Environmental Justice Case Study: Texaco’s Oil Production in the Ecuadorian Rainforest
Ecuador
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Background
The history of petroleum development in Ecuador began in 1878 when the National Assembly of Ecuador granted exclusive rights to M.G. Mier and Company for the extraction of petroleum, tar, kerosene and other bituminous substances. Years later in 1937, the government of Ecuador granted Shell Oil the first oil concession in the Oriente region of the Amazon rainforest (“History of Operations,” 2000). This area encompasses about 200 square miles in the northern part of the Amazon region, one of the most fragile ecosystems in the world. It is inhabited by eight indigenous tribes who live mostly in small villages along the river courses and it holds five percent of all plant species on Earth (“El Oriente,” 2000 and “Why a Lawsuit?” 2000). Many of the 10,000 species of plants, fishes, and birds are now endangered (Press, 1999). It also contains enormous oil reserves, and in 1964, a Texaco subsidiary called Texaco Petroleum Company was invited by the government to explore for and produce oil in the region through a partnership with the government (“History of Operations,” 2000). Texaco’s role in the operation was to design the wells, build the pipeline that would transport the oil across the Andes Mountains to the Pacific Coast, and manage on behalf of a consortium that included Petroecuador, Ecuador’s state-run oil company (“Why a Lawsuit?” 2000). Texaco’s involvement in the project was governed by a 28-year concession agreement and by 1977 Petroecuador became the majority owner and Texaco Petroleum a minority owner. Finally, in 1992, Texaco’s concession ended and Petroecuador became the full owner. Over their years in Ecuador, Texaco provided jobs for 840 employees and 2,000 contract workers. The amount of money generated by the consortium that was received by the country represented more than 50 percent of their gross national product during
that period (“History of Operations,” 2000).
Unfortunately, oil drilling was not completely beneficial to the country. Ecuador had no experience in the oil industry and relied heavily on Texaco to design and build the infrastructure for the extraction of oil and transportation to the market. The governmental leaders trusted that Texaco would use at least the minimum of technological standards it used drilling in the United States and around the world. However, Texaco decided to dispose of the byproducts of drilling, called “production water,” by dumping it into unlined pits dug out of topsoil next to each of the 300 wells (“Why a Lawsuit?” 2000 and Talbot, 1999). “Production water” is water trapped in the geological formation that is brought to the surface when oil is produced. This wastewater is highly toxic and millions of gallons were dumped into the pits. Texaco’s policy in other areas it operates is to reinject the wastewater into the ground where it cannot endanger the environment. The amount of savings Texaco achieved through this procedure total $5 billion over the time of its operations in Ecuador (“Why a Lawsuit?” 2000).
The waste pits used by Texaco are the approximate size of a small pond and when these pits filled up, oil workers would drain them into streams and rivers nearby. This water carried dangerous chemicals, such as Benzene, Toulene, Xylenes and Polyciclic Aromatic Hydrocarbons, chemicals known for their connections to cancer. Additional gallons of raw crude oil, more toxic than wastewater, were also dumped or put into the pits. Over the years these toxins leached into the ground and overflowed into the wetlands and rivers that flow into the Amazon River (“Why a Lawsuit?” 2000). To this day, about 4.3 million gallons of the wastewater reaches Amazon tributaries every day (Talbot, 1999).
Another hazardous activity performed by Texaco was the burning of excess crude oil and wastewater, resulting in the occurrence of what local people refer to as “black rain.” The waste was dumped into landfills and spread over dirt roads in order to maintain them and control dust (“Yana Curi Report,” 2000 and “Why a Lawsuit?” 2000). Texaco did not maintain the pipeline network properly, and this resulted in further discharges of crude oil into the environment (“Why a Lawsuit?” 2000). It is claimed that more oil has been dumped into the rainforest than was spilled by the Exxon Valdez into Prince William Sound (Talbot, 1999).
Texaco claims its savings were much smaller than $5 billion and that they compiled with environmental laws of Ecuador and international petroleum industry standards. They also claim to have developed new industry standards for operating in sensitive environments (“Residents take Texaco…,” 2000 and “History of Operations,” 2000). At the end of their concession, two audits were conducted to assess the impact of Texaco on the local environment. The result of these audits was $40 million in remediation money given by Texaco in 1995 (“Remediation,” 2000). However, they failed to build water treatment plants, medical facilities, and reforestation projects promised as part of the cleanup agreement (Markels, 1999).
