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Case Study 5

Page history last edited by Rachel Griffith 11 years, 11 months ago

Environmental Justice Case Study: Examples of Environmental Injustice among Two major Oil Companies.  Chevron and ExxonMobil

 


Toxic sludge pit in Ecuador left behind by ChevronTexaco (AmazonWatch)

 

The Places:

 

1) One of the worst ongoing ecological and social disasters in the Western Hemisphere occured in the areas surrounding the Lago Agio Oil Fields in the Ecuadorian Amazon Rainforest (Koenig 2004). People are forced to live next to the toxic legacy left behind by the Chevron Texaco oil operations in the rainforest of Oriente. Thirty years ago this region was a pristine zone of rainforest that had a great diversity of plant and animal life. There were a thriving indigenous people who used the Aquanco and NapoRivers to satisfiy many of their basic needs (drinking water, fishing etc...). The forest and the rivers served the traditional communities both spiritually and environmental for thousands of years (Koenig 2004). Since Texaco’s arrival the groups that live in the region, the Cofran, Secoya, Siona, Huarani, Quchau have been pushed to the brink of collapse. In the words of Quichua leader Inocencio Macanilla, "Before Texaco's arrival we were the guardians of all of the sickness of the Amazon. Today, we are the guardians of contamination. We are the guardians of poverty and sickness. All the indigenous peoples of the Amazon are facing death." (Koenig 2004)

 

 

2)The area of Beaumont, Texas in the United States of America

 

 

 

The Stakeholders:

 

PLAINTIFF

 

  • The charges were brougt on behalf of 30,000 indigenous peoples living in vicinity of the Lago Agrio Oil Fields, in the Ecuadorian Amazon.  Known as El Oriente.
  • The lead counsel is Alberto Wray, a well-respected Ecuadorian attorney and a former Supreme Court justice (Koenig 2004).

  • civil litigation in Ecuador spearheaded by NY lawyer Stephen Dozinger and bankrolled by Philadelphia plantiffs firm Kohn Swift and Graf (Chevron Lawyers Indicted in Ecuador 2008)

  • President of Ecuador, Rafael Correa, endorsed the long standing legal battle with Chevron-Texaco. He lashed out at the oil giant for failing to clean up damage done to the country’s Amazon region, "Let the whole world see the barbarity that Texaco has committed. The damage caused is incredible. It is irreversible." (President Rails Against Chevron 2007). Correa claims that his government supports “affected populations” and is willing to help the plaintiffs collect evidence

 

                                                             A Cofán Child

 

  • Impoverished people of Beaumont, Texas who are living in the vicinity of the large ExxonMobil plant.

 

DEFENDANT

 

  • Chevron Texaco Corporation the second largest energy company (Koenig 2004)
  • Adolfo Callejas, lead attorney for the company (Koenig 2004)

                
  • ExxonMobil 

 

 

The Issues:

 

1. Chevron v. El Oriente

 

An ongoing legal battle between the Chevron Corporation and a group of plaintiffs including Ecuadoran Amazonian indigenous people, Ecuadoran Environmentalists, and US environmentalists has been ongoing since 1993. The ongoing court battles have been about what environmental activists have been calling an Amazonian Chernobyl. This refers to an area of the Ecuadorian Amazon rain forest around the Lago Agrio oil field in which the US based oil company Texaco, was granted a drilling concession in the mid 1960's as part of a consortium with Petroecuador.

 

Oil Deposits were found in Oriente in the late 1960s and Texaco was the first international oil company invited to install drilling technology and 498 miles of trans Andean pipeline (Koenig 2004). The pipeline enabled them to bring oil to the coast for export. Texaco controlled the oil operation from 1971 to 1992. When the contract expired in 1992 assets and operations were turned over to Petroecuador (Koenig 2004). The controversy arises due to the environmental damage caused by the drilling in these areas. They left behind thousands of toxic waste pits scattered near local communities, rivers, and streams. These toxic pits were created as result of Texaco’s cost cutting decisions. These decisions resulted in an operation that did not comply  with standard practices at the time. During the oil extraction process waste water is brought to surface and it was standard procedure at the time to re-inject the waste water back into the deep subsoil formations from where it came. Instead Texaco dumped the dangerous chemicals (benzene, toluene, arsenic, lead, mercury, and cadium) into streams and tributaries (Koenig 2004). These pits however proved to be inadequate in keeping the toxic wastewater out of the environment and as a result today an estimated 1700 hectares of land have been poisoned. (1) Chevron Texaco was unable to cite another instance anywhere in the world where they dumped toxic waste water into streams or unlined pits. During the height of Chevron Texaco operations there was 4.3 million gallons of toxic wastewater released directly into the environment very day. Over the company’s 21 years of operation roughly 20 million gallons were dumped into the environment (Koenig 2004). Over this time Texaco extracted over 1.5 billion barrels of oil. By dumping the byproducts instead of re-injecting them, the company saved about $3 per barrel or about $4.5 billion (Koenig 2004). They sacrificed the health and safety of the people living near these operations as well as the preservation of the environment for the simple purpose of saving money.

