Beyond the Texaco case, can the Ecuadorian Northeast be rescued?

Beyond the Texaco case, can the Ecuadorian Northeast be rescued?

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By Guillaume Fontaine

Until 1992, Texaco Inc. The socio-environmental balance left after twenty years of exploitation was criticized by various environmental groups and defenders of human rights and led to a widely mediated judicial process at the international level, known as the Texaco case.

Since the discovery of important hydrocarbon reserves in the mid-sixties, Ecuador has developed on the basis of oil exports. 90% of national production (250,000 barrels per day, on an annual average) comes from the Amazon region, which covers almost half of the country with about 120,000 km2, and is home to less than 5% of the national population (estimated at 12 million ). The oil bonanza? However, it was accompanied by growing indebtedness and dependence on both technology and finance abroad. Until 1992, Texaco Inc. The socio-environmental balance left after twenty years of exploitation was criticized by various environmental groups and human rights defenders and led to a widely mediated judicial process at the international level, known as the Texaco case.? However, after eight years of fighting before the US courts, this case was forwarded to Ecuador, as ultimately decided by the Court of Appeals, in August 2002.
In this article we would like to recall in the first part how the "Texaco case" developed. In a second part we will ask ourselves about what is at stake, beyond this case, for the Ecuadorian Amazon region and Ecuador, from the point of view of sustainable development.

Texaco case news

The socio-environmental impacts of the? Texaco era? they remained unknown to the Ecuadorian population until the early nineties, that is, when the exploitation contract ended when Petroecuador became the operator of this block. The first systematic investigation into those impacts is due to Kimerling, a US lawyer based in Ecuador since 1989, where she worked as a legal advisor to the FCUNAE for the delimitation of properties. According to this report, the 30 most serious spills of the SOTE caused the loss of 403,200 barrels, to which are added 456,000 barrels of crude oil and 450 million barrels of formation water discharged into the environment.

It should be said that this information, provided by Petroecuador, is probably very conservative, considering that SOTE transports 250,000 barrels per day. By way of comparison, the losses caused by the wreck of the Exxon Valdez in Alaska reached 259,200 barrels. The same can be said of the incineration of gas in the open air: according to the Kimerling Report, 6,667 million cubic meters of gas were incinerated in the open air in twenty years, while Bustamante and Benítez mention the figure of two million cubic meters of gas incinerated per day, or 14.6 billion cubic meters in this period.

On the other hand, it would be false to say that the environmental pollution problems ended with the departure of Texaco from Ecuador. In reality, the Nororiente (that is, the provinces of Sucumbíos, Orellana and Napo) continues to be the scene of the greatest socio-environmental impacts produced by oil activities. Between 1994 and 2002, an average of 114 spills were produced each year, causing the loss of more than 33,000 barrels of formation water or crude oil. While it is true that most of the oil spilled is recovered, the damage persists, largely due to the lack of financial and human resources on the part of the national company Petroecuador.

Despite the imprecision of certain figures, the Kimerling report had the merit of provoking an awareness in the Ecuadorian population, to which we will return later. Other reports followed and were added to the file, which should be mentioned before studying the consequences of the trial.

A second report was produced by the Center for Economic and Social Rights (CDES), an NGO based in New York since 1992. Unlike other environmental organizations, it places particular emphasis on human rights. For this reason, his report to document the Texaco case is essentially interested in the health aspects of the oil industry. This is a study carried out in a dozen communities with 1,465 people, of which 1,077 lived in contaminated areas and 388 in healthy areas. According to the findings of this survey, populations living in polluted areas are exposed to concentrations of polycyclic aromatic hydrocarbons (PAHs) and volatile organic compounds (VOCs) well above US and European health standards. These products can be absorbed into the human body through the oral, tactile or inhalation routes. They generate various diseases that range from secondary infections (such as skin fungi, warts or eczema, to cancers of the skin, blood or esophagus, through pneumonia and spontaneous abortions). Jochnick's team deduces from this that the contamination caused by oil activity constitutes a violation of human rights, under international law, although the affected populations do not have any protection against the Ecuadorian government or the Texaco company.

