Only recently have oil companies
come under scrutiny as possible human rights violators
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(AR) QUITO, Ecuador -- An Organization of American States delegation to
Ecuador's eastern Amazon rainforest sent to investigate human rights
violations has turned up widespread concern about two U.S. oil companies
-- Texaco and Maxus.
Environmentalist and indigenous groups have protested unregulated
development of oil resources, but it is only recently that oil companies have
come under scrutiny as possible human rights violators.
The eastern "Oriente" of Ecuador is a 32-million acre natural
reserve of tropical rainforest situated at the headwaters of the Amazon
river network. The region contains one of the most diverse collections of
plant and animal life in the world and includes many endangered species.
It is also home to 95,000 indigenous people in eight different
ethnic groups as well as 250,000 recent immigrants, who have followed the
oil roads east in search of land and work.
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In 1994, the President of Ecuador announced a plan to double the
amount of rainforest to be opened up to oil exploration
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Oil development
in this South American Andean country has followed
a pattern that is familiar in most developing countries. The first
barrels were extracted in 1972, with the industry dominated by
multinational corporations -- led by Texaco until it left in 1992.
There is negligible government oversight and scant attention paid
to non-economic matters. Oil development has taken a predictable toll on
the environment and the welfare of the Oriente's inhabitants but the
strength of opposition to it has been less predictable.
Conflicting interests came to a head in 1994 when, in January,
president Sixto Duran-Ballen's government announced a plan to double the
amount of rainforest to be opened up to oil exploration. A coalition of
environmental and indigenous groups immediately challenged the
government's plan and local protesters took over the offices of the
Ministry of Energy and Mines in Quito.
The groups demanded that there be no new oil development until the
oil companies remedied past environmental damage, and urged the government
to impose stricter controls on the industry.
The protests were joined by international groups led by Rainforest
Action Network (RAN) and Oxfam America; and, last March, the New
York-based Center for Economic and Social Rights (CESR) released a report
documenting dangerous levels of toxic contamination and related health
problems in Ecuador's Amazon, charging the government in Quito with human
rights violations.
In a parallel matter, U.S. Judge Vincent Broderick in New York
sided with Ecuadorian plaintiffs who had brought suit against Texaco.
Broderick granted access to Texaco's files to establish the parent
company's responsibility for damages caused by the company's Ecuadoran
operations.
Just a few months ago, Ecuador's minister of energy Francisco
Acosta rejected a Texaco-commissioned environmental audit of the damages
caused by the company and argued that it was too narrow. He then
threatened to bring his own suit against Texaco if the company refused to
negotiate in good faith, but suddenly Acosta's aggression towards Texaco
lost wind.
He was impeached recently by the country's congress
when it was discovered he allegedly had arrived at a secret, personal
agreement with Texaco to drop the matter.
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"Texaco is viewed as the chief human rights violator"
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The OAS
investigation and the use of human rights allegations
against Texaco and other private companies have challenged traditional
human rights dogma with claims that more than civil liberties are being
threatened. The government is only one of many essential actors.
"When we indigenous peoples talk about the environment, we are not
just talking about trees, rivers and butterflies," Rafael Pandam, vice
president of the Confederation of Indigenous Nationalities of Ecuador
(CONAIE), said. "We are also talking about human
beings, and when we talk of human rights, we're not just talking about the
right to free speech. We're talking about political, economic, social and
cultural rights of all peoples."
Pandam's vision of human rights is supported by international and
Ecuadoran law. In 1972, the U.N. General Assembly unanimously endorsed
the principle that "man has the fundamental right to freedom, equality and
adequate conditions of life, in an environment of a quality that permits a
life of dignity and well-being."
Ecuador's constitution provides for the right "to live in an
environment free from contamination," although most commentators here
think that's a joke.
Economic and social rights, like the right to a healthy
environment, implicate corporate activities here in Ecuador more directly
than traditional civil and political rights would.
