In February 2011, the Sucumbíos provincial court in Ecuador issued a landmark ruling in the case known as Lago Agrio against the Chevron-Texaco oil company. Texaco, which was taken over by Chevron in 2001, arrived in Ecuador in 1964 to drill for oil in the Northern Ecuadorian Amazon, specifically in the provinces of Sucumbíos and Orellana. The company then spent nearly three decades wrecking the environment of Ecuador, dumping nearly 650,000 barrels of crude oil and more than 16 billion gallons of wastewater in the rivers and soils of the Amazonian jungle. This landmark case became known as the “Amazonian Chernobyl” because of the harm inflicted on the health and ways of life of the more than 30,000 indigenous peoples who call this area home. As punishment for these crimes against the planet and indigenous communities, the company was sentenced to pay $9.5 billion in damages. At the time, the case was hailed as an important environmental justice victory for indigenous peoples in the global South combating the predatory practices of Big Oil. Unfortunately, nothing could be further from the truth.
Ecuador’s economy had long been defined by its reliance on the natural resource sector - bananas, cacao, etc. Following the discovery of the Lago Agrio field in the 1970’s, Ecuador broadened its economic focus towards a new resource: oil. At the time, Ecuador’s newly-established military government racked up a sizable debt under the assumption Texaco’s oil drilling and export profits would generate significant economic growth and tax revenues, and allowed the company to develop Lago Agrio with little to no environmental restrictions or social safeguards.
In the decade prior, Ecuador had been successfully moving away from an agro-export model — one in which poorer countries depend on exporting agricultural raw materials to richer ones. Instead, the country focused on adopting import-substitution industrialization (ISI). By 1971, the increased manufacturing of consumer durable goods accounted for 50 percent of industrial output. But upon discovering vast oil reserves, the potential for quick profits proved more tempting than slow-moving economic diversification. Shifting its focus to meet the demands of Texaco’s operations, Ecuador’s oil production significantly exceeded previous years, jumping from 27 to 73 million barrels annually in just over six years. As a result, oil exports jumped from one percent of total exports to 65 percent over three years. Accompanied by an increase in oil prices internationally, Ecuador’s economy soared.
But these golden years were short lived. Ecuador quickly fell victim to the “resource curse” -- where the over-reliance on the export revenue generated by a single resource (especially oil) breeds government corruption, and renders the entire economy vulnerable to fluctuations in world market prices. The economy relied on oil for over 50 percent of its exports, a risky proposition in a notoriously volatile global oil market. When oil prices dropped dramatically in the 1980s, Ecuador was thrust into its own Great Depression. Inflation rates soared to 13.2 percent, the government defaulted on loans, and the country struggled to meet domestic fuel demand despite being a top oil exporter. This region’s entire infrastructure development had been built on Texaco’s profit-maximizing oil extraction operations.
Chevron-Texaco’s abuses have resulted in devastating health and environmental consequences for the Ecuadorian people. This is the core grievance of Ecuador’s class-action lawsuit against Chevron-Texaco: an entire region in the Amazon was rendered inhabitable. It could and should have been avoided. The ecological damage is devastating: some 4,000 square kilometers of flourishing, biodiverse land has been turned into a wasteland. The Aguarico River, a three hour canoe ride from the Lago Agrio field, had supported the indigenous Siona people’s drinking, cooking, and cleaning demands for centuries. Now it is a hotspot for toxic heavy metals, carcinogens, and soil erosion. People walk barefoot along dirt roads doused in crude waste, as it is much cheaper to let oil trickle away from drilling sites than to properly discard it. Cancer rates in the oil-drilling area remain 150 percent higher than in other parts of Ecuador due to increased exposure to carcinogenic chemicals. Deforestation has spiked mercury levels in local rivers, contaminating the tribes’ main food and water source. The cultures and practices of Ecuador’s indigenous tribes are dependent on the rainforest and its abundant resources. Texaco’s irresponsible operations threaten this way of life, raising a genuine concern about indigenous extinction. The buildup of these health, environmental, and cultural harms are life-threatening.
But despite all these injustices, to this day the Ecuadorian justice system has been unable to enforce the sentence against Chevron-Texaco. In fact, as a result of an international lawsuit filed by Chevron-Texaco under the global system of investment protection, the Supreme Court charged the Ecuadorian government with paying them a $96 million compensation in 2016. The arbitration tribunal that admitted Chevron’s lawsuit and charged the government has also ordered Ecuador to annul the sentence of the Sucumbíos court, which it considers unlawful. In response, the plaintiffs in the case — the Union of the People Affected by Texaco-Chevron Operations (UDAPT) — denounced the decision of the arbitration panel, accusing them of overriding the rights of the affected communities. UDAPT has warned that if the decision of the arbitrators is implemented, this will set a very dangerous precedent in the global fight to protect the environment and defend human rights from the predatory practices of multinational corporations.
