New Evidence of Fraud in Chevron's "Amazon Chernobyl" In Ecuador

Amazon Defense Coalition

FOR IMMEDIATE RELEASE

2009-03-24

Karen Hinton
karen@hintoncommunications.com
703-798-3109

New Evidence of Fraud in Chevron's "Amazon Chernobyl" In Ecuador

On Eve of Final Inspections, Proof that Dozens of Waste Pits Never Touched Were Counted As "Remediated"

Quito, Ecuador (March 24, 2009) –With judicial inspections in Chevron’s long-running environmental trial in Ecuador about to end, new proof has emerged that the oil giant never touched the majority of toxic waste pits that it certified as “clean” to Ecuador’s government in exchange for a legal release, said a lawyer for the Amazon Defense Coalition.

The new evidence will be turned over to prosecutors who already have indicted two Chevron lawyers and seven former government officials for criminal fraud relating to the purported remediation, said Pablo Fajardo, the Ecuadorian lawyer leading the class action lawsuit on behalf of 30,000 rainforest residents.

The purported remediation was performed by Texaco (now Chevron) between 1995 and 1998 on pits that were mostly built in the early 1970s. The so-called clean-up was controversial from the start, with Amazon residents claiming toxic pits were covered with dirt for cosmetic purposes, allowing contaminants to continue leaching into the soil and groundwater to this day. Texaco also received the release before any work was done.

The release has no bearing on the claims of the 30,000 residents bringing the civil suit, as they did not sign off on it, said Fajardo. But it does provide evidence of an underlying fraud that proves the remediation never really occurred, despite Chevron’s claims today to the court and its public relations materials.

Texaco was the exclusive operator of several large oil fields in Ecuador’s Amazon from 1964 to 1990. Chevron bought Texaco in 2001 and will bear any liability in the case.

In any event, the so-called release and remediation are now haunting Chevron in an even bigger way with new evidence that Texaco never even touched the majority of pits it certified as cleaned, said Fajardo. The final four inspections of 101 ordered by the court will be finished this week, clearing the way for a final decision on $27 billion in damages.

“Some pits Chevron covered with dirt for cosmetic purposes and called them remediated,” said Fajardo. “We now know there are many more pits that Chevron never even touched but counted as remediated in its certification to the government.”

“It is just unbelievable that a sophisticated American oil company could think it would get away with this,” added Fajardo. “This took a high level of sophisticated planning and clearly could not have been done without the cooperation of corrupt Ecuadorian government officials.”

A report by Texaco sub-contractor Woodward Clyde, the U.S.-based company that did the clean-up, clearly indicates that the results fell far short of what Texaco claimed at the time and what Chevron today continues to maintain today.

According to the Woodward-Clyde report:
• Texaco agreed under its contract with Ecuador’s government to “remediate” only 130 of its 356 well sites to obtain a legal release from government claims. At the 130 wells sites, it identified the existence of 250 unlined waste pits, which were used to permanently dump toxic sludge when wells were drilled – a violation of customary industry practice and environmental laws in both the U.S. and Ecuador.
• Of the 250 waste pits identified, Texaco actually touched only 162 of them. Texaco claimed he other 88 pits were being “used” by the local community, despite the fact they were filled with toxic oil sludge. (No evidence has ever been produced by Texaco or Chevron that any pit was actually being “used” by the local community other than what its engineers claimed at the time.)

• The 88 pits were designated “No Further Action” based on a “visual” inspection of the pit. No soil or water sampling was done to determine if the pit was actually contaminated with hydrocarbons – a clear violation of scientific protocol and of Texaco’s legal obligations under its clean-up contract with the government.
• Even worse for Chevron, the 250 pits identified was a gross undercount. During the trial, the court found 379 pits at the same 130 sites – or 129 more pits than Texaco had claimed at the time that it was obligated to remediate.
• Texaco thus moved dirt at only 43% of the 379 pits that it was obligated to “remediate” even though it received credit for cleaning all 379 pits to receive its legal release, according to Fajardo.
In September of last year, the two Texaco lawyers who negotiated and supervised the clean-up – American Ricardo Reis-Veiga and Ecuadorian Rodrigo Perez Pallares – were hit with a criminal indictment for lying about the remediation results. Seven key government officials with whom they worked closely at the time were also indicted.

Both Reis Veiga and Perez Pallares continue to work for Chevron. Both have played instrumental roles in supervising Chevron’s defense in the current civil trial where their previous conduct relating to the remediation is at issue.

The lawsuit charges that Texaco dumped more than 18 billion gallons of toxic waste into Amazon waterways and abandoned more than 900 large waste pits gouged out of the jungle floor, creating one of the worst oil-related environmental catastrophes in the world. The $27 billion in damages is more than the company’s record-breaking profits in 2008.

More than 62,000 chemical sampling results are in evidence. The court expert found the sampling results prove that 100% of the inspected sites, which cover an area roughly the size of Rhode Island, show illegal levels of toxic hydrocarbons in the soil.

A final decision by Judge Juan Nunez is expected later this year.