"Texaco is viewed as the chief human rights violator," explains
Paulina Garzon of the Quito-based Accion Ecologica. "Texaco has invaded
the forests, killed the rivers and animals, created a health disaster and
destroyed indigenous groups like the former Tagiere tribe," he charged.
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At least one group has completely disappeared in the
wake of Texaco's activities
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Texaco's
involvement in human rights abuses in Ecuador has been
documented in "Amazon Crude," a book written by Judith Kimerling and
published by the National Resources Defense Council in 1991. Kimerling
estimated that Ecuadoran oil operations discharged 4.3 million gallons of
toxic wastes into the Oriente's environment every day.
Until 1990, Texaco controlled 90 percent of oil operations in the
area, and a later report confirmed that wastes created a potential health
catastrophe, documenting toxic contaminants in drinking water at levels
reaching 1,000 times the safety standards recommended by the U.S.
Environmental Protection Agency.
Local health workers report increased gastrointestinal problems,
skin rashes, birth defects and cancers, ailments they believe to be
related to the Texaco contamination. But these charges are intertwined
with parallel social and cultural assaults on indigenous groups.
A statement published by the Federation of Indigenous Communities
of the Ecuadoran Amazon (CONFENAIE) said "more than two decades ago,
Texaco entered indigenous territories and exploited petroleum, destroyed
the forests, contaminated the rivers, soil and environment, made the fish
and animals disappear and then came the colonists and our territory was
occupied by foreigners."
Contact with outsiders and the vital loss of land has broken down
many traditional bonds, brought malnutrition and new diseases and pushed
the indigenous communities onto the bottom rung of a hostile market
economy where alcoholism and prostitution, endemic to the Oriente's oil
towns, are among the most visible signs of the social and cultural
deterioration.
The World Bank has described the region's socio-economic state as
"calamitous."
A 1987 study by the Ecuadoran government warned that oil
development led by Texaco had placed the local indigenous groups "at the
edge of extinction as a distinct people."
At least one group, the Tetetes, has completely disappeared in the
wake of Texaco's activities, and the Cofan population has been reduced from
15,000 to about 300.
"Since the 1950s, almost every aspect of the Cofan culture has
experienced change. Their houses, tools and weapons, traditional medical
practices, the behavior of community members, and their traditional food
taboos have been drastically affected," notes a World Bank Report. "As a
result of outside contacts and pressures, the Cofan have suffered a
process of social disorganization, rapid acculturation and near cultural
extinction."
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A law granted legal title
to any person that cleared the rainforest and put it to "productive use"
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Texaco rejects
the allegations, saying that development of oil
resources is essential to Ecuador's development -- oil revenues now
account for approximately half of the government's revenues.
Michael Trevino, vice-president of Texaco Petroleum (Texpet),
notes that Texaco's operations brought $24 billion to the Ecuadoran
government over the course of the last 18 years. He denies that Texaco's
operations have seriously damaged the Ecuadoran Amazon.
"Texaco did not ravage the Amazon region. We think we made a very
significant contribution. We have international standards to which we
hold ourselves accountable," Trevino says, pointing to an environmental
audit commissioned by Texaco and the Ecuadoran state oil company that
found only "moderate to high" levels of contamination in 60 percent of the
former Texaco sites in the Oriente.
That audit recommended a limited program of remediation costing
less than $30 million. According to former minister of energy and mines
Francisco Acosta, Texaco offered to pay 33 percent of any cleanup costs,
based on its ownership share of the consortium.
Strangely, through 1990, Texaco was the consortium's sole
operator, but held only a one-third ownership stake. "Texaco is not
interested in dollar amounts; the issue is commencing with the cleanup,"
Trevino said.
"To allege that Texaco is responsible for the local population's
subsequent use of the roads for colonization and agricultural development
is both dishonest and unrealistic. As a private company, Texaco would
have no authority or right to restrict citizens of Ecuador from using
these roads or to interfere in Ecuador's national programs and/or planning
for colonization of the region," Trevino said.
