Secret Tribunals and Hand-Picked Arbiters—A Little-known System Undermines Environmental Regulation

“Like a War on the Environment” —Texaco’s 30 Years in Ecuador

Blood of the Devil

[00:00:03] Combat bombing, but no longer.

[00:00:13] This is Maria Aguinda, an indigenous woman in Ecuador singing about the damage that oil companies have done to her community. She was the lead plaintiff in the case against Texaco and then Chevron and Ecuador. It's usually referred to as the Aguinda case, after her. In the decades since the case began, there have been various attempts alternately to lionize and discredit her, to cast her as a victim of the oil companies or as a pawn of the plaintiffs attorneys. There is a mountain of situations like this in this case, where one side says one thing, the other side says the exact opposite thing, and there's no way that both could be true. These sorts of things started to really pile up in 2008, five years after the case had initially kicked off again in Ecuador.

[00:01:04] Basically, the closed pit required eight different steps.

[00:01:08] This is Ricardo Reis Vega, who led Chevron's legal team in Ecuador on this case. In this video, with lots of cheesy sound effects, he's explaining the steps that Texaco took back in the 1990s to remediate its drill sites in Ecuador.

[00:01:24] You had to take the oil out. You had to clean the sludges.

[00:01:32] You had to drink the water and take the water out. He had to pass tests of the water. You had to solidify the base. Did he have to put new Dirk?

[00:01:46] And revegetate around the same time that the case against Chevron was filed in Ecuador in 2003, the government of Ecuador filed a criminal complaint against Rie's Vega and another lawyer working for Chevron on the case.

[00:02:00] Rodrigo Perez politesse the complaint, alleged that the two had falsified documents around Texaco's remediation work. You might recognize Pities politesse his name from episode two. He was the Texaco attorney meeting with the president at his beach house to discuss the company's troubles back in 1994. In 2003, the government was questioning whether the 1998 document releasing Texaco of all future liability for its operations in the country was the product of fraud.

[00:02:32] That complaint was thrown out in 2006 for lack of evidence and then refiled in 2008. At that point, Vega and Politesse were indicted for conspiracy to fraudulently certify Texaco's cleanup. Chevron says this was all rigged up by the plaintiffs and points to it as a clear indication that the government and the courts under President Rafael Correa were in cahoots with the plaintiffs, that there was no way they could get a fair trial in Ecuador. [00:03:02]Here's Randy Mastro, an attorney who's been working on this case for Chevron since 2009. [4.7s]

[00:03:08] [00:03:08]He got Ecuadorian authorities without any basis whatsoever to bring criminal charges against two of the old Texaco lawyers who were involved in negotiating the releases when Texaco left the country in the early 90s. Those two lawyers faced criminal charges. They couldn't even travel. One of them was allowed to leave family in Ecuador right on bogus criminal charges. They had done nothing wrong. [31.4s]

[00:03:40] [00:03:40]He in that sentence is Donziger. And it's striking how much Mastro's description of what happened to these lawyers in Ecuador matches how Donziger describes his situation today. [10.9s]

[00:03:52] [00:03:52]I cannot travel. I don't have a passport. I cannot leave my apartment. [4.5s]

[00:03:57] [00:03:57]This kind of he said he said has been going on for years in this case with each side calling out the tactics of the other, each side trying to get the other to flinch. [8.8s]

[00:04:08] In an outtake from a documentary about the case, Donziger talks about this dynamic between legal teams.

[00:04:15] We have to keep pushing on all fronts at all times. That's simple. All fronts at all times. Push, push, push.

[00:04:24] It's just a matter of force. It's pure force who can put the most pressure and who can resist.

[00:04:30] It's just like, you know, all this bullshit about the law and facts, you know.

[00:04:37] Yeah. That factors into it because that affects the level of force. But in the end of the day, it is about brute force who can apply the pressure and who can withstand the pressure. And can you get them to the breaking point?

[00:04:53] It's the only way to litigate a case against a powerful company on behalf of people have no power.

[00:05:01] That pushing was happening in the legal sphere, of course, as the case dragged on each side, accused the other of obstruction and delay tactics. But both sides were also meeting with judges and playing politics, both in the U.S. and in Ecuador. And the case was really playing out in the press.

[00:05:19] By 2008 and 2009, the plaintiffs seemed to be winning on all fronts. Welcome back to Drilled. Season five, Lulu and Angler. This is absurd for the court of public opinion. If you haven't listened to the first three episodes, you're going to need to do that for this one to make any sense. Today, we're going to get into how this case played out in the press and how that played into the verdict in Ecuador. All of that coming up right after this quick break.

