The elaborate press event was an amazing logistical feat considering it took place deep in the Amazon Rainforest. The arrival of Ecuadorian President Rafael Correa’s helicopter was heralded by the theme from Star Wars, which blared from powerful speakers arranged around a giant white tent that billowed in a clearing near the tree line of dense forest. Correa then strode past the tent and into the forest wearing a white shirt, blue jeans, and bright yellow rubber boots. He walked along a narrow path and then onto a log that stretched precariously across a swampy pit that oil company workers had dug into the forest floor. He crouched down and plunged his gloved hand into the dirty water and grabbed a glob of black, oozing sludge. He held the muck over his head and the forest canopy exploded with flashes from the dozens of news photographers that lined the pit.
Correa then walked along the narrow path that edged the contaminated pool followed by television camera crews that awkwardly tried to keep up with him without falling into the polluted pit. In the press tent, Correa walked up to Richmond Mayor Gayle McLaughlin who was giving media interviews. “Gayle, Gayle,” Correa said in a thick accent and then held up his sludge-covered hand. “This is Chevron. For thirty years, this is Chevron.”
The fifty-year-old Correa, a charismatic and popular progressive, timed the media event to precede the October 15 start of a federal trial in New York involving the East Bay oil giant. Chevron’s lawyers are attempting to block indigenous groups and farmers of Ecuador who were harmed by the widespread contamination caused by the oil company from collecting a $19 billion court judgment lodged against Chevron two years ago. Lawyers for the San Ramon-based corporation, which also has long been criticized for pollution and human-health problems associated with its Richmond refinery, contend that the attorneys who defeated the oil company in court in Ecuador engaged in fraud and racketeering.
President Correa decided to invite McLaughlin to tour his country after she participated in a large protest in August at the Richmond Chevron Refinery. The Ecuadorian government then paid for McLaughlin to fly to the country in September and participate in a large-scale media campaign and to tour the Lago Agrio region where Texaco — an oil company that Chevron absorbed a dozen years ago — left a legacy of destruction, contamination, and, residents say, high rates of cancer and other illnesses. I accompanied the tour.
In the rainforest, McLaughlin stood at the edge of a ten-foot-deep pit filled with black sludge. She said it was a moving experience to see firsthand the damage that Chevron/Texaco left behind. She also said the people of Lago Agrio and the people of Richmond have a common bond. “This is a massive environmental disaster, and Chevron is turning its back on it. That’s a crime. It is criminal that they would leave this here and say they are not responsible,” McLaughlin said to a bank of television cameras that had followed her into the forest. “I said to the president that he exposed the truth here today about Chevron’s practices, and we do the same in Richmond. I said you expose the truth, we expose the truth, and together we are stronger.”
McLaughlin’s trip to Ecuador was an unprecedented act. No Richmond mayor had ever taken a diplomatic trip to another country for the purpose of criticizing the city’s largest revenue generator and employer.
For more than one hundred years, Chevron and its refinery had wielded a great deal of influence over city politics. But after city residents elected McLaughlin to be the East Bay’s first-ever Green Party mayor in 2006, the Richmond City Council has held the oil company accountable in ways to which it had not been accustomed. The council sponsored ballot measures requiring the refinery to pay back utility taxes, filed lawsuits to ensure greater safety standards, and, in August, McLaughlin and other councilmembers joined 2,500 protesters at the refinery gates. “I suppose I am the first mayor to take such a trip,” McLaughlin said. “But it was an important trip for me to make because it helped shed light on the fact that these corporations cause suffering all over the world.”
During her six-day visit, McLaughlin met and exchanged gifts with Correa at the presidential palace in Quito, the Ecuadorian capital; gave dozens of television, radio, and print interviews; and toured an Amazonian nature sanctuary and several remote villages. She also met with some of the farmers and indigenous villagers who won the $19 billion lawsuit against Chevron for contaminating the Lago Agrio region with billions of gallons of spilled oil and billions of gallons of dumped toxic drilling byproducts.
