Amazon Oil Offensive by Chris Jochnick, Multinational Monitor - Developments concerning Texaco's and Maxus Oil's presence in the Ecuadorian Amazon
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[Ed. Note: This article is reproduced with permission from
the "Multinational Monitor", Vol XVI, No. 1-2 January/
A M A Z O N O I L O F F E N S I V E
By Chris Jochnick
Chris Jochnick is the legal director of the New Cork City-
based Center for Economic and Social Rights.
THIS PAST NOVEMBER, the Organization of American States
sent an official delegation to Ecuador's Amazon ("the
Oriente") to investigate alleged human rights violations.
The investigation was significant for its concern with the
actions of two U.S. oil companies, Texaco and Maxus. While
environmentalist and indigenous groups have long decried the
unregulated development of oil in the Oriente, it is only
recently that these activities have come under scrutiny as
human rights violations.
The Oriente consists of over 13 million hectares (32
million acres) of tropical rainforest lying at the
headwaters of the Amazon liver network. The region contains
one of the most diverse collections of plant and animal life
in the world, including many endangered species. The Oriente
is also home to 95,000 indigenous people belonging to eight
different ethnic groups and 250,000 recent immigrants, who
have followed the oil roads east in search of land and work.
The development of oil in Ecuador has followed a
pattern that, familiar to most developing countries. Since
the first barrels were extracted in 1972, the industry has
been dominated by multinational corporations -- led by
Texaco until its 1992 departure -- with negligible
government oversight and scant attention paid to non-
economic concerns. Oil development has taken a predictable
toll on the environment and welfare of the Oriente's
inhabitants. Less predictable was the strength of the
The struggle over oil came to a head in 1994. In
January, the government announced a plan to double the
amount of rainforest subject to oil exploration; a coalition
of environmental and indigenous groups immediately
challenged the government's plan. Local protesters took over
the offices of the Ministry of Energy and Mines in Quito,
condemning any new oil development until the oil companies
remedied past damages and the government imposed stricter
controls on the industry.
The protest was joined by international groups led by
Rainforest Action Network (RAN) and Oxfam America. In
March, the New York City-based Center for Economic and
Social Rights (CESR) released a report documenting dangerous
levels of toxic contamination and related health problems in
Ecuador's Amazon and charging the government with human
rights violations. That same month, New York federal judge
Vincent Broderick sided with Ecuadoran plaintiffs bringing
suit against Texaco, granting them access to Texaco's files
to establish the parent company's responsibility for damages
caused by the company's Ecuadoran operations. This past
summer, Ecuador Minister of Energy Francisco Acosta rejected
a Texaco-commissioned environmental audit of the damages
caused by the company, arguing that it was too narrow. The
minister threatened to bring his own suit against Texaco if
the company refused to negotiate in good faith. When it was
later discovered that the minister had arrived at a secret
agreement with Texaco, environmentalists convinced an
already restless Congress to impeach him.
VIOLATING THE AMAZON AND ITS PEOPLE
The OAS investigation and the use of human rights
rhetoric against Texaco and other private companies have
challenged traditional human rights dogma. In this case, it
is more than civil liberties being threatened and the
government is only one of many essential actors. "When we
indigenous peoples talk about the environment, we are not
just talking about the trees, rivers and butterflies. We are
also talking about human beings," explains Rafael Pandam,
vice president of the Confederation of Indigenous
Nationalities of Ecuador (CONAIE). "Likewise, when we talk
of human rights, we are not just talking about the right to
free speech. We are talking of the political, economic,
social and cultural rights of all peoples."
Pandam's broad vision of human rights is well supported
by international and Ecuadoran law. In 1972, the United
Nations General Assembly unanimously endorsed the principle
that "man has the fundamental right to freedom, equality and
adequate conditions of life, in an environment of a quality
that permits a life of dignity and well-being." This non-
binding agreement is rooted in the Universal Declaration of
Human Rights and the International Covenant on Economic,
Social and Cultural Rights which, in addition to granting
the right to "life, liberty and the security of the person,"
oblige governments to take necessary steps for "the
improvement of all aspects of environmental and industrial
hygiene." The Organization of American States recently
drafted a more specific "right to a healthy environment" in
the 1988 San Salvador Protocol. Ecuador and other nations
have ratified the protocol, which will enter into force once
several more nations ratify it. Similarly, Ecuador's
constitution provides for the right "to live in an
environment free from contamination."
