“The black hand” of Chevron in Ecuador

Usually petroleum companies can be really harmful for the environment and sometimes can damage the landscape of the whole region where they work, causing future problems on the inhabitants of those regions and to their way of living. This is what happened in Ecuador with the former company TEXACO when they damaged the whole landscape of the zone of Lago Agrio in the province of Sucumbios, north-west of Ecuador. Today TEXACO belongs to the company CHEVRON, who is known as one of the least ethical companies globally, because they have been accused of tax evasion as well a number of environmental infractions in several countries around the world (Kiser).

How did all this happen?

In 1967 there was a discovery of petroleum under the soil of the Ecuadorian jungle. The government opened a bidding process for the extraction of the oil. One of the companies that got one of those contracts was Texaco. They were operating in Ecuador for around 28 years until 1992. That year Texaco stopped their activities in Ecuador and just left the country.

When they left the country, they also left behind them around 1000 open toxic waste pits with all the toxic wastes caused by their extraction activities. These pools full of harmful chemicals and from the extraction per se produced around eighteen billion gallons of toxic and highly saline “formation waters“. These toxicities began to flow into the rivers near the extraction site. This would not be that serious if these communities had potable water or a good system of water provision, but the contaminated water is the water that they consume and irrigate their crops with.

The polluted water caused diseases on the skin, the stomach, cancer, miscarriages, birth defects, dead livestock, sick fish, and the near-extinction of several tribes from the villagers of those small communities. Some of them got organized and suited the company TEXACO for all the damages that they had caused to the environment and to the people from that part of Ecuador. Since 1993, a group of Ecuadoreans had been pursuing an apparently fruitless legal struggle to hold Texaco responsible for environmental destruction in the region (Benali).

But what happened during the Lawsuit?

We arrived at the year 2001 and the big company TEXACO was acquired by the even bigger company CHEVRON. Everybody knows that when you acquire a company you also acquire the responsibilities and problems that the acquired company could have, for instance, a lawsuit against this company due to environmental damages in a country in South-America.

An Ecuadorian tribunal from the city of Lago Agrio decided in justice to put a fine of 9.5 billion dollars to Chevron for all the damages previously described. CHEVRON dismissed this decision saying that everything was already solved and that they have nothing to do with this issue, even saying that all was already remediated by TEXACO before.

“Chevron’s insistence that Texaco undertook and completed a “remediation” in Ecuador is a clear acknowledgement that Texaco is responsible for causing significant environmental damage. That said, the scientific evidence in the trial has made it increasingly clear that Texaco’s self-described “remediation” was nothing more than a choreographed fraud designed to evade any level of accountability for the company’s reckless use of sub-standard operational practices in the planet’s most delicate ecosystem” (AMAZONWATCH).

To avoid this lawsuit the company alleged that Ecuador was involved in a case of bribery due. They spied on the judges in Ecuador who were in charge of this case.

“Chevron invested tens of millions of dollars in its legal defense as well as counterattacks against the plaintiffs and Ecuadorean officials. It has long argued that a 1998 agreement Texaco signed with Ecuador after a $40 million cleanup absolves it of any liability in the case. The plaintiffs say the cleanup was a sham and didn’t exempt third-party claims” (CBS News).

The current government is running a Campaign called “La mano Sucia de Chevron” (The dirty hand of Chevron) to show the world how they had destroyed the Ecuadorian environment.

For more information you can always watch these videos:

The True Story of Chevron’s Ecuador Disaster

Chevron: The Real Human Story in Ecuador

Author: Mauricio Chavez, Master in International Business, 2015
Business School Lausanne