 

They claim that the human cost caused by Chevron Texaco’s negligent actions is difficult to quantify. A higher than expected rates of cancer and miscarriage have been indicated. A decline in human population is evident.  The indigenous populations depend on the waters in this region for drinking, fishing, cooking, and bathing however they are no longer able to rely on them because they have become dangerously polluted. Also the forest has been irreversibly damaged. Many of the farmer’s lands have been destroyed by oil runoff (Koenig 2004).

 

Plaintiff's Position: 

 

The plaintiff claim that Chevron Texaco engaged in “negligent, reckless, deliberate and outrageous acts” in the Ecuadorian Amazon by refusing to adhere to accepted oil-industry standards in cleaning up and disposing of toxic drilling waste (Koenig 2004). They claim that the egregious actions led to the systematic and irreversible destruction of their homelands and provoked a health epidemic (Koenig 2004). Other grievances include oil spills that were never cleaned up, abandonment of at least 627 open, unlined oil sludge pits, and rainforest devastation.

 

Alberto Wray, counsel for the plaintiffs, claimed that Texaco's use of procedures and technology to conduct operation left the environment of the Ecuadorian Amazon toxic. Examples of the toxicity evoked by Chevron included, "massive damage to human health, massive damage to flora, massive damage to the fauna, to the environment, and the balance of nature" (Koenig 2004). Wray argued that Texaco knew that other extractive and waste management methods existed that would be less damaging to the environment and people’s health they simply chose not to use them exclusively for economic reasons (Koenig 2004).

The first witness for the plaintiffs was Galo Yepez. He performed a study using  global positioning system technology as well as data provided by the National Hydrocarbon Agency in order to document all the waste pits created by Texaco before 1990. Visual evidence, personal testimonies and interviews with many of the 1,100 families that live near the oil pits were also included (Koenig 2004).

The next witness Roberto Befarano was the co-author of a new 1,200-page study by Petroecuador and the Amazon Defense Front. He explained that investigators visited the oil production camps of Dureno, Lago Agrio, Atacapi, Shushufindi, Yuca, Auca, and Cononaco and discovered that in each of the 207 waste pits that Texaco claimed it had cleaned up were found to still be contaminated with a significant amount of petroleum (Koenig 2004).

 Rene Vargo Parzos, a former head of Ecuador's state oil company and ex-minister of energy and mines during Texaco's tenure in the country, confirmed the fact that a Texaco official wrote a 1980 letter that stated that "the current [unlined] pits are necessary for efficient and economical operations of our drilling ... operations. The total cost of eliminating the old pits and lining new pits would be $4,197,958.... It is recommended that the pits neither be lined or filled." (Koenig 2004). Pazos claimed that at the time Ecuador’s state oil company did not have the expertise to conduct oil operations. Their job was to monitor and comply with “production rates, volume rates, opening new wells, construction of the pipeline, investments and payments” (Koenig 2004) however they never had knowledge of the technical standards that Texaco was utilizing. Since Texaco was a U.S. company it was viewed as having credibility and they relied on the company to install technology that was consistent with the latest industry standards in use in the U.S. and around the world (Koenig 2004).

A Texaco contractor, Tobias Ojeda, explained Texaco’s procedure for contrasting and maintaining their operations. He claimed that they would first find a location for the well and then construct two pits for the disposal of crud and drilling mud. After drilling certain pools would become full of oil and mud and during rainy season they would fill with water and overflow into estuaries. Tobias claimed that the pipelines would break on occasion and he would report it to Texaco engineers. Sometimes Texaco would clean it other times it would remain for days. There procedure for cleaning involved either burning it or leaving it buried. (Koenig 2004).

