May 13, 2002

Lawsuits Target Energy Giants: Ecuador — Aguinda v. Texaco

By Jennifer Huang | World Power I: Business & Law

Page 7 of 11

Aguinda v. Texaco, a class-action suit brought in November 1993 in New York by approximately 25,000 Indians from eight tribes, was one of the first cases to use the Alien Tort Claims Act against an American petroleum company for environmental damage abroad. The case has been consolidated with another suit, Jota v. Texaco, which was filed on similar grounds by Peruvians living downstream on the Napo River from the drilling operations.

The suit alleges that from 1972 to 1992 Texaco Petroleum Company (TexPet) in Ecuador dumped an estimated 30 billion gallons of toxic waste — including benzene, mercury and lead, much of it in hundreds of unlined pools throughout the rainforest.

In the complaint, plaintiffs say the pollution jeopardizes “their very existence as a people” by killing livestock and fish, and causing cancer, skin rashes, spontaneous abortions and other effects. Lawyers estimate cleanup costs to be over $1 billion.

“There are 350 pools of oil scattered in the rainforest,” said Cristobal Bonifaz, lead counsel for the plaintiffs. “The damage is so great, we believe it violates the law of nations.”

Chris Gidez, spokesperson for ChevronTexaco, said the corporation always followed the law protecting indigenous inhabitants and habitats.

“PetroEcuador is using the exact same practices today” that TexPet used, he said, pointing out that “it’s curious why the plaintiffs haven’t included PetroEcuador in the lawsuit.”

Gidez also questioned the validity of studies cited by the plaintiffs, saying, “there has been no credible scientific study,” and that stories of tribal people suffering from contamination are “anecdotal,” lacking proof that the oil company is responsible for their problems.

On its website, ChevronTexaco said the myriad health problems of the inhabitants might be the result of “diet, the lack of medical care and other potential contributing factors, including the colonization of the region and the development of other industry in the area.”

On June 31, 2001, Judge Jed Rakoff in New York’s southern district found insufficient evidence that Texaco had direct involvement in its Ecuadorian subsidiary, and recommended the case be tried in Ecuador.

Before Rakoff’s ruling, lawyers for the plaintiff requested the judge recuse himself, saying his attendance at a pro-business environmental conference in Montana — with former Texaco Chairman Alfred DeCrane as a speaker — demonstrated a conflict of interest.

According to reports in the New York Times and Bloomberg news in September 2000, the all-expense paid trip to Montana was organized by the Foundation for Research on Economics and the Environment (FREE), a nonprofit organization that received $125,000 from Texaco between 1997 and 1999.

In February 2001, the Second Circuit Court of Appeals ruled the Rakoff-Texaco connection “far too remote,” and Rakoff declined to step down.

The plaintiffs have appealed the dismissal to the second circuit in an attempt to keep the case in the U.S., asserting that numerous inadequacies in Ecuador’s legal system will terminate the action. ChevronTexaco’s Gidez says that the case will get a fair hearing there.

Bonifaz said he expects a ruling on the appeal in early fall 2002.

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