[00:06:14] In 2007, William English was getting ready to run a big feature in Vanity Fair on the case against Chevron in Largo, unreal. He had done his homework. He'd gone to the town and to the resignation sites. He'd met with various scientists. He talked to the lawyers on both sides.

[00:06:31] The last thing he needed was responses from Chevron to a list of technical questions with a list of questions today.

[00:06:38] Several Oscars held very technical ones with still a specific remediation went and then what the findings were during the short of opposing Schappell. Sadly, that was done during the court case. They said that they wanted to talk to me and they wanted me to come. So I said, look, I'm happy to talk to you, but only if you answer this question first.

[00:06:59] Seven years later, those questions became a weapon that Chevron used to question languishes journalistic integrity merely because he asked Donziger for his input on them, which frankly is a little weird. But Language explained that he needed Danziger's input on some of the more technical questions for accuracy. And he was hoping Donziger could help him freeze the questions in such a way that Chevron would feel more compelled to answer. At any rate, here's what happened as he was working on the story.

[00:07:31] Answer those questions. Yes or no? Tell me which one. Your responses. If you answer the questions, I'm very happy. At that point, they never answered the questions. They were very specific questions. And then they went after Colin asked. But they had great Carter and Graydon Carter had all green.

[00:07:51] And Carter, of course, was the longtime editor of Vanity Fair.

[00:07:54] Those are the days where great results of last years, Graydon Carter being like, don't mess with Graydon Carter. Shaw, when living with a shred of Losh came when Chevron started pulling that stuff and threatening space. This saber rattling. Stood up to it and we weren't sure. We did go through a verification process.

[00:08:13] The piece was in no sense affected by that process. There was absolutely no censorship of any kind. What did happen is that I in that case had lines that were casually surreal and it wasn't absolutely factual. I had to leave the effect of that on the piece. At the time, I thought it definitely felt like I was sorry. Things just don't relate to it anymore. Sharon had that effect, although recently, because of Danziger's current troubles, I'm seeing maybe six months ago I read the piece together. That piece wasn't as bad as I thought it was at the time.

[00:09:02] That piece triggered an uptick in media attention on the case, which kept building in 2008.

[00:09:08] Then in April that year, the two Ecuadorians who'd been leading a lot of the work on the ground, Louisiana, we met in Episode two and Pablo for Hado were awarded the prestigious Goldman environmental tax.

[00:09:24] He thought, as I see, must have been Daniel's in his himi process live from us young Lucha Paulo, their friends. And they just had either on longan design, yellow DCO.

[00:09:37] I happened to be living in separate Cisco at that time and was actually at this award ceremony. I remember Luis and Pablo getting a standing ovation from the crowd. This was happening right in Chevron's backyard and they weren't super pleased about it. They took out a full page ad in the San Francisco Chronicle calling for Hado and Jansma frauds. But it didn't seem to work. The press continued to stack up in favor of the plaintiffs.

[00:10:02] Now we want to go to Ecuador, where an epic lawsuit pits an American oil giant against a group of Indians from the Amazon rainforest and environmental activists.

[00:10:10] We turn now to Chevron, the oil giant based in California that's being accused of promoting geo political blackmail in its effort to stave off a lawsuit accusing it of contaminating the Ecuadorian Amazon rainforest.

[00:10:24] It's been many years now since residents of Exxon response, Chevron, amped up its PR and lobbying efforts. Its lobbyists began pushing against a trade deal that would benefit Ecuador. And in an email dated September 2008, various Chevron PR folks are going back and forth with one of their external publicists, a guy named Chris Getas, who at the time was with the firm Hill and Knowlton, about a report that they're preparing to cast doubt on the Ecuadorian plaintiffs. And on some of the evidence that they've presented in this case. They're also cracking jokes about not wanting to eat anything that comes out of the water in Lago Agrio.

[00:11:04] A lot of the report that the PR team is working on and talking about in these emails seems to focus on the science in the case, as we heard last time. It's common in Ecuador for both plaintiffs and defendants to commission their own expert reports and submit those to the court. And both sides did. The plaintiffs hired a U.S. firm called Stratis Consulting. Here's one of their experts, Douglas Bultmann, talking to 60 Minutes. It's a disgrace.

[00:11:31] They treated Ecuador like a trash heap, frivolous stream here.

[00:11:36] Doug Veltman worked for the EPA on Superfund sites in the US. He's now the scientific expert for the people suing Chevron. Monitor it.

