TEXACO ON TRIAL
for background and related information.
by EYAL PRESS
Like virtually everyone else in San Carlos, Ecuador, Hugo Urena never
imagined that danger might lurk in the shiny black liquid that began
appearing in the water near his home roughly thirty years ago.
"The creeks and rivers around here were suddenly full of
oil," Urena told me from the front porch of his modest,
tin-roofed farmhouse in San Carlos, a small community nestled in the
heart of the Ecuadorean Amazon, "and everyone thought, 'oil is
good.' Many animals, especially cows, would drink the water and die.
And we had no idea why."
Thirty years later, Urena and 30,000 other Ecuadoreans, including
several indigenous tribes, are among the plaintiffs in a
billion-dollar class-action lawsuit that the people of the Amazon have
filed against one of America's largest oil companies, Texaco. They
accuse Texaco of causing vast destruction to the Oriente, a
spectacular stretch of rainforest that dips beneath the Andes
Mountains to form the eastern half of Ecuador. It's a unique--and
potentially historic--case, not only because corporations like Texaco
have rarely had to answer to people like Hugo Urena but because the
plaintiffs, convinced there is no way they can obtain justice in
Ecuador, are attempting to sue Texaco in a US district court in lower
Manhattan, a short drive from the company's headquarters in White
Plains, New York. The case, like the current effort to bring Gen.
Augusto Pinochet to justice, represents a bold attempt to expand the
scope of international human rights law, only this time the target is
not a dictator but a US corporation.
Thousands of miles from White Plains, beyond the wild flowers, potted
plants and coconut trees at the entrance to Urena's home, it is easy
to make out the most enduring physical monument to Texaco's presence
in the Amazon: a large, rusting metal pipeline, built in the early
seventies, that cuts across the center of the Oriente. Through this
pipeline, which snakes its way across the Andes to the port of
Esmeraldes, Texaco, working in partnership with Petroecuador, the
state oil company, pumped more than 1.4 billion gallons of crude out
of Ecuador--and in the process created one of the great environmental
catastrophes of modern history.
According to Judith Kimerling, whose 1991 book, Amazon Crude,
first exposed the impact of oil development on the Oriente, the Trans-Ecuadorean
Pipeline alone has accounted for oil spills totaling 16.8 million
gallons, a figure that dwarfs even the Exxon Valdez spill in Alaska.
On top of this, during its twenty years of operations in Ecuador,
which ended in 1992, Texaco discharged an estimated 4.3 million
gallons of highly toxic "produced water" per day into
the Oriente, ignoring oil industry standards that call for reinjecting
the wastes back into the ground. Instead, these viscous byproducts,
laden with heavy metals and cancer-causing hydrocarbons, were dumped
into hundreds of open, unlined pits that now pockmark the region and
have been leaching into local streams and rivers ever since. When the
pits threatened to overflow, Texaco simply burned off the excess,
sending dark plumes of smoke into the air that would eventually result
in what the locals came to know as "black rain."
In Shushufindi, a short drive from Urena's home, I waded through a
marsh of shoulder-high bushes that opened onto one of these pits. The
smell of petroleum, sharp and overwhelming, filled the air as I neared
the edge of an enormous pool of bubbling black liquid. One hundred
feet away fresh water trickled through a creek, but just barely, for a
thick bed of black-gold petroleum waste had formed along the banks.
The entire Oriente is crisscrossed by these streams and rivers, part
of the reason the watershed is home to more than 10,000 varieties of
plants, fishes and birds, many of which are now endangered. The
tropical biologist Norman Myers has called the Oriente "the
richest biotic zone on earth...a kind of global epicenter of
biodiversity." In the area I traversed, everything was eerily
still, the fish and birds nowhere in sight and the vegetation stained
black with petroleum residue.
