1.   The case, Aguinda v. ChevronTexaco, began on November 3, 1993 when 30,000 people from Ecuador’s Amazon filed a class action suit against Texaco in New York federal court alleging massive oil contamination of the rainforest. For ten years, Texaco argued before various U.S. judges that the case should be transferred to Ecuador’s courts. During this time, Texaco lawyers submitted numerous expert affidavits praising the fairness of those courts. The U.S. federal judge granted Texaco’s motion and removed the case to Ecuador on the condition that Texaco submit to jurisdiction there and be bound by any ruling. In the meantime, Chevron bought Texaco in 2001 and thereby assumed its liabilities and the defense of the case.

2.  The case is historic for three primary reasons: a) it is the first time indigenous people from the rainforest have succeeded in forcing an American oil company to accept jurisdiction in their own courts; b) it concerns what experts believe to be the most extensive oil-related contamination on the planet; and, c) the amount of damages – estimated by a court appointed special master to be as high as $16.3 billion – could lead to the largest civil judgment in history. 

3.  The basic facts are not in dispute. Texaco was the exclusive operator from 1964 to 1990 of an oil concession that covered 1,700 square miles of pristine rainforest – an area roughly the size of Rhode Island.   Chevron has admitted that Texaco dumped over 18.5 billion gallons of toxic produced water into streams and soil in the rainforest during this time – about 4 million gallons daily at the height of its operation.[1]   It is also not disputed that Texaco gouged over 900 unlined, open-air waste pits out of the jungle floor and filled them with deadly toxins that were run off via a piping system into nearby streams and rivers. The company also burned or vented millions of cubic meters of natural gas into the atmosphere without adequate controls. All three of these practices violated customary industry standards in existence at the time in the U.S. Produced water was supposed to be re-injected into the ground; pits were to be built with impermeable liners so groundwater and soil would not be contaminated; and gas, which contains deadly dioxins, was not to be burned into the environment. The company also spilled at least 17 million gallons of crude from its pipelines. Overall in Ecuador, the amount of crude Texaco either deliberately dumped or spilled from its pipeline amounts to roughly 30 times the amount discharged in the Exxon Valdez disaster.

4.   By refusing to replicate environmentally safe practices required in the US at the time, it is estimated that Chevron saved an estimated $1 to $3 per barrel. According to the court’s special master, the cost savings derived from using the three main sub-standard operational practices has created an “unjust enrichment” to Chevron shareholders of $8.3 billion (in 2008 dollars). The plaintiffs are asking that this entire amount be disgorged from the company in addition to the roughly $8 billion in actual costs that it would take to remediate the environmental damage and compensate the affected communities – hence, the $16.3 billion damages assessment. Although Chevron has never revealed the cumulative profits Texaco made in Ecuador, the plaintiffs estimate them to be as high as $30 billion. 

5.   A court-ordered report conducted by 15 independent scientists under the supervision of Richard Cabrera, an Ecuadorian professor and geologist, found that all 94 Chevron oil production sites examined during the trial had illegal levels of toxins in either surrounding soils or water, or both.[2]  Some samples produced levels of deadly toxins thousands of times higher than Ecuadorian and U.S. standards. In a startling finding, Cabrera concluded that Chevron itself had produced samples at almost every site inspected, thus proving its own culpability. Cabrera found Chevron to be the primary responsible party and concluded that damages were between $7 billion and $16.3 billion.   That figure excludes the cost of cleaning up groundwater contamination, which ultimately could drive the amount of damages significantly higher. Even if all of this money is collected, it will be impossible to repair much of the environmental and social damage.

6.   Texaco ran roughshod over the five indigenous groups that inhabited the region. One of the groups (the Tetete) has disappeared while four others (the Cofan, Secoya, Siona, and Wuaroni) are struggling to survive after having lost 95% or more of their ancestral land to oil operations and squatters from other parts of Ecuador who took over their territory. Further, the contaminated water and soil makes it virtually impossible for the indigenous groups to survive in the rainforest; the traditional lifestyles have been all but decimated. Testimonies gathered during the trial from elders demonstrate that Texaco workers would lie about the oil, claiming it was full of vitamins and would cause no harm. Several woman reported they were raped by oil workers. The main town in the region, Lago Agrio, means “Sour Lake” and was named by Texaco after a town in Texas where the company was founded.

