Chevron, Ecuador In Costly Environmental Dispute Oil giant Texaco, now owned by Chevron, is involved in an epic environmental lawsuit brought on behalf of the indigenous people of Ecuador's rain forest. Attorney Stephen Donziger, who works with the plaintiffs legal team, and Chevron spokesperson Kent Robertson discuss the case.
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Chevron, Ecuador In Costly Environmental Dispute

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Chevron, Ecuador In Costly Environmental Dispute

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Chevron, Ecuador In Costly Environmental Dispute

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MICHEL MARTIN, host:

Now we want to go to Ecuador where an epic lawsuit pits an American oil giant against a group of Indians from the Amazon rainforest and environmental activists. A lawsuit which has been going on for years alleges that Texaco, now owned by Chevron, failed to remove tons of toxic sludge, 18 billion gallons, from waterways deep in the forest and that as a result, indigenous people in the area are suffering from cancer and other physical defects.

The stakes are high. If Chevron looses, it could be required to pay billions of dollars in damages. And the case comes at a politically sensitive time, when Americans are concerned both about the high cost of oil and the country's reputation overseas. I'm joined now by Stephen Donziger. He is an American attorney who is working on behalf of the plaintiffs. Welcome, thank you for speaking with us.

Mr. STEPHEN DONZIGER (Attorney): Hi, good to see you.

MARTIN: I should mention that we are going to hear from a representative from Chevron in just a few minutes, but Mr. Donziger, how did this case start?

Mr. DONZIGER: Well, this case started way back in 1993, if you can believe it. Texaco started drilling in Ecuador's Amazon in the late 1960s and they were the exclusive operator of an oil consortium until 1990. The lawsuit was actually filed in 1993, and for several years Texaco argued that it would better be heard in Ecuador's courts, and they won that battle in early 2000. In 2002, the case was transferred to Ecuador. It was refiled in 2003. Since then there's been a massive amount of evidence, over 200,000 pages put into court.

Once the evidence started to come in and really, a lot of this evidence was put in by Chevron itself, indicating significant amounts of toxic contamination that the areas that Texaco built, the 378 oil wells and separation stations, at that point Chevron claimed the trial was not fair. Our feeling is that there's no court in the world that is truly independent that would accept competent evidence that Chevron would accept.

MARTIN: It's been difficult on you, of course, to show the link between particular forms of cancer and environmental waste. Are there different standards in Ecuador? I guess, what accounts for your - for you, the view of the plaintiffs, that they can prove that their ailments were caused by this action, if indeed it did occur, which is, of course, a matter of dispute.

Mr. DONZIGER: There's independent scientific studies, purity of studies that show cancer rates in the area where Texaco and now Chevron operate are very, very high. They're much higher than other parts of the country. Even though there is significant evidence of toxic contamination that causes cancer - we know this because it is in the scientific literature - Chevron has never funded a single health evaluation of the area. There are hundreds of families who suffer from cancer or have a family member suffering from cancer. There are children as young as six months old suffering from leukemia.

The reason is the water people are drinking is massively contaminated with toxins, on the ground water, the surface water. The case, though, is not about cancer. We do not have to prove that any particular case of cancer is linked to what Texaco did. We are suing strictly for environmental cleanup, but the cancers are an impact. The independent court-appointed expert found there are 428 excess cases of cancer due to contamination Texaco caused, and we expect to get a recovery for those cancers.

MARTIN: In 1998 the government of Ecuador released Texaco from future obligations or liabilities in case. Isn't that pretty significant evidence that the government of Ecuador, which presumably has the interest of its citizens at heart, doesn't believe there is a problem and perhaps there isn't one?

Mr. DONZIGER: Well, there is a major problem with that. First of all, that release doesn't apply to private claims, the type being in the lawsuit. We represent 30,000 private citizens in the Amazon and that was a negotiation that Texaco did directly with Ecuador's government. It released the claims of Ecuador's government but not the claims of its private citizens. Chevron consistently misrepresents the scope of that release. It doesn't apply to the lawsuit. It never has and we don't think it ever will. There has never been a court anywhere in Ecuador or the U.S that has accepted Chevron's interpretation of that release.

But more importantly, Chevron has a huge problem, which is that we believe that that release was the product of a fraud. There are two Chevron lawyers who negotiated that release for Texaco back then - they are now employed by Chevron - who in recent days were indicted by Ecuador's national prosecutor for lying about the results of remediation, for falsifying the soil sampling they did to prove that remediation actually happened when it didn't. And we know this because in the civil case that we're currently litigating, the independent court-appointed expert reviewed all the evidence of all the pits that were remediated, and he found that over 80 percent of them have levels of toxins higher than was allowed by the remediation agreement.

MARTIN: Petrol Ecuador took complete control of the oil consortium in 1992. Why aren't they the ones being held responsible, other than the fact that Chevron is a deep pocket?

Mr. DONZIGER: Well, it's very simple. When we filed the case in 1993, it was Texaco that had been the exclusive operator of this consortium for all these years, not Petro Ecuador. Texaco designed this system of oil extraction to contaminate. That is, that's how they designed it. They did it against industry custom, it was illegal the way they did it, and it's not something that you would ever see happen in the United States. You simply cannot dump toxic waste into areas where it can contaminate fresh water sources.

Petro Ecuador inherited this system. We believe Chevron is responsible, not only for what Texaco did while they were the exclusive operator but also for what Petro Ecuador is doing, using the system that Texaco designed to deliberately contaminate. Now, if Chevron believes Petro Ecuador shares some of the responsibilities, they should sue Petro Ecuador. But it is not the responsibility of the victims to sue every party that might be partially responsible for an environmental contamination.

MARTIN: I understand that you're in town this week to meet with members of Congress?

