Texaco’s Ecological Terrorism of the Ecuadorian Amazon


Suzanne Simon

From
1972 until 1992, the U.S.-based Texaco Corporation spearheaded oil production
activities in the Ecuadorian Amazon. They guided exploration activities, built
roads and a trans-Ecuadorian pipeline, which runs from the oil town of Lago
Agrio to the port city of Esmeraldas. These two decades of oil extraction and
production have resulted in levels of environmental contamination and
destruction which are shocking even to a generation accustomed to hearing
about the acts of atrocity and imperialism committed by US and multinational
corporations throughout the world. After exploiting the majority of
Ecuador’s oil reserves, Texaco intentionally left behind an
environment contaminated by over three hundred unlined oil pits, which are
full of toxic and carcinogenic wastes. These pits—and the commonplace
occurrence of oil spills—were led to contaminate rivers, streams, and ground
water. They also left an entire population ridden with chronic and acute
illnesses, including cancer, in a population where it was previously
nonexistent, and children born with genetic deformities. For all of this,
Texaco has refused to claim any responsibility.

The
Ecuadorian Amazon

The
Ecuadorian Amazon is a sparsely populated region that comprises roughly half
of all Ecuadorian territory. The people who live there are almost entirely
indigenous and colonoscolonists who moved to the Oriente during the
oil boom. Colonos form a universally poor and formerly landless
population that has come from other regions of Ecuador. Following the failed
land reform attempts of 1964, the first attempt to reform Ecuador’s feudal
land-labor relations, colonos
were granted tracts of land in exchange for colonization, in a
policy similar to the American Homestead Act of 1861. The Ecuadorian
government’s motives for doing this lay in colonizing the land by civilizing
or pushing the indigenous groups who lived there deeper into the forest and
thereby providing a labor supply for the oil industry and, in general, making
the area safe for oil extraction activities.

Until the oil
boom years of the early 1970s, the Ecuadorian Amazon—as tropical rain forest
and home to many indigenous groups—was virtually impenetrable. Tropical
indigenous groups, such as the Cofan, Siona-Secoya, Shuar-Jivaro, and Huaorani,
had successfully defended
their territories against the incursions of the Inca and Spanish Empires, as
well as attempts by the Ecuadorian government throughout the 19th century to
colonize the region. The first sustained foreign presence in the region
occurred at the turn of the 20th
century during the rubber boom. At that time, rubber barons brought Quechua
peoples down from the mountains to work as slaves, indentured laborers, and
serve the encomienda system. The largest indigenous population of the
Ecuadorian Amazon are now the lowland Quechua.

The first oil
company to go to Ecuador in search of oil reserves was Royal Dutch Shell
during the 1930s. Being unsuccessful in the Amazon and having discovered oil
in St. Elena, they moved to the coast to exploit oil resources there. The
largest foreign oil presence to date, therefore, has been Texaco—or as it
likes to refer to its phantom subsidiary, “Texpet.” Oil is
the primary natural resource extracted from the Oriente, and it was
Texaco’s oil production activities that changed the landscape and
demographics of the region.

Texaco in
Ecuador

Texaco
came to dominate the oil production industry by taking a hard line against the
nationalist and populist military regime of General Rodriguez Lara. The
Rodriguez Lara regime seized control of the generally unstable Ecuadorian
government in 1972 in order to pursue oil production from a national populist
and anti-imperialist position, and to ensure that the fruits of the oil boom
would be properly invested in the national infrastructure of schools, roads,
and hospitals. CEPE (Coporacion Estatal de Petrolera Ecuadoria) was
established in order to negotiate with and learn the tools of the trade from
Texaco, and to build an Ecuadorian professional class of oil experts.