Dr. Miguel San Sebastian, a Spanish physician, explained the results of his health study that revealed the link between the oil operations and the health crisis in the region. The study was conducted in February 1999 in San Carlos, a town of 1,000 farmers that lie near 30 of Chevron Texaco’s wells (Koenig 2004). His study indicated the risk of cancers in the population is 2.3 times the expected rate. The men suffer a risk “30 times higher than expected for cancer of the larynx, 18 times higher for bile duct cancer, 15 times higher for liver cancer and melanoma, 4.6 times higher for stomach cancer, and 2.6 times higher for leukemia” (Koenig 2004). The risk of miscarriages among women who live near the oil production wells is 2.8 times higher than women who don’t live near oil operations. Dr. Sebastian also discovered that the pollution in the town’s main river was found to be between 5 and 250 times higher than the allowable limit for drinking water (Koenig 2004)

Dr. Miguel San Sebastian, a Spanish physician, explained the results of his health study that revealed the link between the oil operations and the health crisis in the region. The study was conducted in February 1999 in San Carlos, a town of 1,000 farmers that lie near 30 of Chevron Texaco’s wells (Koenig 2004). His study indicated the risk of cancers in the population is 2.3 times the expected rate (Koenig 2004). The men suffer a risk “30 times higher than expected for cancer of the larynx, 18 times higher for bile duct cancer, 15 times higher for liver cancer and melanoma, 4.6 times higher for stomach cancer, and 2.6 times higher for leukemia” (Koenig 2004). The risk of miscarriages among women who live near the oil production wells was discovered to be 2.8 times higher than women who don’t live near oil operations. Dr. Sebastian also discovered that the pollution in the town’s main river was found to be between 5 and 250 times higher than the allowable limit for drinking water (Koenig 2004).

 Defense's Position:

 

Chevron claims that the pollution is not as widespread and that other factors have led to the health problems (Guterman 2005). The Texaco Website quotes Lowell E. Sever, a professor of epidemiology at Texas, as stating that there is no evidence that would support a relationship between oil contamination and health effects (Guterman 2005). Chevron Texaco argued for nine years in New York courts that the case should be moved to Ecuador where the damages occurred. Once they had been granted position to have the Ecuadorian court system decide this case they changed their mind claiming that the Ecuadorian’s could not handle this case effectively. When the trial began in Ecuador the lead attorney for Chevron Texaco, Adolfo Callejas, claimed that,"There does not exist a single reason that this case should move forward and you, Mr. Judge, don't have the competence nor the jurisdiction" to handle it.” (Koenig 2004). They also claimed that they were suing the wrong company and that they should be suing a Chevron Texaco subsidiary (and now defunct) Texpet which had operated the oil operations. However it was stated that Texpet had complied with the existing laws and industry standards. The Law of Environmental Management was not in effect at the time and therefore does not apply to their oil operations. If in fact damages had occurred the company had already provided a successful clean up and even if this clean up was inadequate the Ecuadorian government had released the company from further liabilities by signing an agreement in 1995. Chevron Texaco did not call a single witness or present any evidence in its defense they only claimed that they would just go back to the U.S. and argue that the Ecuadorian courts “were out of control” (Koenig 2004).

 

Resolutions & Consequences:

 

1. Chevron v. El Oriente

 

     In 1993 the first litigation against Texaco emerged and resulted in 1995 with Texaco paying 40 million dollars to clean a number of waste pits. This resulted in the Ecuadoran government releasing the company of any liability in the region.(5) This however did not prevent private lawsuits against the corporation. In 1993 Indigenous people represented by local and national environmental firms and attorneys began a long legal battle against the company. Since then, Texaco merged with Chevron in 2001. As a result Chevron has inherited the charges that were formally placed against the Texaco Petroleum company. Recent legal battles have been conducted by representatives of some 30,000 inhabitants living around the Lago Agrio Oil field. Although the main charges have been centered around improper waste disposal and the need for a subsequent environmental clean up campaign, much attention has also been given to compensation for communities in which rates of cancer have reportedly gone up by 150% and to giving reparations to tribal peoples who's ancestral lands have been contaminated.(8)