A third report was made by Miguel San Sebastián, with the "Manuel Amunárriz" Institute of Epidemiology and Community Health. First, Dr. San Sebastián's team presented a list of 15 symptoms suffered by 650 women, of which 365 lived in contaminated areas and 282 outside. The conclusions of the study show that the rate of pregnant women during the last two years is higher in the uncontaminated area (93.5%) than in the other (88.4%) but the rate of spontaneous abortions is less than 28 weeks is higher in the contaminated area (9.8% versus 4.4%). Second, this team made an effort to demonstrate the correlation between cancer risk and oil contamination, by studying the population of San Carlos (Sacha, Sucumbíos), a municipality of 1,000 inhabitants located near the main production station of the region, where 10 cancer cases were registered between 1989 and 1998. The small size of this sample prohibits generalizing the conclusions of Dr. San Sebastián but attracts attention on two points: the diversity of the types of cancer diagnosed (stomach, gallbladder, larynx, liver, blood, etc.) and the increase in the mortality rate among exposed people, which shows a strong aggressiveness of cancers or a dramatic abandonment.

Perhaps the most striking thing in this succession of publications is the lack of commitment by the State in defending the interests of the Amazonian population. It is true that in April 1992, the government of Rodrigo Borja signed a contract with the Canadian company HBT Agra, to carry out an environmental audit on Texaco's activities. But the preliminary report, delivered in November 1993, was only released after a tough power struggle between the President and Congress. Indeed, having come to power in the meantime, Sixto Durán Ballén refused to publicize it, while the Congressional Oversight and Political Control Commission was pressing for a copy of the document.

When the Commission finally got this copy, it hired two biologists to analyze it. These experts rejected the HBT Agra Report, both in substance and in form. They highlighted the numerous translation errors and the inaccuracy of the bibliographic sources. On the other hand, they criticized the solutions proposed by the Environmental Management Plan, which consisted of covering the leaks and the waste pools that were still open with earth. Finally, they demanded that an environmental management plan be carried out that includes preventive measures to control and mitigate the impacts, a contingency and rehabilitation plan, and recommendations to the authorities. In passing, they noted that the report did not contemplate compensation and reparation measures for the populations affected by the contamination.
The Congressional Commission and environmental organizations organized a highly mediated forum on the topic? Oil, nature and life ?, in April 1994, which was attended by representatives of Petroecuador, the Ministry of Energy, the College of Geological Engineers, along with organizations indigenous and peasant women of the Amazon. With this opportunity, an intersectoral monitoring committee was created whose mission was to monitor and control oil activity in the Amazon region. Finally, in June, the Minister of Energy admitted that the audit did not meet the requirements and that, therefore, Texaco would have to pay for the damages caused, under penalty of being sued by the Ecuadorian government.

At that time, the government inaugurated the 7th round of tenders for oil contracting. In this round (the most important in Ecuador's oil history), eight blocks were put out to tender, of which six were in the RAE. The government faced a dilemma: it could not reject the accusations of Congress and the environmentalists, but neither could it run the risk of scaring off investors by dissociating itself from Texaco, to which the state owed 20 years of oil boom. It is in this context that the Ecuadorian ambassador to the United States, Edgar Terán, tried to discredit the plaintiffs, through a letter dated December 3, 1993. When it was published in the national press, this letter rekindled the discrepancies between the executive and legislative, when Congress protested against the ambassador's statements, while Durán Ballén supported them.

