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Texaco's billion dollar catastrophe

Overview of the Case
In November of 1993, several dozen tribal leaders and other residents from the Ecuadoran Amazon traveled to New York to file a groundbreaking, billion-dollar class-action lawsuit against Texaco in federal court. The Ecuadorans charge the oil company caused widespread devastation to their rainforest environment by dumping 10 million gallons per day, over the course of about twenty years, of highly toxic waste water and crude oil into the surrounding ecosystem. The residents charge that Texaco's practices wrecked their traditional way of life and created a dramatically increased risk of cancer for tens of thousands of people. The Cofans have seen their population dwindle from 15,000 to approximately 500 since Texaco built its first Ecuadoran well on their land in 1971. Almost six years after the filing of the lawsuit — as the case moves toward trial despite Texaco's six attempts to have it dismissed — the residents of the Ecuadoran Amazon continue to live out their version of an environmental apocalypse: increased pollution, an alarming cancer rate, a dramatic upsurge in spontaneous abortions and other diseases, and a devastated economy.

Texaco has revenues of approximately $40 billion per year. Over two decades, it saved about $5 billion by dumping the toxic waste water into the Ecuadoran rainforest, rather than reinjecting into the ground as it does in the United States. The plaintiffs estimate that the clean up and compensation will cost approximately $1 billion. Texaco has not disputed the claim that it dumped the toxic waste water. Texaco insists that its practices were not wrong and that its presence in Ecuador actually raised the quality of life for the persons who are now suing the company in New York.


Texaco's Drilling Practices
The Amazon rainforest of Ecuador, one of the most fragile ecosystems in the world, is home to eight indigenous tribes. About the size of the state of Alabama in the United States, the region contains five percent of all plant species on Earth. It also holds vast oil reserves. In the late 1960s, Texaco was invited by the government of Ecuador to develop the country's first oil field in the northern part of the Amazon region, in an area encompassing about 200 square miles. Texaco was to design the wells, build the pipeline that would transport the oil across the Andes Mountains to the Pacific coast, and manage the operation on behalf of a consortium that included Ecuador s state-run oil company, CEPE.

Because Ecuador had no experience in the oil industry, it relied completely on Texaco to design and build the infrastructure for extracting the oil and taking it to market. Governmental leaders of Ecuador — including General Rene Vargas Pazzos, who managed the national oil company in the early 1970s — trusted that Texaco would use, at a minimum, the same technological standards in drilling in the fragile rainforest environment that it used in the United States and elsewhere in the world. In an effort to cut costs, however, Texaco made a decision that had disastrous consequences for the people of the region. It decided that it would dispose of millions of gallons of highly toxic waste water, a byproduct of oil drilling, by systematically dumping it into unlined pits dug out of the topsoil next to each of its 300 wells. In the United States and other places where it operates, Texaco reinjects this toxic waste water into the ground, where it cannot threaten the environment. It is estimated that Texaco saved about $3 per barrel by dumping the toxic waste water rather than building and using the technology to reinject it. This amounts to a potential $5 billion savings to the company over the life of its operations in Ecuador — a savings that has been become a horrid cost to the residents who live in and around the area where Texaco was drilling.

Texaco dumped the toxic waste water using the most primitive methods available. Each of the waste pits are about the size of a small pond. When the pits dug by Texaco filled up, oil workers often drained them into nearby streams and rivers. The water dumped into the pits contained some of the most cancer-laden chemicals known to man: Benzene, Toluene, Xylenes, and Polyciclic Aromatic Hydrocarbons. Millions of additional gallons of raw crude oil, even more toxic, was also dumped or found its way into the pits. Over the course of the 21 years that Texaco operated in Ecuador, the toxins in these pits leached into the ground and overflowed into the surrounding wetlands and rivers, all of which flow into the Amazon River. These rivers have been rendered useless as a source of nourishment because of the contamination. So have most other tributaries and wetlands in the area.

In addition to the hazard created by the waste pits, much of the crude and toxic waste water was periodically burned, producing an eerie phenomenon known locally as "black rain". The toxic waste was also dumped into landfills and spread over the local dirt roads, where it further contaminated the environment. It is not uncommon today to see a cow or chicken wander into a pit and get trapped in the oil muck, certain to die slowly by asphyxiation. In addition, the lawsuit alleges that Texaco was negligent in building and maintaining its pipeline network in Ecuador, resulting in the discharge to the environment of millions of gallons of additional raw crude oil.


Impact On Residents
While the waste disposal process might have allowed Texaco to save money, it wrecked the rainforest environment and pushed three indigenous tribes — the Cofan, the Secoya, and the Siona — to the brink of extinction. The contamination also flowed down river, affecting the health and livelihood of thousands of residents who live along the Napo River in Peru (these residents have filed a separate lawsuit against Texaco in federal court in New York). As a result of Texaco's dumping, an estimated 50,000 persons from both countries are exposed to a dramatically increased risk of disease, including cancer; the wetlands are contaminated with oil; the growth of livestock is stunted; vegetation is withering; and children playing outside, many of whom suffer rashes from exposure to the oil, are regularly smeared with grease and have no way to clean themselves except with gasoline-soaked rags. Many families must spend hours each day searching for drinkable water, or hunting for animals, leading many to abandon their traditional lands. Rivers that for centuries provided sustenance to indigenous tribes have been rendered useless as sources of nourishment.

The victims of Texaco's contamination have formed an organization, Front For The Defense of Amazon Life (Frente de Defensa de la Amazonia), to press their legal claims. Members of this organization, which is based in the Amazon town of Lago Agria, have been extremely active in persuading the Ecuadoran government and public to support their right to sue Texaco in the United States. They also have tried, with extremely limited resources, to organize medical care for those suffering from serious illnesses as a result of Texaco's pollution. Other environmental groups in Ecuador have played a leading role in bringing Texaco's actions to the attention of the international community. These groups are The Center for Social and Economic Rights (Centro de Derechos Economicos y Sociales), and Accion Ecologica (Ecological Action), both based in Quito. All of these organizations can be reached through the Media Room.

Texaco has not denied that it dumped millions of gallons of toxic waste water on a daily basis. Its only defenses seem to be that the waste pits complied with Ecuadoran laws in effect at the time, and were in conformity with industry standards. Both of these defenses run contrary to the weight of the evidence, which might explain why Texaco is battling fiercely to keep the case out of court. We explore Texaco s defenses in more detail under Texaco Claims, which can be reached from the Home Page.

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