Ecuadorans Wage Legal Battle Against US Oil Company

In country's oil-rich Oriente region, Indians and colonists file class-action lawsuit against Texaco

Two decades ago, Maria Aguinda watched builders clear a road near her wooden shack home deep in the Amazon jungle. At the time, Mrs. Aguinda knew it meant she could get her crops to market much faster. But the road brought more than progress to this small Quechua Indian farming community, as she and her family now understand. The widow says contaminated water from nearby oil wells has caused her to have stomach and skin disorders and lose scores of pigs and chickens. She no longer bathes, washes, or fishes in nearby rivers that are blackened with oil. Aguinda also has taken another, more dramatic, step: She has joined 76 others on behalf of approximately 30,000 Indians and colonists of the Amazon rain forest, known here as the Oriente, in a $1.5 billion lawsuit against Texaco, the United States company that built the road and pioneered Ecuador's oil operation. Known as Maria Aguinda, et al., v. Texaco Inc., the class-action suit was filed in White Plains, N.Y., where Texaco is heaquartered. THe suit claims that the fourth-largest oil company in the US acted with ''callous disregard for the health, well-being and safety of the plaintiffs.'' It also states that ''large-scale disposal of inadequately treated hazardous wastes and destruction of tropical rain forest habitats caused harm to indigenous peoples and to their property.'' Cristobal Bonifaz, the plaintiffs' lead attorney, says the international lawsuit is a relatively new phenomenon of an era of increasing free trade and global activism. The Ecuadoran native, who practices law in Amherst, Mass., calls it the only way to reign in ''ungovernable multinational corporations.'' Moreover, the legal action is a novel form of protest for indigenous residents of developing countries who say they trust a foreign justice system far more than their own. Aguinda and others, who can't even speak their nation's national language, are relying on a court thousands of miles away to ensure them a better life. So far, they have found reason to hope. ''I believe in US justice,'' says Luis Yanza, president of the Amazon Defense Front, an indigenous organization based in Lago Agrio, the Oriente's largest oil town. ''At least they listen to us.'' Many Ecuadorans say that their country is too dependent on oil to provide a fair trial against a foreign oil company. Oil is Ecuador's lifeblood, a $1-billion-a-year industry that represents 50 percent of the nation's export earnings and 62 percent of its fiscal budget. Economists say oil is this nation's best chance of paying off a $12.6 billion foreign debt. Otherwise, it is left with the nearly hopeless option of trying to pay it with revenues from bananas and shrimp. ''The government has a twisted vision that we have to produce oil, no matter how,'' says Fabio Sandoval, an environmental adviser to President Sixto Duran-Ballen. The lawsuit was filed in November 1993. Under the Alien Torts Claims Act, foreigners can sue in US courts against American companies for injuries resulting from violations of international law. ''I signed my name,'' explains Aguinda in her native dialect, ''because the lawyers told us that if we win, everybody wins.'' Meanwhile, Aguinda's lawyers filed a separate class-action lawsuit against Texaco last December on behalf of 25,000 Peruvian residents. Plaintiff attorneys say oil dumped in Ecuador's Rio Napo reached Peru. Overall, the battle against Texaco is continuing. The New York law suit involving the Ecuadorans has progressed further than any other similar legal action in recent years. Last year, New York Federal Judge Vincent Broderick ruled that it could move forward if the plaintiffs proved that the decision to pollute the rain forest was made at Texaco's White Plains headquarters. The suit has become a cause celebre for US and European environmental groups. The San Francisco-based Rainforest Action Network maintains that Texaco spilled some 17 million gallons of crude oil into the Oriente environment. By comparison, the Exxon Valdez spilled 10.8 million gallons in Alaska's Prince William Sound in 1989. In a recent statement, Texaco spokesman J. Michael Trevino wrote that the suit's allegations are ''based on gross distortions of the facts in an effort to elicit an emotional response and tarnish the company's image unjustly.'' He argues that the company transferred to Petroecuador (the national oil company that took over Texaco's operations in 1990) all production and related facilities ''in good operating order.'' He also says that the plaintiffs should sue in Ecuador since the case involves ''Ecuadoran residents, exclusively, Ecuadoran territory, Ecuadoran natural resources, Ecuadoran oil production and transportation facilities, Ecuadoran laws, Ecuadoran policies governing the opening and colonization of the rainforest region, and Ecuadoran socio-cultural issues.'' Texaco first discovered oil in the Oriente in 1967. By the time its contract with Ecuador had ended in 1992, the company had built 18 production