As Ortiz and Varea have pointed out, the particularity of this conflict is the effect of interpellation towards other actors who, despite the eminently political nature of the matter, did not identify themselves with ideological positions. Indeed, at the Oil, Nature and Life Forum, each actor was present in an institutional and non-partisan capacity. The Congressional Commission was also made up of six deputies from different parties. The Congressional Commission also appears as a new actor, with whom the environmentalists formed a tactical alliance. It should be noted that, although this matter was presented in the plenary session of Congress in January, the decisions were generally taken by the President of the Commission. This shows that the State is not monolithic, since this commission efficiently opposed the executive. Taking advantage of this rivalry, the environmentalists tried to directly challenge the State so that the Ministry of Energy could rule on the validity of the audit.

Meanwhile, the populations affected by the Texaco era organized the Front for the Defense of the Amazon (FDA) to group the claims for compensation and damages before the Supreme Court of the Southern District of New York (Texaco headquarters), on behalf of 30,000 people . The plaintiffs alleged damages to persons and property during operations carried out by the Texaco CEPE / Petroecuador consortium. In order to group the individual lawsuits and obtain collective reparations, the lawsuit consisted of a "class action." A year later (December 1994), a similar lawsuit was filed on behalf of 25,000 inhabitants of the Peruvian Amazon equally affected by the consequences of these operations.

These class actions sought to obtain damages and compensatory interests for the bodily and property damages caused by the contamination of the environment. The plaintiffs invoked negligence and intentional offense by action and omission, which entailed individual and collective damages, among which were the increased risk of cancer and other diseases, as well as the degradation and destruction of their environment. Taken together, the lawsuit included seven allegations: negligence, public injury, private injury, strict reliability, medical monitoring, death, civil conspiracy, and violation of the Alien Tort Claim Act (ATCA). In addition to the ATCA, the Aguinda lawsuit was protected by Article 13 of the Treaty of Peace and Friendship of Commerce and Navigation between the United States and Ecuador, according to which the citizens of both nations have the right to present their claims before the courts of the friendly country.

Given these arguments, Texaco began by trying to deny any responsibility in the case, arguing, on the one hand, that its Ecuadorian subsidiary, Texpet, was a minority in the consortium with CEPE / Petroecuador, and on the other that the area affected by its activities only covered 3.8% of the Ecuadorian Amazon region. According to the company, the disposal of waste in the production phase had been done in accordance with the Ecuadorian legislation of the time. Texaco's lawyers added that spreading formation water around the environment was a common practice in many countries. Texaco still claimed to have contributed to the improvement of local environmental regulations and implemented new procedures, such as the transport of material by helicopter to mitigate the impacts caused by the construction of the routes.

Later, the multinational stated that there was no scientific evidence of the plaintiffs' allegations regarding the risks of cancer in the region. This is how he considered the CDES report null and void, because it misinterpreted US standards and due to a lack of relevant quantitative analysis. According to the experts cited by Texaco, not only was this report based on shots taken under suspicious conditions, but they excessively extrapolated the results of cancerology experiments carried out with animals in laboratories. Likewise, it was described as? Alarmist? and the? Yana Curi Report? because the restricted number of cases studied and the disparity of the diagnosed cancers made it impossible to take a representative shot.

A first class action had been brought against Texaco before the Supreme Court of Houston (Texas), on behalf of Sequihual. But Judge Black, in charge of this file, had returned the case to the Ecuadorian courts, on the occasion of the? Forum non conveniens? and the? international committee ?, without asking for more information. Incidentally, this judge justified his decision by the fact that the case had serious implications for relations between the two countries and had to do with the right of nations to dispose of their own natural resources.

Following this success, Texaco tried to obtain the rejection of the lawsuit filed in New York on the same grounds, in order to have the case tried in Ecuador. However, before ruling, Judge Broderick, in charge of the New York file, ordered to supplement the information. In January 1996, Texaco again requested the annulment of María Aguinda's lawsuit, taking advantage of the death of Judge Broderick, in 1995, and his replacement in this case by Judge Rakoff. In November 1996, the latter accepted that request, citing the Sequihual versus Texaco case.