At nearly all of the events, meetings, and interviews, McLaughlin compared the Ecuadorian struggle against Chevron to Richmond’s struggle with the same company. In particular, she spoke about the explosion and fire at the Richmond Chevron Refinery on August 6, 2012 that sent a huge column of smoke across the sky and 1,500 Richmond residents to local hospitals. The fire was the third major accident at the refinery in fourteen years. The US Chemical Safety Board concluded that the explosion and fire could have been prevented had the company carried out regular maintenance and equipment upgrades. Chevron pled no contest in Contra Costa County Superior Court to six charges of willful criminal neglect and paid $2 million in fines.
After the criminal court action, the Richmond City Council voted to sue Chevron to ensure that the refinery applies the best practices and safety measures. “The whole purpose is to secure the safety of the people of Richmond and to let Chevron know they have to put safety first,” McLaughlin said. “Children should feel secure in their environment and not have to worry about sheltering in place because of toxic fires at the refinery.”
Chevron was not pleased with McLaughlin’s trip to Ecuador, however. Company spokeswoman Melissa Ritchie issued a statement criticizing McLaughlin for participating in what Chevron officials essentially described as an illegal government propaganda campaign. The oil company also pointed out that it is the largest taxpayer in Richmond and has partnered with a number of community organizations to improve education and economic development in the city. “Rather than traveling to South America, the mayor would better serve the citizens of Richmond by constructively addressing the city’s most pressing issues, including jobs, education and public safety,” the statement read.
Since Chevron pleaded guilty to six counts of criminal neglect in relation to the 2012 fire in Richmond, the multinational corporation has sought to improve its reputation in the city. The company has leased numerous billboards that promote the refinery as a good employer and community safety advocate. The refinery has also invited Richmond residents to tour the refinery as a gesture of good will, and, earlier this month, Chevron announced a $15 million community investment in Richmond to strengthen small businesses and education and help create jobs.
McLaughlin was lukewarm to the announcement of community investment. “It’s fine they are doing this, but it’s charity and Richmond did not ask for charity,” she said. “When they show us respect for our health and safety, then we can see the charity as given in a genuine spirit.”
The press conference in the rainforest was the centerpiece of President Correa’s “Dirty Hand of Chevron” media campaign, which denounced the oil giant for the damage it caused to the Amazon Rainforest during years of intensive drilling between 1972 and 1992 (Chevron took over Texaco in 2001 and then absorbed all of Texaco’s liabilities). During those two decades, Chevron/Texaco, in partnership with Petroecuador, Ecuador’s nationalized oil company, extracted $1.7 billion barrels of oil (much of which was shipped to California markets) and $25 billion in profits from the Lago Agrio oil fields.
But the highly lucrative endeavor also left a legacy of destruction and contamination that continues to harm the environment and the region’s residents. The company had spilled 16 billion gallons of crude oil — 50 percent more than the 1989 Exxon Valdez spill in Prince William Sound — and dumped another 18 billion gallons of a drilling byproduct known as “produced water” into an estimated 600 to 1,000 unlined pits, called piscinas or pools, dug into the forest floor. The “produced water” contains crude oil and a variety of toxins including carcinogenic polycyclic aromatic hydrocarbons. Because Chevron/Texaco did not line the pits, contaminates have leached into the rivers and streams that residents of the area rely on for drinking, fishing, bathing, and farming.
McLaughlin met with Pablo Fajardo, an attorney who successfully won the $19 billion judgment against Chevron for residents, farmers, and indigenous tribal members of the Lago Agrio region. During the meeting in his modest office in Quito, Fajardo told McLaughlin that not only was the Lago Agrio region contaminated, but that a traditional way of life was irreversibly disrupted. “Two entire indigenous tribes have disappeared,” Fajardo said. “Chevron/Texaco’s primary legacy for the people of Lago Agrio is sickness. The rates of leukemia, miscarriages, and deformities are very high and there is scientific proof that cancer rates are three times higher in that sector than the rest of the country.”
