Albion Monitor /Features
Child plays near Texaco barrel

Texaco's Devastating Search for Amazon Crude

by Chris Jochnick

Only recently have oil companies come under scrutiny as possible human rights violators

(AR) QUITO, Ecuador -- An Organization of American States delegation to Ecuador's eastern Amazon rainforest sent to investigate human rights violations has turned up widespread concern about two U.S. oil companies -- Texaco and Maxus.

Environmentalist and indigenous groups have protested unregulated development of oil resources, but it is only recently that oil companies have come under scrutiny as possible human rights violators.

The eastern "Oriente" of Ecuador is a 32-million acre natural reserve of tropical rainforest situated at the headwaters of the Amazon river network. The region contains one of the most diverse collections of plant and animal life in the world and includes many endangered species.

It is also home to 95,000 indigenous people in eight different ethnic groups as well as 250,000 recent immigrants, who have followed the oil roads east in search of land and work.

In 1994, the President of Ecuador announced a plan to double the amount of rainforest to be opened up to oil exploration

Oil development in this South American Andean country has followed a pattern that is familiar in most developing countries. The first barrels were extracted in 1972, with the industry dominated by multinational corporations -- led by Texaco until it left in 1992.

There is negligible government oversight and scant attention paid to non-economic matters. Oil development has taken a predictable toll on the environment and the welfare of the Oriente's inhabitants but the strength of opposition to it has been less predictable.

Conflicting interests came to a head in 1994 when, in January, president Sixto Duran-Ballen's government announced a plan to double the amount of rainforest to be opened up to oil exploration. A coalition of environmental and indigenous groups immediately challenged the government's plan and local protesters took over the offices of the Ministry of Energy and Mines in Quito.

The groups demanded that there be no new oil development until the oil companies remedied past environmental damage, and urged the government to impose stricter controls on the industry.

The protests were joined by international groups led by Rainforest Action Network (RAN) and Oxfam America; and, last March, the New York-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, charging the government in Quito with human rights violations.

In a parallel matter, U.S. Judge Vincent Broderick in New York sided with Ecuadorian plaintiffs who had brought suit against Texaco. Broderick granted access to Texaco's files to establish the parent company's responsibility for damages caused by the company's Ecuadoran operations.

Just a few months ago, Ecuador's minister of energy Francisco Acosta rejected a Texaco-commissioned environmental audit of the damages caused by the company and argued that it was too narrow. He then threatened to bring his own suit against Texaco if the company refused to negotiate in good faith, but suddenly Acosta's aggression towards Texaco lost wind.

He was impeached recently by the country's congress when it was discovered he allegedly had arrived at a secret, personal agreement with Texaco to drop the matter.

"Texaco is viewed as the chief human rights violator"

The OAS investigation and the use of human rights allegations against Texaco and other private companies have challenged traditional human rights dogma with claims that more than civil liberties are being threatened. The government is only one of many essential actors.

"When we indigenous peoples talk about the environment, we are not just talking about trees, rivers and butterflies," Rafael Pandam, vice president of the Confederation of Indigenous Nationalities of Ecuador (CONAIE), said. "We are also talking about human beings, and when we talk of human rights, we're not just talking about the right to free speech. We're talking about political, economic, social and cultural rights of all peoples."

Pandam's vision of human rights is supported by international and Ecuadoran law. In 1972, the U.N. 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."

Ecuador's constitution provides for the right "to live in an environment free from contamination," although most commentators here think that's a joke.

Economic and social rights, like the right to a healthy environment, implicate corporate activities here in Ecuador more directly than traditional civil and political rights would.

"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 Tagiere tribe," he charged.

At least one group has completely disappeared in the wake of Texaco's activities

Texaco's involvement in human rights abuses in Ecuador has been documented in "Amazon Crude," a book written by Judith Kimerling and published by the National Resources Defense Council in 1991. Kimerling 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 oil operations in the area, and a later report confirmed that wastes created a potential health catastrophe, documenting 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 they believe to be related to the Texaco contamination. But these charges are intertwined with parallel social and cultural assaults on indigenous groups.

A statement published by the Federation of Indigenous Communities of the Ecuadoran Amazon (CONFENAIE) said "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 many traditional bonds, brought malnutrition and new diseases and pushed the indigenous communities onto the bottom rung of a hostile market economy where 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."

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.

"Since the 1950s, almost every aspect of the Cofan culture has experienced change. Their houses, tools and weapons, traditional medical practices, the behavior of community members, and their traditional food taboos have been drastically affected," 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."

A law granted legal title to any person that cleared the rainforest and put it to "productive use"

Texaco rejects the allegations, saying that development of oil resources is essential 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 the last 18 years. He denies that Texaco's operations have seriously damaged the Ecuadoran Amazon.

"Texaco did not ravage the Amazon region. We think we made a very significant contribution. We have international standards to which we hold ourselves accountable," Trevino says, pointing to an environmental audit commissioned by Texaco and the Ecuadoran state oil company that found only "moderate to high" levels of contamination in 60 percent of the former Texaco sites in the Oriente.

That audit recommended a limited program of remediation costing less than $30 million. According to former minister of energy and mines Francisco Acosta, Texaco offered to pay 33 percent of any cleanup costs, based on its ownership share of the consortium.

Strangely, 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 cleanup," Trevino said.

"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/or planning for colonization of the region," Trevino said.

In Texaco's favor, the government of Ecuador's government has in fact encouraged settlement along Amazon oil roads to relieve pressure on land elsewhere in the country. And a "Wastelands Law" granted legal title to any person that cleared the rainforest and put it to "productive use."

