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Chevron Lawsuit: Greed & Deceit

The legal action against Chevron in Ecuador is a story of greed and deceit.


BY GUSTAVO CORONEL

 

About two years ago I received a message from a good friend regarding the legal action against Chevron in Ecuador, asking me to look into it with the eyes of a geologist and oilman and give him my opinion. The legal action had to do with the activities in Ecuador of Texaco, a company later acquired by Chevron. A group of Ecuadorian citizens claimed that the company had generated significant environmental and health damages during its operations in the country and were asking Chevron to pay for the damages.

Being an oilman I knew that any oil production activity generates damages to the environment. They can be minimized by an efficient operation or they can be disastrous when operations are inefficiently or indifferently executed. The plaintiffs in the Chevron case labeled the activity of the company in Ecuador as a “new Chernobyl.”

I started to look into this case. At the outset I recognized I had two biases: one, being an oilman, I instinctively tended to side with oilmen. The other, Chevron was not my favorite company, as they seemed to be too friendly with Venezuelan strongman Hugo Chavez, a man I consider the most damaging president my country has ever had. Having to deal with these two contradictory emotions I made a conscious effort to be objective. I started to navigate the web and found an immense amount of material related to this case. This was not surprising, as it had all the elements of high drama: a powerful oil company, indigenous people claiming to be victims, a small country against a big corporation, environmental organizations supporting the plaintiffs, a U.S. media largely sympathetic to the small guys; seemingly idealistic lawyers on the sides of the plaintiffs, a substantial claim of $27 billion against Chevron; strong political involvement by President of Ecuador Rafael Correa. The case seemed to be the stuff Hollywood thrillers are made of.

BIAS AGAINST CHEVRON

 

The first thing that caught my eye was that comments on the case were strongly in favor of the plaintiffs. For each article or piece of news favorable to Chevron there were, perhaps, five items favorable to the plaintiffs, putting Chevron in the worst possible light. Again, I found this to be expected, as popular sentiment all over the world tends to side with the small guy against the big guy, with the environmentalists against the polluters. I found items about Hollywood actresses and U.S. congressmen visiting Ecuador to offer public support for the plaintiffs. I also felt the spokespersons for the plaintiffs in the United States had done a very good job of selling their case to powerful communicators like those at prestigious 60 Minutes and major national newspapers. If we were to judge only by this overwhelming show of sympathy for the underdog, Chevron was dead meat. 

I sent messages to persons representing both sides and eventually met with them. I was cordially and decently treated by both sides and given abundant material on the case. At no time I heard from them any suggestion of payment for my research, nor asked for it.

 

I must say that what started as an item of passing interest became a more serious object of investigation. At some point in time I felt the need to go to Ecuador to “take a look” but I could not afford to do this. Being invited by one of the two sides was, of course, out of the question.

When digging into the materials I found many things that I felt were not normal. As the owner of the Dallas Cowboys famously said recently about his 2010 team: “I could not put my finger on all the wrong things because I did not have enough fingers.”

"EXPERT" UNQUALIFIED AND BIASED

 

First of all I was amazed at the poor qualifications of the “expert” who had been named by the court to conduct “an impartial evaluation of the environmental situation in the area where Texaco once conducted operations.” When I looked at the credentials of this person I felt sure he was unqualified. I felt that if he had come to me looking for a job as a petroleum geologist or engineer, I would have rejected his application as being totally insufficient for the most basic type of petroleum related work. His very short experience had been in the mining sector and his academic credentials were, at best, mediocre. Why, then, was he named?

 

Second, I went into his report to the court and read it with great attention. I found many unwarranted assumptions, plenty of inconsistencies, wild estimates of environmental and health damages to the area and people and a very “generous” assessment of Texaco’s liabilities. Some sections of his report were taken from work done by a Spanish consultant paid by the plaintiffs and some statements made resembled those contained in a report by a U.S. based consultant, also paid by the plaintiffs. This suggested some kind of link between the expert and the team of experts of the plaintiffs, which would be totally illegal.

IMPROBABLE CHRONOLOGY

 

In the third place, I felt that the chronology of the oil production activities in the region made it very improbable that most of whatever environmental damages existed in the area had been caused by Texaco. The evaluations made for the purposes of the litigation did not show extensive environmental damage and, in any case, were done some 20 years after Texaco had left the country. During this long period of time the company operating in the region had been PetroEcuador, the state-owned oil company of Ecuador. This was most disturbing to me, as I pictured a crime scene being examined 20 years after the suspect last visit and after another group of people had trampled, at will, over it. Texaco had been given a total release by the Ecuadorian government and PetroEcuador when it left the country. In fact, even when Texaco was operating, PetroEcuador had been a partner, in fact the majority partner. As an oilman I knew that a partner is always kept fully informed of the situation of the joint venture.  PetroEcuador would have cried foul if it had seen something wrong happening. After Texaco left the country PetroEcuador continued operating alone, in exactly the same manner as Texaco had operated. 

 

In the fourth place the hand of the Ecuadorian government was highly visible in the whole process. President Rafael Correa had openly expressed his support of the plaintiffs and had gone as far as intimidating the judge in charge of the case and threatening the Ecuadorian officers who had given Texaco its release years before, calling them traitors. I felt that only because of this intervention the trial should be declared null and void.

 

TERRORIST TACTICS, GANGSTER PHRASES


As things have developed later, all of my points of concern have been corroborated and, even, magnified. The judge of the cause has been removed, found to be in collusion with the plaintiffs. The full disclosure of the contents of a documentary film called Crude has become the plaintiff’s worst nightmare. In this documentary the “idealistic”
U.S. lawyer for the plaintiffs, Steven Donziger, appears as a political manipulator, advocating terrorist tactics to pressure the judiciary into submission. Some of his phrases truly belong into the realm of gangsters: “The law and facts are bullshit… at the end of the day brute force is all which is needed.”
 

The expert was named due to the pressure exerted on the tribunal by the plaintiffs. The plaintiffs wrote the report for the expert. The “popular and spontaneous” demonstrations against Chevron were organized and paid for by the plaintiffs. The whole idea of a defenseless group of victims being abused by a big oil corporation is fiction. What remains in this case is a story of greed by a group that wanted to make a killing of billions of dollars off a powerful corporation, with the help of unscrupulous political leaders and judicial corruption. 

Gustavo Coronel, a 28-year oil industry veteran, was a member of the first board of directors of Petroleos de Venezuela (PDVSA) and is the author of several books.

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