stations, more than 300 oil wells, and a 300-mile Trans-Ecuadoran pipeline that shipped 1.4 billion barrels of oil from 1972 to 1990. The operation transformed this small nation of 11 million inhabitants into South America's No. 2 oil-producing nation after Venezuela. Texaco, which is represented by several law firms including the Atlanta office of former US Attorney General Griffin Bell, claims that their Ecuador operation used state-of-the-art technology and standards that exceeded local requirements. The majority of oil spills, they say, were the result of natural disasters such as floods, landslides, and a 1987 earthquake that destroyed nearly 25 miles of the company's oil pipeline. Attorney Bonifaz, however, argues that the company made a conscious decision to not reinject toxic byproducts deep underground, a customary process in the US, because it would have cost Texaco $1 million per well. Experts say ''reinjection,'' or pumping back into the ground untreated production waters, prevents oil-contaminated wastes from spilling into the local watershed. ''They were fully aware of what would happen,'' Mr. Bonifaz says. In May, Bonifaz took credit for an agreement that the Ecuadoran government signed with Texaco to clean up the pollution. Under its terms, the company promises to close down all toxic-waste pits it left behind, reinject production water, and finance reforestation projects, schools, health clinics, river ambulances, and sewage and water systems in the Oriente's largest communities for health damages caused by the company. Neither the Ecuadoran government nor Texaco spokesman Trevino would say how much the agreement would cost. Bonifaz, however, has rejected the settlement, calling it a ''cheap cosmetic solution'' that doesn't include reinjection for all wells and is a ploy to stop the suit. Indeed, Texaco attorneys sent a letter after the agreement to the White Plains court asking ''in light of the settlement'' to ''dismiss the Aguinda complaint either unconditionally or conditionally.'' In June, Judge Lisa Margaret Smith responded that the suit would go forward: ''Texaco seems to believe that it is in a position to negotiate with the court,'' she wrote. ''Texaco's assumptions have missed the mark entirely.'' Furthermore, according to Bonifaz, Ecuador's Congress is expected to send a fact-finding mission next week to the Oriente to investigate Petroecuador's operations. Jose Miguel Goldaraz, a Capuchin priest who has lived 23 years in the oil boom town of Coca and supports the New York suit, says no settlement is complete unless it includes representatives of major Indian organizations and long-term monitoring of the effects of oil pollution. In protest, the Spanish priest refused to accept a small plane Texaco had wanted to donate to his mission. The Rev. Fr. Goldaraz points to a 1994 report by a team of Harvard-trained scientists who were sent to the Oriente by the Center for Economic and Social Rights, a New York-based nonprofit health and human rights group. They determined that those exposed to the oil had a high occurrence of health problems. Texaco officials, however, call the study ''spurious'' and insist no such link exists between the company's operations and health problems. Alcivar Paredes, a coffee farmer who lives in the area called Shushufindi, disagrees. Mr. Paredes says he experiences chronic ill-health problems and blames his plight on the nearby state-owned oil production station formerly run by Texaco. Recently, he took three visitors to a creek by his home. There he dunked his machete into the clear water. It instantly turned black. ''This is my problem,'' he says, showing the visitors oil byproducts stuck to a rusty blade. ''It's ruining my health and killing my cows.'' Mr. Paredes, who arrived here nearly 11 years ago from Bolivar province, followed the roads built by Texaco that environmentalists say opened up 2.5 million acres of previously untouched homelands of eight indigenous tribes. Currently, some 300,000 poor Andean peasants have sought a new life in the Amazon rain forest. The colonists slashed and burned land to raise crops and cattle, causing massive deforestation and the displacement of thousands of indigenous peoples from their ancestral lands. The World Resources Institute estimates that Ecuador has the highest rate of deforestation in South America, losing more than 100,000 acres, or 2 percent of its forests annually. The Indians claim oil spills poisoned their traditional source of game and fish. In recent years, Indians from the Shuar, Huaorani, Cofan, Secoya, and Siona tribes have been striking back by detaining oil workers and marching on production sites with machetes and shotguns. In the most recent skirmish in April, warriors from the Huaorani tribe - who are on the verge of extinction with fewer than 1,500 members - attacked oil workers from the Dallas-based Maxus Energy Corporation. No one was killed. In the meantime, while lawyers for both sides fight it out in a US courtroom, Maria Aguinda envisions a settlement with a simple outcome. ''The suit gives me hope,'' she says, ''that I will one day have clean water to drink.''