The optimistic
sentiments of this nationalist regime did not last long under Texaco pressure.
The strong nationalist stance of the Rodriguez Lara regime had created
conditions, which smaller corporations could not meet, leaving Texaco in a
dominant position. Texaco consolidated its position of power and influence
over the terms of production by enforcing an oil embargo in 1975, pushing the
Ecuadorian economy into a severe financial crisis and its first period of
heavy borrowing. CEPE subsequently bought out the shares of Texaco-Gulf (the
other major competitor) leaving CEPE as a majority shareholder, but still in a
subordinate position vis-a-vis Texaco, and Texaco as the foreign oil company
to monopolize the industry. In this way, Texaco forced the Ecuadorian
government to conform to its standards as the only oil producer in the nation,
and squelched nationalist ambitions in a matter of a few short years. Although
since the early 1970s CEPE held a nominal majority shareholder position (Petroecuador
is the main oil company now, having assumed all of Texaco’s holdings in 1992
as per contract), it was widely recognized that control of the oil industry in
Ecuador rested in Texaco’s hands both because of their powerful position as
a global corporation—Ecuador was in dire need of foreign investment—and
because only Texaco had the knowledge, expertise and technology to pursue oil
production.

While it is
true that the Ecuadorian state shares blame with Texaco Corporation for the
environmental contamination in the Oriente region, clearly Texaco Corporation
made the decisions of where and how to drill and what technology to use. It
was for this reason that the class-action lawsuit filed by 30,000 indigenous
residents of the Oriente was filed in a New York Second District
Federal Court, where it is alleged that all of the important decisions were
made at Texaco’s headquarters in Westchester County. The Ecuadorian
government played their part by considering these lands (which were inhabited
by indigenous peoples) as “vacant,” by dismissing as dispensable the lives
of both the indigenous peoples who had already lived there and the newly
relocated migrant group, and by using the Ecuadorian military to make
inhospitable areas safe for oil production.

It is well
known that the oil companies with the help of the Ecuadorian military forcibly
removed indigenous peoples and farmers from their lands. One woman told me of
how, as recently as 1990, the Ecuadorian military came to her home and
forcibly removed her family. Her three children were beaten before they were
all able to escape by swimming across the river and fleeing into the forest.
That night, they stayed at a neighbor’s small hut where her three-year-old
daughter fell into a cooking fire. To this day she is severely scarred. In
Guayaquil the mother of the family made a courageous denuncia on a sympathetic
television channel, only to have her own life threatened by local military
officials and to be told that they should have killed her “worthless”
Indian daughter. Afterwards, they had to go and live in city parks and beg for
money and food, all because they lived too close to a line (all oil production
areas in the Oriente are marked off by “blocks”) where Texaco and another
smaller French corporation wanted to drill.

It has yet to
be discovered how many stories like this exist, but the implication was made
clear to me, as an investigator, that this was, and is, an all too commonplace
event. Military surveillance of oil production areas is a fact; I was stopped
and questioned by a large military patrol over fifty miles away from a well
where I had taken pictures, implying close radio communication between the
seemingly isolated guard and the Ecuadorian military.

Although it is
painfully clear that the Ecuadorian government was never concerned with the
welfare of the indigenous peoples and colonos who inhabit the region, it was
always assumed that, with respect to the actual technical business of
exploring, drilling, pumping oil, and disposing of the toxic wastes, Texaco
would follow normal, industry-approved standards. Wasn’t this precisely the
role that Texaco was supposed to assume vis-a-vis the Ecuadorian state and
CEPE, to initiate them into the business of oil production in the way that it
is done in the rest of the world?

So it came as a
shock for many Ecuadorians to learn that, rather than using trusted and
industry-approved standards for oil production in the Amazon, Texaco had
chosen to cut corners and use inadequate and inappropriate technology. Texaco
intentionally chose not to install the reinjection technology, which had been
the de jure practice of oil production since the early 20th century in
the United States. By doing so, they saved approximately $1 million per well
for the more than 300 wells that were drilled there.

