The Amazon Post

Chevron is being blamed for a situation that is the sole responsibility of the Ecuadorian government and Petroecuador.

Petroecuador, Ecuador’s state-owned oil company, was the majority partner in the consortium with Texaco Petroleum. Today, Petroecuador still owns and operates the oilfields in the former Concession area as well as other fields in the Amazon. Petroecuador took over consortium operations in 1990 and became the sole owner of the consortium fields and installations when Texaco Petroleum’s concession contract expired in 1992. Since that time, Petroecuador has developed a widely acknowledged record of operational and environmental mismanagement, due to, among other things, widespread corruption, a lack of investment in, or proper maintenance of its equipment and installations, and numerous spills.

Petroecuador’s environmental record is alarming.  The company has been responsible for more than 1,400 spills between 2000 and 2008.  According to media reports, Petroecuador has spilled over 4.4 million gallons of oil at oil production and storage sites and along its various pipelines.

Meanwhile, Petroecuador has significantly increased the footprint of oil operations within the former consortium fields.  For instance, the company has drilled more than 400 new wells since taking over while the consortium operated 321 wells.  Likewise, Petroecuador has constructed more than 270 new reserve pits in the last three years alone.  All the while, the company has largely ignored its obligations to clean up its portion of the consortium operations based on the remediation agreement with Texaco Petroleum.

View a photo gallery or watch a video of Petroecuador’s environmental mismanagement.

Despite Petroecuador’s dismal environmental record, neither the Amazon Defense Coalition nor Amazon Watch has made Petroecuador a focus of their Oriente clean-up campaign, and the plaintiffs and their lawyers have never pursued any legal action against the state oil company. To the contrary, Petroecuador stands to benefit, directly and indirectly, more than any other Ecuadorian entity if the cost for widespread remediation is shifted to Chevron by:

  • Forcing Chevron to pay for remediation work that is clearly the responsibility and obligation of Petroecuador, both under the Settlement and Release entered into by Texaco Petroleum, the Government of Ecuador and Petroecuador, and as the sole owner and operator of the former consortium fields for the past two decades.
  • Requiring Chevron to refurbish and upgrade Petroecuador’s deteriorating infrastructure even though Texaco Petroleum transferred all of that property to Petroecuador in good operating condition almost 20 years ago and has had no say in any of Petroecuador’s operational decisions since 1992.

See these photographs of Petroecuador’s operations in Ecuador:

petroecuadoroperations1petroecuadoroperations3

 

There is no question that the people of the Oriente region of Ecuador face a series of challenges regarding health in their communities.  However, they are being deceived by the trial lawyers and activists who have brought this lawsuit.

The major health concerns in the Oriente region are not the result of oil operations, but are related to a lack of water treatment infrastructure, a lack of sufficient sanitation infrastructure and inadequate access to medical care.  (Read about Texaco Petroleum’s past operations and questions of health.)

Drinking water samples taken during court-ordered inspections of sites remediated by Texaco Petroleum found high levels of bacterial contamination from human or animal waste in 90 percent of the samples, indicating widespread microbial contamination of the water sources.

While the samples contained a high level of microbial contamination, results showed little evidence of contamination from oil. Court-ordered inspections found that 98 percent of surface water and 99 percent of drinking water samples meet international drinking water standards for petroleum hydrocarbons.  Those few samples indicating petroleum-related impacts were from areas where Petroecuador’s poor operations had resulted in contamination.

In addition, sworn declarations filed in April 2013 by environmental consultants from Boulder, Colo.-based Stratus Consulting testify that the plaintiffs’ lawyers not only contrived to falsify environmental damages claims, but that “Stratus is not aware of any scientific evidence that people in the former concession area are drinking water contaminated with petroleum” and that “at no time while working on the Ecuador Project did I see any data supporting a finding of groundwater contamination from TexPet operations…”

The Government of Ecuador has not fulfilled its obligation to remediate the environmental impacts that it has caused, much less to modernize or even maintain its facilities to mitigate further impact.  Nor has the government provided any sewage treatment in the region with raw sewage being discharged directly into streams and rivers used for bathing and drinking water by the local communities.  As a result, many rural residents do not have access to potable water.

The judicial system in Ecuador is not fair and is far from independent.

Since assuming office in January 2007, President Correa has consolidated his power over all of Ecuador, including its political, financial, and media institutions:

Correa consolidated political power when the Constituent Assembly, which is dominated by his political party, Alianza PAIS, drafted a new constitution, dissolved the National Congress and announced that its decisions were superior to any other ruling by the judicial system.

He threatened that “[j]udges and tribunals that process any action contrary to the decisions of the Constituent Assembly shall be dismissed from their post and subject to corresponding prosecution” and has since made clear that this threat extends to judges that rule against state interests.

