Chevron V.S. Ecuador

Done by Bryan QuevedoMinorities in America

His-311Picture from: http://www.antirasisme.no/en/news/?module=Articles&action=Article.publicShow&ID=19860

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Photo from: http://www.panamericanworld.com/en/article/ecuadors-economic-diversification-culture-substitute-oil-income

Top Five Exports1. Petroleum at 51%2. Bananas at 12%

3. Crustaceans at 5.2%4. Refined Petroleum at 4.5%

5. Processed fish at 4.1%2

Photo from: http://www.umich.edu/~snre492/Jones/texaco.htm

• Ecuador is a relatively small country and is approximately 283,560 sq. km. It also has the earth’s largest watershed and tropical rainforest.

• It is located on the equator in the tropical Andes of South America. Ecuador’s territory includes four principal regions: the Amazon, the Andes, the Pacific Coast, and the Galapagos Islands; and is home to at least 14 indigenous nationalities including the Huaoranis.

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Main export changes From Bananas to Oil

• Left: http://www.freshplaza.com/article/120675/Brazil-in-search-of-new-banana-varieties-resistant-to-Panama-disease• Right: http://www.niobraranews.net/how-much-oil/

Texaco Petroleum Company commenced major shipments of oil from the region in 1972, when the Trans-Ecuadorian pipeline was complete. Manufacture of oil increased rapidly, equally with the country's top grossing export which was bananas. The second largest producer of oil in South America became Ecuador; soon after they became a member of Organization of the Petroleum Exporting Countries.

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Huaorani’s

• A tribe that resided in the Ecuadorian Amazon.• “The Huaorani , wrote reporter Joe Kane, ‘were trapped in the path

of an American Juggernaut, their fate bound up with a culture whose thirst for oil was second to none.’ Kane noted sardonically, ‘It is likely that Huaorani will be wiped out for the sake of oil to meet United States

energy needs for thirteen days” (Haynes, Keen, 2012).• This is when the class action suit was filed against Texaco oil conglomerate over massive environmental damage.

Photos from: http://www.travellersbook.net/index.php?option=com_content&task=view&id=163&Itemid=368Bottom Right Photo: http://selvavidasinfronteras.wordpress.com/2013/03/08/ecuador-amazon-families-split-over-lure-of-oil-money/

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Photo from: http://www.bidnessetc.com/business/chevron-cvx-business-meme-chevron-fined-by-ecuadorian-courts/

In November of 1993, a group of indigenous Ecuadoran leaders including the Huaorani’s filed a $1.5 billion suit against Texaco which worked under the umbrella of Chevron. Chevron was accused of massive pollution that destroyed natural environments and increased cancer rates.

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Photo from: http://amigosamazonia.org/08/areas-de-trabajo

Texaco officially left Ecuador in 1992 prior to the suing. The government pardoned it of any further accountability. Although Ecuador criticized them for leaving cleanup unfinished, Texaco

officials said that the fault laid with the Ecuadorian government. Texaco Stated that Ecuador lacked a comprehensive set of

environmental laws while the company operated.

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Drop in Oil Prices

• Photo from: http://money.cnn.com/2012/05/14/markets/oil_prices/

In the early 80’s there was a drop in demand for oil. Despite the drop in demand, Ecuador took the lead in dropping its minimum price per barrel. They were still producing a good amount of oil even though oil production was not at a level that could support economic growth and international demand unrelentingly fell.

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Photo: http://www.nanduti.com.py/v1/noticias-mas.php?id=31732

Fair Or Un-FairFact: The catastrophic Deepwater Horizon oil spill in the Gulf Coast, in which approximately 210 million barrels of oil seeped into the ocean just off the coast of Louisiana. BP was forced to spend over $26 billion dollars and compensation to cleanup the mess they left behind.

Fact: Texaco (now under the banner of Chevron) was found guilty of dumping 18 billion gallons of toxic waste from what used to be a pristine amazon rainforest; but has yet to pay anything to its many victims still to this day.

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Photo: http://www.corpwatch.org/article.php?id=15811

Left: http://selvavidasinfronteras.wordpress.com/2012/08/20/the-amazon-pink-dolphins-voice-u-s-government-deals-chevron-stinging-defeat-over-ecuador-trade-preferences/Right: Photos from: http://www.travellersbook.net/index.php?option=com_content&task=view&id=163&Itemid=368

Now a group of indigenous people who live in the rain forest are suing Texaco over environmental damage, which they say has contaminated their water, killed their food supply and caused

disease. (NYTimes, 1999)

Who throws the first blow?

