Texaco's Ecological Terrorism of the Ecuadorian Amazon

Making the area safe for oil extraction

by Suzanne Simon

In These Times magazine, October 2000


From 1972 until 1992, the U.S.-based Texaco Corporation spearheaded oil production activities in the Ecuadorian Amazon. They guided exploration activities, built roads and a trans-Ecuadorian pipeline, which runs from the oil town of Lago Agrio to the port city of Esmeraldas. These two decades of oil extraction and production have resulted in levels of environmental contamination and destruction which are shocking even to a generation accustomed to hearing about the acts of atrocity and imperialism committed by U.S. and multinational corporations throughout the world. After exploiting the majority of Ecuador's oil reserves, Texaco intentionally left behind an environment contaminated by over three hundred unlined oil pits, which are full of toxic and carcinogenic wastes. These pits-and the commonplace occurrence of oil spills-were led to contaminate rivers, streams, and ground water. They also left an entire population ridden with chronic and acute illnesses, including cancer, in a population where it was previously nonexistent, and children born with genetic deformities. For all of this, Texaco has refused to claim any responsibility.

The Ecuadorian Amazon

The Ecuadorian Amazon is a sparsely populated region that comprises roughly half of all Ecuadorian territory. The people who live there are almost entirely indigenous and colonos-colonists who moved to the Oriente during the oil boom. Colonos form a universally poor and formerly landless population that has come from other regions of Ecuador. Following the failed land reform attempts of 1964, the first attempt to reform Ecuador's feudal land-labor relations, colonos were granted tracts of land in exchange for colonization, in a policy similar to the American Homestead Act of 1861. The Ecuadorian government's motives for doing this lay in colonizing the land by civilizing or pushing the indigenous groups who lived there deeper into the forest thereby providing a labor supply for the oil industry and, in general, making the area safe for oil extraction activities.

Until the oil boom years of the early 1970s, the Ecuadorian Amazon was virtually impenetrable. Tropical indigenous groups, such as the Cofan, Siona-Secoya, Shuar-Jivaro, and Huaorani, had successfully defended their territories against the incursions of the Inca and Spanish Empires, as well as attempts by the Ecuadorian government throughout the l9th century to colonize the region. The first sustained foreign presence in the region occurred at the turn of the 20th century during the rubber boom. At that time, rubber barons brought Quechua peoples down from the mountains to work as slaves, indentured laborers, and to serve the encomienda system. The largest indigenous population of the Ecuadorian Amazon are now the lowland Quechua.

The first oil company to go to Ecuador in search of oil reserves was Royal Dutch Shell during the 1930s. Being unsuccessful in the Amazon and having discovered oil in St. Elena, they moved to the coast to exploit oil resources there. The largest foreign oil presence to date, therefore, has been Texaco-or as it likes to refer to its phantom subsidiary, "Texpet." Oil is the primary natural resource extracted from the Oriente, and it was Texaco's oil production activities that changed the landscape and demographics of the region.

Texaco in Ecuador

Texaco came to dominate the oil production industry by taking a hard line against the nationalist and populist military regime of General Rodriguez Lara. The Rodriguez Lara regime seized control of the generally unstable Ecuadorian government in 1972 in order to pursue oil production from a national populist and anti-imperialist position, and to ensure that the fruits of the oil boom would be properly invested in the national infrastructure of schools, roads, and hospitals. CEPE (Coporacion Estatal de Petrolera Ecuadoria) was established in order to negotiate with and learn the tools of the trade from Texaco, and to build an Ecuadorian professional class of oil experts.

The optimistic sentiments of this nationalist regime did not last long under Texaco pressure. The strong nationalist stance of the Rodriguez Lara regime had created conditions, which smaller corporations could not meet, leaving Texaco in a dominant position. Texaco consolidated its position of power and influence over the terms of production by enforcing an oil embargo in 1975, pushing the Ecuadorian economy into a severe financial crisis and its first period of heavy borrowing. CEPE subsequently bought out the shares of Texaco-Gulf (the other major competitor) leaving CEPE as a majority shareholder, but still in a subordinate position vis-a-vis Texaco, and Texaco as the foreign oil company to monopolize the industry. In this way, Texaco forced the Ecuadorian government to conform to its standards as the only oil producer in the nation, and squelched nationalist ambitions in a matter of a few short years. Although since the early 1970s CEPE held a nominal majority shareholder position (Petroecuador is the main oil company now, having assumed all of Texaco's holdings in 1992 as per contract), it was widely recognized that control of the oil industry in Ecuador rested in Texaco's hands, both because of their powerful position as a global corporation-Ecuador was in need of foreign investment-and because only Texaco had the knowledge, expertise and technology to pursue oil production.

