Hey CHEVRON, what’s up with CRUDE

Do you believe in Karma? Do you believe that if you commit a mistake then the forces of nature work against you, to even out your arrest.

What do you think of the Amazon rain-forest, do you believe they are beautiful and are the only remaining explicable entities to comprehend our natural outlook. If your answer is YES, then the next big thing will come as a shock to the many who are not aware of it. I believe no environmentalist has missed it and it underlines a fine line between “Industrial Exploitation permitted by law” and “Contamination of Nature”. The story I am referring to is “the $ 27 billion lawsuit against Chevron filed by tens of thousands of Ecuadorans”.

A documentary “Crude” deals with the issue and explores the real-time problems that the Ecuadorians face, a possible result of the oil exploration by Texaco, now Chevron. The lawsuit will be the largest environmentally ever encountered if proved. The Joe Berlinger’s film Crude provides diverse angles to the depleting quality of life of the Ecuadorians, the environmental peril and captures explanations from each side onto asserting their claims. Let us understand the situation and study the possible.

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The Scenario

Chevron the third largest  company in USA, is being sued by the Ecuadorian people in a court room of  Ecuador. The high fine is accredited to the clean up and implementation of water systems, and to compensate for cancer debt.

Back in 1972, the Gulf Oil, Texaco and Ecuadorian Government were controlling the oil production in Amazon. But soon in 1997, the Government oil company (CEPE, later restructured and named PetroEcuador) bought shares of Gulf Oil to let it off, since the Government wanted to nationalize the Oil Consortium. Thus, the 40-60 partnership between Texaco and PetroEcuador ran the oil production with Texaco acting as the operator i.e., responsible for safe execution of the construction and commissioning activities in accordance with plan, company standards and management processes.

How they got there?

The lawsuit of $1.5 billion was filed in 1993 by a group of Ecuadorians against Texaco. Chevron acquired Texaco in 2001 and hence inherited the case. They emphasized that the case belongs to Ecuador and not in Manhattan where it was initially filed. They won the case to pursue the fight in Ecuadorian Court, but the compensation raised to a staggering $27 billion.

The case by People

The thousands of Ecuadorians were supported by Plaintiff lawyers lead attorney Steven Donziger to raise the claims of contamination in the Amazon. In 1990, Texaco had spend $40 million in clean up and hence the Ecuadorian Government exempted them from any further liabilities, but there was a loop hole in the pact – it was the absence of third-party claims which was judicially exploited by the people of Ecuador as purported by the Plaintiff lawyers.

  • The people use water as a crucial resource and the centimeters deep oil spills had polluted the water. The result was dying aquatic life, dying animals and loss of human health. For instance, chicken were found dead because of the pollution, further majority of younger generation had stopped developing over time. Consumption of water with traces of oil lead to deaths. Later “Amazon watch” a social activists group supported the case raised by people.

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  • When oil is extracted from ground, pits are constructed  around it to store the liquid oil waste produced. These pits are temporarily filled and then emptied, they are kept away from water sources to prevent contamination. The pits dug by Texaco as operator, till date are filled with the waste, also an anomaly in the construction is the design of pits which have been provided with pipes to let the waste seep out of it when filled completely, into streams directly connecting to water sources used by people.

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  • The hydrocarbons are dangerous to human health, the presence of carcinogens in the water degraded the health of people, further elevated the cancer rates in the region.
  • When evidence were searched in site inspections, the lawyers exclaimed that “Chevron claims that no waste can be found on the ground, and it is true, since it resides beneath it and can be found in the whole region”. According to Chevron, Texaco cleaned 162 pits but inspection of the site discovered 968 pits which was huge.
  • The Plaintiff Lawyers believed that the request of Texaco to pursue the case in Ecuador instead of USA was a deviation, since they intended to delay the case and eventually expected them to run out of money.

The case by Chevron

At first Chevron claimed that the water sources were not contaminated because of them. Texaco had done thorough examination of water, out of which 99% was safe as per WHO standards.

  • Chevron’s Chief Environmental Scientist stated that they disposed their resources in finding the truth and found no increase in cancer deceases. They also blamed poor sanitation for contamination.
  • In the videos shown at the Chevron shareholder meetings, the company blamed PetroEcuador for massive oil spills in the region. They said since they were 40% partners, hence they are liable for 40% of the mess. Thus, the company’s strategy was to pinpoint blame on the Government run company “PetroEcuador”.
  • The company deliberately emphasized on “decisions managed by Consortium” which it was when with PetroEcuador, even though it was the operator and was blamed for faulty pit construction, disrupted waste management system.
  • The company further blamed the judicial system of Ecuador. They were the one’s who in 2002 won the case to shift the case to Ecuador and later blasted on the politically influenced judiciary. They believed that the judge will be partial to the people after being sued for $27 billion in Ecuadorian court. Also the billion dollar lawsuit was erroneous and invented according to them.

The result till date

The Ecuadorian Court on 2011 fined Chevron with $8 billion as found guilty. This makes it the largest environmental lawsuit payable ever. Also, they were asked to provide a public apology, otherwise an additional fine of same amount would be imposed.

To this Chevron replied back with another appeal against the ruling, and the plaintiff lawyers. They have already sued Plaintiff lawyers such as lead attorney Steven Donziger and others involved for manipulation, unethical and improper if not illegal and faulty practices in estimating global assessment report.

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According to them, even if the practices pursued are legal in Ecuadorian Court, the US court would discard the lawsuit on the basis of foul play.

Opinion by a Neutral

  • The pits were responsibility of Texaco, now Chevron and they were being sued, but why is PetroEcuador not being sued, it has also operated and was solely responsible for the damage after 1992. The Plaintiff lawyers said they would do so once they win against Chevron. Is it true what The Wall Street Journal said “an Amazonian Swindle” and the fact that “Chevron is where the money is”. The Chevron spokesman described the lawyers as con man for looting the rich companies.
  • When a master list of the pits dug were inquired from Chevron, they had none. This does not hold to their claim of cleaning up 162 pits, and further cannot challenge the claim of Ecuadorians of having 900+ pits.
  • The company is blaming the Ecuadorian court for corruption, then why did it choose to change the court room in the first place. Why did they not confine themselves to the US court instead of fighting a case for Ecuador for 9 years?

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Chevron is to be blamed for their irresponsible behavior in waste disposal and construction as an operator in the Consortium. However, Chevron is right to blame PetroEcuador for part of fines, however it cannot completely hold PetroEcuador liable for the claims. Not much can be said about the Plaintiff lawyers, but the people of Ecuador are definitely on the losing side and hence, need to be protected.