[00:11:44] Are you saying that Texaco never could have gotten away with this in the United States? No, absolutely not. It wouldn't have happened in the United States if it had happened. They wouldn't have gotten away with leaving it here for 30 years.

[00:11:56] And here is a Chevron appointed expert, Pedro Alvarez, professor of civil and environmental engineering at Rice University.

[00:12:04] When Texaco left, Ecuador decided that it operated. I would consider represented a relatively safe scenario for with regards to potential impacts to human health, both because of the measures that they took to contain and clean up any contamination, and because of the nature of the contaminants that have very little mobility and therefore little Brulle.

[00:12:23] I really people reach a potential receptor on the charge of lasting environmental damage.

[00:12:29] That is a vastly exaggerated charge that is unsupported by the evidence.

[00:12:35] You can see why the judge might want a report from an independent expert. The court appointed a guy named Richard Cabrera. He was tasked with taking and testing samples from all of the former well sites and drafting a report about which sites had been remediated, which sites were still contaminated and how much it would cost to clean everything up. He comes up a lot in this story from here on out, including in Chevron's PR emails.

[00:13:04] Just a couple weeks after the Chevron reps were e-mailing about Cabrera in this report, [00:13:09]Chevron's longtime PR consultant, Sam Singer of Singer Associates, sent the team a new strategy. It breaks down into three key areas to focus on. [10.9s]

[00:13:22] [00:13:22]One, corruption in Ecuador and Correa as the strong man of Ecuador to. Counterattacks against the plaintiffs, including questioning the funding and motives of Cabrera, Donziger and Ecuadorian lawyer Pablo for Hado. Three. [17.4s]

[00:13:41] [00:13:41]Petro, Ecuador, is the real culprit. [1.9s]

[00:13:47] It's a full court press. There are four separate PR agencies, including singers, and they're coordinating with Chevron's PR team. It includes plans for all forms of media and advertising and even money for a front group or a singer puts it, quote, the U.S. Chamber of Commerce or another think tank or organization to create an organization solely devoted to addressing the issues of Ecuador and actively attacking its positions on business, the media, international loans and socialist policies.

[00:14:18] But before this strategy could deliver results. The plaintiffs continued to pick up some wins. First, a bill that extended trade benefits to Ecuador, Peru, Colombia and Bolivia. A bill that Chevron had been lobbying against it passed.

[00:14:37] I am pleased that legislation extending the Andean Trade Preference Act has made it to my desk, and I'm looking forward to signing this piece of legislation.

[00:14:50] Then in 2009, a documentary on the case called Crude was announced.

[00:14:56] Locata and I was once Karadi and now lives in destruction.

[00:15:05] The total area, which Texaco in March, the Chevron PR team was strategizing again and Chris Skeeter's wrote, quote, Our LTE long term strategy is to demonize Donziger. This film provides us a great opportunity to do so.

[00:15:30] Sherman, Texas Before the film came out, 60 Minutes aired its special on the case.

[00:15:35] These are people who never believed they had a right to sue an American company in their own court system.

[00:15:42] Yeah. But you know what Chevron says? They say that this is being driven by a New York plaintiffs lawyer, and they don't mean that as a compliment.

[00:15:50] I'm well aware that they've taken out advertisements in the Ecuadorian press with my name trying to attack my reputation. What do you think of that? Well, I think that it puts me in the membership, frankly, of a very distinguished club of people.

[00:16:13] With the media narrative spiraling out of its grasp, Chevron brought in the big dogs, the law firm Gibson Dunn in fall 2009, the firm was just wrapping up a landmark case for Dole, the food company, which had also been fighting a damages suit in Latin America for decades. Nicaraguan banana farmers had sued the company for knowingly spraying their fields with a pesticide that causes sterilization.

[00:16:39] They won in Nicaragua. But Gibson Dunn attorneys argued that that court had no jurisdiction over Doel, an American company. When did you get involved in the case? What year?

[00:16:55] That's Randy Mastro again. He led Gibson. Dunn's worked for Chevron on the case in Ecuador.

[00:17:00] And what were you know, what was sort of the task at Gibson? Dunn was asked to join the team of outside counsel representing Chevron in connection with the litigation in Ecuador and in connection with trying to find out the truth about what was going on in Ecuador.