While it is true that the Ecuadorian government shares blame with Texaco for the environmental contamination in the Oriente region, clearly Texaco made the decisions of where and how to drill and what technology to use. The Ecuadorian government played their part by considering these lands (which were inhabited by indigenous peoples) as "vacant," by dismissing as dispensable the lives of both the indigenous peoples who had already lived there and the newly relocated migrant group, and by using the Ecuadorian military to make inhospitable areas safe for oil production.

It is well known that the oil companies with the help of the Ecuadorian military forcibly removed indigenous peoples and farmers from their lands. One woman told me of how, as recently as 1990, the Ecuadorian military came to her home and forcibly removed her family. Her three children were beaten before they were all able to escape by swimming across the river and fleeing into the forest. They stayed at a neighbor's crowded hut where her three- year-old daughter fell into a cooking fire. To this day she is severely scarred. In Guayaquil the mother of the family made a courageous denuncia on a sympathetic television channel, only to have her own life threatened by local military officials and to be told that they should have killed her "worthless" Indian daughter.

It has yet to be discovered how many stories like this exist, but the implication was made clear to me, as an investigator, that this was, and is, an all too commonplace event. Military surveillance of oil production areas is a fact; I was stopped and questioned by a large military patrol over 50 miles away from a well where I had taken pictures, implying close radio communication between the seemingly isolated guard and the Ecuadorian military.

Although it is painfully clear that the Ecuadorian government was never concerned with the welfare of the indigenous peoples and colonos who inhabit the region, it was always assumed that, with respect to the actual technical business of exploring, drilling, pumping oil, and disposing of the toxic wastes, Texaco would follow normal, industry-approved standards. Wasn't this precisely the role that Texaco was supposed to assume vis-a-vis the Ecuadorian state and CEPE, to initiate them into the business of oil production in the way that it is done in the rest of the world?

So it came as a shock for many Ecuadorians to learn that, rather than using trusted and industry-approved standards for oil production in the Amazon, Texaco had chosen to cut corners and use inadequate and inappropriate technology. Texaco intentionally chose not to install the reinjection technology, which had been the de jure practice of oil production since the early 20th century in the United States. By doing so, they saved approximately $1 million per well for the more than 300 wells that were drilled there.

Causes of Oil Contamination

Drilling for oil involves handling a series of toxins, ranging from the highly toxic "produced" or formation waters-extracted along with the code in the drilling process and then separated out during processing-to the various hazardous chemicals used in the drilling and separation process. Normally, all toxic "produced waters" are reinjected into the earth at the same subterranean level from which the oil was extracted. Texaco allowed the various produced and waste waters to collect in unlined pits barely scratched from the surface of the earth, forming what Judith Kimmerling, in her 1990 work Amazon Crude, has referred to as a "toxic soup" of brine, crude, PAHs (polycyclic aromatic hydrocarbons-a well-known carcinogen) and VOCs (volatile organic compounds).

While these pools would be hazardous to the environment anywhere, they are especially so in the Amazon region, where the extraordinary delicacy of the lush forest is held together through thousands of web-like streams and rivulets. Oil has also seeped deep into the groundwater, traveling far from the sites of the original pits.

Texaco also added insult to injury by engaging in even more egregious abuses. Gaseous substances which collect on the surface of the waste pits are often burned off, cresting what the local inhabitants refer to as "black rain" and releasing even more PAHs in their most toxic airborne form, and excess crude is poured onto unpaved roads in order to control the dust in the dry seasons. People who clean the pits or who walk these roads must use gasoline to clean off the oil, and are often treated for burns in local hospitals. The pipeline is considered to be poorly built, without enough turnoff spigots to control the spill during a pipeline break. Oil spills are a commonplace occurrence in the Ecuadorian Amazon, so common that, when a local resident talks of how their farm is faring, they may make reference to an oil spill as casually as if they were speaking of bad weather.