7.   In a representative finding, Cabera concluded that the soil around one well site operated exclusively by Chevron (Lago 35) had Total Petroleum Hydrocarbons (TPHs) at 414,414 parts per million--an astounding 4,144 times higher than the typical US soil clean-up norm of 100 ppm. (TPHs are harmful chemicals that derive from crude oil and include the carcinogen benzene.)   Chevron itself found TPHs in its own sampling hundreds of times higher than Ecuadorian and U.S. norms.

8.   Texaco’s practices in Ecuador had been outlawed in several U.S. states for decades before they were implemented. In 1939, Texas banned open-air toxic waste pits; Louisiana outlawed the dumping of oilfield produced water to fresh water bodies in 1942. In Ecuador, the dumping of produced water violated several laws dating to 1921 that prohibit contamination.[3] Chevron also violated its operating agreement with Ecuador, which required it to “employ modern and efficient machinery” and to “avoid contamination of waters, airs, and lands.”

9.    Despite evidence of extensive contamination and the expenditure of an estimated $200 million on its defense of the legal case, Chevron to this day has not conducted even a single health evaluation of residents in the rainforest where it operated. Numerous independent, peer-reviewed academic studies have found cancer rates were anywhere from 1.7 to four times greater for people living in the area where Texaco operated than for people living outside the area.[4] One study found that the risk for spontaneous miscarriage was 2.3 times higher among woman living near contamination; another found alarming rates of childhood leukemia.Chevron blames the health problems in the region on feces in water and poor personal hygiene.[5]

10.  Chevron relies primarily on a technical defense. In 1995, in a maneuver to dismiss the lawsuit then pending in U.S. federal court, Texaco claims it paid $40 million for a clean up in exchange for receiving a legal release from Ecuador’s government for any environmental claims the government had against the company. (Texaco sought the release even though it claimed it had not caused environmental damage.) The release was granted before any remediation work was actually done. Texaco’s “remediation” consisted of dumping dirt into a small number of waste pits without first cleaning out the toxins, the equivalent of trying to treat skin cancer with make-up. Under this process, dirt was dumped only at about 10% of all the pits Texaco built. For example at one of the so-called remediated sites operated exclusively by Texaco, Parahaucu 3, the TPH level today is 2,065 times higher than allowed in the US and 206 times higher than allowed by Ecuadorian law.   The special master generally found no difference in levels of toxins between pits Texaco “remediated” and pits that had not been remediated.   In essence, the Texaco remediation was a sham.

11.  In any event, Chevron's release from the government has no legal relevance to the Aguinda case because it clearly carves out individual claims held by the people of the region. Ecuador’s government refused to include such claims in the release despite prodding from Chevron’s negotiators. That said, Chevron – with no legal basis -- still tries to claim in lobbying to U.S. government officials that the very existence of the Aguinda case in Ecuador’s courts violates its rights under the release. 

12.  Chevron’s current legal arguments in the Aguinda case often demonstrate a profound disrespect for the people and laws of Ecuador. Ecuador law currently prohibits TPHs in the soil at amounts greater than 1,000 ppm (considered a lax standard for polluters), while the mean clean-up standard in the U.S. is 100 ppm. Yet Chevron has urged the Ecuadorian court to adopt the astonishingly high standard of 10,000 ppm for TPH – 100 times higher than the soil clean-up standard in its home state of California and in numerous U.S. states. Chevron has not explained why it used a 5,000 ppm standard (still a grossly inflated standard) in its “remediation” contract but insists that the court adopt a 10,000 ppm standard during the trial. Some critics have called the Chevron practice of using different clean-up standards for different groups depending on where they live or their ethnic status as environmental racism.

13. In 1990, when its operating contract expired, Chevron turned over its flawed production and operational infrastructure to Petroecuador, Ecuador’s national oil company. Although Petroecuador has made efforts to improve the deficient practices inherited from Chevron, there is little doubt that many improvements are still needed.  PetroEcuador, though not a defendant in the Aguinda case, still bears responsibility to the people of the region to conduct oil operations without contaminating the environment. That said, under the legal theory of joint and several liability, Chevron can be held fully responsible for not only the contamination caused during the time it operated the oil fields but also for the contamination produced since by the continued use of the slipshod operational infrastructure that it installed plus continuing releases from its old operations. Chevron’s own audit of its environmental practices concluded that spills that occurred after 1990 (which is when Chevron handed over operations to Petroecuador) that were caused by Chevron’s “improper equipment design” were still the responsibility of Chevron.[6]

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