Economic and social rights, like the right to a healthy
environment, implicate corporate activities more directly
than do traditional civil and political rights. When civil
liberties are threatened, in China for example, foreign
corporations are criticized for their presence but are
rarely accused of active participation in human rights
abuses. By contrast, in Ecuador, "Texaco is viewed as the
chief human rights violator," explains Paulina Garzon of the
Quito-based Accion Ecologica. "Texaco has invaded the
forests, killed the rivers and animals, created a health
disaster and destroyed indigenous groups like the former
Texaco's involvement in these human rights abuses has
been documented in a series of recent reports. Amazon Crude,
written by Judith Kimerling and published by the National
Resources Defense Council in 1991, estimated that Ecuadoran
oil operations discharged 4.3 million gallons of toxic
wastes into the Oriente's environment every day. Until 1990,
Texaco controlled 90 percent of these oil operations. A
later CESR report confirmed that these wastes created a
potential health catastrophe. The report documented toxic
contaminants in drinking water at levels reaching 1,000
times the safety standards recommended by the U.S.
Environmental Protection Agency. Local health workers report
increased gastrointestinal problems, skin rashes, birth
defects and cancers, ailments that they believe to be
related to this contamination.
This assault on the environment is intertwined with a
parallel social and cultural assault on indigenous groups.
As described in a published statement of the Federation of
Indigenous Communities of the Ecuadoran Amazon (CONFENAIE),
"more than two decades ago, Texaco entered indigenous
territories and exploited petroleum, destroyed the forests,
contaminated the rivers, soil and environment, made the fish
and animals disappear, and then came the colonists and our
territory was occupied by foreigners." Contact with
outsiders and the vital loss of land has broken down
traditional bonds, brought malnutrition and new diseases and
pushed indigenous communities into the bottom rung of a
hostile market economy. Alcoholism and prostitution, endemic
to the Oriente's oil towns, are among the most visible signs
of the social and cultural deterioration. The World Bank has
described the region's socio-economic state as "calamitous."
A 1987 study by the Ecuadoran government warned that
oil development led by Texaco had placed the local
indigenous groups "at the edge of extinction as a distinct
people." Indeed, at least one group, the Tetetes, has
completely disappeared in the wake of Texaco's activities,
and the Cofan population has been reduced from 15,000 to
about 300 people. "Since the 1950s, almost every aspect of
the Cofan culture has experienced change. This includes
their house types, tools and weapons, traditional medical
practices, the behavior of community members, and their
traditional food taboos," notes a World Bank Report. "As a
result of outside contacts and pressures, the Cofan have
suffered a process of social disorganization, rapid
acculturation and near cultural extinction."
Texaco counters these allegations by touting the
essential importance of oil to Ecuador's development. Oil
revenues now account for approximately half of the
government's revenues. Michael Trevino, vice-president of
Texaco Petroleum (Texpet), notes that Texaco's operations
brought $24 billion to the Ecuadoran government over the
course of 18 years.
Texaco denies that its operations seriously damaged the
Ecuadoran Amazon. "Texaco did not ravage the Amazon region,"
says Trevino. "We think we made a very significant
contribution . . . we have international standards to which
we hold ourselves accountable." Trevino points to an
environmental audit commissioned by Texaco and the Ecuadoran
state oil company that found "moderate to high" levels of
contamination in 60 percent of the former Texaco sites in
the Oriente, but recommended a limited program of
remediation costing less than $30 million. According to
Fransisco Acosta, former minister of energy and mines,
Texaco has offered to pay 33 percent of any cleanup costs,
based on ownership share of the consortium. (Through 1990,
Texaco was the consortium's sole operator, but held only a
one-third ownership stake). "Texaco is not interested in
dollar amounts; the issue is commencing with the clean up,"
Responding to claims that the oil roads are the source
of many of the region's problems, a Texpet statement says:
"To allege that Texaco is responsible for the local
population's subsequent use of the roads for colonization
and agricultural development is both dishonest and
unrealistic. As a private company, Texaco would have no
authority or right to restrict citizens of Ecuador from
using these roads, or to interfere in Ecuador's national
programs and planning for colonization of the region."
