Sustainable Development in the Amazon: the Need for Complicit, Collective, Shared, And

Sustainable Development in the Amazon: The Need for Complicit, Collective, Shared, and Universal Responsibility

Paper presented at the 4th CORE Conference, Berlin June 15-16, 2009

Jessica Christie Ludescher

Introduction:

Can CSR help the EU to integrate various policy strategies? A primary challenge facing policy making in a global era lies with the rise in power of non-government institutions like corporations. To be effective, public policy requires the support of corporations and other institutions. This paper lays out a map for inter-institutional responsibility that will specify the proper roles of various institutional players in securing global justice. More significantly, it demands a shift in responsibility ascriptions from institutions to their stakeholders. CSR alone will not assist the EU.

Petroleum in the Amazon:

On May 4th 2007, buffered from the public by about 40-50 officers of the Los Angeles Police Department, activists gathered outside the Fairmont Miramar Hotel in Santa Monica, LA[1] to attend a press conference and support a delegation of five communities of the Achuar people from Block 1AB of the Peruvian Amazon to the annual general meeting for shareholders of Occidental Petroleum, Corp, “Oxy.” The Achuar delegation, bolstered by several NGO leaders, activists, and celebrities, demanded that Occidental assume responsibility for the deaths, illnesses, and contamination that have befallen their people, animals, and earth home since Occidental began drilling in their ancestral lands in 1971. They insisted that the company volunteer to clean up the pollution they caused or do so under the compulsion of law, or at least, undergo a lawsuit.[2] A week after the shareholders meeting, spiritual elder Tomas Maynas Carijano and 24 unnamed members of the Achuar sued the company in Los Angeles Superior Court, under the advocacy of EarthRights International and Schonbrun DeSimone Seplow Harris and Hoffman of Venice, CA. They “seek unspecified damages, restitution, medical monitoring and disgorgement of profit” for the Achuar people[3] of the Corrientes River basin. The suit is called Maynas vs. Occidental and has been being appealed since Judge Philip Gutierrez declared in April 2008 that the case needed to be tried in Peru, rather than the United States.

A report issued by three nonprofit CSOs, EarthRights International, Racimos de Ungurahui, and Amazon Watch, called “A Legacy of Harm,” found that numerous Achuar people in Block 1AB suffer from lead and cadmium poisoning and that their rainforest ecosystem is damaged by similar toxicity. Lead and cadmium are known carcinogens and contributors to developmental damage. The report makes a strong case that these health and environmental harms are directly caused by the methods used by Occidental Petroleum between 1971 and 2000, which methods the CSOs allege to have been in violation of Peruvian, U.S., and International Law.[4] The CSOs claim that, among other abuses, Occidental “dumped an average of 850,000 barrels per day of toxic oil by-products directly into rivers and streams used by the Achuar for drinking, bathing, washing, and fishing.”[5] In addition to listing conclusions from scientific studies of human, animal, and habitat health, the report includes numerous pieces of testimony from people living in Block IAB that corroborate the CSOs’ allegations about the liability of Occidental. People report having witnessed dumping by the company, seeing and feeling petroleum in the water, finding petroleum inside gutted fish and game animals, and observing a sharp reduction in size of fish and plants.[6] They report developing symptoms such as hemorrhaging, urinating blood, nausea, vomiting, and pains in the vagina, bowels, abdomen, chest, and bones.[7] “Several deaths have occurred in the communities following ingestion of apparently contaminated water.”[8] A schoolteacher interviewed said he thought the children were “slower” in school.[9] One man said that they have to walk four to five hours to get fresh water.[10] The CSOs supporting the Achuar believe Occidental broke the laws protecting human rights and the environment in order to cut costs and boost profits.