Causes of
Oil Contamination

Drilling
for oil involves handling a series of toxins, ranging range from the highly
toxic “produced” or formation waters, which are extracted along with the
code in the drilling process and then separated out during processing, to the
various hazardous chemicals that are used in the drilling and separation
process. Normally, all toxic “produced waters” are reinjected into the
earth at the same subterranean level from which the oil was extracted. Texaco
allowed the various produced and waste waters to collect in unlined pits
barely scratched from the surface of the earth, forming what Judith Kimmerling,
in her 1990 work Amazon Crude has referred to as a “toxic
soup” of brine, crude, PAHs (polycyclic aromatic hydrocarbons—a well-known
carcinogen) and VOCs (volatile organic compounds).

While these
pools would be hazardous to the environment anywhere, they are especially so
in the Amazon region, where the extraordinary delicacy of the lush forest is
held together through thousands of web-like streams and rivulets. Oil has also
seeped deep into the groundwater, traveling far from the sites of the original
pits. Were the contamination of these pits not enough Texaco added
insult to injury by engaging in even more egregious abuses. Gaseous substances
which collect on the surface of the waste pits are often burned off, cresting
what the local inhabitants refer to as “black rain” and releasing even
more PAHs in their most toxic airborne form, and excess crude is poured onto
unpaved roads in order to control the dust in the dry seasons. People who
clean the pits or who walk these roads must use gasoline to clean off the oil,
and are often treated for burns in local hospitals. The pipeline is considered
to be poorly built, without enough turnoff spigots, which would control the
spill during a pipeline break. Oil spills are a commonplace occurrence in the
Ecuadorian Amazon. They are so common that when a local resident talks of how
their farm is faring, they may make reference to an oil spill as casually as
if they were speaking of bad weather.

In such an
extraordinarily wet environment with thousands of natural sources of water,
the indigenous peoples and colonists in the region have access to only
contaminated rivers and streams for drinking, fishing, bathing, and laundry.
They now suffer from chronic problems such as diarrhea and malnutrition, and a
number of illnesses are widely documented among the population, including:
spontaneous abortions, respiratory disorders, severe and constant head and
throat aches, skin discoloration, childhood leukemia, children born with
genetic deformities, cancer of the larynx, bile duct, throat, stomach, lung,
and uterus. The rate of cancer is 130 percent higher than what would be
expected under normal conditions. (For more information on the spread of
cancer, refer to the Yana Curi report available at .) Many people have already
died, and a cancer epidemic is expected to spread throughout the area in the
comma years.

In addition to
having their land raped and various previously unknown illnesses introduced
into their populations, the main oil towns of the Oriente—Coca and Lago
Agrio—are now facing rising unemployment and violence. Due to Ecuador’s
well-known economic woes, the current state-owned company, Petroecuador, has
cut back on the maintenance work for pipeline and other oil-related
activities, eliminating an importance source of employment for the colonists
who live in the region and, especially, in the towns. Most colonists rely on a
combination of farming the poor soil of the Ecuadorian Amazon and working for
the oil companies in order to survive. Petraecuador’s cutbacks, in addition
to the fact that oil reserves are running out and are expected to be
completely exhausted by the year 2010, indicate that unemployment will only
continue to rise. One can only speculate as to what will happen to the two
large towns and other colonist communities which are isolated from the rest of
the Ecuadorian national economy and which rely almost exclusively on oil. for
the income necessary to survival. It is certain that more clear-cutting of the
Amazon rain forest—the “lungs of the worlds, source of what many
scientists consider as a possible ethnobotanical cure for cancer, and one of
the ecological ”hot spots" designated by Norman Myers for its
extraordinarily high levels of endemism and biodiversity—will continue to be
destroyed. All so that Texaco could make a few bucks. It is for this reason
that many people refer to Texaco’s activities as acts of “ecological
terrorism.” and the skull and crossbones are drawn next to the name
Petroecuador on the main pipeline that connects the Oriente with the coast.