Mr. DONZIGER: The reason we're in Washington is because Chevron has hired an army of lobbyists, including Wayne Burman, who is John McCain's finance chairman, former Senator Trent Lott and others to spread what we believe are inaccurate representations before the Congress about this release. They claim they're victimized even though they are the ones who caused this environmental catastrophe. So we've been left with no choice but to bring people up from Ecuador and make visit with members of Congress to try to stop what is essentially political interference in the trial.

MARTIN: OK, Stephen Donziger, you're going to stand by for a moment. We're going to hear from a representative of Chevron, and the reason that we're doing it this way is that Kent Robertson, who's representing Chevron, prefers not to participate in a direct conversation with Stephen Donziger. So Mr. Robertson, we'd like to hear from you now. You've just heard our conversation with Stephen Donziger. Your response?

Mr. KENT ROBERTSON (Spokesperson, Chevron): You've asked some very good questions. I'd like to start off with the tone from our perspective. Chevron has never operated in Ecuador. In 2001, through the acquisition of Texaco, Chevron inherited this issue. One of the very first things that the company did was evaluate the legitimacy of the allegations that had been leveled against Texaco.

Our vetting process was scientific. It began with looking at the scientific testing that was done at the time of the remediation that was performed between 1995 and 1998 in Ecuador. That remediation process was monitored by the government of Ecuador as well our partner in the oil consortium, who was Petro Ecuador. It was scientifically validated by university labs in Ecuador as having achieved the cleanup standards that had been established ahead of time, and all of the subsequent legitimate testing that's been performed demonstrate that the cleanup was effective.

In effect, what you have is dualing science and dualing sampling and results from areas outside of the remediation versus areas that were remediated. And you've got Petro Equador, which is kind of the elephant in the room who has repeatedly stated that they have remediation obligations that are unfulfilled. They are trying to fulfill this remediation obligations but remarkably, even the plaintiffs are opposing Petro Ecuador's attempts to clean up what they admit is their mess.

MARTIN: Why do you think that is?

Mr. ROBERTSON: Well, the very first time someone tells you, not about the money, you know, you got to realize, it's about the money.

MARTIN: It is true, though, that Chevron has had lobbyists urging the U.S. government to take away trade preferences from Ecuador. Doesn't that suggest it's punishment, it's an attempt to pressure the government?

Mr. ROBERTSON: That's not exactly true. Chevron is the holder. You mentioned the release agreements earlier. The release agreements are very important and there's also another document, which is called a Joint Operating Agreement, that was basically the rules by which Petro Ecuador and Texaco Petroleum operated. Part of the Joint Operating Agreement included provisions that stated Petro Ecuador would assume any litigation expenses in behalf of the operator, would provide adequate assurances that would it indemnify the operator and provide funding should any additional remediation activities be necessary. We have approached Petro Ecuador on multiple occasions and we have approached the Republic of Ecuador on multiple occasions to live up to these contractual obligations. That has been rebuffed at every turn.

MARTIN: Well, why don't you sue them?

Mr. ROBERTSON: Well, we asked - the Joint Operating Agreement has a provision in it saying disputes will be resolved through the American Arbitration Association. We sought that out, and Petro Ecuador and the Republic of Ecuador actually sued Chevron in order to prevent that conversation from happening.

MARTIN: Is it your view, in essence, is it Chevron's position that - Chevron, of course, which Texaco is now owned by Chevron - Chevron, as you pointed out, did not operate as its own entity but has now inherited this issue. Is it your statement that Chevron has essentially done the best that it could do in repairing the damage, the environmental damage to this area? And that it's basically a fight between perfection being the enemy of the good, and are there different standards? Did you employ different standards in cleaning up that area than you would have employed had you been in the United States?

Mr. ROBERTSON: No, not at all. Texaco held a 37 percent interest in the consortium with its majority partner being Petro Ecuador. Texaco has not operated in Ecuador for 18 years. When it was time for Texaco to depart Ecuador, the party sat down and worked out a remediation program where Texaco would address its proportionate share of the consortium, 37.5 percent. And Petro Ecuador assumed responsibility for the balance of the operations, and it has recognized that their operations would continue until this day.

MARTIN: And I asked Mr. Donziger this question I'd like to ask you, this question. Is there a reason that Americans should take an interest in this case from your point of view, from Chevron's point of view?

Mr. ROBERTSON: Americans, I would argue, should be concerned if 18 years after a company left a country where it had operated honestly that it's under attack, and if the American trial attorneys can collaborate with an opportunist government and try to extort vast sums of money.

MARTIN: Kent Robertson is a spokesperson for Chevron. He joined us from his office. I thank you so much for speaking with us. I'm going to go now for one more word to Stephen Donziger, who's representing the plaintiffs in this case, and we're doing that because Mr. Robertson preferred not to engage directly with Mr. Donziger and we thought it was fair given that to give you one more final thought.

Mr. DONZIGER: Texaco submitted ten affidavits to the U.S. court asking for the case to be transferred to Ecuador. They wanted the trial in Ecuador. They have the trial they asked for. And that trial has produced more than 64,000 analytical results, most of them from Chevron and most of them showed massive amounts of toxic contamination. And the important thing is people need to watch this. This is a case of big oil trying to quash the legal rights of indigenous groups in the Amazon rainforest who are fighting for their lives to survive a massive oil contamination caused by an American oil company, and we're hoping the American people continue to watch this.

MARTIN: And we're going to have to leave it there. Stephen Donziger is an attorney. He's with the D.C.-based Amazon Defense Coalition. He joined us in our studios in Washington. I thank both gentlemen for joining us. We heard earlier from Kent Robertson, a spokesperson for Chevron.

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