Chevron disputes Fajardo’s assertions. The company said there is no concrete evidence that the oil contamination came specifically from Chevron/Texaco operations — and not from Petroecuador, which continued to extract oil (and had a poor environmental record) from the region long after Chevron/Texaco exited the country. Chevron also claims that there is no solid evidence of an increase in cancer or other diseases. “We hired external epidemiologists as well as internal epidemiologists and what we have found is there’s absolutely no evidence that there’s an increase in cancer death rates,” Sara McMillen, a Chevron environmental scientist said in a documentary about the issue called Crude. “Certainly there are people there who are sick, it’s a very poor region, but there is absolutely no evidence there’s an increase in cancer rates and there is absolutely no evidence that any of that is linked to oil production.”
But to the farmers and indigenous villagers affected by the billions of gallons of contamination, there is no question about the harmful impacts caused by Chevron/Texaco. Jose Shingre, a farmer and former Texaco employee who lives in the Lago Agrio region, was also one of the lead plaintiffs in the lawsuit against Chevron. In an address to members of the Human Rights Council of the United Nations in September, Shingre said oil contamination in the region has been devastating to human life, and he noted that the region continues to suffer from a lack of clean water for drinking, bathing, and farming. “Many hundreds of fellow farmers and fellow indigenous are dying,” he said in his presentation. “We want water, because we have no way of getting water in the area because the water is contaminated. Everything is contaminated. We want justice because, at this time, we can’t even count on our crops.”
In 2011, an Ecuadorian court agreed with the plaintiffs and leveled a $19 billion judgment against Chevron. Since the verdict, various aspects of the case have been heard in venues around the world. Ecuador has sought help from courts in Canada, Argentina, and Brazil to seize Chevron’s billions in assets in those countries to put toward the $19 billion verdict. But they have not yet been successful.
In September, an international tribunal, acting under the Hague’s Permanent Court of Arbitration found that Chevron/Texaco was indemnified from lawsuits related to the Lago Agrio oil fields after the multinational company spent $40 million to remediate the environmental damage and signed release agreements with previous administrations in 1995 and 1998. However, that is only the tribunal’s opinion and does not carry the weight of law. Chevron also has appealed the 2011 Ecuadorian verdict to the Ecuadorian Supreme Court, but there is no expectation it will overturn the judgment.
The most important trial since the 2011 verdict began in federal court in New York City this week. In that case, Chevron has accused the attorneys for the Lago Agrio plaintiffs of fraud and racketeering under the federal Racketeering Influenced and Corrupt Organizations Act, known as RICO. Chevron claims that Steven Donziger, a New York-based attorney representing the plaintiffs, used false evidence, bribes, and ghostwritten court documents to win the case.
Donziger flatly denies the allegations and hired prominent San Francisco attorney John Keker to defend him. However, Keker withdrew as defense attorney in May citing the strong bias of US Federal Court Judge Lewis Kaplan — who said during pretrial motions that he suspects Donziger of masterminding an enormous fraud against the multinational company — and Chevron’s seemingly endless resources, which the company has used to hire hundreds of attorneys to win the case. According to court documents, Chevron claims to have 2,000 legal personnel and 60 law firms working to void the Ecuadorian court judgment. In the New York case alone, Chevron is employing 114 attorneys from Dunn & Crutcher, the principal law firm in the proceedings. According to US Attorney Aaron Page, Chevron’s legal tab is quickly approaching $2 billion.
Donziger, who works from his New York home, is unable to pay his legal fees, which are estimated to be $5 million, according to Keker. As of late last week, it also was unclear whether Donziger would be representing himself in the case.
Keker tried and failed to have Kaplan removed from the trial for alleged bias in favor of Chevron. He called legal proceedings under Kaplan a “show trial” in which he felt like a “goat tethered to a stake,” and that the case has degenerated into a “Dickensian farce.”
