-wald/dbaccess/411?key=71.
Accessed
28
November 2000.
“El Oriente.”
Encyclopedia Britannica.
http://www.britannica.com/bcom/eb/article/6/0,5716,32766+1+32207,00.html?query=oriente.
Accessed on 28 November 2000.
“Environmental
Group Advertises Texaco Case.” Forests Conservation Portal.
http://forests.org/ric/wrr40/texador.htm.
Accessed 28 November 2000.
Gualinga, Carlos
Viteri. “The Oil Flows, and the Forests Bleeds.” UNESCO Courier.
April 1999: 12.
“History of
Operations.” Texaco and Ecuador Information Pack.
http://www.texaco.com/asp/frameit.asp?tn=sr_t_nav.html&bn=sr_b_nav.html&cn=/shared/position/docs/chron_overview.html.
Accessed 28 November 2000.
“Judge Keeps
Texaco Case.” The New York Times. 7 September 2000: Foreign Desk, 4.
Lawrence, David
Aquila. “When Forest People Defy Big Oil.” The Christian Science
Monitor. 23 February 1999: 6.
“Make an Example
of Texaco: “Star” Polluter of the Ecuadorian Amazon.” Rainforest
Relief Network. http://www.enviroweb.org/rainrelief/newsnotes/texaco.htm.
Accessed 28 November 2000.
Markels, Alex.
“Texaco’s Crude Legacy.” Mother Jones. May 1999: 64.
McManamin,
Brigid. “Bring Me Your Tired, Your Poor, Your Litigious.” Forbes.
November 1999: 180-184.
“Q & A.”
Aguinda v. Texaco and Jota v. Texaco. http://www.texacorainforest.org/why/questions.html.
Accessed 28 November
2000.
Press, Eyal.
“Texaco on Trial.” The Nation. May 1999: 11-16.
Raeburn, Paul.
“Legal Wrangling Won’t Restore the Rain Forest.” Business Week. 11
October 1999: 97.
“Remediation.”
Texaco and Ecuador Information Pack.
http://www.texaco.com/asp/frameit.asp?tn=sr_t_nav.html&bn=sr_b_nav.html&cn=/shared/position/docs/chron_overview.html.
Accessed 28 November 2000.
“Residents Take
Texaco to Court in U.S.” Forests Conservation Portal.
http://forests.org/ric/wrr35/ecuador.htm. Accessed 28 November 2000.
“Response To
Claims.” Texaco and Ecuador Information Pack.
http://www.texaco.com/asp/frameit.asp?tn=sr_t_nav.html&bn=sr_b_nav.html&cn=/shared/position/docs/chron_overview.html.
Accessed 28 November 2000.
Revkin, Andrew
C. “Lawyers for Ecuador Indians See U.S. Judge Linked to Texaco.”
The New York Times. 3
September 2000: Foreign Desk, 10.
Souter, Gavin.
“Campaign Charges Texaco with Racism.” Business Insurance. 4 October
1999: 73.
Talbot, David.
“Rain Forest Pays the Price of Oil; Suit Claims Texaco Polluted Ecuador.”
The Boston Herald. 29 August
1999: News, 1.
“Why a Lawsuit?”
Aguinda v. Texaco and Jota v. Texaco. http://www.texacorainforest.org/why/index.html.
Accessed 28 November 2000.
“Yana Curi
Report.” Aguinda v. Texaco and Jota v. Texaco.
http://www.texacorainforest.org/case/YanaCuriReport.pdf.
Accessed 28
November 2000.