In such an extraordinarily wet environment with thousands of natural sources of water, the indigenous peoples and colonists in the region have access only to contaminated rivers and streams for drinking, fishing, bathing, and laundry. They suffer from chronic problems such as diarrhea and malnutrition, and a number of illnesses are widely documented among the population, including: spontaneous abortions, respiratory disorders, severe and constant head and throat aches, skin discoloration, childhood leukemia, children born with genetic deformities, and cancer of the larynx, bile duct, throat, stomach, lung, and uterus. The rate of cancer is 130 percent higher than what would be expected under normal conditions. Many people have already died, and a cancer epidemic is expected to spread throughout the area in the comma years.

In addition to having their land raped and various previously unknown illnesses introduced into their population, the main oil towns of the Oriente-Coca and Lago Agrio-are now facing rising unemployment and violence. Due to Ecuador's well-known economic woes, Petroecuador has cut back on the maintenance work for pipeline and other oil-related activities, eliminating an importance source of employment for the colonists who live in the region and, especially in the towns. Most colonists rely on a combination of farming the poor soil of the Ecuadorian Amazon and working for the oil companies in order to survive. Petraecuador's cutbacks, in addition to the fact that oil reserves are running out and are expected to be completely exhausted by the year 2010, indicate that unemployment will continue to rise. One can only speculate as to what will happen to the two large towns and other colonist communities which are isolated from the rest of the Ecuadorian national economy and which rely almost exclusively on oil for the income necessary to survival. It is certain that more clear-cutting of the Amazon rain forest-the "lungs of the worlds, source of what many scientists consider as a possible ethnobotanical cure for cancer, and one of the ecological "hot spots" for its extraordinarily high levels of endemism and biodiversity-will continue to be destroyed. All so that Texaco could make a few bucks. It is for this reason that many people refer to Texaco's activities as acts of "ecological terrorism," and the skull and crossbones are drawn next to the name Petroecuador on the main pipeline that connects the Oriente with the coast.

Most people that I spoke with were well aware and vocal about the fact that the Ecuadorian government and Texaco raped their land, and that the economic benefits of oil development were enjoyed only by a very few-the wealthy aristocracy and corrupt military or political officials. Barely a cent of oil production revenues were reinvested in the communities which were most connected with the on-the-ground business of oil extraction: the single road-more than 100 miles long, connecting the two main oil towns of Lago Agrio and Coca-is only occasionally paved. Most stretches of the road are so pocked with potholes as to make for extremely hazardous driving. A bridge that used to connect the road across the Aguarico River to Lago Agrio was washed out by the 1987 earthquake, and has yet to be replaced. Instead a very primitive ferry transports cars and buses from one side to another. Lago Agrio has only a few paved roads in town and Coca has none. Medical facilities are generally poor, as are schools, the water system, and other public utilities and facilities. As one person informed me, "All of the oil money went to the cities, where the already rich people live. None of it came to us, where the poor people live-those of us who worked for the oil. And now the oil boom is over-it is too late for us and we will not get anything."

It remains to be seen precisely how the Colombia Plan will affect this region, but it is certain that it will. During the second week of July 1999, as plans were developing around the now U.S. air base at Manta, a spate of articles concerning the northeast corner of the Oriente-an area usually ignored by the rest of the nation-were published in the major daily newspapers. Lago Agrio was targeted as a site of arms and supply transfers (fuel was added to the fire by a supposedly large cache of arms discovered there), and the local population was cast as vulnerable to the subversive influences of the FARC. Having little legitimate sources of income, it was claimed, they are likely to resort to illicit activities and insurrectionary politics. The military presence has already been dramatically increased in these areas, in order to both "stop the flow" of supplies and arms, and to beef up the Ecuadorian border in the hopes that Colombia's problems will not bleed over. The Clinton administration's Colombia Plan has now allocated $12 million for "community" and "social development" (as well as $13 million for military equipment and $86 million for the air base at Manta). Already entry to and exit from these areas is being closely monitored.

The Lawsuit

In 1993, a class-action lawsuit against Texaco was filed in New York by an Ecuadorian-American environmentalist lawyer on behalf of 30,000 indigenous peoples of the Ecuadorian Amazon. In April 1994, Texaco moved to dismiss the case on the grounds that a lawsuit in their domicile was "harassment." Judge Vincent Broderick refused the request for dismissal, citing the 1992 Rio Declaration, which, like the 1972 Stockholm declaration, declared the right to a clean and healthy environment as a fundamental and inalienable human right Judge Broderick accepted jurisdiction over the Texaco case without hesitation, and immediately requested that discovery be conducted to determine the extent of Texaco's control over Ecuador's petroleum production industry. Judge Broderick died one year later and jurisdiction was passed to Judge Rakoff, a known conservative on environmental issues.

