30,000 Ecuadorians Want Canada to take $10 Billion from Chevron to Clean Up the Amazon January 13, 2015 Justin Ling by Justin Ling Toxic waste is burned off in the Lago Agrio oil pits in Ecuador. All photos via Lou Dematteis Crude Reflections Two decades. Seven countries. Hundreds of lawyers. Scores of public relations specialists. Billions of dollars. Tens of thousands of barrels of oil. Thats the scorecard of the Lago Agrio case. In what may well be one of the worlds more complex and far-reaching lawsuits, the legal battle between 47 Ecuadorians, represented by their dogged American lawyer, and one of the worlds biggest oil companies has stretched into its second decade. And the venue for one of its most important showdown is, surprisingly, Canada. Whats left in the middle of this battle is the environmental disaster known as the Amazon Chernobyl. A consortium made in heaven The story begins in 1964, when Ecuadors military junta decided to get into the oil-drilling business. Looking to boost a flagging economy, they partnered with American-based Texaco Petroleum to develop the Lago Agrio region of the Amazon. They set up a consortium—state-owned Petroecuador would own two thirds of the partnership, and Texaco, which would later be acquired by Chevron, controlled the rest. Texaco was chiefly responsible for the dirty work of extracting the oil and doing away with the toxic wastewater. They developed the area over 30 years, drilling hundreds of wells and filling nearly 1,000 pits full of toxic waste in an area that is, otherwise, largely untouched. In the process, they spilled roughly 17 million gallons of crude oil, thanks to pipeline ruptures. The return on the project has been some $25 billion. The consortiums contract was up in 1992, and Petroecuador bought out Texacos one-third stake in the company. Texaco agreed to clean up a third of the wells and pits it had helped create. A Texaco report says it remediated 161 of the 430 oilfield pits and seven oil spill areas for which it was responsible: a proportion that was equal to their share in the consortium. The whole package ran the company about $40 million. By way of comparison, a ruptured line in Michigan, which unloaded less than 900,000 gallons (roughly five percent of the size of the Lago Agrio spills), had a price tag of $1 billion. The Ecuadorians lawyers are asking the Canadian court to enforce a judgment that has been declared illegal in both an international tribunal and an American court. Beyond that, Chevron doesnt actually have a penny in Canada—everything is owned by its Canadian subsidiary, which runs a sizeable operation in Albertas oil sands. Under Canadian law, companies cant be held liable for the actions of their subsidiaries. In theory, the principle should also work in reverse. Chevron Canada, however, sends billions back to its American parent every year. If the Ecuadorians win the case, even if they are forbidden from sending repo guys to seize Chevrons equipment in Alberta, they might be able to seize the cross-border profit before it reaches Chevrons hands.
Posted on: Mon, 19 Jan 2015 04:20:20 +0000
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