ClimaTalk – Climate is Talking

by Reinout Debergh

The accusers and the accused

In November 1993, a Massachusetts attorney named Cristóbal Bonifaz filed a class-action lawsuit against Texaco in a federal court in Manhattan, on behalf of thirty thousand indigenous people and uneducated settlers who called themselves the ‘afectados’ or the ‘affected ones’. Also working as part of the legal team, was his friend Steve Donziger [1]. 

On the other side, there is Chevron who inherited the lawsuit when it bought Texaco in 2001 [2]. The oil and gas company was the 11th largest company in the US in 2019 (pre-covid) and 27th in 2021 (post-covid) [3]. It is listed as second in the list of companies with the most historical emissions, with only Saudi Aramco having emitted more, amounting to over five times the historical emissions of the Netherlands (1965 – 2017) [4, 5]. Read more on this topic in our article on the recent ruling which mandated Royal Dutch Shell to cut emissions. 

Texaco claimed that the case should be tried in Ecuador and not the US. In 2001, a federal judge in New York sided with Texaco saying that it had “everything to do with Ecuador and very little to do with the United States [1]. But Texaco had to agree that it would accept jurisdiction in Ecuador and agree to pay any judgment imposed against it [6]. Texaco denied claims that Ecuador would not give a fair trial due to corruption and its dependence on oil revenues [1]. 

The accusation and the defense

The basic claim of the case was that Texaco consistently dumped 18 billions of gallons (68 billions of liters) of toxic waste into unlined pits and into swamps, streams, and rivers instead of injecting it deep in the ground where it would have had little to no environmental impact [6, 7]. They also accused Texaco of spilling 64m liters of crude oil into the rainforest [7]. All this to save about $4.5 billion over the two decades of the operations [6]. This resulted in contamination of the local people’s drinking water who couldn’t afford or access bottled water meaning they had no choice but to drink contaminated water resulting in severe health impacts such as cancer and birth defects [6, 7]. All this took place in the Oriente, a region in eastern Ecuador [1,8].

Figure 1: Oil resources in the Oriente. Source: https://www.bbc.com/news/world-latin-america-45455984, accessed 27/06/2021.

Figure 2: black toxic sludge part of the toxic waste dump by Chevron. Source: https://www.yoair.com/blog/devastating-environmental-impact-on-ecuadorian-amazon-rainforest-from-dumping-of-toxic-oil-waste/, accessed on 27/06/2021. 

ChevronTexaco claimed that it’s one of its subsidiaries that should be sued instead of ChevronTexaco. This was dismissed by the judge. Secondly, it also claimed that it was released from any responsibility when it agreed on a $40 million settlement with Ecuador’s Ministry of Energy and Mines in 1995 [6]. Thirdly, it claimed that it was Ecuador’s state-run oil company that is responsible for much of the pollution in the area [9]. Chevron maintained that they never owned any assets in Ecuador [7].

The ruling

In February 2011, Judge Nicolás Zambrano ruled that Chevron was responsible for polluting remote areas of the Ecuadorian jungle and ordered the company to pay $18 billion in damages, which was later reduced to $9.5 billion by Ecuador’s Supreme Court [7, 10, 11]. One of the plaintiff’s lawyers called it a ‘triumph of justice’. But they appealed because it was not enough [10]. Chevron on the other hand claimed the judgement to be “illegitimate and unenforceable” and said that they would not pay, despite Texaco having agreed it would do so a decade earlier [1, 6].

The aftermath

In 2014, a federal judge blocked US courts from being used to collect the $9.5bn in damages. Judge Kaplan claimed the judgement ‘was obtained by corrupt means’. He claimed that Steven Donziger, and Ecuadorian lawyers submitted fraudulent evidence, forced a judge and arranged to write the judgement themselves by promising $500,000 to the Ecuadorian judge if he ruled in their favour. He also ordered them to pay Chevron’s legal costs [9].

In 2018, an international tribunal in The Hague ruled in favour of Chevron. It said that the 2011 ruling by the Ecuadorian court was obtained through fraud, bribery and corruption [7]. This ruling was upheld in September 2020 by the District Court of The Hague. Chevron is now looking to recuperate their legal expenses from Ecuador [12].

