Chevron’s Ethical Dilemma

A court in Ecuador has fined US oil giant Chevron $8.6bn (£5.3bn) for polluting a large part of the country’s Amazon region. The oil firm Texaco, which merged with Chevron in 2001, was accused of dumping billions of gallons of toxic materials into unlined pits and Amazon rivers. Campaigners say crops were damaged and farm animals killed, and that local cancer rates increased. Condemning the ruling as fraudulent, Chevron said it would appeal.

The company will also have to pay a 10% legally mandated reparations fee, bringing the total penalty to $9.5bn (£5.9bn). Pablo Fajardo, lawyer for the plaintiffs, described the court ruling as “a triumph of justice over Chevron’s crime and economic power”. “This is an important step but we’re going to appeal this sentence because we think that the damages awarded are not enough considering the environmental damage caused by Chevron here in Ecuador,” he told the BBC. A Chevron statement said the firm would appeal, and called the ruling “illegitimate and unenforceable”. Hopes of precedent

The lawsuit was brought on behalf of 30,000 Ecuadoreans, in a case which dragged on for nearly two decades. The plaintiffs said the company’s activities had destroyed large areas of rainforest and also led to an increased risk of cancer among the local population. The trial began in 2003 after almost a decade of legal battles in the US. At that time, a US appeals court ruled that the case should be heard in Ecuador. Environmentalists hope the case will set a precedent, forcing companies operating in developing countries to comply with the same anti-pollution standards as in the industrialised world.

Ecuadorean Indian groups said Texaco – which merged with Chevron in 2001 – dumped more than 18 billion gallons (68 billion litres) of toxic materials into the unlined pits and rivers between 1972 and 1992. Protesters said the company had destroyed their livelihood. Crops were damaged, farm animals killed and cancer increased among the local population, they said. Chevron has long contended that the court-appointed expert in the case was unduly influenced by the plaintiffs. Its statement described the ruling as “the product of fraud (and) contrary to the legitimate scientific evidence”. Source: BBC World News

15 February 2011

AnalysisThe Ecuadorian rainforest was contaminated by Chevron during its oil drilling operations there. It affected the lives of thousands of inhabitants who were dependent on the rainforests for their living. The company dug huge oil pits in the forest and dumped 18 billion toxic waste in the soils, rivers and land over a period of 40 years, polluting over 1700 sq. miles of Ecuador. When the local NGOs and the Amazon watch discovered the obvious contamination, they started campaigning against Chevron and took them to court.

Chevron used its power to influence the trial and suppress the campaign to avoid affecting its business in other countries abroad. The case dragged on for 18 years until the final verdict was given in favor of the campaigners but which was immediately overturned by an American court- the power of political influence and money.

Recommendations:* Whatever unethical means the plaintiffs adopted during the trial, it is very obvious that Chevron is guilty of polluting Ecuador so there is no question of not punishing Chevron * Chevron should clean up its oil pit

* The people should be compensated for their health problems and for the loss of their relatives * In addition to compensation, Chevron should take the responsibility of providing medical assistance to the affected people