In Texaco's favor, the government of Ecuador's government has in
fact encouraged settlement along Amazon oil roads to relieve pressure on
land elsewhere in the country. And a "Wastelands Law" granted legal title
to any person that cleared the rainforest and put it to "productive use."
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Oil roads and lack of government
regulation have opened the door to land speculators,
agro-industrialists, ranchers and loggers
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The resulting
deforestation has been exascerbated by the poor
quality of Amazon soils and inappropriate farming techniques, encouraging
continual clearing of new land. Oil roads and lack of government
regulation also have opened the door to land speculators,
agro-industrialists, ranchers and loggers, who place even greater pressure
on the land.
An international boycott of Texaco has been organized by Accion
Ecologica and Rainforest Action Network in the United States and Europe,
and their political lobbying appears to have had an effect on Texaco's
willingness to negotiate an agreement -- the groups estimate proper
cleanup costs and fair compensation will run to several billions of
dollars, dwarfing the figures that Texaco had previously been considering.
Texaco has also been under pressure from the U.S. Congress and the
Clinton administration to find a equitable solution, but the company is
facing a major challenge on the legal front in the form of a $1.5 billion
lawsuit brought in a New York federal court on behalf of 30,000 Ecuadoran
plaintiffs. The case was filed in November 1993 by a team of lawyers
headed by Cristobal Bonifaz and Joseph Kohn of Kohn, Naft and Graf of
Philadelphia.
"Texaco can't be brought before international human rights
tribunals and there is no chance of finding justice in Ecuador, so we
filed a suit in its own backyard," says Bonifaz. "We don't care how it's
achieved, but Texaco must be forced to make good on the damage it caused
to the people and environment of the Oriente in Ecuador."
The most crucial question raised by the suit is whether foreign
plaintiffs alleging health and environmental damages in their country
should be allowed to sue a U.S.-based company in the United States.
When Indian plaintiffs tried to sue Union Carbide for the Bhopal
disaster, they were sent back to India under a doctrine, known as forum
non conveniens, which gives U.S. judges wide discretion to decide that a
case would be more suitably heard in the courts of another country.
An earlier suit filed by attorney Judith Kimerling in Texas was
quickly dismissed by a federal judge, who viewed Ecuador as a more
appropriate forum.
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"The problem has now spread to Peru and has snowballed into an
international catastrophe"
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But
the plaintiffs in the New York case argue that New York is the
appropriate site for the case because Texaco made the critical decisions
that resulted in the damages to the plaintiffs at its headquarters in
White Plains, New York. They also maintain that the Ecuadoran courts are
incapable of fairly hearing the case against Texaco because of widespread
corruption, racism and incompetence.
More importantly, they argue, the Ecuadoran courts have no
meaningful authority over Texaco since Texaco operated in Ecuador through
its Texpet subsidiary, which now has assets of less than $10 million.
Not bound by the Texas court's decision, Judge Vincent Broderick has
granted plaintiffs the opportunity to depose Texaco's employees and to
review Texaco documents before he decides whether to accept the case. In
a 25-page March 1994 memo denying Texaco's petition to have the case
dismissed, Judge Broderick suggested the case will proceed if plaintiffs
can show that decisions made in Texaco headquarters directly led to
environmental and health problems in Ecuador. His memo also takes
seriously the plaintiff's use of an 18th Century statute allowing
foreign plaintiffs to sue U.S.-based defendants for violations of
international law.
Were he to grant jurisdiction under the so-called "Alien Tort
Statute," it would mark a major advance in the field of environmental law
and would have far-reaching implications for U.S. corporations operating
abroad.
This past summer, Judge Broderick granted Texaco a temporary hold
on discovery while the company seeks a settlement with the government. On
December 22, 1994, Texaco submitted to the court a "Memorandum of
Understanding" the company reached with the Ecuadoran government.
Texaco's Trevino says the agreement "establishes a mechanism for the
implementation of environmental remedial work."