Oil roads and lack of government regulation have opened the door to land speculators, agro-industrialists, ranchers and loggers

The resulting deforestation has been exascerbated by the poor quality of Amazon soils and inappropriate farming techniques, encouraging continual clearing of new land. Oil roads and 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.

NY demonstration against Texaco An international boycott of Texaco has been organized by Accion Ecologica and Rainforest Action Network in the United States and Europe, and their political lobbying appears to have had an effect on Texaco's willingness to negotiate an agreement -- the groups estimate proper cleanup costs and fair compensation will run to several billions of dollars, dwarfing the figures that Texaco had previously been considering.

Texaco has also been under pressure from the U.S. Congress and the Clinton administration to find a equitable solution, but the company is facing a major challenge on the legal front in the form of 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.

"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," says Bonifaz. "We don't care how it's achieved, but Texaco must be forced to make good on the damage it caused to the people and environment of the Oriente in Ecuador."

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.

An earlier suit filed by attorney Judith Kimerling in Texas was quickly dismissed by a federal judge, who viewed Ecuador as a more appropriate forum.

"The problem has now spread to Peru and has snowballed into an international catastrophe"

But 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. They 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 now has assets of less than $10 million.

Not bound 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, Judge Broderick suggested 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 18th 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 operat- ions.

"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 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 make it more difficult to dismiss the suit on the grounds that Ecuadoran courts are the more suitable forum.

The OAS investigation in Ecuador, undertaken by the Inter-American Human Rights Commission, has at first concentrated on a different U.S. oil company, Maxus Energy.

Diseases, water contamination, breakdown of traditional cultures and loss of land has followed oil development

In 1990, the Sierra Club Legal Defense Fund filed suit to block the plans of Maxus's former consortium partner in Ecuador, 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.

The Yasuni National Park is one of the most biodiverse territories in the world, designated by the United Nations as a World Biosphere Reserve. Ecuadoran lawyers initially succeeded in blocking the Conoco-Maxus operation under a constitutional provision giving the right to a contamination-free environment and under laws prohibiting exploitation of protected areas.

One month after, however, the constitutional court in Quito reversed itself, in the face of what one judge later described as intense pressure from the government and the oil industry, and ordered a stop to the Conoco-Maxus plans.

The environmentalists' suit had said that oil development poses a serious threat to indigenous groups in the area, particularly 1,200 Huaorani Indians. Filed before Maxus had begun to develop the Yasuni, it describes 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," specialist lawyers working on the case contend. "Their population is small, dispersed and isolated from the outside world."

The complaint is supported by testimony from 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," predicts 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's wholly possible that the Huaorani culture and language will disappear within two or three generations," he charged.

Texas attorney Judith 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 the Huaorani can no longer live there."

Maxus carved a 94-mile road, opening up vast stretches of rainforest formerly accessible only by helicopter and boat

While Maxus is not as easy a target for the environmentalist groups as Texaco, it's taken steps to avoid the same sort of political damage that Texaco suffered in Ecuador. 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 roads).

The company claims to be spending $60 million on environmental protection, which is a significant figure by Ecuadoran standards. But given the ecological richness and fragility of the territory, many environmentalists object to any sort of development in the area, and are particularly concerned by Maxus's policy of denying outsiders access to its facilities to independently verify company claims.

Even the best environmental policies provide little defense against the primary threat to this highly-sensitive region. Colonization and deforestation has inevitably followed the oil roads, and Maxus has carved a 94-mile road into the Yasuni, opening up vast stretches of rainforest formerly accessible only by helicopter and boat.

"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?" one Huaorani representative asked.

Amazon Indian's fears are exemplified by the fact 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.

A 1982 government census showed the Oriente was growing at twice the rate of the rest of the country, and critics say that plans by Maxus and the government in Quito to prevent colonization by establishing army-run roadblocks are unsustainable and unrealistic.

Because of endemic political corruption, monitoring is in the hands of the corporations themselves

There is good news, however. Where Texaco allegedly ignored indigenous inhabitants of the Amazon rainforests, 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 do indeed make contact with indigenous people, employees are told to announce "Waponi, amigos Huaorani, boto Maxus," or, "Greetings Huaorani friends, I am Maxus."

Maxus has also contracted government health and educational services, and has begun supplying medical and dental care, educational materials, school rooms and health clinics. It's also employing indigenous men, providing funds for a political organization and plying community leaders with personal gifts.

While it may have temporarily won Maxus the support of the Huaorani Nation of the Ecuadoran Amazon (ONHAE), that group 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 met with government officials and the press to denounce 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, environmentalist critics worry about ceding it such fundamental government functions as health and education.

"It's no longer clear who's supposed to do what," environmentalist attorney Neil Popovic said. "The Ecuadoran government has abdicated its responsibilities to private companies and has made no effort to regulate them."

Because of endemic political corruption, government agencies remain seriously understaffed and underfunded, leaving monitoring essentially in the hands of the corporations themselves.

Critics say the Huaorani have no effective recourse if Maxus fails to comply with its promises. The "Friendship Agreement" between the Huaorani and Maxus is written in Spanish, a language that few Huaorani either speak or read, and essentially it makes no firm commitments, environmentalists say.

"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."

Nevertheless, critics remain skeptical. They view Maxus's gestures as hollow, and they're emphasizing the larger political questions of accountability, asking whether corporations such as Maxus or Texaco (whose annual revenues of $42 billion dwarf Ecuador's $12 billion GNP) should not be treated differently from private citizens; the contention is that they should 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, an environmentalist policy director. "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."

Photos courtesy Rainforest Action Network.

Albion Monitor November 14, 1995 (

All Rights Reserved.

Contact for permission to reproduce.

Front Page