The plaintiffs wanted to requalify the demand, to take into account the new attitude of the Ecuadorian government. Until that moment, he had dissociated himself from the Aguinda versus Texaco case, considering that it was a matter of private law and had rejected the summons of the judge. In the same way, Congress refused to support the plaintiffs, even though some deputies had done so in a personal capacity. However, in November 1996, it appears that the Republic of Ecuador was about to agree to be cited in the case.

However, the government and Petroecuador continued to refuse to lift sovereign immunity to submit to the entire jurisdiction of the New York court. Therefore, in August 1997, the request for requalification was denied. Judge Rakoff argued that it was a maneuver to buy time, since the investigation had taken more than three years. He added that neither the Republic of Ecuador nor Petroecuador were qualified by law to intervene as plaintiffs.

The plaintiffs immediately appealed this decision to the New York Second Circuit Court of Appeals, which requested a reconsideration of the trial by the Trial Court (October 1998). He confirmed that the intervention of the Republic of Ecuador was neither necessary nor required for the case to continue its course. Therefore, the procedure was maintained and, in January 2000, Judge Rakoff requested a new complement of information to determine if the courts of Ecuador and Peru were not more appropriate. In December 2000, the prospect of the purchase of Texaco by the US group Chevron (effective in October 2001), suggested new deadlines in a judicial proceeding whose end remained uncertain. However, in May 2001, the judge decided to send the complaint to Ecuador, which was confirmed by the Court of Appeals in August 2002.

In the meantime (September 1998), Texaco had concluded the rehabilitation program started three years earlier and had released itself from any legal obligation in Ecuador. In effect, in May 1995, the Ministry of Energy and Mines, Petroecuador and Texpet had signed a contract for the rehabilitation of the Texaco area, which would release the company from any commitment upon completion of operations. The operations were carried out with the collaboration of the municipalities of Nueva Loja, Shushufindi, Joya de los Sachas and Coca, as well as the Sucumbíos provincial council, for a total cost of 40 million dollars. A ridiculous sum, compared to the reparations that Texaco was asking for about 1,500 million dollars and with which the Exxon company had been ordered to pay for the damages in Alaska 900 million dollars by way of civil charges and 250 million by way of charges. criminal.
Pollution and socio-environmental conflicts
Despite what certain observers suggest, the Texaco case is not a conflict in which indigenous communities and a multinational company are exclusively opposed. In reality, the peasant settlers constitute the vast majority, not only of the signatories of the lawsuit filed in New York but also of the population that was tried to defend in the "class action." In reality, it is a typical case of convergence between the environmental, indigenous and peasant movements, which was concretized by the creation, on May 15, 1994, of the FDA.
Currently, the FDA groups seventeen first- and second-degree organizations and collaborates closely with indigenous organizations in the Siona, Secoya, and Quichua region and human rights organizations such as FEPP and CDES. Originally constituted to explain? Class action? to local populations, it gradually extended its activities to other cases of contamination or socio-environmental conflicts. Of course, his advisory mission included two parts: where there was already an oil activity, it was about helping the affected populations to achieve a level of compensation and protection in accordance with Ecuadorian public law; where oil activity was still incipient or did not exist, the aim was to inform and train local populations about their rights, the socio-environmental impacts of oil activities, tactics and strategies for negotiation and / or resistance.

The FDA also intervenes as a facilitator or mediator to file complaints with the Ministry of Energy and Mines. In this sense, it assumes an advisory role on the procedure that must be followed to file a lawsuit, in case of violation of the constitutional right to live in a healthy environment free of contamination. However, the organization began to follow up on pending cases only in the late 1990s (among other things thanks to the creation of a legal adviser position and a program funded by Oxfam America and the Austrian Cooperation ). This activity had the effect of modifying the behavior of the affected populations: from a fatalistic and dependent attitude towards the companies, they turned to an attitude of resistance and struggle for the respect of their rights.