He adds that Texaco also proposes to establish schools, fish farms
and health clinics. But the agreement does not bind Texaco to any
specific amount of compensation and the corporation has only agreed to put
up a $5 million bond to settle individual claims in Ecuador. Without
consent of the plaintiffs, it is unclear whether the judge would consider
the agreement sufficient grounds for dismissal of the suit.
Less than a week after Texaco's filing, the plaintiffs' attorneys
filed a new suit in front of the same judge on behalf of 25,000 Peruvians
who complain of similar damages related to Texaco's former Ecuador operat-
ions.
"The problem has now spread to Peru and has snowballed into an
international catastrophe," says Bonifaz. All of the rivers in which the
Center for Economic and Social Rights found oil-related contamination
eventually flow through Peruvian territory.
Trevino calls the case "frivolous," claiming that the plaintiffs
live more than 150 miles away from Texaco's former sites and that Texaco
stopped operating the sites almost five years ago.
Judge Broderick has agreed to consolidate the two cases, which
should make it more difficult to dismiss the suit on the grounds that
Ecuadoran courts are the more suitable forum.
The OAS investigation in Ecuador, undertaken by the Inter-American
Human Rights Commission, has at first concentrated on a different U.S. oil
company, Maxus Energy.
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Diseases, water contamination, breakdown of traditional cultures
and loss of land has followed oil development
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In 1990,
the Sierra Club Legal Defense Fund filed suit to
block the plans of Maxus's former consortium partner in Ecuador, Conoco,
to build a road and begin oil development in the Yasuni National Park.
Conoco abandoned the project soon after in the face of heated protest from
indigenous and environmental groups, but Maxus went ahead with the road
and began oil production in the summer of 1994.
The Yasuni National Park is one of the most biodiverse territories
in the world, designated by the United Nations as a World Biosphere
Reserve. Ecuadoran lawyers initially succeeded in blocking the
Conoco-Maxus operation under a constitutional provision giving the right
to a contamination-free environment and under laws prohibiting
exploitation of protected areas.
One month after, however, the constitutional court in Quito
reversed itself, in the face of what one judge later described as intense
pressure from the government and the oil industry, and ordered a stop to
the Conoco-Maxus plans.
The environmentalists' suit had said that oil development poses a
serious threat to indigenous groups in the area, particularly 1,200
Huaorani Indians. Filed before Maxus had begun to develop the Yasuni, it
describes diseases, water contamination, breakdown of traditional cultures
and loss of land that has followed oil development in other parts of the
country.
"Oil development will have especially severe effects on the
Huaorani," specialist lawyers working on the case contend. "Their
population is small, dispersed and isolated from the outside world."
The complaint is supported by testimony from Dr. William T.
Vickers, an anthropologist with 26 years of experience in Latin America.
The road into the Yasuni "will be the bridge for a spontaneous invasion of
the land..."
"Deforestation will begin immediately," predicts Vickers. "Many of
the Huaorani will contract new diseases and many will die. Many will be
disheartened and depressed by these losses. Among the survivors, some
will become alcoholics and others will sustain themselves by begging from
the whites. It's wholly possible that the Huaorani culture and language
will disappear within two or three generations," he charged.
Texas attorney Judith Kimerling says "Huaorani lands that have
been used by the Petroecuador-Texaco consortium for oil production
activities are so degraded by pollution, colonization and deforestation
that the Huaorani can no longer live there."
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Maxus
carved a 94-mile road, opening up vast stretches of
rainforest formerly accessible only by helicopter and boat
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While Maxus
is not as easy a target for the environmentalist
groups as Texaco, it's taken steps to avoid the same sort of political
damage that Texaco suffered in Ecuador. On the environmental front, Maxus
has managed to assuage some critics through its program of reforestation
and its use of modern drilling practices, including the reinjection of
production wastes (as opposed to Texaco's practice of leaving them in
unlined pits and spreading oil residue on roads).
The company claims to be spending $60 million on environmental
protection, which is a significant figure by Ecuadoran standards. But
given the ecological richness and fragility of the territory, many
environmentalists object to any sort of development in the area, and are
particularly concerned by Maxus's policy of denying outsiders access to its facilities to independently verify company claims.