Most people
that I spoke with were well aware and vocal about the fact that the Ecuadorian
government and Texaco raped their land, and that the economic benefits of oil
development were enjoyed only by a very few—the wealthy aristocracy and
corrupt military or political officials. Barely a cent of oil production
revenues were reinvested in the communities which were most connected with the
on-the-ground business of oil extraction: the single road—more than one
hundred miles long -which connects the two main oil towns of Lago Agrio and
Coca—is only occasionally paved. Most stretches of the road are so pocked
with potholes as to make for extremely hazardous driving. A bridge that used
to connect the road across the Aguarico River to Lago Agrio was washed out by
the 1987 earthquake, and has yet to be replaced. Instead a very primitive
ferry transports cars and buses from one side to another. Lago Agrio has only
a few paved roads in town, and Coca has none. Medical facilities are generally
poor, as are schools, the water system, and other public utilities and
facilities. As one person informed me, “All of the oil money went to the
cities, where the already rich people live. None of it came to us, where the
poor people live- those of us who worked for the oil. And now the oil boom is
over—it is too late for us and we will not get anything.”

It remains to
be seen precisely how the “Colombia Plan” will affect this region, but it
is certain that it will. During the second week of July 1999, as plans were
developing around the now IJS air base at Manta, a spate of articles
concerning the northeast corner of the Oriente—an area usually ignored by
the rest of the nation—were published in the major daily newspapers.. Lago
Agrio was targeted as a site of arms and supply transfers (fuel was added to
the fire by a supposedly large cache of arms discovered there), and a
discourse clearly emerged casting the local population as vulnerable to the
subversive influences of the FARC. Having little legitimate sources of income,
it was claimed, they are likely to resort to illicit activities and
insurrectionary politics. The military presence has already been dramatically
increased in these areas, in order to both “stop the flow” of supplies and
arms, and to beef up the Ecuadorian border in the hopes that Colombia’s
problems will not bleed over. The Clinton administration’s Colombia Plan has
now allocated $12 million for “community” and “social development” (as
well as $13 million for military equipment and $86 million for the
U.S.-controlled air base at Manta). Already entry to and exit from these areas
is being closely monitored.

The Lawsuit

As
mentioned earlier, in 1993, a class-action lawsuit against Texaco was filed in
New York by an Ecuadorian-American environmentalist lawyer on behalf of 30,000
indigenous peoples of the Ecuadorian Amazon. In April 1994, Texaco moved to
dismiss the case on the grounds that a lawsuit in their domicile was
“harassment.” Judge Vincent Broderick refused the request for dismissal,
citing the 1992 Rio Declaration, which, like the 1972 Stockholm declaration,
declared the right to a clean and healthy environment as a fundamental and
inalienable human right Judge Broderick accepted jurisdiction over the Texaco
case without hesitation, and immediately requested that discovery be conducted
to determine the extent of Texaco’s control over Ecuador’s petroleum
production industry. Judge Broderick died one year later and jurisdiction over
the case was passed to Judge Jed Rakoff, a known conservative on environmental
issues.

Although the
Ecuadorian government did sign a deal with Texaco in 1995 for a $40 million
cleanup, it is widely recognized that the cleanup performed by Texaco was
really just a PR display and an effort to pacify the Ecuadorian government.
Their cleanup activities in the past and present generally consist of covering
unlined pits with dirt and vegetation so that they are less noticeable
to the naked eye, and removing the debris from a pipeline spill that is
visible from the road to a less visible spot (usually just over the next
hill).

Since 1995, the
Texaco lawsuit—filed as Aguinda v. Texaco—has bounced back and
forth between the court of Judge Rakoff and the Second District Court of
Appeals. By 1996 Texaco had filed three motions to dismiss the case on the
basis of international comity, indispensable parties, and forum non
conveniens
. In November 1996 Judge Rakoff agreed to dismiss the case on
the basis of these principles, but in October 1998 the U.S. Court of Appeals
for the Second Circuit court reversed Judge Rakoff’s decision. In late
November 1999, Judge Rakoff dismissed the case for a second time, pointing to
the inconsistency of the Ecuadorian government’s stance toward the case: the
presidency of Sixto Duran Ballen had signed an agreement with Texaco in 1998,
relinquishing further claims against the company. This position was refuted by
subsequent presidencies and the Ecuadorian government has since come out in
support of the lawsuit. In early December 1999 the U.S. Second Circuit court
of Appeals voted unanimously to send the case back to Judge Rakoff, claiming
that he did not have sufficient reason for dismissal.