For indigenous tribes like the Cofan, who were displaced from their
land as Texaco carved roads and pipelines through the jungle, the
poisoning of streams and rivers has amounted to, in Kimerling's view,
nothing short of "ethnocide." For Hugo Urena, it has meant
living with the fear that by drinking the local water, he is literally
risking his life. "Everyone around here is dying," he says,
ticking off the names of neighbors suffering from chronic skin
lesions, headaches and, as in the case of Urena's recently deceased
father, a wave of deadly cancer. Dr. Miguel San Sebastian, who lives
one hour south, in the town of Coca, is completing a study of health
patterns in Oriente communities affected by oil development. His
preliminary analysis of the cancer rate among men in San Carlos
indicates that the risk of larynx cancer is thirty times higher than
that for men of comparable age in Ecuador's capital, Quito; the risk
of stomach cancer is five times higher; and the risk of cancer overall
is 2.3 times higher.
Had all this happened in, say, Texas or California, the grounds for a
lawsuit would be clear. But can an American company be sued in a US
court for environmental crimes committed overseas? Six long years
after the Texaco case was originally filed, in 1993, there are no
answers yet. In order to sue Texaco in the United States, the
plaintiffs must persuade a US court that Texaco's actions in Ecuador
constitute fundamental human rights violations that the world should
not allow to go unpunished. They must, in addition, convince the court
that they cannot possibly obtain justice in Ecuador. If Federal Judge
Jed Rakoff, whose ruling on the case is expected soon, accepts these
arguments, the impact will be felt not only in White Plains but in
corporate boardrooms throughout the world.
The origins of the Texaco lawsuit date back to the spring of 1991,
when Cristobal Bonifaz, a lawyer who lives in Massachusetts but was
born and raised in Ecuador, was helping his son, John, also now a
lawyer on the case, move out of his college dormitory at Harvard.
"John handed me this publication of Oxfam America," says
Bonifaz, a handsome, silver-haired man who speaks English in short,
staccato sentences with a heavy Spanish accent, "and in it was a
paragraph on what Texaco had been doing in the Amazon. 'Here,' John
told me, 'this is your country; why don't you go do something about
Bonifaz proceeded to make a round of phone calls to various people he
knew in Ecuador, including numerous government ministers (he was well
positioned to do so, being the grandson of a former Ecuadorean
president, Neptali Bonifaz, and the son of one of the country's most
celebrated conservationists). "Everyone told me it's not true,
it's all lies," Bonifaz recalls. But then he spoke to Manuel
Pallares, the brother of his former sister-in-law, who had witnessed
the impact of Texaco's oil production firsthand when he spent two
years living in the Oriente with the Secoya tribe, now among the
parties to the lawsuit. Bonifaz was soon aboard a plane, on his way to
"Once I got there, I was flabbergasted," says Bonifaz.
Before becoming a lawyer, Bonifaz had spent twenty years working as a
chemical engineer for Du Pont, so he knew something about the
byproducts of petroleum production. "I recognized right away that
what Texaco was doing--dumping the produced water straight into the
environment--is not something that's done anywhere." On his
second trip to the region, in 1993, Bonifaz brought along a team of
scientists from Harvard who took water samples from thirty-three
sites. Their tests revealed polycyclic aromatic hydrocarbons, crude
oil toxins linked to cancer, at levels up to one hundred times the
amount permitted in the United States.
Bonifaz was committed to bringing a case against Texaco. The question
was, how? As he was well aware, Ecuador's judicial system does not
even recognize the concept of a class-action lawsuit and has no
history of environmental litigation whatsoever. (The system is also
notoriously corrupt; a poll by George Washington University found that
only 16 percent of Ecuadoreans have confidence in their judiciary,
lower than in any other Latin American country except Guatemala.) It
was then that Bonifaz spoke with the Philadelphia-based law firm Kohn,
Swift & Graf and learned about the Alien Tort Claims Act.