Correa claims that the “Executive Branch [can] exert pressure on the Judicial Branch to get the courts to “respond to the needs of the country” and that, as President, he “is not only the leader of the Executive Branch [but] of the entire State and the State is made up of the Executive, the Legislative, and the Judicial branches.”

Correa has also cancelled foreign corporations’ contracts and seized their assets while simultaneously foreclosing their possibilities for a fair resolution of the disputes by rejecting the jurisdiction of international arbitral tribunals and refusing to comply with their orders. He has also taken steps to control the media, which Correa considers “a corrupt instrument of the oligarchy” and the main “enemy of change,” including threatening to revoke hundreds of radio and television licenses because of alleged “irregularities.”

There is evidence going back to previous administrations that the lawyers representing the Lago Agrio plaintiffs and the Government of Ecuador are working together to ensure a verdict against Chevron in the Lago Agrio lawsuit. The Correa Administration has maintained and furthered this arrangement, converting the lawsuit against Chevron from a legal matter to a political cause.

The Government of Ecuador could benefit greatly from a decision against Chevron, which would absolve it of its own remediation obligations and result in the transfer of an enormous amount of money to Ecuador (the proposed $27 billion judgment would represent half of Ecuador’s GDP). Politically, the Lago Agrio case diverts attention and responsibility for environmental conditions away from Petroecuador and allows Correa to blame all social ills in the Oriente on Chevron.

Correa has publicly prejudged Chevron’s liability in the ongoing case, even taking the unfounded and highly offensive position that Texaco Petroleum was guilty of “crimes against humanity.” Ecuador’s Attorney General confirmed that “the Correa administration’s position in this case is clear: ‘The pollution is the result of Chevron’s actions and not of Petroecuador.’”

Correa has thrown the support of the Government behind the plaintiffs, even offering them “assistance in gathering evidence” against Chevron. In April 2007, just months after assuming office, President Correa took a media tour of the Amazon accompanied by the plaintiffs’ lawyers and representatives, calling plaintiffs’ attorney Pablo Fajardo and Amazon Defense Coalition leader Luis Yanzareal heroes…who have fought for years for their people, their Amazon.” He has also repeatedly referred to Fajardo and Yanza in Ecuador’s national press as “our compañeros” (“comrades”) and his “dear friend[s].”

Correa has called on Ecuador’s Prosecutor General to initiate criminal prosecution against the Chevron attorneys who signed the settlement and release agreements on behalf of Texaco Petroleum. Two previous Prosecutor Generals serving the Correa Administration, called for the criminal charges to be dismissed on three separate occasions. However, the next appointee, Washington Pesántez, then issued baseless indictments despite three earlier opinions that charges be dropped, without pointing to any new evidence, and notwithstanding his earlier opinion, as a District Prosecutor, that found no evidence to support the criminal charges and affirmed the recommendation to dismiss the criminal complaint.

Recently, Correa’s legal advisor, Alex Mera, and Correa’s sister, Pierina, were implicated in a $3 million bribery scheme aimed at guaranteeing remediation contracts that would result from a verdict against Chevron by one of the scheme’s organizers, Patricio García, who stated that he was a political operative for the ruling Alianza PAIS party. García also stated during one of the videotaped meetings that executive-branch lawyers would be sent to Lago Agrio to help Judge Núñez (who was also implicated in the scheme) draft his opinion.

Correa confirmed his alliance with the plaintiffs again after the bribery scheme was revealed, stating unequivocally “[o]f course I want our indigenous companions to win.” And as further proof of the Government’s control over the judicial process, despite repeated claims that the Government has no role in the litigation, Prosecutor General Washington Pesántez announced that he asked Judge Núñez to excuse himself from continuing in the process in order to “ensure that the ruling will not be delayed any longer” and so as not to allow Chevron “to avoid paying the compensation we believe is more than fair because it caused a lot of damage in our country.” Pesántez then confirmed the estimate that “90% [of any judgment against Chevron] would be delivered to the State for remediation and bio-remediation activities.”

The cancer claims made by Richard Cabrera is one of the most shocking examples of the absurdity of his work.  Cabrera, a mining engineer with no experience or training in oilfield remediation work, was appointed by the court to assess possible environmental damage.

This is an environmental remediation case, and none of the 48 named plaintiffs have claims for cancer or related damages.

In fact, in sworn declarations (see here and here) filed in April 2013 by environmental consultants from Boulder, Colo.-based Stratus Consulting, the Stratus scientists testify that the plaintiffs’ lawyers not only contrived to falsify environmental damages claims, but that “…the conclusion that there were 1,400 ‘excess cancer’ deaths near the oil operations area is invalid and unsupported.” A Stratus scientist further claims not to be “aware of any credible scientific evidence that supports the statement that cancer rates were up to 30 times higher than normal, or that the incidence of childhood leukemia was found to have reached alarming levels.”

