Corporate Irresponsibility or Government Interference? The Chevron-Petroecuador Fiasco

The images are enough to make even a non-environmentalist cringe. Lush rain forest coated in black, dredge-filled lakes, and rivers of oil make up a Rhode-Island size portion of the Ecuadorian rain forest in Sucumbíos state. The controversy of who is to blame has lasted since Chevron’s departure from Ecuador.

Chevron (then Texaco) operated in the Ecuadorian Amazon from 1964-1990. The company officially stopped operations in Ecuador in 1992, handing over the areas of exploration in Sucumbíos on the Ecuadorian-Colombian border to Petroecuador, which was established in 1989 to take over Texaco’s exploration. During Texaco’s tenure in Ecuador, they contributed a total of $24.5 billion dollars to the Ecuadorian government as part of taxes and fees for operating on Ecuadorian soil. In 1998, the Ecuadorian government officially absolved Chevron for its activities in the region with a $40 million dollar cleanup in 1998.

Today, there is a class-action lawsuit being filed by a number of NGOs and organizations of indigenous tribes against Chevron in the sum of anywhere between $6-$16 billion dollars for environmental damage and human suffering. Interestingly, U.S. attorneys Steven Donziger (who has been on the case since the mid 1990s) and the Philadelphia firm Kohn, Swift, and Graf are part of the prosecution. Donziger says that he is doing this on behalf of the suffering caused by the damage. Surely the large pay-out from a multi-billion dollar lawsuit provides extra motivation.

At the heart of the controversy is the issue of who is to blame. Chevron, which hasn’t operated in Ecuador since 1989, claims the spills are the fault of Ecuador’s state-owned oil company, Petroecuador. Petroecuador claims that the corporate giant is to blame. To complicate matters, Rafael Correa has officially endorsed the lawsuit. Years of litigation have been exacerbated by dismissals of evidence, indictments of lawyers on both sides and an uncompromising stance from both camps.

It remains unclear who is at fault. The legitimacy of soil sample collections, anti-US sentiment (see the Air Force base at Manta), legal pressures on the Nueva Loja Supreme Court from the executive branch, a shotgun absolvement of guilt signed during times of economic crisis in Ecuador, and a malleable legal system are but a few of the complications that have delayed a ruling.

Today’s vote approving a new 444-item constitution ostensibly gives more power to the executive branch as well as indigenous groups. This does not bode well for Chevron, whose cries of political and legal foul play may fall on deafer and deafer ears.

It is likely that both Petroecuador and Chevron are to blame for the destruction. However, as long as neither side is willing to admit any guilt, one of nature’s most endangered habitats will continue to erode, destroying lives and endangered ecosystems in the process. The indigenous tribes, on whose behalf the litigation is supposedly being fought, are caught in a tangled web of corporate neglect, opportunistic foreign lawyers, and governmental denial that trivializes the devastating impact the spills have had. As the blame game drags on, so will the continued suffering of Ecuador’s most impoverished and destruction of a rapidly shrinking natural wonder.