CASE STUDY

THE TRIBES VS CHEVRON-TEXACO

PROBLEM-While drilling in the Ecuadorian Amazon from 1964 to 1990, Texaco, which
merged with Chevron in 2001 dumped more than 18 billion gallons of toxic wastewater, spilled
roughly 17 million gallons of crude oil, and left hazardous waste in hundreds of open pits dug
out of the forest floor.
ISSUES
1. Environmental impact-Produced water, is brackish water from within an underground
oil formation that is pumped to the surface along with crude oil. Although the water can
then be separated from oil by technological means, this separation is never perfect, and so
produced water frequently contains petroleum as well as a number of toxic heavy metals.
Produced water is much saltier than seawater, and is extremely hot, rendering it harmful to
aquatic life.
Texaco constructed hundreds of earthen waste pits for its oil operations in Ecuador.
These pits allow toxic waste to leach into surrounding soil, and they overflow in heavy
rainstorms, sending oil into rivers polluting them
2. Health impact-The contamination of water essential for the daily activities of thousands
of people has resulted in an epidemic of cancer, miscarriages, birth defects, and other
ailments. Scientific surveys have confirmed that rates of cancer, including mouth,
stomach and uterine cancer, are elevated in areas where there is oil contamination. Other
studies have found high rates of childhood leukemia in particular among cancers, as well
as an abnormal number of miscarriages. Children whose mothers were exposed to
contaminated water have been born with birth defects.
Beyond the epidemic of these deadly health problems, far more people suffer from
frequent illness of a more minor type. Those who bathe in contaminated rivers report skin
rashes. Those who drink the water report diarrhea.
TRIBAL PEOPLES DEMAND
Tribal people in 2003 filed a lawsuit in Ecuadorian court against Chevron demanding a 28 billion
dollars cleanup of the affected area. This estimate takes into consideration several factors such as
the cost of cleaning up groundwater contamination. The $27 billion figure, although historically
large for a court-imposed penalty, is in line with the estimated clean-up cost for other
environmental disasters of similar scope.
CHEVRONS DENIAL OF ACCUSATIONS-
Texaco quit the oil production in Ecuador in 1990, and handled all its operations to
Petroecuador. Texaco claims that it had spent 40 million dollars in the government supervised
cleanup before turning over all its operations to Petroecuador after which the government signed
an agreement releasing the company from any future responsibilities arising from its prior
operations. Hence they are not responsible to pay the money.