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Raul Gallegos :
Review: The law of the jungle

Rogue lawyers can be more dangerous than the oil business. That is the conclusion one draws after reading “Law of the Jungle,” a new book by Paul Barrett that tells the story of how Steven Donziger, a brash American lawyer, won a $19 billion pollution judgment against Chevron in Ecuador's courts by using bribes, intimidation and fraud.

The spoiling of a swath of Ecuadorian Amazon jungle is well known. For decades, state-owned company Petroecuador and its junior partner Texaco pumped a fortune in oil from the Lago Agrio region leaving behind pools of crude sludge, contaminated water and scores of sick farmers. Texaco left in 1993, and was soon sued by indigenous tribes seeking retribution. Chevron inherited the dispute when it bought Texaco years later.

Barrett's book puts the scandal in context. For starters Petroecuador ran the show and took more than 90% of the revenue obtained from the oil that both companies produced. During its nearly 30 years in the Andean country, Texaco abided by Ecuador's admittedly weak environmental rules. After leaving Ecuador, Texaco also spent $40 million in a woefully inadequate cleanup, and Ecuador's government signed off on it. But the deal did not shield the U.S. oil company from lawsuits by aggrieved indigenous communities that blamed Big Oil for their troubles.

That's where Donziger came in. He convinced indigenous Ecuadorians to file a class action lawsuit against the U.S. company, and he recruited Hollywood stars, and anyone else who would go along, to trumpet the case as a David vs. Goliath story. His problem was a lack of enough solid evidence to blame Chevron for the polluting practices that Petroecuador continued to employ for years after Texaco had left the country. This didn't stop Donziger.

Barrett's prose turns the convoluted legal spat into an engaging narrative of malfeasance. He shows readers how Donziger's team coerced a judge into appointing a handpicked environmental damages “expert,” how Donziger paid a consultant to write a report with wildly inflated cleanup estimates, and finally how his team ghostwrote the judge's own ruling. Donzinger's people even promised the judge $500,000 to rule against Chevron.

Such egregious actions no doubt explain why Chevron won a racketeering case against Donziger earlier this year. Barrett generously paints Donziger as a well-meaning lawyer who lost his way. The book unearths one of Donzinger's most telling personal notes, in which he admits feeling “like I have gone over to the dark side.”

He did far more than that. By choosing not to prosecute Petroecuador for its lead role in polluting the Amazon, Donziger let the Ecuadorian government get away with its rotten oil pumping practices. His zealous pursuit of Chevron's big pockets promoted the idea – prevalent in poor nations – that big business is solely responsible for the plight of the poor. And he did more than most to further corrupt a Latin American country's legal institutions. In doing this, Donziger became an unwitting example of the abusive American intervention the region's leftist leaders often denounce.

* ”Law of the Jungle: The $19 Billion Legal Battle Over Oil in the Rain Forest and the Lawyer Who'd Stop at Nothing to Win It,” by Paul M. Barrett was published this week by Crown.



 

Raul Gallegos is a commentary writer on economics and business with a specialty in emerging markets and the energy industry. He has worked as a Latin America columnist for Bloomberg View, the editorial division of Bloomberg, and as a financial columnist for Reuters Breakingviews, the analysis and commentary unit for Reuters. Petroleumworld does not necessarily share these views.

Editor's Note: This commentary was originally published by The State of The Americas on Sep. 26, 2014. Petroleumworld reprint this article in the interest of our readers.

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