ECUADOR: U.S. COURT THROWS OUT SUIT AGAINST TEXACO.
The complaint, filed on behalf of some 30,000 mostly indigenous people, alleged that the New York-based company deliberately polluted their water and land.
Texaco denied any wrongdoing and asked that the cases be dismissed on grounds they should be tried in courts where the plaintiffs are located.
US District Judge Jed Rakoff agreed. "The record establishes overwhelmingly that these cases have everything to do with Ecuador and nothing to do with the United States," said Rakoff.
The plaintiffs brought the cases to New York because they were convinced they could not obtain justice in Ecuador, especially since Texaco no longer operates there. If ultimately successful, the case could set a precedent for groups seeking to sue companies in the companies' home country for environmental damages abroad.
Cases stem from oil exploitation in Ecuador
The litigation stems from two suits filed in 1993 and 1994 by residents of the Oriente region of Ecuador and residents of Peru who live downstream from that region.
The class-action suit alleged that a Texaco subsidiary dumped billions of liters of toxic waste into their environment while extracting oil from the Ecuadoran Amazon between 1964 and 1992.
The plaintiffs claimed that Texaco, ignoring oil-industry standards, dumped the substances in local rivers, directly into landfills, or spread them on the local dirt roads instead of pumping them back into emptied wells. The resulting contamination killed off fish and wild game, which indigenous communities depended on for food.
They also alleged that the TransEcuador Pipeline, constructed by Texaco, leaked large amounts of petroleum into the environment. The Indians said they and their families suffered various injuries, including poisoning and developed precancerous growths.
In 1995, Texaco subsidiary TexPet agreed to clean up contamination from oil spills that had affected indigenous communities. The company said it paid about US$40 million in cleanup costs.
"Texaco was firmly committed to the protection of people and the environment in those areas where we operated," the company said in a written response to the lawsuit.
The plaintiffs said, however, that the agreement did not compensate the affected communities.
"This was not an accidental spill, but the intentional and systematic use of our land for the disposal of Texaco's waste," said Luis Yanza, president of the Ecuador-based nongovernmental Committee for the Defense of the Amazon.
A medical team made up of local experts, the organization Medicus Mundi, and the University of London's School of Hygiene and Tropical Medicine reported in 1999 that cancer rates were much higher in the population living in contaminated areas.
"The health of these populations has been gravely affected," said Dr. Miguel San Sebastian, co-author of the report. "The rivers, used daily by local residents, are polluted with oil at 200 to 300 times higher than the permitted level of human consumption."
District Court hears arguments about Ecuador's judiciary
The District Court dismissed the suits in 1996 and 1997 saying the case should be tried in Ecuador rather than in New York. In 1998, however, the US Second Circuit Court of Appeals reversed those rulings and sent the case back to the District Court for reconsideration (see NotiSur, 1998-10-16). Texaco is headquartered in White Plains, New York, within the Second Circuit's jurisdiction.
Last year, Rakoff said he would consider arguments about whether an Ecuadoran court could be impartial. Rakoff said former President Jamil Mahuad had appeared to be trying to improve the independence of the judiciary. His ouster raised concerns that the military might become too involved in civilian affairs.
The plaintiffs had argued that Ecuador's legal system was not sufficiently independent and impartial. They also claimed the judiciary did not recognize class-action suits or tort claims in which compensation is sought for damages caused by a breach of duty.
On May 30, Rakoff again dismissed the suit saying there was no reason the case could not be heard in Ecuador. He said he was satisfied that Ecuadoran courts could exercise "that modicum of independence and impartiality necessary to an adequate alternative forum."
Rakoff quoted the US State Department's most recent human rights report on Ecuador, which gave examples of the country's Judicial Council taking action against corrupt judges.
"While no one claims the Ecuadoran judiciary is wholly immune to corruption, inefficiency, or outside pressure, the present government of Ecuador, headed by a former law school dean, has taken vigorous steps to further the independence and impartiality of the judiciary," Rakoff said in a 46-page opinion.
Cristobal Bonifaz, a Massachusetts-based environmental lawyer and native of Ecuador, said Rakoff misinterpreted the State Department report, noting that the document also described parts of Ecuador's legal and judicial systems as "politicized, inefficient, and sometimes corrupt."
Bonifaz said he would appeal the ruling. "It is an absurdity to say the case has nothing to do with the United States," he said. "All the profits came to the United States. This is where Texaco planned its policy of dumping toxic waste water to save drilling costs."
Bonifaz has also accused Rakoff of bias. Several years ago, the lawyer asked the judge to remove himself from the case after Rakoff confirmed that he had attended an expenses-paid seminar in 1998 at which a former Texaco chairman spoke. Last September, Rakoff denied that motion. [Sources: Reuters, 05/30/01; Associated Press, 05/31/01; Inter Press Service, 06/01/01]