There are two
aspects of this lawsuit that—if the case is successful—could set a new
precedence for the monitoring and control of multinational corporations
activities overseas. The Alien Tort Claims Act (ACTA) and the common law
doctrine of forum non conveniens
work in direct
contradiction of each other; the former allows U.S. agents to be tried in U.S.
courts for torts committed overseas against foreign bodies, while the
latter permits U.S. corporations to require that lawsuits filed against them
by foreign agents be tried in the courts of the host country. The claim is
that a U.S. forum is inconvenient and that, since the torts were committed in
the host country, the claim should be tried there. The real motivation in
having lawsuits filed against them tried overseas is that often times, as in
the case of Ecuador, the host country’s court system is not sufficient to
try mass toxic tort suits, nor are the environmental laws stringent enough to
allow success of the case.

The ACTA,
enacted by Congress in 1789, allows foreign citizens to bring either U.S.
citizens, foreigners and—if this case is successful—corporations to
justice in U.S. courts, and to seek remedy for wrongful conduct “committed
in violation of the law of nations.” The Alien Tort Claims Act was rarely
used until 1980, when the case of Filartiga vs. Pena-Irala—in which
the Paraguayan death squad member Americo Pena-Irala was prosecuted for the
torture and murder of 17-year-old Joelito Filartiga in 1976—was won on the
principles of ATCA. Since then, the Alien Tort Claims Act has been used
successfully in a number of lawsuits: a Bosnian-Serb leader accused of rape,
genocide and forced prostitution; a former Guatemalan army general and defense
minister accused of torture; a former Ethiopian military official accused of
torture; a former Argentian general accused of kidnapping and torturing many
Argentinian civilians; and the Los Angeles Police Department for the false
arrest and imprisonment of a Mexican couple. The Alien Tort Claims Act has,
therefore, been used primarily to prosecute individuals for human
rights abuses committed abroad.

More recently,
ATCA has been used to bring multinational corporations to court for human
rights violations. This is what happened when the New York-based human rights
organization, the Center for Constitutional Rights, filed a class action
lawsuit on behalf of the Burmese government in exile and farmers of the
Tenasserim region of Burma against Unocal, Total, and two Burmese government
institutions, the State Law and Order Restoration Council (SLORC) and the
Myanma Oil and Gas Enterprise (MOGE) in October 1996 in a Los Angeles court.
The defendants were accused of participating in the relocation of entire
villages, forced labor, rape, and murder to build a natural gas pipeline from
the Yadana natural gas field off the coast of Burma through the Tenasserim
region to the border of Thailand. By April 1997 the LA court had reached the
initial ruling that although the Burmese government institutions of SLORC and
MOGE were able to maintain sovereign immunity under the Foreign Sovereign
Immunity Act, the remaining defendants of Unocal and Total Corporations could
still be held under court jurisdiction based on the ATCA. This appears to be
the first time ACTA has been successfully applied to a U.S. multinational
corporation for its overseas operations. The decision extended the scope of
earlier Filartiga decision from private individuals to transnational
corporations, while at the same time suggesting that multinational commercial
enterprises could be held accountable for the activities of partners,
including foreign or host governments. As William Aceves in the March 25, 1997
edition of The American Journal of International Law notes, “Until
recently, efforts to address the issue of corporate responsibility (and
liability) with respect to human rights have met with limited success Prior
cases brought against multinational corporations for international | law
violations have had mixed results (…) In contrast, Doe v. Unocal is
perhaps the first case to recognize I the possibility of corporate liability
for human rights violations arising out of corporate activity abroad.”

