We’ve all seen the commercial. A team of biologists is sent out after an oil spill and all the cute little ducklings are cleaned off with Dawn dish soap, good as new.
These commercials provide great publicity for Dawn and are even better for oil companies: the destruction of an ecosystem is as easy to clean up as a sink full of dirty dishes! Sometimes, though, the oily little ducks just follow you around and won’t stop quacking. For close to twenty years, Chevron has been plagued by 30,000 Ecuadorian “ducks.”
What happened in Ecuador from 1964 to 1990 remains controversial. According to the cleverly named ChevronToxico Campaign, Texaco “dumped approximately 16 billion gallons of “production water”—water containing PTEX, TPH, and polycyclic hydrocarbons—directly into the surface waters” and “dumped oil waste into unlined pits that were merely shallow excavations in the ground” in and around the Ecuadorian Amazon. These contaminants then affected downstream residents in Peru.
But Chevron, which acquired Texaco and its subsidiaries in 2001, offers a different kind of story.
As Chevron tells it, Texaco Petroleum Company, or TexPet, “used open-air unlined earthen pits to store drilling fluids” because it was, and remains, a “standard industry practice.” Additionally, only TexPet participated in a remediation effort, even though the national Ecuadorian oil company, Petroecuador, had been the majority partner in the operations there since 1976. In exchange for the remediation of 161 oil pits and 7 spill areas, Petroecuador, TexPet and Ecuadorian officials agreed that TexPet would be completely “discharged for all of its legal and contractual obligations and liability for environmental impacts arising out of the Ecuadorian operations.”
Unfortunately for Chevron, though, Ecuadorian officials didn’t run that idea by their citizens and in 1993, the Ecuadorian plaintiffs filed a class action lawsuit against Texaco in the Southern District of New York. One year later, Peruvians brought a separate class action suit in the same court. One of Chevron’s main defenses has been that the suit by the Ecuadorians is barred by that government’s 1998 discharge of Chevron’s liability.
The battle between the Ecuadorians/Peruvians and Chevron/TexPet has raged on for nearly twenty years, but the issues remain far from settled. In February of 2011, the Ecuadorians secured a monumental victory when an Ecuadorian court imposed an $18 billion judgment against Chevron for its role in polluting the Lago Agrio region of the Amazon and for causing significant damage to the health of the residents there. Citing fraudulent conduct by the court, Chevron sought an injunction to block enforcement of the foreign judgment, which was granted in March 2011 by U.S. District Judge Lewis Kaplan in New York City.
But Chevron’s success has been short-lived. Last week, the 2nd Circuit Court of Appeals in New York overturned the March 2011 injunction, mainly because the Ecuadorians have not yet sought enforcement of the judgment, so there is really nothing to enjoin them from doing. Additionally, Chevron cited a New York state law providing for the recognition of foreign money judgments. But the 2nd Circuit refused to apply the law in Chevron’s favor, stating that New York’s “Recognition Act and the common-law principles it encapsulates are motivated by an interest to provide for the enforcement of foreign judgments, not to prevent them.”
Understandably, Chevron would like to avoid having to pay $18 billion, but at what point does its attempt to defend TexPet’s indefensible conduct become just plain stupid? Included in that judgment is nearly $5 billion as punishment for Chevron’s refusal to apologize for what has been dubbed the “Rainforest Chernobyl.”
No one, not even Chevron, continues to pretend that TexPet’s nearly 40-year involvement in Ecuador didn’t cause significant environmental damage. As Chevron grasps at straws to demean the efficacy of the Ecuadorian judgment, so will other corporations begin to turn their back on the sinking Chevron ship. After all these years of stumbling through the largest environmental court case in history, all the Dawn in the world couldn’t save Chevron from the mess it’s created.
Sources:
· Jonathan Stempel, Chevron loses injunction in $18 billion Ecuador case, Reuters, Jan. 26, 2012.
· Amazon Defense Coalition, Chevron CEO’s Plan to Evade $18b Ecuador Liability Falters As Courts Slam Oil Giant, Says Amazon Defense Coalition, PR Newswire, Jan. 30, 2012.
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