“Through scorched-earth litigation, executed by its army of hundreds of lawyers, Chevron is using its limitless resources to crush defendants and win this case through might rather than merit,” Keker stated in his fifteen-page motion to withdraw as counsel. “Encouraged by this court’s implacable hostility to Donziger, Chevron will file any motion, however meritless, in the hope that the Court will use it to hurt Donziger.”
President Correa, meanwhile, has had his own troubles with environmental activists, which became apparent during McLaughlin’s tour. Correa rose to power in Ecuador as a progressive economist who had modeled himself after Venezuela President Hugo Chavez. But since Correa became president in 2007, his critics say he has steadily become more enamored with drilling and mining in sensitive areas of the Amazon.
Perhaps the largest controversy to confront Correa’s administration is the president’s decision to open up three regions of Yasuni National Park, known as the ITT Block, for oil extraction. Yasuni is near the northeastern part of Ecuador, close to the border with Colombia. It is said to be one of the most pristine and ecologically diverse areas in the world. In addition, it is home to two factions of the Waorani indigenous tribe, which has chosen to live in voluntary isolation from the Western World, pursuing the traditions and customs it has honored for hundreds, perhaps thousands, of years.
In 2007, Correa offered other nations an innovative option to avoid drilling in Yasuni. It was called the ITT Initiative, and the idea was that if foreign countries contributed $3.5 billion to Ecuador, roughly half of the estimated drilling profits, he would preserve the rights of the region’s indigenous tribes, keep Yasuni in its pristine state, and avoid releasing into the air 410 metric tons of carbon dioxide from the estimated 846 million barrels of oil that would be extracted from the ITT Block.
But international support was lackluster and after six years, foreign countries had pledged only $336 million to the initiative. Citing Ecuador’s need to fight poverty by improving health care, education, and infrastructure, Correa abandoned the plan in August and announced that the ITT Block would be opened for oil extraction. “We have waited long enough. The world has failed us,” Correa said, calling the larger economies of the world hypocrites. “It was not charity that we sought from the international community, but co-responsibility in the face of climate change.”
But the Ecuadorian public doesn’t appear to be buying into Correa’s explanation. His announcement was met with widespread street protests, and 130 scholars and academics from 22 countries signed a letter to Correa asking him not to drill in the Yasuni ITT Block. They also asked that he put a referendum on the ballot for Ecuadorian voters — a suggestion Correa has strongly resisted. In addition 100 scientists warned the Ecuadorian Congress against drilling in the remote rainforest. “Yasuni National Park may very well be the most diverse place in the world,” said Shawn McCracken of Texas State University. “It is a remarkable convergence of global peak diversity levels of amphibian, bird, insect, mammal, and tree species.”
Alberto Acosta, Correa’s former energy minister who was once one of Correa’s closest progressive allies, told Ecuadorian reporters that Correa never put much effort into raising contributions and that he had appointed a second-rate team of government employees to promote the project. In addition, Correa had publicly threatened to drill in the Yasuni ITT Block if wealthy nations did not pony up billions of dollars. “It came off as a kind of blackmail,” said Acosta, who ran against Correa in the 2013 presidential election. “The government failed to transform this powerful initiative into a credible proposal.”
There were other factors that cast doubt on the credibility of the Yasuni ITT Initiative. The most glaring was Chinese investment in Ecuador. In 2008, Ecuador defaulted on IMF loans, leaving the country unable to secure international loans. But according to a brief by Oakland-based Amazon Watch, Chinese banks have a long history of offering loans, unburdened by restrictions or policy conditions, to countries that are mired in conflict or buried in debt. To date, Amazon Watch estimates that Chinese banks have lent or invested $16 billion to Ecuador. Some of these loans are paid back in oil. According to a Wall Street Journal report, a $2 billion loan issued in 2011 requires Ecuador to make a payment of 39,000 barrels a day.