Even the best environmental policies provide little defense
against the primary threat to this highly-sensitive region. Colonization
and deforestation has inevitably followed the oil roads, and Maxus has
carved a 94-mile road into the Yasuni, opening up vast stretches of
rainforest formerly accessible only by helicopter and boat.
"Maxus and the government have promised to keep the colonists out,
but what happens when Maxus leaves and there is no more oil? Who will
stop them then?" one Huaorani representative asked.
Amazon Indian's fears are exemplified by the fact that over the
course of eight years of oil development in the northern Oriente, the
influx of colonists more than tripled the local population from 74,000 to
260,000.
A 1982 government census showed the Oriente was growing at twice
the rate of the rest of the country, and critics say that plans by Maxus
and the government in Quito to prevent colonization by establishing
army-run roadblocks are unsustainable and unrealistic.
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Because of endemic political corruption, monitoring
is in the hands of the corporations themselves
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There is
good news, however. Where Texaco allegedly ignored
indigenous inhabitants of the Amazon rainforests, Maxus has actively
sought their support, signing an unprecedented "Friendship Agreement" with
the Huaorani in 1993.
Maxus's directive to its employees reads "Maxus is a guest in the
home of the Huaorani, the rainforest. For this reason we must respect
their culture, customs and territory."
If they do indeed make contact with indigenous people, employees
are told to announce "Waponi, amigos Huaorani, boto Maxus," or, "Greetings
Huaorani friends, I am Maxus."
Maxus has also contracted government health and educational
services, and has begun supplying medical and dental care, educational
materials, school rooms and health clinics. It's also employing
indigenous men, providing funds for a political organization and plying
community leaders with personal gifts.
While it may have temporarily won Maxus the support of the
Huaorani Nation of the Ecuadoran Amazon (ONHAE), that group has formally
distanced itself from the demands of the Confederation of Indigenous
Organizations of Ecuador (CONAIE) for a 15-year moratorium on oil
development.
Last April, during a conference of indigenous organizations held
in the Amazon, Maxus flew a group of Huaorani leaders to Quito, where they
met with government officials and the press to denounce Maxus's critics.
Maxus's overwhelming presence in the social and cultural affairs
of the community has alarmed outsiders. Given the government's proven
inability or unwillingness to regulate oil companies and the lack of
transparency in Maxus's internal operations, environmentalist critics
worry about ceding it such fundamental government functions as health and
education.
"It's no longer clear who's supposed to do what," environmentalist
attorney Neil Popovic said. "The Ecuadoran government has abdicated its
responsibilities to private companies and has made no effort to regulate
them."
Because of endemic political corruption, government agencies
remain seriously understaffed and underfunded, leaving monitoring
essentially in the hands of the corporations themselves.
Critics say the Huaorani have no effective recourse if Maxus fails
to comply with its promises. The "Friendship Agreement" between the
Huaorani and Maxus is written in Spanish, a language that few Huaorani
either speak or read, and essentially it makes no firm commitments,
environmentalists say.
"Maxus is under no obligation," explains spokesperson Tom
Sullivan. "We're damned if we do, damned if we don't. If we weren't
providing anything we'd have a whole other group of people condemning us."
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Nevertheless,
critics remain skeptical. They view Maxus's
gestures as hollow, and they're emphasizing the larger political questions
of accountability, asking whether corporations such as Maxus or Texaco
(whose annual revenues of $42 billion dwarf Ecuador's $12 billion GNP)
should not be treated differently from private citizens; the contention is
that they should be held more accountable to the public in the way that
public bodies are.
"Ecuador's indigenous and environmental organizations have pushed
human rights groups to reexamine their exclusive focus on government
actors," says Roger Normand, an environmentalist policy director. "When
multinationals assume the role of government, they must be held more
directly responsible for the welfare and human rights of their
constituents, the people they effectively govern."
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