[00:17:32] By this point, not only was the media tipping in favor of the plaintiffs, but President Correa had been publicly supportive of the suit as well. Louise Yance of Ecuador says it wasn't even so much that Correa was a great friend to the plaintiffs. He just wasn't as much in the pocket of oil companies as previous Ecuadorian presidents had been Bob Brulle or somebody autists simply as their own. And they basically said his staff have order. They like Compania. Previous governments were always biased in favor of the company, he says. Citrus is symbol's much as I see onis, and we had to have a lot of actions in Quito with marches, meetings, press conferences, meetings with politicians, all of that much. I'm not sure which one, but I mean, really, Sadun was very Adama's a lot, a lot, a lot of work to neutralize the government just so they didn't Baule completely to the company. When Correa was elected, though, NBC promised on the Yablokov to him. He said, look, when he visited the area and talked to the people and realized the magnitude of the damage the company had done and that the struggle we had been carrying out for more than a decade was just a hoax.

[00:18:53] In this video for Yatta and on top of all that, in 2008, Ecuador had ratified a new constitution, one that gave equal rights to indigenous people, and that included a radical new idea, the rights of nature.

[00:19:15] Ecuador is the first country to include these rights in its constitution. At some point, we're gonna do a whole season on rights of nature because it's fascinating and it's really become an interesting new legal tool. But in broad strokes, if you think about private property rights and how they ascribe control over nature to whatever human has purchased, this piece of land rights of nature says forget that nature has its own rights. All life forms have the right to exist and to continue living. And here's where it gets interesting from a legal perspective. It says that legally we, the people have authority to enforce these rights on behalf of ecosystems. The ecosystem itself can be named as the defendant. It's hard to imagine Chevron or really any oil company being happy about this kind of thing.

[00:20:13] And so in 2009, with multiple PR firms and a new legal team on board, the company started to tell a different story.

[00:20:21] A bitter environmental lawsuit against Chevron, the second largest oil company in the United States, appears to be entering its critical phase in Ecuador.

[00:20:30] First, they hired former CNN reporter Gene Randall to host a mirror image version of the 60 Minutes documentary with their side of the story.

[00:20:41] Chevron asked toxicologist Thomas McCue to study the issue.

[00:20:44] The health effects that a burn reported are attributable to exposure to bacteria, which is widespread in the drinking water. Sources there, not attributable to petroleum exposure. No doubt about that. There's no doubt in my mind, despite the claims. That's correct.

[00:21:01] There are fears such findings may be trumped by politics. Ecuador's president Rafael Correa loudly supports the case against Chevron. That's a courageous instigation with the support of the Amazon Defense Coalition. Seven Ecuadorian officials who signed Texaco's environmental liability release face criminal charges.

[00:21:21] He's talking about the attorneys we mentioned at the top of this episode, Ricardo Ruiz, Viðga and Rodrigo Perez politesse along with seven Ecuadorian officials. They were accused of tampering with a release form that had become pretty central to Chevron's defense in this case. Shortly after that 1994 meeting, we mentioned in Episode two where Texaco's lawyer was meeting with the president and various environment ministers. The government came to an agreement with Texaco about remediation. Here's Chevron spokesperson Cantt Robertson explaining that arrangement to NPR.

[00:21:54] In late 2008, Texaco held a 37 percent interest in the consortium with its majority partner being Petroecuador. Texaco has not operated in Ecuador for 18 years. When it was time for Texaco to depart Ecuador, the parties sat down and worked out a remediation program where Texaco would address its proportionate share of the consortium thirty seven point five percent and Petroecuador assumed responsibility for the balance of the operations.

[00:22:28] In 1988, after they had remediated thirty seven point five percent of the pollution, Texaco submitted documentation to the government and the government signed a document releasing the company from any further cleanup. Again, the argument the plaintiffs make and that the lawyer and researcher Judith Kemberly meet us as well is that Texaco was the operator and that means they set everything up and they taught everyone how to do things. They created the oil industry in Ecuador and they set a low standard for environmental responsibility. I asked Randy Mastro about that.

[00:23:03] We've had a few people kind of float this idea of like, yes, OK, technically, Petro, Ecuador has been doing all of this stuff, but, you know, it was Texaco who train them and it's Texaco who built the whole system. What's what is the response to that kind of line of thought?

[00:23:21] Wow, that that is revisionist history and, you know, trying to put the blame where it doesn't belong. Texaco got kicked out of the country. Starting in 1990, Texaco spent, you know, back in the early 90s, you know, 40 plus million dollars and remediation and and other relief. And in those days that that was a lot of money.

[00:23:51] And in independent testing services confirmed that Texaco did what it was supposed to do.