Nonetheless, Cabrera assessed more than $9.5 billion in damages for “excess cancer deaths,” yet failed to identify a single victim or provide any corroborating documentation, such as death certificates or medical diagnoses.

Instead, Cabrera based his cancer claims on self-serving answers to ad hoc surveys administered to the local population in secrecy by unknown individuals. The survey asked leading questions like “what [do] you think should be demanded of Texaco Petroleum as relief of the damages suffered?”

Additionally, Mr. Cabrera makes obvious math errors in his calculations and incorrectly interprets his own survey data to obtain falsely high rates of cancer.  He lumps all types of cancers together, even though there is no evidence linking components of crude oil to most of the cancer types reported, including stomach and uterine cancer – the two most common cancers reported in the surveys. These are also the two most common types of cancers in Ecuador.

Cabrera’s conclusions are contradicted by official Ecuador statistical data on cancer mortality, which show there is no increased cancer risk in the oil-producing areas compared to non-oil producing regions of the Ecuadorian Amazon.  The cancer rate calculated by Cabrera is more than 250 times higher than the rate reported by Ecuador’s government.  View an analysis of cancer mortality and oil production in the Amazon Region of Ecuador.

This isn’t the first time lawyers who have been involved in this case have tried to bring cancer claims against Chevron. In 2007, a U.S. federal court for the Northern District of California threw out a similar complaint against Chevron allegedly filed on behalf of Ecuadorians from the Oriente region.  The case was dismissed after it was discovered that the plaintiffs had never been diagnosed with cancer and they testified that they did not even know that a suit had been filed in their names.

And they’ll keep telling their story over and over again with more and more embellishment until someone either confronts them with the truth or pays them to stop.

Here is one of the major myths the US-based trial lawyers and environmental activist groups have spun in a naked attempt to tarnish Chevron’s reputation in the U.S. and pressure the company into an unjust settlement in the lawsuit against Chevron in Ecuador:

Myth 1:  Chevron is responsible for $27 billion worth of damages to the Amazon.

The $27 billion assessment against Chevron was concocted by Richard Cabrera, a mining engineer with no experience or training in oilfield remediation work.

Cabrera was appointed by the court to assess possible environmental damage in the former Concession oilfields, if any, the cause, and remediation projects to remedy those damages.  His selection was fully supported by the Amazon Defense Coalition over the opposition of Chevron.

In addition to being unqualified for the task he was given, Cabrera ignored directions from the court and improperly expanded his work scope to invent categories of damages that have nothing to do with the issues raised by the lawsuit or with environmental remediation of the former Concession area.

Nearly 90 percent of his $27 billion figure is allocated to issues unrelated to the actual claims in the case:

  • Cabrera provided no medical records or death certificates to support his recommendation for more than $9.5 billion in compensation for “excess cancer deaths” and did not name a single victim or identify any family members as beneficiaries. He has no public health training or expertise in diagnosing the epidemiology of cancer, nor can he point to anyone on his team who does. Rather than relying on an expert, Cabrera based his cancer claims on self-serving answers to ad hoc surveys administered to the local population in secrecy by unknown individuals.
  • Cabrera also claims $1.7 billion in damages for improvement of oil infrastructure sites, which have been operated exclusively by Petroecuador since Texaco Petroleum ceased operating in 1990.  The sites are the sole property of Ecuador, and are currently in use and even being expanded by the state-owned oil company.
  • He assessed more than a billion dollars in soil remediation for sites he never visited and grossly inflated the calculation to arrive at a suggested per-pit remediation cost that is 25 times greater than the current costs for Petroecuador’s own remediation program.
  • He assessed $428 million to improve the potable water system in the Oriente and $3.2 billion for groundwater remediation even though he did not take any samples of streams, rivers, municipal water sources or drinking water wells, did nothing to assess whether other factors (such as fecal contamination) were contributing to health problems, and states in his own report that he did not have enough data to develop a groundwater remediation plan.
  • He also calls for $320 million for the creation of an animal husbandry farm to raise and release wild animals for indigenous people to hunt.

So far, Cabrera has refused to answer questions about his methodology, identify additional team members, explain their responsibilities and contributions, or produce supporting documentation, specifically regarding the survey that supports his cancer-related damage assessment.

Cabrera’s work was far from independent.

A number of indicators suggest that Cabrera worked closely with the plaintiffs’ lawyers to prepare his last report:

  • He received payments of at least $200,000 for his work from Selva Viva, an Ecuadorian company that serves as the financial and logistical intermediary for the Amazon Defense Coalition. The checks were apparently signed by Luis Yanza, legal coordinator for the Amazon Defense Coalition and general manager of Selva Viva.
  • He benefited from the assistance of members of the Amazon Defense Coalition during his field work, as demonstrated by photographs and video taken at the time, while Chevron observers were prevented from even observing Cabrera’s work.
  • He even copied sections of his $27 billion report word-for-word from observations submitted to the court by the plaintiffs’ lawyers.