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Faces Huge Pollution Suit
Sat May 3, 2003 07:11 AM ET
By Richard Valdmanis
YORK (Reuters) - ChevronTexaco CVX.N
next week will begin its defense in a multibillion dollar legal
battle in Ecuador against accusations it has polluted portions of
the country's Amazon region, the company said.
suit, which was brought by thousands of residents near the
company's former oil fields, alleges Texaco Petroleum Co, a
subsidiary of Texaco Inc. which merged with Chevron in 2001,
dumped roughly 18.5 billion gallons of oil-laden water into
unlined pits, estuaries and rivers during its operations in
Ecuador's Oriente between 1971 and 1992.
said the trial could last two years.
living near the fields, now operated by state firm Petroecuador,
claim the oil pollution destroyed sources of drinking water,
caused health problems, and led to deaths of farm animals, lawyers
for the plaintiffs said.
denies the allegations, saying the "produced water" in
question, a by-product of oil drilling, was treated before being
discharged. They also say that the firm has already completed a
remediation project to eliminate any permanent effect from its
10 years of jurisdictional disputes, the case will be heard in
court starting May 6 in Lago Agrio in Ecuador. The 2nd U.S.
Circuit Court of Appeals, based in New York, ruled in 2002 that a
ruling on the case in Ecuador would be enforceable in the United
say damages could exceed $5 billion.
one denies that the region is polluted: a stack of photographic
evidence shows dozens of oil-filled pits, some on fire, slicked
rivers and marshes, and residents' shoeless feet covered in crude
entered Ecuador in 1964 along with Gulf Oil to help Petroecuador
develop oil concessions. In 1977, Gulf left the consortium,
leaving Petroecuador with a 62.5 percent interest and Texaco
Petroleum the remaining 37.5 percent.
leaving Ecuador, Texaco entered into a remediation agreement with
the Ecuadorean government, putting $40 million into covering
waste-water pits, replanting cleared land, and funding local
infrastructure and institutions. Petroecuador continued to operate
the fields in the area as full owner.
is important to remember that oil operations are ongoing in the
region, so how can anyone say that TexPet is the one responsible
for any current impact," said ChevronTexaco spokeswoman
Maripat Sexton. "TexPet was committed to ensuring that there
was no lasting impact to its operations."
for the plaintiffs say several of the photos in evidence were
taken in 1992, the year Texaco left Ecuador but also three years
before the remediation project was completed. Many were taken in
1999, after years of solo operations by Petroecuador.
attorneys, who say they represent 30,000 residents, add that they
have a long list of testimonials from witnesses suggesting
systematic toxic dumping, including one from former Ecuadorean
Minister of Natural Resources Vargas Pazzos.
point is that Texaco made a decision to dump these toxins into the
Amazon in order to save money and increase its profits," said
attorney Steven Donziger.
attorneys for the plaintiffs estimated Texaco Petroleum increased
its profits $4.5 billion between 1964 and 1992 by dumping the
produced water instead of re-injecting it.
principal contention in the case concerns the quality of the waste
water before it was discharged. Produced water, a common
by-product of drilling, is often re-injected back into the
reservoir if its not properly treated.
for the plaintiffs claim the water dumped by Texaco contained up
to 5,000 parts oil per million, causing ponds and rivers to
develop a layer of crude oil. The oil, they say, was later burned
or sprayed on roads.
people there have said it sometimes rained black," said
officials claim the waste water was put through a three-stage
separation process in line with normal industry practice. But the
officials could not give an estimate of the amount of oil left in
the water before it was discharged.
firm claims the final stage of separation took place in
clay-bottomed pits, and oil was frequently siphoned out and placed
into pipelines or used on roads to keep dust down.
conducted road oiling at the express direction of Ecuador's
government that it maintain and improve the roadways of Oriente,"
water remaining in the pits was released into "nearby rivers
and streams," the company said. ChevronTexaco denied that
Texaco Petroleum set any oil pits on fire.