Passed by Congress in 1789, the ATCA was originally designed to grant
noncitizens access to US courts in cases involving a breach of
international law, including treaties (the so-called "law of
nations")--in part, at least, so that the United States could
safeguard its global reputation by holding its own residents
accountable for inflicting wrongs on aliens. For much of US history,
the statute was rarely invoked, but in the late sixties Peter Weiss, a
lawyer with the Center for Constitutional Rights, stumbled upon it as
he was searching for grounds to bring a lawsuit against the US
military officers responsible for the My Lai massacre in Vietnam.
Weiss never filed the case, but a few years later he and CCR did bring
a successful lawsuit on behalf of the father and sister of Joel
Filartiga, who was tortured to death by a Paraguayan police official
who later fled to Brooklyn.
Since the Filartiga case, more than twenty successful lawsuits have
been filed under the ATCA on behalf of foreigners against human rights
abusers who have ventured onto US soil. In 1986 Kohn, Swift & Graf
filed a successful suit under the ATCA against the Philippine dictator
Ferdinand Marcos. When Joseph Kohn reviewed the facts of the Texaco
case with Cristobal Bonifaz, he reasoned that if such suits could be
brought against former police officials and dictators for
international human rights violations, why not against US
corporations, which, after all, enjoy the status of individuals in the
US legal system? Shortly thereafter, in November 1993, they filed
Other victims of corporate abuse have since done likewise. In the past
two years, the Alien Tort statute has been used to file lawsuits
against Unocal (for alleged use of slave labor and forced expulsion of
villagers in Burma), General Motors (for alleged collusion in human
rights abuses committed during World War II in Nazi Germany) and,
recently, a half-dozen apparel companies, which are charged with
knowingly benefiting from forced labor in the sweatshops of the island
What's unique--and potentially precedent-setting--about the Texaco
case, says Bonifaz, is that it is the first lawsuit to claim that a
company's environmental practices so depart from acceptable
international standards that they constitute a violation of the
"law of nations." Until now, the ATCA has been confined to
cases of torture, genocide and other more conventional human rights
abuses. But in the Filartiga ruling, Bonifaz notes, the court
emphasized that international law is not static but should be
interpreted "as it has evolved and exists among the nations of
the world today."
In a motion to dismiss the suit, Texaco firmly denies that the law of
nations applies to this case, arguing that, unlike torture and
genocide, environmental misdeeds are defined differently from country
to country. "Environmental debates rage today among developed and
underdeveloped nations," Texaco contends. "What some nations
prohibit, others encourage, and environmental priorities vary
Yet while nations do have a right to set their own environmental
standards, a growing body of international accords--from the 1972
Stockholm Declaration, signed by more than 100 countries, including
Ecuador and the United States, to the 1992 Rio Declaration--identifies
the right to a clean and healthy environment as a fundamental and
inalienable human right, and prohibits both state and private actors
from recklessly endangering "the environmental needs of present
and future generations," as Rio states. It's true that
enforcement of these conventions has been rare--but not unprecedented.
"After the Persian Gulf war," notes J. Martin Wagner of the
Earth Justice Legal Defense Fund, which has filed a brief in support
of the plaintiffs' claims, "the UN Security Council relied on
customary international law to impose liability on Iraq for spilling
into the Persian Gulf less than one-quarter of the amount of oil that
Texaco is estimated to have spilled in the Oriente, and for having,
like Texaco, polluted the air by burning oil."
In April 1994, in what appeared to be a historic ruling, Federal
District Judge Vincent Broderick cited the Rio Declaration and other
conventions in ruling that he would accept jurisdiction over the
Texaco case. One year later, however, Judge Broderick died of cancer,
and the case was passed along to Jed Rakoff. A former partner at a New
York firm that has represented Texaco in patent litigation (though he
did not personally handle those cases), Judge Rakoff, it seems safe to
say, is unlikely to be as receptive to the environmental claims in the
lawsuit. In a 1991 New York Law Journal essay titled
"Moral Qualms About Environmental Prosecutions," he railed
at US courts for prosecuting corporate officers for environmental
violations carried out by their subordinates--violations that,
according to Rakoff, they are often not aware of. "To imprison a
morally blameless person in the name of social policy always appears
in hindsight as an act of barbarity," Rakoff charged.
