More Chevron Truth

Chevron, the parent company of Texaco Petroleum (Texpet) has been horribly libeled in the media as well as the courtroom by opportunistic U.S. environmental lawyers looking to turn a quick buck. They were illegitimately sued for its partnership with Petroecuador, Ecuador’s state-owned oil company. Chevron has been falsely linked to genocide and that is patently false as evidenced with the steady increase of the Cofan indigenous population from 1920 to present day.

There is absolutely no basis for the claim of genocide of any indigenous group. Ecuador
government census data and all peer-reviewed published population data agree that the population of the six indigenous groups has either increased or remained stable since Texpet began operations in Ecuador. For example, demographic studies presented by Dr. Bedoya indicate that the Cofán - far from "facing extinction" as claimed by the plaintiffs and their supporters - increased in number from about 300 inhabitants in 1955 to 1,044 in the official government of Ecuador census of 2001. All government (1) and peer reviewed population estimates (23) found by Dr. Bedoya are shown in the figure below. Doctor Eduardo Bedoya has a Ph.D in Anthropology from New York University and has worked as consultant for the ILO, CARE-Perú, WINROCK Corporation, the World Bank, and the IUCN.

Cofán Population: 1920 - 2010
PARAHUACU ATACAPI
DURENO
GUANTA AGUARICO
SACHA
YULE BRA
CULE BRA
RON
ENO
PALA NDA
AUCA
AUCA
SUR
RUMIYACU
CONONACO
Rio
Napo
Aguarico
LAGO AGRIO
Rio
PALO
ROJO Cofán
HUSHUFINDI
Secoya

1970 1980 1990
Period of Texpet Concession
100
300
500
700
900
1100
1300
1500
1700
1920 1930 1940 1950 1960 1970 1980 1990 2000 2010
Year
1923: Measles epidemic
Period of
Texpet
Concession
155016
5003
5174
3005 3006
4007
6909
29710
40012
46013
50014
100015
78018
58019
62720
85021

The production took place primarily on government lands and was conducted in compliance with Ecuadorian laws and regulations. Roughly 1.7 million barrels of crude oil were produced, with the Government of Ecuador (GOE) receiving 95% of the total financial proceeds. Perhaps they want more because the Ecuadorian government is in collusion with fraudulent U.S.-based lawyers greedily seeking to extort monies from Chevron over these bogus allegations.

At the conclusion of the venture’s twenty-year concession, the area and facilities of the former consortium were subjected to a government-supervised audit, which, together with other Government data, became the basis for a settlement agreement under which Texpet was required to conduct environmental remediation with respect to the sites in proportion to its one-third interest in the venture. Everything was fine then.

To that end, Texpet executed a $40 million remediation and public works program under close GOE supervision. Texpet’s remediation was fully inspected, certified and approved by the GOE, and the GOE granted Texpet a full and complete release of all further claims, liabilities and obligations associated with Texpet’s operations in Ecuador.

The release documents were signed by the GOE’s Minister of Mines & Energy, the President of Petroecuador, and the General Manger of Petroproduccion—the operational division of Petroecuador. Texpet has had no role whatsoever in exploration and production in Ecuador since 1992.

Petroecuador, the sole owner and proprietor of the oil fields, had 15 years to make remediation and failed to remediate its sites even though it was more than willing to do so when it took the $40 million in funding from Texpet in 1992. The environmental degradation which still takes place today is due to Petroecuador’s poor operations and negligence, and the Ecuadorian government’s unwillingness to fund adequate remediation.

Interestingly, in 1999, seven years after Texpet ceased to have any involvement in Ecuadorian operations, the government of Ecuador enacted a new environmental statute – the 1999 Environmental management Act. This allowed any Ecuadorian to file suit for environmental reparations on behalf of the collectivity. While the 1999 EMA created new substantive rights that did not previously exist, the new law cannot be used to challenge pre-1999 conduct, as per Article 7 of the Civil Code of Ecuador, which expressly prohibits retroactive application of Ecuadorian substantive law. Nevertheless, in 2003 the very same U.S. lawyers whom have been waging this campaign since 1993 filed suit against Chevron using this same 1999 law. They should be disbarred for misrepresenting a legal statute in a transparent effort to extort monies from Chevron.

Chevron is getting blamed for environmental degradation and being illegitimately sued for an environmental crime committed by Petroecuador which accepted Chevron/Texpet’s $40 million pay-out and didn’t fulfill its responsibility to remediate the sites that were explored and extracted. A costly and long-standing legal dispute has arisen between U.S.-based contingency fee-based trial lawyers working in partnership with NGOs and local activists whose goal is to extort a large windfall from Chevron, a large and successful corporation with deep pockets. The general public perceives large corporations such as Chevron as evil-doers, and public opinion tends to scapegoat them.

The litigation in Ecuador has followed the typical pattern for such suits. The lawyers retained a consultant to devise an astronomical estimate of financial liability, which the plaintiffs have attempted to use to frighten the company into a settlement. The expert in question, David Russell, made only a cursory examination of a small handful of sites and did not seek to distinguish between damage caused by Texpet/Petroecuador consortium and damage caused by Petroecuador over the 15 years since Texpet left Ecuador. Also, they did not determine how much was the fault of Petroecuador’s and the Government of Ecuador’s negligence after they had received $40 million in funding to more than cover the costs of this operation from Chevron, as well as being signed off by the GOE upon Texpet’s agreed-upon departure.