One man in particular felt the consequences of Chevron’s victory, namely lawyer Steve Donziger who has been defending the local people’s rights for decades [13]. On the one hand, Donziger was being sued in New York state supreme court by the Huaorani people, one of five groups of indigenous groups living in the Oriente who claimed that Donziger and others were aggressively trying to collect the judgement in countries such as Canada, Brazil and Argentina (without success) without ensuring the money would make it to the affected people [9, 12].

On the other hand, Donziger was the victim of an all-out assault from Chevron to demonise him. Chevron hired private investigators, hundreds of lawyers all part of a smear campaign. He lost his license and his bank accounts were frozen. He’s been put on house arrest, faces huge fines, his passport has been taken by court and he has been prohibited from earning money [14]. 

Conclusion

While after a nearly 20-year legal battle, justice seemed to be achieved, it soon turned sour for Donziger and the people of the Oriente. While in the biblical story, David managed to beat Goliath, in the case of Aguinda vs. ChevronTexaco, Goliath is crushing David. But the fight is not over yet. 

References

[1] Radden Keefe, P. , Reversal of fortune, The New Yorker, https://www.newyorker.com/magazine/2012/01/09/reversal-of-fortune-patrick-radden-keefe, accessed on 26/06/2021.[2] Folkenflik, D., A ‘Crude’ Awakening: Chevron Vs. The Documentarian, NPR, https://www.npr.org/templates/story/story.php?storyId=127410188, accessed on 26/06/2021.[3] Fortune 500, Fortune, https://fortune.com/fortune500/, accessed on 26/06/2021.[4] Taylor, M., Watts, J, Revealed: the 20 firms behind a third of all carbon emissions, The Guardian, https://www.theguardian.com/environment/2019/oct/09/revealed-20-firms-third-carbon-emissions, accessed on 26/06/2021.[5] Ritchie, H., Roser, M., Netherlands: CO2 Country Profile, Our World in Data, https://ourworldindata.org/co2/country/netherland,  accessed on 26/06/2021.[6] Donziger, S., Rainforest Chernobyl: Litigating Indigenous Rights and the Environment in Latin America, Center for Human Rights and Humanitarian Law in conjunction with the Washington College of Law at American University, https://www.corteidh.or.cr/tablas/r13030.pdf, accessed on 26/06/2021.[7] Chevron wins Ecuador rainforest ‘oil dumping’ case, BBC News, https://www.bbc.com/news/world-latin-america-45455984, accessed on 27/06/2021. [8] Oriente, Encyclopaedia Britannica, https://www.britannica.com/place/Oriente-region-Ecuador, accessed on 27/06/2021.[9] Chevron wins US legal battle against Ecuadorian court’s $9bn ruling, The Guardian, https://www.theguardian.com/business/2014/mar/04/chevron-ecuador-court-ruling-rainforest-billions, accessed on 27/06/2021.[10] Romero, S., Krauss C., Ecuador Judge Orders Chevron to Pay $9 Billion, The New York TImes, https://www.nytimes.com/2011/02/15/world/americas/15ecuador.html, accessed on 27/06/2021.[11] IMAGE – Illustrated Courtroom – Chevron v. Donziger: Judge Nicolas Zambrano, The Amazon Post, https://theamazonpost.com/illustrated-courtroom-chevron-v-donziger-judge-nicolas-zambrano/, accessed on 27/06/2021.[12] The Hague Court Rules for Chevron in Ecuador Dispute, Chevron, https://www.chevron.com/stories/the-hague-court-rules-for-chevron-in-ecuador-dispute, accessed on 04/07/2021.[13] Weyler, R., Steven Donziger: The man who stood up to an oil giant, and paid the price, Greenpeace, https://www.greenpeace.org/international/story/28741/steven-donziger-chevron-oil-amazon-contamination-injustice/, accessed on 04/07/2021.[14] Lerner, S., How the Environmental Lawyer Who Won a Massive Judgment Against Chevron Lost Everything, The Intercept, https://theintercept.com/2020/01/29/chevron-ecuador-lawsuit-steven-donziger/, accessed on 04/07/2021.