Chevron-Texaco has also adopted the aggressive strategy of personally targeting the attorney in the case. Steve Donziger, representing UDAPT, spent two decades fighting the Lago Agrio case against Chevron-Texaco. In retaliation, Chevron-Texaco employed more than 60 law firms and 2,000 legal professionals to claim innocence and accuse Ecuadorian villagers of lying about the pollution’s impact. In 2011, Chevron filed a civil RICO (Racketeer Influenced and Corrupt Organizations Act) suit against Donziger in New York City, accusing him of bribing an Ecuadorean judge and "fixing" scientific studies. U.S. District Judge Lewis Kaplan, the Chevron-funded Federalist Society’s President, was assigned as the judge.
Judge Kaplan, the Chevron-funded Federalist Society’s President, personally charged Donziger with criminal contempt upon the U.S. Attorney Office’s refusal to prosecute. In 2014, Kaplan ruled that the judgement in Ecuador was invalid because the process in Ecuador was "not fair or impartial and did not comport with the requirements of due process" and was "not entitled to recognition". In fact, Kaplan described Donziger’s conduct as "criminal" in his 2014 ruling. However, the U.S. Attorney’s Office for the Southern District of New York disagreed, and declined to prosecute him. However, instead of dropping the case, Kaplan personally appointed private counsel and a presiding judge for the case — both with financial ties to Chevron —, and approved the unethical seizure of Donziger’s devices and confidential information. Kaplan is single-handedly the accuser, appointer, judge selector, and judge, an obvious conflict of interest in an already-unjust trial against Donziger.
As for Steve Donziger, he is now disbarred, on house arrest over six criminal contempt charges, and has spent his post-victory years as a corporate political prisoner. Kaplan’s strange decision came on the heels of Chevron-Texaco’s long term strategy, revealed in a series of emails between company lawyers and higher-ups, which was to demonize Donziger from the get-go. The company launched a smear campaign and sued Donziger for $60 billion dollars. Chevron-Texaco also hired private investigators to track him, funded a publication solely to ruin his reputation (boasting the headline “Science Fiction: Donziger's Own Experts Admit to Fabricating Scientific Evidence,” among others), and orchestrated his house arrest. A Google search of Donziger results in critical articles and headlines of fraud, which critics have charged Chevron-Texaco with fabricating in order to evade responsibility.
The company’s star witness, Alberto Guerro, admitted to taking $2 million in bribes from Chevron-Texaco to testify against Donziger on a number of baseless claims. He even practiced his testimony some 53 times with Chevron-Texaco’s lawyers before taking the stand. Chevron-Texaco also created The Amazon Post, a website that heavily critiques Ecuador's justice system and is dedicated to debunking “misinformation” surrounding water contamination, cancer rates, and other health hazards. The website denies the majority of pollution claims against the company, and instead pushes responsibility for the damage onto the Ecuadorian government.
Chevron-Texaco’s unprecedented — and successful — punishment of Donziger and refusal to compensate Ecuador’s indigenous tribes demonstrate the lengths to which multinational corporations are willing to go to protect their empires. The neoliberal capitalist system has not only allowed, but also encouraged, the maltreatment of Donziger and Ecuadorian citizens in the name of protecting their profits. Chevron was tasked with paying $9.5 billion in cleanup costs, which pales in comparison to the company’s $190 billion-and-growing net worth. The reparation itself would not have harmed Chevron. The possibility of lost profit, however, was enough to send the company into a legal frenzy, which Attorney Steve Donziger is suffering first hand.
Coincidences do not exist within the polluter-industrial complex. Chevron’s onslaught against Donziger aligns with their history of evading responsibility. The success of a neoliberal capitalist system is predicated on exploitation of the poor for the prosperity of the rich. Any backlash from exploited populations can be suppressed through control of the political and legal systems — all energy is funneled into ensuring the victims never win. Unfortunately, Donziger’s win was completely out of the norm. Chevron is making an example out of Donziger; even the most seemingly black and white cases, even those that are won by the underdogs, can ultimately be lost, unless we have truly representative legal systems.
Today, Donziger’s rights to a fair trial are continually being violated as he remains on indefinite house arrest. An effort to release him on bail while awaiting trial was denied in late March. In the meantime, Chevron is unlikely to compensate either group for their suffering anytime soon. On the contrary, the company is pursuing further abuses against these innocents, demonstrating yet again the cold, profit-prioritizing nature of big oil.
