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Chevron fights massive lawsuit in Ecuador

A case about responsibility for cleaning up a toxic drilling site could cost the company billions and send a chill through the industry.

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“Texaco did its job, now the state has to do its part,” says James Craig, Chevron’s lead spokesman for the case, standing in front of an open waste pit that is about 200 feet long and 75 feet wide, a dark brown pit with a layer of degraded petroleum five feet deep. It is an example Mr. Craig uses to show what Chevron says are Petroecuador’s unmet responsibilities.

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The pit, surrounded by giant palms and Heliconia flowers that hang like racks of red bells, is outside the small town of Shushufindi. It illustrates the seemingly irreconcilable views on either side of the courtroom. The day before, plaintiffs’ supporters had accompanied visitors to the same site to present the opposite argument. This, they said, exemplified the damage wreaked by Texaco – the exclusive operator of this area – for one purpose: to cut costs.

Far-reaching implications for a decision against Chevron

The local community here is not completely united against Chevron. Some residents aren’t even aware of the case. Others dismiss the claims that the water is unsafe.

Johana Mantuano, who lives near the Victoria River, where children dive off oil pipelines into the water below, says she worries little. Some even quietly say that Petroecuador is far worse than Texaco ever was. Mr. Santos, the former energy minister, agrees.

Still, a decision against Chevron would reverberate across the oil industry, says Santos, especially at a time when oil companies from China to Argentina are voraciously exploring petroleum sources in the Amazon, one of the largest unexplored areas for hydrocarbons after Antarctica.

Locals hope it echoes in areas where foreign oil firms still operate. Luis Yanza, of the Amazon Defense Coalition, the group leading the fight against Chevron, says his community used to kowtow to oil companies.

When oil first started to flow from wells here, residents say they had little idea of its impact. Mr. Yanza says he would go to school with red blotches all over his body, and so would everyone else. “We looked like fish,” he says. “We would laugh at each other.”

It is the first time that indigenous people of the Amazon have made an American oil company submit to jurisdiction in their country’s court system, plaintiffs say. “The most important impact is giving people the confidence to demand that oil companies change their practices,” Yanza says.

The plaintiffs are supported by US-funded environmental groups, and celebrities such as Sting have spoken out on their behalf. Still, a strong current of David vs. Goliath runs through this stretch of the country.

The case’s lead lawyer, Ecuadorean Pablo Fajardo, worked as a laborer in the palm and oil industries, and says he became a lawyer because the local community did not have one. To put himself through school, he relied on donations from local priests and friends, who collected money for his studies. This is his first case. He closes his eyes when asked what it means to him: “Chevron is fighting for their reputation and for money,” says Mr. Fajardo. “We are fighting for life.”

Chevron on the defensive

Chevron has fought back mightily. The corporation has taken visitors to the sites they have cleaned up and point out rivers where fecal matter, not hydrocarbons, they say, has made the local population sick.

It has taken out quarter-page ads in local newspapers with headlines such as “the fraud of the century.” Chevron recently tucked 280,000 supplements into four Ecuadorean papers, highlighting the impact that relocation programs – instituted by a government desperate for the prosperity oil would bring – has had on this once pristine region.

“We expect the judgment here will be against us,” says Chevron spokesman Craig. “If we don’t find justice in Ecuador, we will go abroad.”
Residents here say it is neither revenge nor money that inspires their fight, but a desire for safe water for drinking, cooking, bathing, and washing their clothes. They blame the government just as much as big oil.

They say they have long been abandoned by both. “What do I want? I just want them to come here and clean up so we can all move on,” says Angamarca. “So that I know my children will be OK."