Between 1994 and 2000, the FDA dealt with over a hundred lawsuits from local social organizations, except for those filed individually. The study of these demands makes it possible to establish a typology of socio-environmental conflicts in the Texaco area. It results from this analysis that the pollution related to the practices of the companies originated 49% of the claims, while the pollution caused by accidents in the production cycle originated 30%. We are talking here about the contamination of rivers and fields of crops or fish farming, which causes the destruction of coffee plantations, cocoa and other fruit trees, causes the death or intoxication of domestic animals and livestock, even taking away drinking water to the inhabitants. For the rest, violations of private property originate 9% of the lawsuits and claims for compensation not paid or for unfulfilled agreements constitute 7% of the cases. The other demands directed at the FDA include legal assistance or the strengthening of grassroots organizations.

Among the origin of accidents that caused oil losses in nature, we find maintenance accidents, delays in equipment renovation operations and ruptures of secondary pipes, caused by use and oxidation or by errors of manipulation and even for acts of sabotage. Compared to pipeline blasting in Colombia, this last practice is still marginal in Ecuador, but the theft of pipes has become a common practice, to supply shrimp farmers or the construction of houses. On the other hand, handling errors in maintenance tasks are quite frequent, whether it was trying to change a behavior, or to regulate the pressure in the pipeline network.

Another cause of accidents comes from the fact that pipelines were rarely buried and can be run over by cars or agricultural machines. Several accidents of this type were caused by excessive speed or poor road surfacing. A common practice until 1996 was to spread crude waste on public roads, instead of asphalt. These products contain high percentages of oils and chemical residues, which have the effect of making roads slippery when it rains or is very hot. In addition, they produce toxic fumes, which affect local populations chronically. Although illegal, these practices never disappeared, at least on secondary roads, where it is quite common to see spread trucks cover the ground with an opaque liquid, without the minimum fixing treatment afterwards.

Apart from accidents, the main cause of contamination in the Texaco area is due to past and present industry practices. Drilling a well often causes formation water to be discharged into the environment and the discharge of oils and chemicals contained in these waters goes directly to the surrounding rivers. The absence of remediation of wastewater pools causes its overflow and infiltration into the subsoil, particularly in the rainy season. With few exceptions, the operations carried out jointly by Texaco and Petroecuador between 1995 and 1998 were limited to plugging these inactive pools and wells with earth, then planting some trees. Not only does this not rule out contamination risks, it also frequently results in the formation of salt fields and sterile areas.

Another common practice is the storage of banal domestic or industrial waste by subcontractors, whether for the maintenance of equipment or the construction of roads and exploration and production platforms. It is not only a polluting practice, but also that exposes people, especially children, to injury, as sometimes happens with mines or abandoned wire ropes. On the other hand, these practices are at the origin of conflicts that directly implicated local populations.

The incineration of natural gas in the open air that produces acid fumes and a foul smell, the non-renewal of the equipment that causes chronic spills, the delay or absence of cleaning and remediation operations after an accident are as many reasons for tension between the people of the Texaco era and the oil companies. Added to this are conflicts due to abuse of authority, which involve technicians and company guards or even practices that openly undermine property rights, such as the one that consists of digging a trail on a farm, during the exploration phase. seismic, which hinders the movement of people and pets.

What is at stake for Ecuador

The problem of remediation of environmental damage in the Northeast masks a fundamental problem, which is poverty and the lack of integration at the national level. Perhaps because the RAE electorate barely represents 4% of the country, the political parties or the governments of the day never paid much attention to it. However, the Amazonian population rose from 74,913 to 546,602 between 1962 and 2001, while it was expected to only reach 353,612 according to the 1962 census, which confirms the correlation between the development of oil activities and agricultural colonization.