Although the Ecuadorian government did sign a deal with Texaco in 1995 for a $40 million cleanup, it is widely recognized that the cleanup performed by Texaco was really just an effort to pacify the Ecuadorian government. Their cleanup activities generally consist of covering unlined pits with dirt and vegetation so that they are less noticeable to the naked eye, and removing the debris from pipeline spill visible from the road to a less visible spot (usually just over the next hill).

Since 1995, the Texaco lawsuit-filed as Aguinda v. Texaco-has bounced back and forth between the court of Judge Rakoff and the Second District Court of Appeals. By 1996 Texaco had filed three motions to dismiss the case on the basis of international comity, indispensable parties, and forum non conveniens. In November 1996 Judge Rakoff agreed to dismiss the case on the basis of these principles, but in October 1998 the U.S. Court of Appeals for the Second Circuit court reversed Judge Rakoff's decision. In late November 1999, Rakoff dismissed the case for a second time, pointing to the inconsistency of the Ecuadorian government's stance toward the case: the presidency of Sixto Duran Ballen had signed an agreement with Texaco in 1998, relinquishing further claims against the company. This position was refuted by subsequent presidencies and the Ecuadorian government has since come out in support of the lawsuit. In early December 1999 the U.S. Second Circuit Court of Appeals voted unanimously to send the case back to Judge Rakoff, claiming that he did not have sufficient reason for dismissal.

There are two aspects of this lawsuit that-if the case is successful-could set a new precedence for the monitoring and control of multinational corporations activities overseas. The Alien Tort Claims Act (ACTA) and the common law doctrine of forum non conveniens work in direct contradiction of each other; the former allows U.S. agents to be tried in U.S. courts for torts committed overseas against foreign bodies, while the latter permits U.S. corporations to require that lawsuits filed against them by foreign agents be tried in the courts of the host country. The claim is that a U.S. forum is "inconvenient" and that, since the torts were committed in the host country, the claim should be tried there. The real motivation in having lawsuits filed against them tried overseas is that often times, as in the case of Ecuador, the host country's court system is not sufficient to try mass toxic tort suits, nor are the environmental laws stringent enough to allow success of the cases.

CTA, enacted by Congress in 1789, allows foreign citizens to bring either U. S. citizens, foreigners and-if this case is successful-corporations to justice in U.S. courts, and to seek remedy for wrongful conduct "committed in violation of the law of nations." The Alien Tort Claims Act was rarely used until 1980, when the case of Filartiga vs. Pena-lrala-in which the Paraguayan death squad member Americo Pena-Irala was prosecuted for the torture and murder of 17-year-old Joelito Filartiga in 1976-was won on the principles of ATCA. Since then, it has been used successfully in a number of lawsuits: a Bosnian-Serb leader accused of rape, genocide and forced prostitution; a former Guatemalan army general and defense minister accused of torture; a former Ethiopian military official accused of torture; a former Argentinian general accused of kidnapping and torturing many Argentinian civilians; and the Los Angeles Police Department for the false arrest and imprisonment of a Mexican couple. The Alien Tort Claims Act has, therefore, been used primarily to prosecute individuals for human rights abuses committed abroad.

More recently, however, ATCA has been used to bring multinational corporations to court for human rights violations. This is what happened when the New York-based human rights organization, the Center for Constitutional Rights, filed a class action lawsuit on behalf of the Burmese government in exile and farmers of the Tenasserim region of Burma against Unocal, Total, and two Burmese government institutions, the State Law and Order Restoration Council (SLORC) and the Myanma Oil and Gas Enterprise (MOGE) in October 1996 in a Los Angeles court. The defendants were accused of participating in the relocation of entire villages, forced labor, rape, and murder to build a natural gas pipeline from the Yadana natural gas field off the coast of Burma through the Tenasserim region to the border of Thailand. By April 1997 the LA court had reached the initial ruling that although the Burmese government institutions of SLORC and MOGE were able to maintain sovereign immunity under the Foreign Sovereign Immunity Act, the remaining defendants of Unocal and Total Corporations could still be held under court jurisdiction based on the ATCA. This appears to be the first time ACTA has been successfully applied to a U.S. multinational corporation for its overseas operations. The decision extended the scope of earlier Filartiga decision from private individuals to transnational corporations, while at the same time suggesting that multinational commercial enterprises could be held accountable for the activities of partners, including foreign or host governments. As William Aceves in the March 25, 1997 edition of The American Journal of International Law notes, "Until recently, efforts to address the issue of corporate responsibility (and liability) with respect to human rights have met with limited success Prior cases brought against multinational corporations for international law violations have had mixed results. In contrast, Doe v. Unocal is perhaps the first case to recognize the possibility of corporate liability for human rights violations arising out of corporate activity abroad."