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Problem
Among the consequences of Texaco’s drilling in Ecuador is an ongoing and critical health crisis. Health workers have documented an increase in problems such as rises in cancer rates, miscarriages and birth defects. A study conducted by the Ecuadorian Union of Popular Health Promoters of the Amazon (UPPSAE) found higher occurrences of spontaneous abortions, dermatitis, headaches, and nausea in people of the Oriente. These serious health effects are attributed to the results of the oil producing operations conducted by Texaco. Another study, performed in 1993 by The Center for Economic and Social Rights (CESR), demonstrated that “residents of the Ecuadorian Amazon are exposed to levels of oil-related contaminants that significantly exceed internationally-recognized safety limits, and that dermatoses and other skin problems related to oil contamination were found in residents near oil facilities. Such levels of exposure, of course, suggest an increased risk of more serious health problems, including cancers (“Response to Claims,” 2000).” The Department of Tropical Medicine and Hygiene of the University of London produced a study that documented dramatically increased rates of cancer among the populations in the areas where Texaco drilled (“Yana Curi Report,” 2000). Specifically, the study provides evidence that residents in the oil zone experience suffer 30 times more larynx cancer, 18 times more bile duct cancer, 15 times more liver and skin cancer, and five times more stomach cancer (Talbot, 1999). In February of 1999, a community of 500 people where Texaco had operated several wells reported 15 cases of cancer. In another community four women all under 40 reported uterine cancer. It is rare to find a child in the region who does not have some type of skin rash due to exposure from toxic chemicals (“Why a Lawsuit?” 2000).
Perhaps the health effects can be better illustrated by the voices of the people from the region. Hugo Urena of Shushufindi believes that by drinking the local water, he is risking his life. “Everyone around here is dying,” he says and reports the names of neighbors suffering from chronic skin lesions, headaches and a wave of cancer, the fate suffered by his father. Dr. Miguel San Sebastian, who lives in the town of Coca, an hour south of Shushufindi, has been studying the health patterns in Oriente communities affected by oil development. He reported that the cancer rate is four times higher in San Carlos than for men of comparable age in Quito, the capital of Ecuador (Press, 1999). Humberto Piyaguaje, a Secoya Indian from the Oriente, reported seeing his people suffer from strange maladies that their culture had never seen until oil moved into the region. “There are times when they bathe in the river, their body gets full of rashes, and that never happened before. Recently I went bathing in the river, and my body got rashes. The people have a lot of problems, but they don’t know (the causes) because they don’t have doctors. Especially the ones that have the most problems are the children, because they love to be in the river. They have vomit and skin problems and stomachaches and diarrhea a lot,” Piyaguaje recounted through a translator (Markels, 1999).
Texaco’s oil production in Ecuador has damaged the once relatively untouched rainforest through deforestation, soil erosion, and reduced biodiversity (Gualinga, 1999). Three indigenous tribes were almost eradicated-the Cofan (who inhabit the first place Texaco drilled), the Secoya, and the Siona. The cultures and traditions developed by these tribes are linked to the rainforest and its abundance of resources. The toxic waste dumped by Texaco has endangered their lives so seriously extinction has become a real threat. The Cofan numbered approximately 15,000 when wells were first build on their land in 1971. Since then, their population has been reduced to a few hundred due to disease and forced migration to find work in the cities. The Secoya and the Siona have seen similar decreases in their populations. All of these tribes depend on the rivers for their food, hygiene, and transport. Due to the amount of pollution, the rivers now have been rendered useless for any of the above three activities. The pollution also flowed down the Amazon and affected the livelihood and health of the residents that live along the Napo River in Peru (“Q & A,” 2000).
These indigenous groups and others have claimed this is a case of environmental racism, and that the pollution is a part of a history of racial discrimination at Texaco. They site a 1996 lawsuit that Texaco discriminated against its minority employees that was settled for $176 million (Souter, 1999). Texaco maintains that they have acted responsibly and used standard industry practice. They also believe there exists no reliable evidence in support of the above claims. “We have seen no credible scientific evidence to support those allegations. What we have seen in anecdotal,” says Faye Cox, a Texaco spokeswoman (Talbot, 1999).
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Key Actors
· Cristobal Bonifaz
Lawyer, born and raised in Ecuador who lives in Massachusetts, that launched a class-action lawsuit on behalf of Oriente residents in U.S. District Court in New York (Talbot, 1999).
· Judge Jed Rakoff of Federal District Court in Manhattan
Judge who ruled against the Ecuadorian people in their motion to have their case against Texaco tried in the United States instead of in Ecuador (“Q&A,” 2000).
· Amazon Communities, Indigenous and Environmental Leaders, and Environmental Groups
People affected by the activities of Texaco in the Oriente region of Ecuador. They serve as plaintiffs on the class-action lawsuit against Texaco, and have implemented many other strategies in their fight against Texaco (“Q&A,” 2000).