In fact, Correa had a problem convincing the world that he was serious about preserving the Yasuni ITT Block when it became known in 2011 that a Chinese oil company, Petrooriental, in a joint venture with the China National Petroleum Corporation, had begun to build roads along the border of the ITT Block. The road-building sent the message that drilling in the ITT Block was a foregone conclusion and made potential contributors wary of how far Correa’s administration would go to meet the debt payments to Chinese banks.
And there are other oil extraction and mining ventures that are being driven by Ecuador’s debt. Chief among them is the Mirador Mine, which is being operated by the Chinese mining company Corriente. The Ecuadorian government has approved an open pit copper mine in Cordillera del Condor, another biodiverse region of the southern Amazon Rainforest. The project is expected to generate $5.4 billion for Ecuador, although it is expected to adversely impact 450,000 acres of forest, which are also the ancestral homeland to the indigenous Shuar tribe. There is also a troubled hydroelectric dam project driven by Chinese investment and a controversial plan to connect the coasts of Brazil and Ecuador with a series of roads, dredged waterways, and a bridge. The project is intended to boost trade by creating another option to the American-controlled Panama Canal. China is also helping to finance a $12 billion refinery to be built on the Ecuadorian coast. The refinery is expected to process the millions of barrels of crude that will be extracted from the Yasuni ITT block, according to Amazon Watch.
Correa has called his critics naive and claims that Ecuador desperately needs the infrastructure and investment oil can provide. Since his election, he is credited with easing poverty and improving the country’s educational and medical institutions. He also claims that increased oil extraction and mining will make Ecuador a modern country with greater economic opportunity and a higher standard of living.
But the dodgy promise of oil prosperity is nothing new to Ecuadorians. In 1972, the first Texaco oil pipeline was built from the Lago Agrio oil fields across the Andes to the Pacific Ocean. The new line catapulted Ecuador into becoming the second-largest oil producer in Latin America. The country seemed drunk on dreams of wealth and modernization. The first wooden barrel filled from the oil pipeline was sent to Quito where it was blessed by the Archdiocese, placed atop a military tank, and paraded through cheering crowds on the capital’s streets. To this day, the barrel is kept in an honored place in the Temple of Heroes at Ecuador’s military college. But the promises of economic riches from oil extraction were never fully realized, at least not in Ecuador.
Acosta wrote in his book The Curse of Plenty that oil-rich countries tend to be characterized by widespread poverty. The nations that have a narrow focus on drilling and mining don’t develop human capital and tend to destroy the environment and abuse human rights. In Ecuador, for example, oil companies have pumped an estimated $130 billion worth of crude out of the country’s lushly forested landscape, and yet it still has greater sociological problems than countries with fewer resources. “The oil did not contribute to our national development,” Acosta wrote.
Reflecting on her trip, McLaughlin said she was glad to establish connection with the people of Ecuador. She is planning a public event this month to discuss what she learned on her trip and to answer questions from Richmond residents. Pablo Fajardo, the lead attorney for the Lago Agrio plaintiffs, is expected to be on hand with some Lago Agrio residents to talk about the federal trial in New York.
In the future, McLaughlin said she would like to strengthen the bond with Ecuadorians who are fighting Chevron, as well as other groups in Nigeria, Brazil, and Argentina that have also suffered at the hands of transcontinental oil companies. “It’s true that corporations have a great deal of power, but it’s nothing compared to the power the people have when they are united” she said.
McLaughlin refrained from judging Correa for the controversial environmental decisions he’s made and said his progressive government is doing much more for its citizens than any previous administration over the past fifty years. “The history of corruption in Ecuador is incredible,” McLaughlin said. “Former presidents, the government, and citizens were in total servitude to companies like Chevron, and they left the country impoverished, underdeveloped, and in deep need of investment.”
She quickly added that it is imperative that any corporations extracting oil in Ecuador elevate the safety and rights of people above profits — the same expectation she has in Richmond.