ISSUES....
Inside,
confidential, off the record
Ecuadorian Farce
WRONG TARGET: Petroecuador is responsible for more than 1,000 oil
spills in the past five years alone, but it's Chevron - which left
Ecuador in 1992 - that is being sued for environmental damages.
It is not Chevron which should be sued for environmental damages in Ecuador,
but the country's own state oil company.
It makes good headlines, but asking Chevron to pay $7 to $16 billion
in compensation for environmental damages in Ecuador is both unfair
and absurd. The lion's share of contamination has been done by
Ecuador's own state oil company Petroecuador, one of the most mismanaged
and inefficient oil companies in Latin America.
From 2002 to
2007, Petroecuador was responsible for more than 1,000 oil spills,
of which 168 took place last year alone. In fact,
Petroecuador (through its oil and gas exploration and production
subsidiary Petroproducción) accounted for 90 percent of
all oil spills in Ecuador last year, according to official government
data quoted by local newspaper El Universo. The remaining 10 percent
were contaminated by six different private companies. In other
words, Petroecuador is clearly a major and serial contaminator.
NO MONEY FROM PETROECUADOR
While Chevron paid $40 million in remediation costs in 1995, Petroecuador
has not used one dime to clean up its mess. Chevron, through its
Texaco subsidiary, operated an oilfield joint venture with Petroecuador
between 1964 and 1990, when the Ecuadorian company took over management
of the oil field. Texaco continued with a minority stake in the
consortium until 1992. In 1998, the government of Ecuador declared
that the remediation was completed according to the terms and parameters
agreed upon and released Texaco from any future liability.
Meanwhile, Petroecuador doesn't even bother paying the multiple
fines it received for its spills, according to El Universo. Yet,
Chevron is the target of international campaigns and a lawsuit
by a group of local Indians that is currently underway.
The lawsuit was originally filed in 1993 in the United States,
but was thrown out here in 2002. Then the case was refiled in Ecuador,
where the process has been marred by serious flaws. Richard Cabrera,
the court-appointed expert, has shown a combination of incompetence
and bias against the U.S. company. Cabrera conducted field work
that ignored all scientifically accepted technical procedures for
site assessment, while including members and supporters of the
Frente de la Defensa de la Amazonia (FDA) in his field support
team, Chevron points out. The FDA was formed to represent the group
suing Chevron. Chevron has repeatedly asked the court to remove
Cabrera, but to no avail.
INCOMPLETE AND WRONG INSPECTIONS
While Cabrera had been specifically asked by the court to present
his report after inspecting 122 sites, he did so after only inspecting
47. Even worse, Cabrera took samples from areas that are the sole
responsibility of Petroecuador, areas which Petroecuador has publicly
acknowledged its obligation to remediate, and from areas already
remediated by Petroecuador, Chevron points out. He has also repeatedly
asked the court to stop Petroecuador from conducting remediation
of the areas of the former concession that Petroecuador has publicly
recognized were under its responsibility and have gone unfulfilled
since 1998, according to the U.S. oil company. (See Chevron: Biased
and Improper Report).
Most of the "evidence" from
the group suing Chevron has been analyzed by Havoc laboratory,
which has refused all attempts
(seven, in all, over more than two years) by an Ecuadorian court
to inspect its facilities.
Finally, the court received unwarranted pressure from President
Rafael Correa, who has publicly stated his support for the lawsuit.
While that clearly violates the judicial independence of Ecuador,
it should come as no surprise. After all, Correa is the brains
behind the absurd proposal that the international community pay
Ecuador $350 million per year to not explore oil in the Ishpingo,
Tambococha, Tiputini (ITT) field, which may have reserves of one
billion barrels. (See Ecuador's
Oil Paradox).
It is now up to the court to accept or reject Cabrera's findings.
If it has any sense, it will throw out the report and its recommendations.
If not, it will only provide another chapter in this judicial farce.
-
Chronicle Editors /
Latin Business Chronicle / Monday, June 11, 2007
Petroleumworld
News 04/08/08
ISSUES....
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