In fact, Ecuador's government has encouraged settlement
along Amazon oil roads to relieve pressure on land elsewhere
in the country. The "Wastelands Law" granted legal title to
any person that cleared the rainforest and put it to
"productive use." The resulting deforestation has been
exacerbated by the poor quality of Amazon soils and
inappropriate farming techniques, which encourage the
continual clearing of new land. Oil roads and the lack of
government regulation also have opened the door to land
speculators, agro-industrialists, ranchers and loggers, who
place even greater pressure on the land.
TAKING ON TEXACO
Texaco's denial of responsibility notwithstanding, an
international boycott organized by Accion Ecologica and RAN
in the United States and Europe, along with political
lobbying, appears to have had some effect on Texaco's
willingness to negotiate an agreement. These groups estimate
proper cleanup costs and fair compensation will run to
several billions of dollars, dwarfing the figures that
Texaco has been considering. Texaco has also reportedly felt
pressure from the U.S. Congress and the Clinton
administration to find a fair solution to the problem.
Texaco is facing a major challenge on the judicial
front as well: a $1.5 billion lawsuit brought in a New York
federal court on behalf of 30,000 Ecuadoran plaintiffs. The
case was filed in November 1993 by a team of lawyers headed
by Cristobal Bonifaz and Joseph Kohn of Kohn, Naft and Graf
of Philadelphia. Bonifaz says, "Texaco can't be brought
before international human rights tribunals and there is no
chance of finding justice in Ecuador, so we filed a suit in
its own backyard. We don't care how it's achieved, but
Texaco must somehow be forced to make good on the damage it
caused to the people and environment of the Oriente."
Perhaps the most crucial question raised by the suit is
whether foreign plaintiffs alleging health and environmental
damages in their country should be allowed to sue a U.S.-
based company in the United States. When Indian plaintiffs
tried to sue Union Carbide for the Bhopal disaster, they
were sent back to India under a doctrine, known as forum non
conveniens, which gives U.S. judges wide discretion to
decide that a case would be more suitably heard in the
courts of another country. Under this doctrine, an earlier
suit filed by Attorney Judith Kimerling in Texas was quickly
dismissed by a federal judge, who viewed Ecuador as a more
The plaintiffs in the New York case argue that New York
is the appropriate site for the case because Texaco made the
critical decisions that resulted in the damages to the
plaintiffs at its headquarters in White Plains, New York.
The plaintiffs also maintain that the Ecuadoran courts are
incapable of fairly hearing the case against Texaco because
of widespread corruption, racism and incompetence. More
importantly, they argue, the Ecuadoran courts have no
meaningful authority over Texaco since Texaco operated in
Ecuador through its Texpet subsidiary, which has assets of
less than $10 million.
Unbound by the Texas court's decision, Judge Vincent
Broderick has granted plaintiffs the opportunity to depose
Texaco's employees and to review Texaco documents before he
decides whether to accept the case. In a 25-page March 1994
memo denying Texaco's petition to have the case dismissed,
he suggested that the case will proceed if plaintiffs can
show that decisions made in Texaco headquarters directly led
to environmental and health problems in Ecuador. His memo
also takes seriously the plaintiff's use of an eighteenth
century statute allowing foreign plaintiffs to sue U.S.
based defendants for violations of international law. Were
he to grant jurisdiction under the so-called "Alien Tort
Statute," it would mark a major advance in the field of
environmental law and would have far-reaching implications
for U.S. corporations operating abroad.