There can, however, be little doubt that Texaco was aware that its
production methods in the Amazon departed from accepted standards. In
a phone interview Texaco spokeswoman Faye Cox insisted that the
company's methods, including its dumping of produced water,
"adhered to prevailing industry standards.... How you manage
produced water is done case by case." Yet in testimony before
Congress in 1971--one year before Texaco began drilling in the Oriente--the
oil industry's own leading spokesman, Richard Byrd, general counsel
for the Interstate Oil Compact Commission, informed Congress that
dumping tainted water "into unlined pits is not considered to be
an acceptable practice." What's more, according to Bonifaz,
"Texaco actually owned several patents on technology that made
the reinjection of produced water cheaper. How can the company that
owned these patents claim it did not know what it was doing?"
Texaco has justified its actions by noting that its operations were
conducted "in compliance with Ecuadorean law" and indeed
with the full approval of the Ecuadorean government. Yet Texaco's
contract specifically required it to "adopt suitable measures to
protect the flora, fauna, and other natural resources, and to prevent
contamination of water, air, and soil," an obligation reaffirmed
in Ecuador's civil code. And while there is no doubt that the
Ecuadorean government, as Texaco's partner, shares responsibility for
what happened in the Amazon, there is evidence that Texaco played the
preponderant role. Manuel Navarro, a former high-level official at
Petroecuador who later founded the country's Environmental Protection
Unit, has stated in an affidavit that Texaco "designed, built,
and managed all the installations and facilities required to extract
and transport the crude oil" and also "trained national
technicians and transferred its technology to the Ecuadorean state oil
"The fact that Texaco was in partnership with the government of
Ecuador by no means releases the company from responsibility,"
says Arthur Berney, an expert on international law at Boston College.
Indeed, in the recent case that was filed against Unocal, which is now
proceeding to trial, a US court rejected Unocal's claim that as a mere
partner of the Burmese government, the company could not be held
accountable for violating international law.
In Texaco's view, even if all of the plaintiffs' allegations were
true--which the company vehemently denies--the case should still not
be tried in the United States. Like nearly all companies that have
been sued in this country for their actions abroad, Texaco has sought
to have the suit sent back to Ecuador on the grounds of forum non
conveniens, arguing, in essence, that holding the trial in the
United States, thousands of miles from where the alleged misconduct
took place, would be inconvenient. "The Ecuadorian judicial
system," the company explains, "is fully capable of fairly
adjudicating this issue."
In late March I traveled to Lago Agrio, an oil town perched on the
Oriente's northern edge (where Texaco first struck oil in the Amazon),
to inspect the courthouse where the trial will take place if the case
is returned to Ecuador. After repeated inquiries, I discovered that
there is no courthouse in Lago Agrio. I did find the judge who would
be assigned to the case, Dr. Luis Naranjo Jara. A polite, soft-spoken
man, Jara works out of a small office on the third floor of a brown
cinderblock building off the main road in town, a building that, he
informed me, has one computer, no fax machine, no Internet connection
and no law clerks to assist with paperwork.
Since Ecuador has no equivalent of a class-action lawsuit, how, I
asked Jara, would he be able to handle the tens of thousands of cases
that would likely flood his office were the suit sent back to Ecuador?
He smiled politely and explained that in such a situation he would
have to work "late into the nights." Would the government of
Ecuador increase his office's budget if this were to happen?
"No," he flatly replied.
"It's very clear why Texaco wants to have this sent back to
Ecuador," says Bonifaz, who, as it happens, wrote his master's
thesis on the issue of forum non conveniens. Bonifaz points to
the affidavit submitted by Dr. Alberto Wray, a noted authority on
Ecuador's judiciary and now the government's top legal adviser. Judges
in Ecuador, Wray noted, almost never compel witnesses to testify if
they don't want to and require all questions to be submitted in
writing, which would make it virtually impossible to extract any
meaningful confessions from Texaco's officers. In addition, if the
company wished to withhold any subpoenaed documents from the court in
Ecuador, it could simply do so and pay a paltry $180 fine--whereas in
the United States such an action would likely land the company's
officers in jail.
