Chevron has been trying to delay, deny, and distort its responsibility for the billions of gallons of toxic waste left behind when it ceased operations in Ecuador 1992. In the words of one Chevron spokesman, "We’re going to fight this until Hell freezes over — and then we’ll fight it out on the ice."
But after almost 18 years, environmentalists and social justice activists have reason to celebrate. Last week, Chevron got smacked down in court twice over its attempt to avoid paying for the destruction it caused in the Amazon Rainforest in Ecuador. Not only did an appeals court uphold the $18 billion awarded by a trial court last year in Ecuador, but a US District Court judge dismissed its attempt to wriggle out of paying altogether.
Pics and a brief recap of the legal struggle below the orange squiggle of doom.
A little background is in order. The legal fight started so long ago that it has outlived the original company named in the suit. Texaco was responsible for the pollution, dumped there as part of its oil extraction operation in the Oriente region of Ecuador from 1964 to 1992. When Chevron bought Texaco in 2001, it also bought the court battles, already well into their eighth year (nice summary of the legal wranglings here).
The plaintiffs, the Assembly of those Affected by Texaco or "Los Afectados," is a group of tens of thousands of Ecuadorans and Peruvians living in the affected area. In 1993, US attorney Steve Donzinger filed a class action suit on their behalf in US District Court. The suit claimed that Chevron had violated international law by failing to prevent pollution from the Oriente operation from affecting neighboring Peru. Patrick Keefe writes in his New Yorker article, Reversal of Fortune:
Since 1993, a group of Ecuadorans had been pursuing an apparently fruitless legal struggle to hold Texaco responsible for environmental destruction in the Oriente. During the decades when Texaco operated there, the lawsuit maintained, it dumped eighteen billion gallons of toxic waste. When the company ceased operations in Ecuador, in 1992, it allegedly left behind hundreds of open pits full of malignant black sludge. The harm done by Texaco, the plaintiffs contended, could be measured in cancer deaths, miscarriages, birth defects, dead livestock, sick fish, and the near-extinction of several tribes; Texaco’s legacy in the region amounted to a “rain-forest Chernobyl.”
Despite literally tons of evidence to the contrary - huge areas devastated by deforestation and gigantic open pools of toxic waste next to the abandoned wells, containing raw crude oil as well as benzene, tolulene, xylene and other carcinogens - Texaco claimed it had cleaned up the oilfields prior to turning them over to the state-run oil monopoly, Petroecuador. Texaco maintained its operations were in accordance with the environmental standards of the time. Besides, the company claimed an agreement with the Ecuadoran government in 1995 protected it from any further liability (much the same as the Too Big To Fail banks are trying to do with the toxic mortgage mess they created in this country). That deal required the company to pay only $40 million for environmental remediation and community development.
The trial in US District Court didn't rule on Texaco's arguments. Instead, in 2002 the court ruled that despite the increased incidence in both Ecuador and Peru of health conditions associated with the chemicals present in the waste pools, there wasn't sufficient proof that the pollution from Texaco's wells was responsible. The plaintiffs appealed, and lost again. The appeals court agreed with Chevron that the matter should properly first be addressed by the Ecuadoran judicial system.
Finally, in February 2011 - after 18 years and seven different Ecuadoran and US District Court judges - an Ecuadoran court ruled against Chevron. Judge Nicolás Zambrano ordered the company to pay over $18 billion (yes, that's billion with a "B") to Los Afectados, the largest ever for an environmental protection case. Judge Zambrano ordered $8.2 billion for remediation, plus 10 percent to be awarded to the plaintiffs for damages, and an additional $9 billion if the company did not issue an apology.
As you might have guessed, the verdict was appealed - but by both Chevron and the plaintiffs. Chevron claimed the damages awarded were excessive; the plaintiffs had argued for as much as $27 billion for remediation. In addition, Chevron filed a RICO suit (Chevron Corp. v. Donzinger et al, 783 F.Supp.2d 713 (2011)) in US District Court. If it had been successful, Chevron would have been able to nullify the award by preventing the claimants from collecting the money.
But US District Judge Lewis Kaplan wasn't buying it. Last week, Judge Kaplan dismissed the suit (scroll down - short article about halfway down the page), noting that not only had Chevron failed to show any damages from the alleged fraud, but that they had not even attempted to quantify them. And in Ecuador last Tuesday, an appellate court upheld Judge Zambrano's decision of culpability on Chevron's part, and reaffirmed the $18 billion award for damages.
The battle is won, but the war is not over. Paying damages to ordinary people who they've injured may be anathema to big business, but when it comes to spending money to avoid responsibility, the sky's the limit. Chevron spent millions on a PR campaign to discredit Donzinger and Los Afectados. That effort included a fourteen minute documentary-style film featuring former CNN correspondent Gene Randall to tell Chevron's "side" of the story. And last year, there were allegations that the oil giant offered $1 billion to persuade the Ecuadoran government to set aside the damages. If nothing else, the company can still appeal to the supreme court of Ecuador - provided they pay a filing fee equal to one percent of the damages awarded.
For now, at least, the verdict is in: a supermajor oil company is being held accountable for the devastation it caused to the Amazon Rainforest and the people who live there.