Oil Boom a Bust for Us, Villagers Say in Court

The Associated Press

Tuesday 03 January 2006

Ecuadorian, Nigerian cases seek compensation from Chevron.

San Francisco - A young boy holds out a deformed hand. A woman is missing a lower leg that was amputated to remove a tumor. A gaunt middle-aged man lays in a hammock dying of stomach cancer.

The haunting images displayed in a photo exhibit at San Francisco City Hall claim to document the devastating effects of more than three decades of oil extraction in Ecuador's Amazon rainforest.

Humberto Piaguaje came to help launch the exhibit and seek justice from the powerful petroleum company he blames for sickening his people and poisoning his homeland. He's one of 30,000 plaintiffs in a class-action lawsuit that alleges San Ramon-based Chevron Corp. failed to clean up billions of gallons of toxic waste dumped in pristine rainforest in Ecuador, where a lengthy trial is under way.

"We've lived there for thousands of years, and we've never had diseases like this before," Piaguaje, a leader of Ecuador's Secoya tribe, said in Spanish. "We want Chevron to do a true cleanup of the areas they contaminated."

Chevron, one of the world's largest oil companies, has denied human rights and environmental violations in the 180 countries where it operates, but allegations of abuse threaten its public image around the world. Critics claim such abuses are increasing as the global scarcity of petroleum drives oil companies into countries with rich reserves but poor protections for human rights and the environment.

"It's the resource curse," said Steve Kretzmann, executive director of Oil Change International. "Unfortunately, the rule around the world is that where you have oil extraction, you see increasing rates of poverty, human rights abuses and environmental destruction."

In Ecuador, the plaintiffs estimate it will cost $6 billion to clean up 18.5 billion gallons of oily wastewater that Texaco, which merged with Chevron in 2001, dumped into more than 600 unlined pits and streams between 1972 and 1990.

Chevron is also fighting lawsuits filed in San Francisco by Nigerian villagers who claim the company's subsidiary supported military attacks on protesters in the oil-rich Niger Delta. A federal lawsuit is scheduled to go to trial next fall, and a trial for a state class-action lawsuit is set to start in 2007.

Chevron lawyers deny the plaintiffs' claims in both Nigeria and Ecuador and believe they will prevail in court.

Chevron Responds

Company officials say Chevron has a long record of protecting human rights and the environment, pointing to its annual reports that detail goals and accomplishments in areas such as environmental management, human rights, AIDS, climate change, energy efficiency, health and safety.

"Wherever we operate, we strive to be a good example through our employment policies, our support for universal human rights as well as obeying domestic and host country laws," said Maria Pica, Chevron's corporate responsibility manager.

Investors don't appear to be worried. Like the rest of the oil industry, Chevron has reported robust profits from soaring worldwide demand.

Fadel Gheit, a senior energy analyst at Oppenheimer & Co., believes the company will likely win both cases, and if they are forced to compensate victims, the payments won't be big enough to affect the bottom line.

"It's nothing but background noise," Gheit said.

But critics say the company's troubles in Nigeria and Ecuador are part of a deeper problem.

"Both ultimately arise out of the corporation's disregard for basic human rights and environmental protection," said Marco Simons, legal director of EarthRights International. "It is part of a pattern that's pervasive in the oil industry."

Simons and other industry critics say the extraction of oil doesn't create many jobs or distribute wealth but props up repressive regimes, leading to widespread social unrest and ecological damage in oil-rich regions.

Sudan, Myanmar Cases

Chevron is hardly the only petroleum company fighting lawsuits alleging abuse. Talisman Energy Inc., for example, is being sued in US courts by Sudanese villagers who allege the Canadian oil company provided money, vehicles and logistics to Sudanese soldiers who sought to depopulate 142 villages near oil fields from 1999 to 2002. Company lawyers have denied the allegations.

As abuse reports have risen, so has the ability of victims to hold corporations accountable. Thanks to the Internet and an increasingly global network of activists, victims are drawing more attention to their plight, and more lawyers are taking on cases.

In an undisclosed settlement in 2005, El Segundo-based Unocal agreed to compensate 15 Myanmar villagers who held the company liable for forced labor, murder and rape allegedly carried out by government soldiers during construction of the $1.2 billion Yadana pipeline.

Chevron, which acquired Unocal in August, now faces criticism for doing business in the Southeast Asian nation formerly known as Burma, where the US government has banned new investment due to human rights concerns.

"Our position is that no one should be investing in Burma right now," said EarthRights' Simons. "It's impossible to do business in Burma without being complicit in serious human rights abuses."

Chevron officials would not comment on the Myanmar operations because the company is still evaluating its new assets, according to spokesman Jeff Moore.

Allegations in Nigeria

The Nigerian plaintiffs accuse Chevron's subsidiary of supporting attacks by Nigerian soldiers that destroyed homes and killed or injured dozens of people. A federal judge ruled in 2004 that Chevron could be held responsible if Chevron Nigeria was involved.

The lawsuits, which seek unspecified damages, claim the subsidiary provided helicopters, boats and planes to Nigerian soldiers who fired at demonstrators in 1998 on an offshore oil platform and in 1999 at two villages where protesters lived.

"Chevron used the Nigerian military as their security force and that resulted in gross human rights violations," said Cindy Cohn, an attorney for the plaintiffs.

Chevron attorneys say the platform protesters were armed youths who demanded money, took more than 200 workers hostage and were shot during a rescue attempt. The company also argues the case belongs in African courts.

"We don't think it's fair or appropriate for Nigerians to bring lawsuits in the United States where they're challenging what the Nigerian government did to them in Nigeria," said Chevron attorney Bob Mittelstadt.

Allegations in the Amazon

The rainforest case spent a decade in US courts before being transferred to Ecuador. The trial, which began two years ago, has proceeded slowly as the judge takes testimony and inspects more than 120 alleged dump sites.

Plaintiffs claim toxic chemicals contaminated rivers, streams and soil in a region the size of Rhode Island, leading to unusually high rates of cancer, birth defects, skin diseases and other health problems. They want the company to pay for their medical care and a thorough cleanup.

"This is rainforest Chernobyl," said Leila Salazar-Lopez of San Francisco-based Amazon Watch. "Before Texaco arrived, this was pristine Amazon rainforest where five indigenous tribes depended on a clean, healthy environment to survive. Now they're basically living in a giant Superfund site."

Chevron has resisted calls for further remediation, saying Texaco already complied with a $40 million government-ordered cleanup from 1995 to 1998 and auditors found no lasting environmental impact.

"So far in the inspections the evidence clearly indicates the remediation was done properly and any residual there doesn't pose a risk to human health," said Chevron environmental scientist Sara McMillen. Samples met drinking water standards of Ecuador, the US and the World Health Organization, she said.

Chevron Blames Ecuadorian Partner

Texaco was only a minority partner in a joint venture with state-owned PetroEcuador, and was released from responsibility for any further remediation when the joint venture ended in 1992, said Ricardo Veiga, the Chevron attorney working on the Ecuador case. He blamed the environmental damage on PetroEcuador and on government policies that encouraged haphazard migration to the area.

"We cannot be blamed for the lack of infrastructure, education and sanitation," Veiga said. "We are sympathetic to the people that live in the area, but we don't think it's accurate or fair to accuse us of creating this situation."

But Amazon natives like Piaguaje don't buy Chevron's arguments.

"We're bringing this case because we do not want to continue living in the disaster left by Chevron," Piaguaje said. "We want this case to be a lesson to the world that companies can act better."