This past summer, Judge Broderick granted Texaco a
temporary hold on discovery while the company seeks a
settlement with the government. On December 22, 1994,
Texaco submitted to the court a "Memorandum of
Understanding" the company reached with the Ecuadoran
government. Texaco's Trevino says the agreement
"establishes a mechanism for the implementation of
environmental remedial work." He adds that Texaco also
proposes to establish schools, fish farms and health
clinics. But the agreement does not bind Texaco to any
specific amount of compensation and the corporation has only
agreed to put up a $5 million bond to settle individual
claims in Ecuador. Without consent of the plaintiffs, it is
unclear whether the judge would consider the agreement
sufficient grounds for dismissal of the suit.
Less than a week after Texaco's filing, the plaintiffs'
attorneys filed a new suit in front of the same judge on
behalf of 25,000 Peruvians who complain of similar damages
related to Texaco's former Ecuador operations. "The problem
has now spread to Peru and has snowballed into an
international catastrophe," says Bonifaz. All of the rivers
in which the Center for Economic and Social Rights found
oil-related contamination eventually flow through Peruvian
territory. Trevino calls the case "frivolous," claiming that
the plaintiffs live more than 250 kilometers (150 miles)
away from Texaco's former sites and that Texaco stopped
operating the sites almost five years ago. Judge Broderick
has agreed to consolidate the two cases, which should at
least make it more difficult to dismiss the suit on the
grounds that Ecuadoran courts are the more suitable forum.
MAXUS'S NATIONAL PARK
The OAS investigation undertaken by the Inter-American
Human Rights Commission was primarily concerned with a
different U.S. oil company, Maxus Energy. In 1990, the
Sierra Club Legal Defense Fund (SCLDF) filed suit to block
the plans of Maxus's former consortium partner, Conoco, to
build a road and begin oil development in the Yasuni
National Park. Conoco abandoned the project soon after in
the face of heated protest from indigenous and environmental
groups, but Maxus went ahead with the road and began oil
production in the summer of 1994.
Yasuni National Park, one of the most biodiverse
territories in the world, is designated by the United
Nations as a World Biosphere Reserve. Ecuadoran lawyers
initially succeeded in blocking the Conoco-Maxus operation
under a constitutional provision providing for the right to
a contamination-free environment and under laws prohibiting
exploitation of protected areas. However, one month after
ordering a stop to the Conoco-Maxus plans, the
constitutional court reversed itself in the face of what one
judge later described as intense pressure from the
government and oil industry.
The SCLDF suit addressed the threat that oil
development poses to the indigenous groups in the area,
particularly 1,200 Huaorani. The complaint, filed before
Maxus had begun to develop the Yasuni, describes the
diseases, water contamination, breakdown of traditional
cultures and loss of land that has followed oil development
in other parts of the country. Oil development will have
especially severe effects on the Huaorani, contend lawyers
working on the case, because their population is small,
dispersed and isolated from the outside world.
The complaint is supported by the testimony of Dr.
William T. Vickers, an anthropologist with 26 years of
experience in Latin America. The road into the Yasuni "will
be the bridge for a spontaneous invasion of the land....
Deforestation will begin immediately," says Vickers. "Many
of the Huaorani will contract new diseases and many will
die. Many will be disheartened and depressed by these
losses. Among the survivors, some will become alcoholics and
others will sustain themselves by begging from the whites.
It is totally possible that the Huaorani culture and
language will disappear within two or three generations."
Kimerling says, "Huaorani lands that have been used by the
Petroecuador-Texaco consortium for oil production activities
are so degraded by pollution, colonization and deforestation
that Huaorani can no longer live there."
GREETING "HUAORANI FRIENDS"
But Maxus is not as easy a target as Texaco, having
learned from its predecessor and taken steps to avoid
political damage. On the environmental front, Maxus has
managed to assuage some critics through its program of
reforestation and its use of modern drilling practices,
including the reinjection of production wastes (as opposed
to Texaco's practice of leaving them in unlined pits and
spreading oil residue on the roads). The company claims to
be spending $60 million on environmental protection, a
significant figure, particularly by Ecuadoran standards.