Two of the Achuar delegation attended the annual general meeting as voting shareholders of the company: Tomas Maynas Carijano, elder of the Achuar, and Andrés Sandi Mucushua, president of a group that represents the Achuar in Peru, called FECONACO,[11] (Federación de Comunidades Nativas del Río Corrientes). They wore traditional dress to the meeting, no doubt creating a strong impression on the other shareholders. This meeting was not the first time that the Achuar have sought to make Occidental redress the alleged harms, but was a public display and the culmination of years’ long attempts to get the company to assume moral responsibility by cleaning up their toxic mess. The LA Times reports that the Achuar “met with Occidental repeatedly over the years” and had finally “set a deadline for a response from the oil company.”[12] The same article reports that the spiritual elder appeared to place the responsibility with CEO Ray Irani, saying to him: “We are dying because of the contamination you caused in our lands. We cannot eat the fish; we cannot drink the water. It’s all toxic. You, Oxy, need to clean up the mess you left.”[13] Before the meeting, the other proxy-holding shareholder Sandi Mucushua said about the pollution in their Ancestral homeland: “We have seen our rivers, farms, and animals sicken and we have become ill and died from the contamination. It is important that Oxy shareholders are told what Oxy has done in the Peruvian Amazon.”[14] A probable purpose of Maynas’ and Sandi’s appearance at the shareholders meeting was to urge shareholders to hold the CEO accountable for the company’s actions. It is also likely that the appearance of the two leaders at the meeting bore a ceremonial significance to the Achuar, as the chiefs of the Amazon met with the chiefs of Occidental. For the past two years, the Achuar have continued to attend the annual general shareholders meetings to press their case as voting members of the company.[15]

The company has not assumed moral or legal culpability for the deaths and illnesses among the Achuar or the degradation of their ancestral lands. Instead it has expressed doubts about the scientific basis of the Achuar’s claims.[16] A company spokesman, Richard Kline, has indicated to reporters that Occidental has obtained no evidence that its activities in the Amazon could have caused the alleged damage, and accuses the CSOs of using “inflammatory” rhetoric and “unsupported conclusions” to make their case.[17] Irani, who The Guardian reports to have been the second highest paid CEO in the U.S. in 2006 at £160m per annum,[18] said to Maynas and the activists: “We want to meet and get the facts from you.”[19] In 2008, Occidental raked in over $20.2 billion in revenues, and $5.4 billion in profits.[20]

The company no longer operates in the region where these communities of the Achuar reside, having divested itself of operations and turned control over to an Argentine firm Pluspetrol.[21] Although Occidental still retains drilling rights to that area of the Peruvian Amazon, it attempted to sell those rights the previous year in a deal that fell through. Activists claim that the attempt to sell was probably due to the imminent threat of a class action lawsuit, which the publication of their CSOs’ report heralded.[22] Company spokesman Kline contends that the company is not liable for past actions since Pluspetrol agreed to “assume all obligations for past, present, and future operating conditions” when Occidental sold them the operations.[23] The Achuar and the CSOs do not believe this deal absolves Occidental of moral responsibility and legal liability for the toxic pollution it emitted into the Peruvian Amazon in the thirty years it did business there.

Occidental has since secured the right to operate in Block 64, a territory adjacent to Block 1AB, where other Achuar communities reside. In “A Legacy of Harm,” the report on Block 1AB, the CSOs allege that Occidental has secured these rights against the wishes of the Achuar and has manufactured consent from some of the people in this region.[24] Occidental’s 2004 Social Responsibility Report states that in Peru, “the company has worked hard to establish open communication and mutual trust with the communities. Oxy’s interface with indigenous communities is a complex issue and an interesting story.”[25] The company report says that Occidental, working with the government of Peru, aims to benefit the Peruvian people by providing them access to the modern amenities that economic development provides, such as electricity, healthcare, and education.[26] It claims to respect rights and traditional values and to be conducting its operations with environmental responsibility.[27] However, the report expresses the following concern: “Some activists are working in these communities to promote ideological views that development should be categorically rejected.”[28] The report also mentions workshops held with some members of the Achuar community of OSHAM in Block 64 to discuss further development and includes quotes from those who are happy to have gained educational opportunities as a result of Oxy’s involvement in the region.[29] It claims that OSHAM has been able to pay for scholarships with payments it has received from the company in exchange for giving the company the right to explore in Block 64.[30] More troubling are the current military conflicts between indigenous activists and the Peruvian government playing out as we speak in the Bagua province. Indigenous communities have been protesting the government decision to commence oil extraction in this northern corner of the Peruvian Amazon. To date, over forty indigenous protestors have been killed by Peruvian police.[31] The legacy continues.

