November 6, 2009
Chevron’s Headache: NGOs and Film Raise Profile of 27 Billion Dollar Case
Accountability & Transparency Trends
The recent release of the documentary film Crude: the Real Price of Oil has elevated the profile of an already widely discussed environmental lawsuit pitting indigenous Ecuadorians against oil giant Chevron. The David vs. Goliath-like film, produced by Joe Berlinger, explores issues of corporate accountability, government corruption, indigenous rights, celebrity activism, and the narratives of two crusading attorneys, one Ecuadorian and the other a New Yorker, pursuing justice in the midst of what is perhaps the world’s worst case of environmental degradation. In addition to the recently released documentary film, nongovernmental organizations (NGOs) are driving attention to the case, generating plenty of work for Chevron’s public relations team, which has been tasked with defending its company’s image in the face of a 27 billion dollar lawsuit. The case has all sides crying foul play and is unlikely to be settled anytime soon.
The 30,000 indigenous plaintiffs have based their case on the consequences of oil exploration projects in Ecuador’s Amazon between 1964 and 1990 by Texaco, which was acquired by Chevron in 2001. The company, along with PetroEcuador and a consortium of oil exporters, drilled roughly 350 wells across 2,700 square miles of Amazon rainforest and constructed over 900 oil sludge pits. It’s believed that about 18 billion gallons of toxic production water--a mixture of oil, sulphuric acid, and other carcinogens--leaked into streams and rivers.
According to Karen Hinton, spokesperson for the Amazon Defense Coalition, an alliance of environmental and human rights NGOs, Texaco’s oil exploration projects in Ecuador led to 1,401 cancer-related deaths. Chevron, which assumed Texaco’s liabilities along with its assets, disputes the group’s claims and insists that the bulk of the damage was caused by Ecuador’s state-run oil company, PetroEcuador. When the oil production agreement between Texaco and PetroEcuador expired in 1992, Texaco paid for a 40 million dollar remediation program to clean-up select damaged sites. According to Chevron, Ecuador then signed off on a full release of liability from any future claims.
“PetroEcuador has repeatedly acknowledged that it is their responsibility to remediate the rest of the sites in the concession area,” says a spokesperson for Chevron. But the NGO community is less than convinced. "By focusing energy on evading responsibility instead of cleaning up the mess in Ecuador, Chevron is letting children suffer from some of the world's most heinous environmental destruction when they could be doing something about it," said Rebecca Tarbotton, Program Director of Rainforest Action Network.
To complicate the case, Chevron has been implicated in the mysterious release of secretly taped YouTube videos that purportedly show an American businessman, Wayne Hansen, and an Ecuadorian partner, Diego Borja, discussing a bribery scheme with a political go-between for Ecuadorian officials and the judge presiding over the case. The tapes suggest that Chevron might be facing what amounts to a rigged court case in which it is predestined to lose. Chevron maintains that the videos were filmed without its knowledge, though it is unclear what motivated Hansen and his partner to carry out the secret meetings. The videos were filmed using cameras hidden in pens and watches implanted with recording devices and reveal plans to apportion bribes among government officials once the Ecuadorian court rules against Chevron. If the company were discovered to have commissioned the sting that led to the videos, it would be guilty of violating the Foreign Corrupt Practices Act, which it pled guilty to violating in a separate case in Iraq in 2007, and eventually paid a $30 million fine.
In response to pressure from NGOs and the government of Ecuador, Chevron has launched an impressive website, The Amazon Post to “set the record straight” about the pending lawsuit. The site features YouTube videos of the secret meetings, press releases about Chevron’s positions on the case, and highlights instances of possible NGO bias. It also posts an elaborate diagram of the case’s protagonists and lists the Amazon Defense Coalition as a potential beneficiary of the 27 billion dollar lawsuit.
The New York Times and Upstream Online, a global oil & gas newspaper, have both launched sites to track the case. Meanwhile, Crude, showcased nationally and internationally continues to stir the waters. The film was recently shown free of charge at the historic E Street Theater in downtown Washington, D.C., by Oxfam America, a development and human rights NGO, and featured presentations by staff members of the U.S. Senate Foreign Relations Committee and the Commission on Security and Cooperation in Europe. With so much money at stake, the lawsuit will continue to attract the attention of the public and the NGO community. What has become a messy case is unlikely to be cleaned up anytime soon.
David Peyton is a program manager for Global Governance Watch.
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