Beyond the inadequacies of Ecuador's judicial system, there is another
reason, in the plaintiffs' view, the trial should be held in New York.
What the plaintiffs intend to prove, after all, is that the decisions
that led to the destruction of the Oriente were made not in Ecuador
but at Texaco's headquarters in White Plains.
Texaco strongly denies this, explaining that the company
"operates through subsidiaries" that "are empowered and
held responsible for managing their businesses wherever they are
located," as Faye Cox told me over the phone. Yet documents
obtained by the plaintiffs' lawyers in the initial round of discovery
(allowed by Judge Broderick) indicate that even minor expenditures of
$5,000 had to be approved in New York. Bertha Margarita Yepez Silva,
an Ecuadorean citizen who worked for Texaco from 1973 to 1989 and was
responsible for overseeing issues related to workers' health, says
that all the department heads in Ecuador sought authorization
virtually "every day" from their Texaco superiors in the
United States, for everything from minor expenditures to the
enrollment of employees in scholarships for technical training
programs. Given all of this, it would be odd indeed if nobody in White
Plains knew about--or gave the orders for--the dumping of oil
production waste, which, if reinjected into the ground, would have
cost the company up to three extra dollars for every barrel that was
extracted over the twenty-year period.
Despite all of this, in November 1996 Judge Rakoff dismissed the
lawsuit on forum non conveniens and other grounds. The case
seemed destined to return to Ecuador. But last October the US Court of
Appeals for the Second Circuit, in a unanimous decision, reversed
Judge Rakoff's ruling, instructing the district court that the lawsuit
could not be dismissed until it was clear that an adequate
"alternative forum" existed.
In his spacious, wood-paneled office in Quito, Ramon Jamanez,
Ecuador's current attorney general, refused to speculate on where the
case would eventually be tried. But Jamanez, an amiable, round-faced
man who chose his words very carefully when we spoke, did allow that
it was no mystery why Texaco wished to have the trial held in Ecuador.
"It is true--it is a fact--that the US justice system has more
experience with class-action lawsuits and therefore is more likely to
bring a powerful lawsuit against Texaco," he conceded. "That
is a fact."
That Jamanez should acknowledge as much is a testament to the
remarkable grassroots movement that has arisen in Ecuador in the wake
of this case. When the Texaco lawsuit was originally filed, some
within the Ecuadorean government went to great lengths to have it
dismissed. In a letter to the State Department, Ambassador Edgar
Teran wrote that holding a trial in the United States would threaten
Ecuador's national sovereignty and deter foreign investment (this in a
country heavily burdened by debt and deeply dependent on oil exports).
Two years later, the Ecuadorean government cut a deal with Texaco on a
$40 million cleanup operation and last year signed an agreement
relinquishing further claims against the company.
In response to the government's efforts to reach an accommodation, an
array of grassroots organizations in Ecuador, including the Frente, an
umbrella group representing indigenous groups in the Oriente, and the
Center for Economic and Social Rights, based in Quito, have staged a
barrage of protests, pointing out that the deal signed with Texaco had
no input from local people and covered a mere fraction of the cleanup
costs, which independent estimates have placed at more than $600
million for the pits alone. In January, after protesters occupied the
attorney general's office and demanded that he support the plaintiffs'
right to pursue their claims, Ramon Jamanez sent a letter to Judge
Rakoff in which he explained that Ecuador, despite its settlement with
Texaco, will fully support whatever decision US courts should reach.
When I met Jamanez, he reiterated this pledge and also made note of a
measure recently passed in Ecuador, Law 55, which stipulates that once
Ecuadorean citizens bring a lawsuit in a foreign domain, Ecuador's
courts will not accept the suit on remand. If Judge Rakoff sends the
suit back to Ecuador, Jamanez strongly implied, Ecuador will likely
send it right back to the United States.
