Law

The Chevron Oil Pollution Mess Gets Messier


A child from the Huaorani tribe stands on an oil pipeline belonging to China's PetroOriental in Yasuni National Park in Orellana province, Ecuador.

Photograph by Alejandra Parra/Bloomberg

A child from the Huaorani tribe stands on an oil pipeline belonging to China's PetroOriental in Yasuni National Park in Orellana province, Ecuador.

The world’s largest, most complicated environmental litigation mess has just become even messier, as dissent erupts among the plaintiffs who won an $18.2 billion verdict against Chevron (CVX) in a provincial rainforest court in Ecuador.

That judgment, the biggest single pollution judgment ever imposed, came in February 2011, after 18 years of legal crusading by lawyers representing farmers and indigenous Amazonian Indians who claim they have been harmed by oil exploration and production in eastern Ecuador. Chevron, which has no assets in Ecuador (having inherited its alleged liability via the 2001 acquisition of Texaco), has vowed it will never pay a dime. The company claims the verdict resulted from an elaborate fraudulent conspiracy involving American and Ecuadorian lawyers, Ecuadorian judges, and government officials in that country. Chevron says whatever pollution remains in the rainforest was caused by Ecuador’s national oil company, Petroecuador.

This year the plaintiffs’ team, led by New York sole practitioner Steven Donziger, has filed formal actions in Canada and Brazil, seeking to enforce the Ecuadorian verdict in those nations, where Chevron owns ample assets. While those suits are proceeding, Chevron, represented by Los Angeles-based corporate firm Gibson, Dunn & Crutcher, has countersued Donziger and others in federal court in New York, accusing them of violating the U.S. civil racketeering law.

As if that were not complicated enough, members of one group of Amazonian Indians, the Huaorani, this month filed their own lawsuit against Donziger, alleging that he is not representing their interests and demanding that he and certain of his allies in Ecuador explain how they plan to spend billions of dollars. The Huaorani action, filed on July 19, is of interest for at least two reasons: First, the reclusive tribe has received a large amount of attention as a symbol of the plight of rainforest residents faced with modern industry. Journalist and author Joe Kane portrayed the Huaorani in his 1995 book Savages, which expanded on articles he had written for the New Yorker.

Second, one of the two lawyers representing the Huaorani against Donziger is Judith Kimerling, an environmental law professor at the City University of New York, who is more responsible than any other person for bringing the side effects of the oil industry in the Amazon to the attention of Americans and Europeans. Kimerling published a book in 1991 called Amazon Crude that prompted the litigation culminating in the $18.2 billion verdict. Alleging that Donziger and his allies have failed to provide the Huaorani with basic information about plans for the money, the Kimerling suit says the tribe members “have reason to believe” that the Donziger-led team “will not properly distribute any portion of the judgment proceeds to compensate, mitigate, and remediate the harm to [the] plaintiffs.”

A spokeswoman for the Donziger legal team, Karen Hinton, called the Kimerling action “baseless.” She added: “No funds are available for anyone to do anything at this point.” Whatever money is recovered “will be spent on everyone in the former [oil] concession area for remedying contamination, environmental damage, and health effects. All of the residents will benefit.” Over the years, Kimerling has sought unsuccessfully to intervene in the litigation on behalf of the Huaorani, Hinton noted.

The original lawsuit against Chevron’s predecessor, Texaco, was filed in federal court in New York in 1993. The U.S. judiciary ultimately ruled that the case ought to be heard in Ecuador, leading to the suit being refiled there in 2003. The legal fight has persisted for 19 years—and there is no end in sight.

Barrett_190
Barrett is an assistant managing editor and senior writer at Bloomberg Businessweek. His new book, Law of the Jungle, tells the story of the Chevron oil pollution case in Ecuador.

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