     To properly asses the situation the Ecuadoran Judge appointed an independent environmental consultant to look into the site and compile a report. The Cabrera report (named after the consultant) produced findings that were not at all appealing to Chevron including the need for Chevron to pay between 8-16 Billion dollars in damages.(6) These payments were based on the grounds that a) Chevron had to pay $3.4 for "soil clean up, improvements in infrastructure, health care costs, a water delivery system, and recovery of indigenous land." b) Had to pay "between $3.7 and $4.6 Billion to compensate families for the excess cancer deaths, as well as for damages relating to deforestation and ecosystem impacts." c) Pay $8.3 billion the amount that Chevron benefited in “unjust enrichment” by failing to adhere to proper standards when it operated the Ecuador Concession."(4)

     Chevron has responded to the charges in the Cabrera report by stating that it contained fabricated evidence and was politically motivated. They question the validity of the document largely on the basis of faulty procedural methods used by Cabrera. Chevron also claims that the document exaggerated accounts of the damages and attributed much of the damage as being caused by Petroecuador but unjustly attributed to Texaco. Under this argument they argue that Texaco was only one of several members in the consortium drilling in the Lago Agrio area and that they have been specifically and unjustly targeted as a deep pocket interests.(5)

     On the opposing side of this, although the Cabrera report was largely hailed by environmental groups as a win, certain environmental groups have stated that the report has likely underestimated the total environmental cost of the disaster. The plaintiffs have argued that the cost of clean up and reparations could rise if the contamination of groundwater and surface water was considered.(1)

     Currently legal battles are expected to continue for some time as both sides mobilize their forces. However in this case Chevron may have backed itself into a corner as it has pledged to abide by the decisions of the Ecuadorian courts.(6)

 

2.) ExxonMobil v. Beaumont, Texas

 

Misrepresented, impoverished and oppressed by the carelessness of a large corporation the people living in Beaumont, Texas are being subjected to harmful toxins and unfortunately the efforts that are being made are proving to be in vain.  

ExxonMobil, a company that prides itself on being “the world's largest publicly traded international oil and gas company, providing energy that helps underpin growing economies and improve living standards around the world,” does not have an acceptable handle on the waste produced by the refinery located in close proximity of the locals in Beaumont (ExxonMobil.com). Each year the refinery emits about 39,000 pounds of air pollutants including “the rotten egg gas” which is comprised of sulfur dioxide and hydrogen sulfide (Toxic Texas Tour). These are the main two pollutants that send the company 385% above the state’s refinery average in Texas.

The people of the town are mainly African American and a little more than half are living in poverty. The complaints normally filed are those of nausea, eye and nose irritation, headaches and other symptoms. They have created groups and organizations that are trying to battle the large corporation, but unfortunately the favor always falls into the big company’s lap.

I would be extremely frustrated if I had to live in a neighborhood that is near a refinery that emits harmful gases. It isn’t fair for folks who do not have the option to choose where they want to live because of their low socio-economic status. I think the negligence to these issues by these large companies should not be so easily dismissed. 

 

 

 


Works Cited

 

 

1) "Amazon Defense Coalition: Ecuador Court Report Underestimates Damages for Chevron's "Amazon Chernobyl" in Ecuador." Chevron Toxico. Amazon Defense Coalition. 8 Oct. 2008 .

 

 

2) Chevron Lawyers Indicted in Ecuador. (2008). The Legal Intelligencer.

 

 

3) "Chevron Loses Another Round In Legal Battle Over Ecuador Rainforest Contamination." ChevronToxico. 7 Oct. 2008. Amazon Watch. 8 Oct. 2008 .

 

4) "Court Expert Smacks Chevron With Up to $16 Billion in Damages for Polluting Indigenous Lands in Amazon." Chevron Toxico. 2 Apr. 2008. Amazon Watch. 8 Oct. 2008 .

 

5) "Ecuador Lawsuit Report Has Fabricated Evidence, Tainted by Political Pressure." Chevron: Human Energy. Chevron Corporation. 8 Oct. 2008 .

  

6) Feige, David. "Pursuing the polluters: An environmental suit may open the door for small countries to take on the multinationals." The Los Angeles Times 20 Apr.

 

 

7) Guterman L. 2005. Scientists denounce Texaco’s academic consultants in Ecuadorean oil dispute. Chronicle of Higher Education 51(32).

8) Kendall, Clare. "Amazonian Chernobyl: Ecuador's oil environment disaster." The Daily Telegraph 8 Aug. 2008. Chevron Toxico. Amazon Watch. 8 Oct. 2008 .

 

 

9) Koenig K. (2004). ChevronTexaco on trial. World Watch 10(10).

 

 

10) President Rails Against Chevron. 2007. EarthIsland Journal 15(1).

 

 

 

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