Time, of course, is not on the plaintiffs' side. Six years after the
Texaco suit was filed, the people of the Oriente have seen little
substantive change on the ground. Down the road from Hugo Urena's
home, I stopped and spoke with Margarita Molina, a thin, brown-haired
woman who lives directly across from one of the production sites once
operated by Texaco in San Carlos. Sighing, she told the familiar story
of pigs and cows dying after drinking water from the pits, and she
pointed to the legs of three of her daughters, who were all born with
a birth defect that has made them so severely bowlegged they are
virtually unable to walk. Strange ailments like this have become
common in the Oriente, and the cause, a doctor has told Molina, could
well be oil pollution. At the very least, Molina would like to see
Texaco pay for providing the region with fresh drinking water, but the
look on her face, hard and dejected, suggested she was not expecting
the company to be forced into action anytime soon.
Despite how long and undoubtedly frustrating the process of attempting
to hold Texaco accountable has been, many of the people I encountered
in the Oriente vowed to battle on. "We will fight Texaco till the
end," promised Manuel Silba, an organizer with the Frente who
traveled to New York this past January with a group of indigenous
leaders, their heads adorned in traditional feathered crowns, to
attend the latest hearings. The battle against Texaco has clearly
taken on enormous symbolic meaning in a country where, as in so much
of the world, corporations have routinely done as they pleased.
"This case has brought to light the whole problem of corporations
using double standards in the Third World," says Paulina Garzon
of the Center for Economic and Social Rights, in Quito. Like other
activists, Garzon is concerned that the lawsuit could raise false
expectations--and meanwhile shift attention away from ongoing problems
in the Oriente to Bonifaz and the lawyers--but she says the effect has
already been overwhelmingly positive. "Now," she explains,
"we find that the first thing companies say when they come to
Ecuador is that they are not like Texaco."
Bonifaz echoes this point. "We've already had people from
Occidental and Mobil communicate to us that they will not dump the
produced water--they're aware this could bring a lawsuit," he
says. "The principal issue in this case is that corporations have
to stop looking at the rest of the world as a frontier like the old
Wild West. If you go to the maquiladoras in Mexico, there are
cases of incredible pollution all along the border. How many of them
violate the law of nations, I don't know, but the point is that real
people live in these countries, and US corporations have an obligation
to use the same care there as they do at home. That is what this
lawsuit is ultimately about.
Eyal Press is a New York-based writer. For more information,
go to www.thenation.com.
Background and Related Information
The Center for Economic and Social
- CESR was one the first organizations to protest economic injustice
as a violation of international human rights. Its basic aim is to
"mobilize people to confront the policies that keep them
poor." Among other projects, CESR has worked with a broad
coalition of local groups to hold Texaco accountable for damaging
Amazonian communities. It has implemented scientific missions, human
rights campaigns and a community-based monitoring system.
Exploration in the Amazon
- Abya Yala's web site contains "Fueling Destruction in the
Amazon," which includes an interview with Dr. Luis Macas, a
Quechua Indian who is president of the Confederation of Indigenous
Natives of Ecuador (CONAIE). Macas has been spearheading indigenous
protests against Texaco for years. The site offers several articles
on Texaco's Ecuadorian involvement and resistance to it.
The Coalition for
Amazonian Peoples and Their Environment
- Founded in 1994 and based in Washington DC, the Amazon coalition
supports indigenous claims to the Amazon and "urges
environmental groups to develop policies and strategies that value
the Amazon as a biosphere of flora, fauna and human life."
Their site posts "Amazon Update," their monthly
publication, as well as images from the Amazon and opportunities to
contribute and/or volunteer.
& Graf, P.C.
- One of the legal firms representing the Ecuadorian plaintiffs. Its
site has a summary and full-length version of the US Second Circuit
Court of Appeals' decision to reinstate the class-action suit filed
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