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Picture from: http://sites.duke.edu/chevrontexacoecuador/2013/12/01/ecuadors-oil-industry-video/

• In the year 2008 an environmental expert suggested that Chevron should pay $27 billion dollars to sufficiently cover all of the damage that occurred.

• The amount was fiercely contested by the oil company. Chevron decided to do research themselves and discovered that Steven Donziger (Ecuador’s Plaintiff/ main lawyer) work contained fabricated and erroneous evidence.

• Texaco Petroleum (TexPet), became a subsidiary of Chevron in 2001,which was a minority partner in an oil-production consortium in Ecuador.

• Chevron themselves never operated in Ecuador.

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Photo from: http://newint.org/blog/2012/01/05/chevron-guilty-in-ecuador/

• On February 14, 2011 an Ecuadorian court found Chevron to be guilty.• The court issued a $8 billion fine which was the largest environmental

penalty awarded ever .• -There was an additional $8 billion fine if Chevron did not promptly issue an

apology.• Chevron refused, claiming that "by imposing this award, the court, in effect,

penalized Chevron billions of dollars for exercising its fundamental right to defend itself.

• It was after this Chevron really started to dig into the bottom of this case. 12

Steven Donziger

• Picture from: http://www.businessweek.com/articles/2012-05-31/chevron-ecuador-fight-comes-to-canada

• The man who was in charge of all the fraud was Steven Donzinger. • Well Wall street journal had mentioned this scheme and named it the legal fraud of

the century. He was accuse for violating the federal RICO Act (Passed in 1970, the Racketeer Influenced and Corrupt Organizations )

• Donziger was involved with extortion, money laundering, wire fraud, FCPA violations, witness tampering and lastly obstruction of justice.

Chevron had discovered two main components to fight the case.1. Who was behind the fraud.2. Which Judge was bribed.

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Picture from: http://autismcustodybattles.wordpress.com/2010/07/18/warning-signs-for-bribery-of-the-family-court-judge-in-a-custody-case/

“A FORMER Ecuadorean judge has admitted that he was part of a plan to offer a US$500,000 bribe to another judge to rule in favor of plaintiffs seeking damages from Chevron as a result of

pollution in Lago Agrio, Ecuador.” (TCENEWS 2013).

Alberto Guerra Testifies

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Judge Lewis Kaplan

• Photo from: http://environmentaljusticetv.wordpress.com/2014/03/04/bbc-news-us-judge-annuls-ecuador-oil-ruling-against-chevron/

• The case referred to was Chevron’s civil racketeering suit against the Ecuadorian plaintiffs’ lead strategist, New York lawyer Steven Donziger.

• Judge Lewis Kaplan ruled in March that Donziger had committed extortion, mail fraud, wire fraud, bribery, obstruction of justice, witness tampering, money laundering, and Foreign Corrupt Practices Act violations in the course of winning the $9.5 billion judgment

• Kaplan issued an order barring Donziger and his associates from attempting to profit from the case in any way.

• Donziger and his co-defendants have appealed that ruling.15

Continuing Dispute

• Photo from: http://voxxi.com/2014/03/04/judge-in-favor-chevron-ecuador-case/

Ecuadorean inhabitants and activists are still arguing to this day that Texaco should be held financially responsible for the pollution in the Amazon rainforest from

the 1960s through the early 1990’s.

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Sources/ ReferencesJo Simmons. How Chevron Got Out of a $19 Billion Lawsuit. Huffington Post. http://amazonwatch.org/news/2014/0616-when-might-equals-right-how-chevron-got-out-of-a-19-billion-lawsuit (slide 9).

TCE News. TCE: The Chemical Engineer. ISSN. Annie Gabriel Library. 2013 http://web.a.ebscohost.com.libproxy.calbaptist.edu/ehost/detail?sid=5fc8b2a2-777d-460f-b0aa-3dfa8417a5fc%40sessionmgr4002&vid=1&hid=4212&bdata=JnNpdGU9ZWhvc3QtbGl2ZSZzY29wZT1zaXRl#db=aph&AN=86174264 (slide 15)

Charles Lyons. Patton Boggs pays Chevron $15 million to settle fraud charges. Fortune. 2014. http://fortune.com/2014/05/07/patton-boggs-pays-chevron-15-million-to-settle-fraud-charges/ (Slide 16)New York Times. Texaco and Ecuador. 1999. http://www.nytimes.com/1999/02/19/opinion/texaco-and- ecuador.html (Slide 10)

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