[00:23:57] Like a lot of things in this story, this is kinda true if you squinted it for long enough. Texaco began exploring for oil in Ecuador in 1964 thanks to an agreement with the military Hooda that controlled the country at the time the company struck black gold in 1967. At that time, Texaco was in a partnership with Gulf oil and both companies were eventually acquired by Chevron. In 1974, Ecuador formed a state owned oil company, which would later become Petro. Ecuador, Texaco and Gulf each gave up a portion of their ownership to the new state oil company. And then in 1977, Petro Ecuador bought Gulf out and they became the majority shareholder. Texaco retained ownership of thirty seven point five percent of the concession. That's why that number keeps cropping up. But it continued to be the operator overall of all of the consortium's exploration and production assets. Intel, 1990. In September 1988, Petroecuador alerted Texaco that it intended to take over as operator by 1990. In 1990, Tuxpan and Petroecuador entered into an agreement to transition operations of the oil fields from tax to Petro Amazonas. Texaco retained its minority stake in the concession until its original contract expired in 1992.

[00:25:26] And in 1994, Texaco's lawyer was being flown in Petroecuador, his plane to the president's speech house.

[00:25:40] Which doesn't exactly sound like they were kicked out of Ecuador. Here's Masteroff again.

[00:25:54] And a company expert doing these things got kicked out of the country and remediated the wells that it was responsible for.

[00:26:03] And at every level of the Ecuadorian government, they will release us for that activity. All right. Ben. Over the next 20 years. Because Ecuador kicked Texaco out of the country. Only Petroecuador drills and spills. No. No oversight. None of the kind of, you know, professionalism that might be expected. You know, just drilling and spilling to make money for Ecuador.

[00:26:33] Just a reminder, here's Judith Kimara Ling on what she saw when Texaco was drilling professionally in the Ecuadorian Amazon in the 1980s.

[00:26:43] The company had just dug a hole in the ground and dumped their toxic drilling waste and then abandoned it in the rainforest. And when you abandoned toxic waste in the rainforest, some of it seeps into the ground. You also get a lot of rain. So it overflows into the surrounding areas.

[00:27:02] And I was appalled. Mastro and his firm were hired in late 2009. The 60 Minutes special had come out. Ecuadorian attorneys Louisiana and Pablo Hartov had gotten the Goldman Environmental Prize. Ecuadorian President Rafael Correa had voiced public support for the case and the Constitution of Ecuador had been changed to include the rights of nature. A documentary about the case. An award winning filmmaker was about to debut at Sundance, and the balance of power in this case was about to shift again.

[00:27:56] No way. Would any rational person. He's very rational jeopardize things by cutting corners. He did nothing. He didn't bribe anyone. He has a big mouth. Now, off this guy. Chill. Sure.

[00:28:08] I think if I had it to do over, I would advise my client to completely protest the trial. And unfortunately, Steven didn't have that option because Steven lives in New York and he's subject to the jurisdiction of the court and he has to defend the case. But my clients did have that option, and that was not a card we chose to play.

[00:28:28] You know, I'm not trying to encourage you guys to focus on the misconduct. I think that's what Chevron wants us to all be. But the point I want to make is that, you know, while I think that the actions against Steven are excessive, I don't think that he's just a victim because he's a human rights defender. I mean, I think that narrative is very simplistic.

[00:29:00] Drilled is an original production of the Critical Frequency podcast network. It's created and reported by me. Amy Westervelt, my co reporter on this season, is Karen Savage. Our editor is Julia Ritchie. The show's editorial consultant is Rekha Murthy Mixing and Mastering by Mark Bush.

[00:29:22] Original score by B. Beamon. Special thanks to Laryssa Keda, Trevor Gowan and Emily Girds. Our fact checker is Woodin in our First Amendment. Attorney is James Wheaten with the 1st Amendment Project. Our artwork for this season was created by the talented Matt Fleming. If you are a patriot and subscriber, thank you. Your money is helping to make this season as a special thank you. We will be putting bonus content in the paycheck on feed and also releasing episodes early there,.

[00:29:55] If you're not a member and you want to support our work, please check out Patrie on dot com slash Drilled. That's it for this time. Thanks for listening and we'll see you next week.

Transcription

In September 2009, Chevron filed an international arbitration claim against the government of Ecuador over the Lago Agrio case. In the years since the company has pointed to the decisions of that arbitral panel as something akin to court decisions, but they're not—arbitral tribunals exist to help companies protect their profits, and are largely conducted in secret. This system has been quietly shaping environmental and climate policy for years. In this episode, expert Marcos Orellana walks us through this shadowy system, this case in particular, and what it all means for global climate action.

S5 Chevron Ecuador Documents

La Lucha En La Jungla

S5, Ep5 | The Big Guns