· Texaco
Texaco was the third largest U.S. oil company as of 1992, with 1992 revenues of $37 billion. They operate refineries, petrochemical plants, and international trading and transportation network, and service stations/convenience stores around the world as well as drilling for oil in 24 countries. They operate 14,000 outlets in the United States alone (“Make an Example of Texaco,” 2000).
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Demographics
Ecuador is located in western South America, bordering the Pacific Ocean at the Equator between Columbia and Peru. Its total area is 283,560 km2 and the climate is tropical along the coast becoming cooler inland. Natural resources the area contains are petroleum, fish, and timber. The environment is subject to frequent earthquakes, landslides, and volcanic activity. It is also experiences deforestation, soil erosion, and periodic droughts.
The population is 10,461,072 (estimated in July 1993) and the population growth rate is 2.07%. The birth rate is 26.54 births per 1,000 population, and the death rate is 5.8 deaths per 1,000 population. The infant mortality rate is 40.8 deaths per 1,000 live births. The ethnic divisions are as follows: mestizo (mixed Indian and Spanish) 55%, Indian 25%, Spanish 10%, and black 10%. The labor force by occupation is 35 % agriculture, 21% manufacturing, 16% commerce, and 28% services and other activities.
Ecuador has significant oil resources and rich agricultural areas. However, growth has been uneven due to natural disasters, fluctuations in global oil prices, and government policies designed to curb inflation. Sixto Duran-Ballen, the new President, has had a more favorable attitude towards foreign investment than the former President. Ecuador has executed trade agreements with Colombia, Peru, Bolivia, and Venezuela and has also applied for GATT membership. The GDP is $11.8 billion and the national product real growth rate is 3% (1992). The inflation rate is 70% (1992) and exports are $3.0 billion (1992). Petroleum constitutes 42% of commodities exported. Ecuador’s external debt is $12.7 billion (1992) (“Ecuador,” 2000).
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Strategies
Residents in the oil production zones have been voicing their concerns about contamination from the very beginning. The Indian communities and farmers of the Oriente have complained to the different governments and Texaco repeatedly about the situation. They have demanded a better quality of life, attention to their basic needs, technical assistance and cleaning up of the contamination (“Yana Curi Report,” 2000).
In 1991 a book was published by Judith Kimerling, an American, called “Amazon Crude.” It detailed the problem of contamination by oil in the Oriente and elevated the problem to the status of an international environmental problem. This book was the first time clear evidence was presented to the media, government and oil companies that supported the claims of the communities. She showed how oil development can have a negative impact on the land and the people in each phase of its life cycle (“Yana Curi Report,” 2000).
Several health studies have been undertaken by such organizations as the Ecuadorian Union of Popular Health Promoters of the Amazon (UPPSAE), the Center of Economic and Social Rights (CESR), and the Department of Tropical Medicine and Hygiene at the University of London.
In 1993 a group of Amazon Indians and farmers representing 30,000 affected individuals took legal action in New York against Texaco, claiming Texaco saw the extraction of more than 1 billion barrels of oil from the Oriente during its 20-year partnership with Petroecuador. At the same time, they allege that Texaco also spilled half a million barrels of crude into the rainforest and dumped billions of gallons of wastewater into the rivers. They also created hundreds of unlined waste pits to hold the sludge instead of reinjecting it into the Earth, a more environmentally sound technology (Markels, 1999). They are asking for $1.5 billion in damages (Lawrence, 1999). Texaco has disputed these claims, but the plaintiffs have used an 18th century law in an effort to get the case tried in the United States instead of Ecuador (Markels, 1999). The case is preferred to be tried in the United States because Ecuador’s judicial system does not even recognize the concept of a class-action lawsuit and has no history of any environmental litigation (Press, 1999). The law being referred to is the Alien Claims Tort Act (ATCA), which was enacted by Congress in part to prosecute pirates of the high seas who sought refuge on the shores of the United States. It was revived in the early 1980s to allow foreigners to go after human rights abusers that had fled from their home countries into the United States. If the decision were to be made in favor of Ecuador, it would encourage other foreigners to sue U.S. based multinational corporations here in the United States (Markels, 1999). The judge deciding the venue, Jed Rakoff, dismissed the cases in 1996 and 1997. The appeals court overturned his decision, and he reheard the case in February of 1999 (Lawrence, 1999 and Souter, 1999). Currently, he has not made a decision as to where the case will be tried. However, he cannot dismiss the case again; it either must be tried in the United States or in Ecuador (Bonifaz, 2000).