The additional aspect of this case lies in the principle of forum non conveniens. A federal common law doctrine, the central purpose of forum non conveniens is to ensure than a judicial form is convenient for both parties, and that an adequate alternative forum exists prior to dismissal of the case. It has been amply documented (see, e.g., "Texaco on Trial" by Eyal Press, The Nation May 11, 1999) and it is well-known that Ecuadorian Courts do not provide an adequate alternative forum.

Perhaps the most famous recent case in which forum non conveniens has been successfully applied by a U.S. corporation in order to escape from the consequences of its actions was in the Bhopal disaster of 1982. Following the December Union Carbide leakage of tons of poisonous gas into the environment and the immediate deaths of over 2,000 residents, thousands of Bhopal residents filed suits in U.S. courts with the help of U.S. Iawyers. These suits were then consolidated into a single mass toxic tort lawsuit that was filed in the U.S. District Court for the Southern District of New York. The U.S. District Court dismissed the case on the basis of forum non conveniens and sent it back to India, maintaining that victims could seek remedy through the Indian court system. To this day, most of the Bhopal victims have yet to be compensated. In 1989, the Indian government negotiated a $470 million settlement with Union Carbide, but that money continues to sit in the bank allowing the Indian government to collect interest. Of the 615,000 special claims cases, less than 10,000 have been decided, with the average compensation being $3,500.00-even for death. Medical facilities are crowded and inadequate, and the death toll attributed to gas-related illnesses continues to climb and is currently estimated to be between 10,000 and 15,000.

A key element of Union Carbide's forum non conveniens dismissal lay in their claim that since the accident took place in India, the most convenient forum for trial was in India. They also claimed that Union Carbide plant was run by' Indians, and threatened that if court were to be held in the United States, more than 100,000 plaintiffs would have to be flown to the States for testimony. The claim that the plant resided in India, that most workers were Indian, obscured the fact that it was the Danbury-based Union Carbide who had a majority ownership (50.9 percent) and effective control over its Indian affiliate, Union Carbide India Ltd., as U.S. owned corporations always do over there less developed partners. Ironically, Union Carbide stocks rose shortly after the disaster.

As this case demonstrates, the application of forum non conveniens in a narrow, technical sense has functioned largely to protect multinational corporations from foreign plaintiffs, and "as a barrier to holding U.S. multinational corporations accountable for their environmentally destructive behavior abroad" as Brooke Clagette in a 1996 edition of Tulane Environmental Law Journal puts it. In the absence of internationally agreed on environmental protection measures, the U.S. court system could, however, make MNCs more accountable for their many egregious actions by allowing these private injury and mass toxic tort lawsuits to be tried in U. S. courts. This would require that U.S. federal courts to take the Alien Tort Statute-and environmental and human rights abuses-more seriously.

To do so, the U.S. judicial system-and the north American population in general-must become cognizant of the fact that many populations in the world, indigenous or otherwise, live in a much closer relationship with their natural environment and often without adequate laws or national infrastructure to protect the safety of both the environment and its peoples. As in the case of Texaco's activities in the Ecuadorian Amazon and countless similar situations, rampant environmental racism has been practiced instead. In these cases, violations of environmental rights should be interpreted as violations of human rights for indigenous communities and other residents of these contaminated areas. Unlike environmental laws, human rights have a strong basis in international law and violations of human rights should be seen as violations of the law of nations, as Hari Osofsky (Suffolk Transnational Law Review, Summer 1997) has argued. Isn't the introduction of cancer into a population where it was previously unheard of a human rights violation?

In one tiny community alone next to the Napo River and centrally located next to many oil wells and contamination sites, more than 40 men have died cancer and the majority of their widows suffer from uterine cancer. I think it's safe to surmise that they would certainly claim that Texaco Corporation has violated their human rights.


Suzanne Simon is an anthropology PhD at the New School in New York. This article is based on her dissertation research.

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