The case against Occidental is perhaps the lesser known parallel to the case against Chevron/Texaco currently pending in Lago Agrio, Ecuador. Plaintiffs against Chevron seek $27 Billion for environmental cleanup, healthcare, and restitution to victims of oil pollution. Plaintiffs allege that Texaco (acquired by Chevron in 2001) allowed over 16 billion gallons of toxic waste water to leak into the Amazon, neglected prevailing oil industry standards that required it to reinject waste into the ground, and subsequently failed to clean up its share of the waste pits it agreed to clean in a 1992 agreement with the Ecuadorean government. The company paid $40 million dollars in the nineties to clean up 161 waste pits as part of a legal deal that would absolve it of all future liability. Meanwhile, there have been at least 1,400 documented deaths and numerous other cases of cancers that the plaintiffs believe are linked to exposure to petroleum and oil byproducts like benzene. The people who live near the oil wells that have been seeping waste byproducts into the ground and into the water supply have no other option but to drink and bathe in the contaminated water. Chevron claims that these deaths are attributable to poor sanitation and the dumping of sewage into the water supply rather than to exposure to petroleum and its byproducts. Both sides have issued scientific investigations into the health problems, and each side has arrived at vastly different conclusions about the pollution levels in the water supply.

An additional problem is that Texaco operated in partnership with PetroEcuador, with the Ecuadorean national oil company holding a 62.5% stake between the years 1977 and 1992. Texaco founded the town of Lago Agrio in the 1960s to begin oil drilling and Ecuador remained under military rule for much of the time Texaco did business there. Chevron claims that it has satisfied its legal obligation to the people of Ecuador, and that the remainder of the burden should fall on PetroEcuador. Chevron believes the indigenous communities and CSOs should file suit against PetroEcuador instead of Chevron and argues that the only reason they are not pursuing PetroEcuador is that they can get more money out of a U.S. company. CSO activists point to the fact that the Ecuadorean government has been far from democratic, using the profits from oil extraction to benefit the wealthy elite, and pay off foreign debts assumed under coercive pressure by international lending institutions. They also point out that the pollution that continued after Texaco exited the region was due to having to make use of the outdated equipment Texaco sold PetroEcuador.

The legal battle has been playing out over the course of 15 years, with the case first having been filed in New York. Judge Jed Rakoff declared that the case should be tried in Ecuador since alleged violations occurred there rather than in the U.S. While it was initially appealing to Texaco to have the case tried in Ecuador whose legal system and political institutions are far weaker than in the United States, the subsequent election of the populist leftist Rafael Correa has lent greater support to the plaintiffs’ case. The Chevron case is perhaps the largest environmental case in history, and is expected to be settled within the year in favor of the plaintiffs against Chevron. For its part, Chevron intends to appeal the case and has marshaled an army of lobbyists in Washington to push the company’s position that it is receiving an unfair trial in Ecuador. It also intends to make use of international arbitration to combat an undesired outcome.

The Problem

These cases pose several ethical problems. First, they point to the issue of who should be held responsible for the protection of human rights and the environment. Second, they point to issues regarding the appropriate mechanisms for accountability that would enable us to hold the relevant parties responsible for their actions. Third, they point to questions about the appropriate trade-off between indigenous rights and environmental preservation on the one hand, and the rights to economic development of the poor and the energy needs of the rich on the other hand.