Thursday, May 21

Ecuador Battles Chevron

This NYT article highlights how Chevron has been caught in the new political climate in Ecuador.

Texaco [now Chevron] reached a $40 million agreement with Ecuador to clean a
portion of the well sites and waste pits in its concession area,
absolving it of future liability. But that cleanup, carried out in the
1990s, was far from the bookend Texaco hoped to achieve. Instead,
villagers in Ecuador became convinced they were getting sick from the
pollution left behind. They filed suit in 1993 in the United States,
and later claimed that their grievances were not covered by Texaco’s
settlement agreement.

With little respect for the law and major populism sweeping the country, any company should be ware of doing business there.


Anna Kay said...

Chevron defends Texaco’s crimes with lies and misinformation. Chevron said that it did not have to clean up the contamination because the Ecuadorian government released it from liability after Texaco cleaned up some of the oil sites. This is what Chevron didn’t say. One, the “release agreement” with the government excluded individual claims, saying there was no way the government would or could prevent an individual from suing Texaco in the future. Two, Texaco never cleaned up the pits, so the agreement is null and void anyway. Court evidence has shown oil site after oil site with high levels of contamination, even though Texaco claimed to have remediated the site. For the truth, click here:

Jake said...

Com'on Anna Kay! A government that looks out for it's citizens and the not an innocent corporate behemoth? Ah yes Lucas' "Truth is Marching On!" Damn them little brown skinned devils in Ecuador!!!

Lucas said...

Anna Kay:

The situation in Ecuador is nasty no doubt. And it appears that Texaco accepts some of the blame for the original mess. But again, I have to say that Chevron has the law on their side in this case.

1. The "individual claims" you mention are only possible because of a retroactive law expressly forbidden by Ecuador's Constitution. Chevron did not include individual claims in its original release because they were not possible when the original liability release was signed.

2. Texaco only owned about 27% of the consortium that caused the damage. Hence they were only required to clean up a percentage of the mess, and they were certified by the Ecuadorian gov't to have fulfilled their obligation at the time they were absolved of all future liability.

Really, I think this is a terrible problem, but I think the blame needs to be much more squarely laid at the feet of the Ecuador gov't. They failed in their negotiations with Texaco, and they contributed a healthy part of the mess too.

Again, just proves my point about the gov't being the trouble right now in Ecuador...not Chevron.