The Amazon Chernobyl

After an Ecuadorean appeals court upheld an $18 billion judgment against Chevron Corporation from February of last year, a New York federal judge last week refused to halt the plaintiffs’ collection on the judgment.  The case, Maria Aguinda v. Chevron, from the Superior Court of Nueva Loja, Lago Agrio, Ecuador, represents a two decade-old legal battle between the second-largest U.S. oil company and more than 30,000 residents of the Amazon.  Chevron can still appeal the ruling to Ecuador’s supreme court.

Texaco, the company originally accused of dumping toxic waste in and around the Ecuadorean town of Lago Agrio, was acquired by Chevron in 2001.  Texaco arrived in Ecuador in the 1970s, and started exporting oil, which not only doubled Ecuador’s per-capita GDP in a decade, but provided the bulk of the country’s public revenue.  However, according to the plaintiffs:

Rather tha[n] safely storing the toxic produced water that comes as a byproduct from drilling oil wells, Texaco simply dumped the fluid into vast pits.  The company allegedly left hundreds of pools of toxic sludge behind, resulting in what the plaintiffs of the lawsuit called a ‘rainforest Chernobyl.

Furthermore,

According to the [Amazon Defense Coalition], Texaco dumped more than 18 billion gallons of toxic waste into Amazon waterways, abandoned more than 900 waste pits, burned millions of cubic meters of gases with no controls and spilled more than 17 million gallons of oil due to pipeline ruptures.

Defendant Chevron argues that, before acquisition, Texaco partnered with an Ecuadorean oil company, Petroecuador.  Chevron further claims that it spent about $40 million to clean up a third of the sites in which it worked, which reflects the 1/3 share of its agreement with Petroecuador.

The Maria Aguinda v. Chevron case was previously dismissed three years after it was filed in New York because Chevron successfully argued that Ecuador was the proper venue.  American lawyers working on behalf of the complaining residents of the Amazon then refiled the case in Ecuador in 2003.

Despite the recent $18 billion judgment, work is far from over for Pablo Fajardo, an Ecuadorean lawyer for the plaintiffs, who was recently distinguished as a “CNN Hero” for his work on this case.  Chevron now disputes the validity of Ecuadorean courts to hear a case, pointing to U.S. State Department documents summarizing corruption in Ecuador along with a video it released in which it found an Ecuadorean judge accepting bribes.  The judge was immediately reprimanded and was eventually removed from the case.

In 2009, a documentary, Crude, by filmmaker Joe Berlinger, depicted the devastating effects on the indigenous people who live in and near the city of Lago Agrio.  Things got even messier when Chevron argued that outtakes from the documentary revealed “improper interaction between lawyers for the Ecuadorean plaintiffs and a neutral court-appointed expert.”  After attempting to block the subpoena for outtakes, a Manhattan federal appeals court ruled that Berlinger must turn over some of the over 600 hours of unused footage in his film to Chevron. In some of the outtakes, a plaintiffs’ attorney Steve Donziger admits that Ecuadorean’s justice system is corrupt and discusses less-than-clean tactics of intimidation.  He even refers to some of the plaintiffs’ evidence of toxic contamination as “smoke and mirrors.”

Although Chevron still has the option of appealing the decision to Ecuador’s Supreme Court, doing so requires a hefty deposit, which legal analysts think Chevron will try to avoid.  Instead, Chevron, will likely look to other countries’ justice systems and argue that the Ecuadorean judgment should be deemed invalid and unenforceable. Considering that countries in which Chevron does retain assets, such as Angola or Nigeria, may be reluctant to threaten ties with Chevron, it seems like an uphill battle for the residents of Lago Agrio.  The plaintiffs’ attorney, Mr. Fajardo, said that it could take up to five years to get the ruling enforced.

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