Historically, this peripheral region served as a substitute for the agrarian reforms of the 1960s and 1970s. At Texaco's exit, all the province's socio-economic development indicators were below national averages, which nuances the balance of the oil boom of the 1970s. In Sucumbíos, where half of the regional GDP is concentrated, life expectancy was one year lower than the national average (63 versus 64). Health personnel for every 10,000 inhabitants barely represented 11.3% against nearly 30% at the national level. The infant mortality rate reached 62.6% against 53.2%. Functional illiteracy exceeded 30%, against 25% for the country. Less than 9% of homes had access to a sewerage network, compared to 39.5% for the country. Less than 40% had access to electricity service, against 77.7%. Only 5.5% of households had piped water, compared to 38.2%.
Ten years after the departure of Texaco from Ecuador, the situation has not improved much, when considering the? Strategic participatory plan of the Sucumbíos province ?. The diagnosis made between 2000 and 2002 (by parish councils, community organizations, municipalities, provincial institutions and agencies, etc.) consists of the poor quality of education, low educational performance, and the weak educational and cultural development of the province. Likewise, it regrets the inefficiency of the health system, due to lack of coordination, insufficiency and low quality of services (which is translated, for example, by high maternal and child morbidity and mortality). Third, it denounces the deficiencies of the electrical energy services, of the communications, of the commercial networks and of the basic infrastructures. Fourth, it warns about citizen security problems, which are manifested by institutionalized corruption, impunity, the effects of Plan Colombia and, of course, the weak response capacity to disasters.

However, it should be noted that the violence in Sucumbíos predates 2000, the year Plan Colombia was implemented. According to a study carried out by FLACSO Ecuador Headquarters, since the early 1990s, the Nororiente has experienced levels of violence that are higher than the national averages. In 1997-1998, the cantons of Lago Agrio and Coca (respective capitals of Sucumbíos and Orellana) were among the 19 cantons with the highest correlation between poverty and deaths from homicide. In these cantons, the rates of poverty and deaths from homicide reached 76.3% and 28.6 per 100,000 respectively (compared to 13.7 at the national level). Sucumbíos appears in the first three provinces for their death rate by homicides, in 1990, 1995 and 1999, along with Esmeraldas and Carchi (the three located on the border with Colombia). Comparing the 1995 and 1999 rates, Sucumbíos appears in fourth place due to the percentage increase (84.9%), behind Morona Santiago, Chimborazo and Loja. Finally, under the heading of drug trafficking, Sucumbíos does not appear among the provinces where the highest seizures were made, but it does appear among those with the highest rates of detainees for drug possession (39.4%), ahead of Imbabura , Esmeraldas and Manabí.

Such is the situation faced by the 30,000 people who, after trying to join the? Class action? Before the New York courts they have to review their judicial strategy to get the help of the Ecuadorian State. Well, for him, the rescue of the Nororiente is a challenge that refers to a double problem of legitimacy: that of the central government and that of justice. En este sentido, la descentralización y la transferencia de las competencias ambientales a los organismos seccionales constituyen sin lugar a duda la mayor esperanza que la situación cambie a mediano plazo.

A corto plazo, las poblaciones amazónicas se benefician de una mejor protección legal, a través de la Constitución de 1998 y del nuevo Reglamento ambiental de las operaciones hidrocarburíferas. No obstante, su situación sigue siendo precaria debido a la desigualdad de fuerzas y a la falta de integración al ámbito nacional a los que ya se aludió. De hecho, si bien es cierto la industria petrolera tiene que cumplir con normas ambientales más estrictas, el ?pasivo ambiental? de la era Texaco seguirá sin ser resuelto hasta que el ejecutivo se involucre mediante los ministerios de Energía y del Ambiente en el diseño de una estrategia de desarrollo sustentable para la Región Amazónica Ecuatoriana.

Mientras tanto, la disyunción entre los fenómenos relacionados con la colonización y las actividades extractivas (típica de una situación de economía de enclave) seguirá contradiciendo el discurso desarrollista oficial que se aplica a la Región Amazónica y al Ecuador desde los sesenta. Así como no hay la menor duda de que la población amazónica no ha podido aprovecharse de la bonanza petrolera, no queda la menor duda de que es urgente pensar el problema del Nororiente más allá del caso Texaco.

* Publicado en Iconos, N0 16, 05/2003

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