The additional
aspect of this case lies in the principle of forum non conveniens. A
federal common law doctrine, the central purpose of forum non conveniens is to
ensure than a judicial form is convenient for both parties, and that an
adequate alternative forum exists prior to dismissal of the case. It has been
amply documented (see, e.g., “Texaco on Trial" by Eyal Press, The Nation
May 11, 1999) and it is a well-known fact that Ecuadorian Courts do not
provide an adequate alternative forum.

Perhaps the
most famous recent case in which forum non conveniens has been
successfully applied by a U.S. corporation in order to escape from the
consequences of its actions was in the Bhopal disaster of 1982. Following the
December Union Carbide leakage of tons of poisonous gas into the environment
and the immediate deaths of over 2,000 residents, thousands of Bhopal
residents filed suits in U.S. courts with the help of U.S. lawyers. These
suits were then consolidated into a single mass toxic tort lawsuit that was
filed in the U.S. District Court for the Southern District of New York. The
U.S. District Court dismissed the case on the basis of forum non conveniens
and sent it back to India, maintaining that victims could seek remedy
through the Indian court system. To this day, most of the Bhopal victims have
yet to be compensated. In 1989, the Indian government negotiated a $470
million settlement with Union Carbide, but that money continues to sit in the
bank allowing the Indian government to collect interest. Of the 615,000
special claims cases, less than 10,000 have been decided, with the average
compensation being $3,500.00—even for death. Medical facilities are crowded
and inadequate, and the death toll attributed to gas-related illnesses
continues to climb and is currently estimated to be between 10,000 and 15,000.

A key element
of Union Carbide’s forum non conveniens dismissal lay in their claim
that since the accident took place in India, the most convenient forum for
trial was in India. They also claimed that Union Carbide plant was run by
Indians, and threatened that if court were to be held in the United States,
more than 100,000 plaintiffs would have to be flown to the States for
testimony. The claim that the plant resided in India, that most workers were
Indian, obscured the fact that it was the Danbury-based Union Carbide who had
a majority ownership (50.9 percent) and effective control over its Indian
affiliate, Union Carbide India Ltd., as U.S. owned corporations always do over
there less developed partners. Ironically, Union Carbide stocks rose shortly
after the disaster.

As this case
demonstrates, the application of forum non conveniens in a narrow, technical
sense has functioned largely to protect multinational corporations from
foreign plaintiffs, and “as a barrier to holding U.S. multinational
corporations accountable for their environmentally destructive behavior
abroad” as Brooke Clagette in a 1996 edition of Tulane Environmental Law
Journal puts
it. In the absence of internationally agreed onenvironmental
protection measures, the U.S. court system could, however, make MNCs more
accountable for their many egregious actions by allowing these private injury
and mass toxic tort lawsuits to be tried in U.S. courts. This would require
that U.S. federal courts to take the Alien Tort Statute—and environmental
and human rights abuses—more seriously.

To do so, the
U.S. judicial system—and the north American population in general—must
become cognizant of the fact that many populations in the world, indigenous or
otherwise, live in a much closer relationship with their natural environment
and often without adequate laws or national infrastructure to protect the
safety of both the environment and its peoples. As in the case of Texaco’s
activities in the Ecuadorian Amazon and countless similar situations, rampant
environmental racism has been practiced instead. In these cases, violations of
environmental rights should be interpreted as violations of human rights for
indigenous communities and other residents of these contaminated areas. Unlike
environmental laws, human rights have a strong basis in international law and
violations of human rights should be seen as violations of the law of nations,
as Hari Osofsky (Suffolk Transnational Law Review, Summer 1997) has
argued. Is not the introduction of cancer into a population in which it was
previously unheard of a human rights violation? In one tiny community alone
next to the Napo River and centrally located next to many oil wells and
contamination sites, more than 40 men have died cancer and the majority
of their widows suffer from uterine cancer. They would certainly claim that
Texaco Corporation has violated their human rights.