However, given the ecological richness and fragility of the
territory, many environmentalists object to any sort of
development and are particularly concerned by Maxus's policy
of denying outsiders access to its facilities to
independently verify the company's claims.
Even the best environmental policies provide little
defense against the primary threat to the region, the
colonization and deforestation that has inevitably followed
the oil roads. Maxus has carved a 94-mile road into the
Yasuni, opening up vast stretches of rainforest formerly
accessible only by helicopter and boat. As one Huaorani
comments, "Maxus and the government have promised to keep
the colonists out, but what happens when Maxus leaves and
there is no more oil? Who will stop them then?" The SCLDF
complaint notes that over the course of eight years of oil
development in the Northern Oriente, the influx of colonists
more than tripled the local population from 74,000 to
260,000. The government's 1982 census revealed that the
Oriente was growing at twice the rate of the rest of the
country. Plans by Maxus and the government to prevent
colonization by establishing army-run roadblocks are
unsustainable and unrealistic, critics say.
In contrast to Texaco's practice of simply ignoring
indigenous inhabitants, Maxus has actively sought their
support, signing an unprecedented "Friendship Agreement"
with the Huaorani in 1993. Maxus's directive to its
employees reads, "Maxus is a guest in the home of the
Huaorani, the rainforest. For this reason we must respect
their culture, customs and territory." If they make contact
with the indigenous people, employees are told to announce
"Waponi, amigos Huaorani, boto Maxus," or, "Greetings
Huaorani friends, I am Maxus."
Maxus has contracted with the government to provide
health and educational services, and has already begun
supplying medical and dental care, educational materials,
school rooms and health clinics. It has also nurtured
support by employing indigenous men, providing funds for a
political organization and plying community leaders with
This policy has temporarily won Maxus the support of
the Huaorani Nation of the Ecuadoran Amazon (ONHAE). ONHAE
has formally distanced itself from the demands of the
Confederation of Indigenous Organizations of Ecuador
(CONAIE) for a 15 year moratorium on oil development. Last
April, during a conference of indigenous organizations held
in the Amazon, Maxus flew a group of Huaorani leaders to
Quito, where they spent their days meeting with government
officials and the press and denouncing Maxus's critics.
Maxus's overwhelming presence in the social and
cultural affairs of the community has alarmed outsiders.
Given the government's proven inability or unwillingness to
regulate oil companies and the lack of transparency in
Maxus's internal operations, critics worry about ceding it
such fundamental government functions as health and
education. "It's no longer clear who's supposed to do what,"
states SCLDF attorney Neil Popovic. "The Ecuadoran
government has abdicated its responsibilities to private
companies and has made no effort to regulate them."
Government agencies remain seriously understaffed and
underfunded, leaving monitoring essentially in the hands of
the corporations themselves.
The Huaorani have no effective recourse if Maxus fails
to comply with its many promises. The "Friendship Agreement"
between the Huaorani and Maxus is written in Spanish, a
language that few Huaorani either speak or read, and makes
no firm commitments. "Maxus is under no obligation,"
explains spokesperson Tom Sullivan. "We're damned if we do,
damned if we don't. If we weren't providing anything we'd
have a whole other group of people condemning us."
However, critics remain skeptical, viewing Maxus's
gestures as hollow and emphasizing the larger political
questions of accountability. They ask whether corporations
such as Maxus or Texaco (whose annual revenues of $42
billion dwarf Ecuador's $12 billion GNP) should not be
treated differently than private citizens, should not be
held more accountable to the public in the way that public
bodies are. "Ecuador's indigenous and environmental
organizations have pushed human rights groups to reexamine
their exclusive focus on government actors," says Roger
Normand, policy director of CESR. "When multinationals
assume the role of government, they must be held more
directly responsible for the welfare and human rights of
their constituents, the people they effectively govern."
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