Amazon Crude

Scott Pelley Reports On A Multi-Billion Dollar Lawsuit Over Oil Drilling Pollution

(CBS)  Chevron is America's third largest company behind ExxonMobil and WalMart. One way it became that big was by buying Texaco in 2001. Now, that purchase of Texaco has pulled Chevron into a titanic struggle in the Amazon.

The people who live in a remote region of Ecuador are suing Chevron, saying reckless oil exploration poisoned the most important rain forest on earth.

Soon, a judge in a tiny Ecuadorian courtroom will decide whether the oil company must pay as much as $27 billion in damages. That would make it the largest environmental lawsuit in history. Most everything is in dispute in this bitter struggle except one thing: powering American cars with Amazon crude has left a toxic legacy.

---

Beginning in the 1960's, Texaco came to northeastern Ecuador to tap into one of the largest oil reserves in the Americas.

Texaco was a partner with Ecuador's national oil company, Petroecuador. And over 23 years, Texaco pumped out one and a half billion barrels of oil. Hundreds of wells were drilled. And at each well site, pits were dug to hold toxic oil waste that comes up during drilling.

Generally two or three pits were carved out near the well site. Trouble is, when Texaco finished its drilling, the waste pits were abandoned by the hundreds and for decades.

Manuel Salinas' house is next to one of those pits. He's one of 30,000 people suing Texaco's owner, Chevron. "We couldn't drink the water," Salinas told 60 Minutes correspondent Scott Pelley.

Salinas says the pollution leaked into his water well.

"It's a disgrace. They treated Ecuador like a trash heap," says Doug Beltman, who worked for the EPA on Superfund sites in the U.S.

He's now the scientific expert for the people suing Chevron.

"Are you saying that Texaco never could have gotten away with this in the United States?" Pelley asked.

"Oh, absolutely not," Beltman replied. "It wouldn't have happened in the United States. And if it had happened, they wouldn't have gotten away with leaving it here for 30 years."

In Texas, for example, pits like this are supposed to be temporary, isolated from fresh water, and soon after emptied and backfilled. But in Ecuador one pit 60 Minutes saw has been there for 25 years and we found it's actually designed to overflow into streams.

"They put these pipes in the side. So that as it rains, it fills up with water, contaminated water, it just dumps out into the jungle," Beltman explained.

"Well, it rains here in the rainforest all the time, so there's water pouring out of it now. And if you smell the water, you can clearly smell the oil pollution in it. Runs right down the ravine, where you are, and right down into the stream, not 50 yards down that way," Pelley observed.

When they stirred the bottom of the nearby stream, oil floated to the top.

Texaco left Ecuador in 1992 and today, Texaco's owner, Chevron says the pollution is now the responsibility of Petroecuador, Texaco's former partner. That dispute is the heart of the lawsuit.

The people who live in this river society call themselves "los afectados" - the affected ones. They use the waterways for washing clothes, bathing and drinking. Texaco acknowledged that it dumped, into the rain forest, billions of gallons of what is called production water. Production water is waste that comes up with the oil. In fact, it's often salty and laced with chemicals.

60 Minutes traveled down river in search of an Indian tribe which is part of the group suing Chevron. For centuries this has been the territory of the Secoyas.

We sat with two of their leaders who said they'd never seen oil until it was on the river. Humberto told Pelley oil looked like flowing black blankets and ruined the fishing.

The Secoyas took 60 Minutes to their community hut, where we saw the driving force behind the suit, Steven Donziger, a New York lawyer, far from home.

"These are people who never believed they had a right to sue an American company in their own court system," Donziger told Pelley.

"Yeah, but you know what Chevron says. They say that this is being driven by a New York plaintiff’s lawyer, and they don't mean that as a compliment," Pelley pointed out.

"I'm well aware of that. They've taken out advertisements in the Ecuadorian press with my name trying to attack my reputation," Donziger said.

Asked what he thinks of that, Donziger told Pelley, "Well, I think that it puts me, in the membership frankly, of a very distinguished club of people."

[tejhoustontx]

""Yeah, but you know what Chevron says. They say that this is being driven by a New York plaintiff?s lawyer, and they don't mean that as a compliment," Pelley pointed out. It is. He disputes that."

When an attorney from NY digs to find people in REMOTE villages in another country that he has no jurisdiction in to sue a company, it?s all about the money. He could give two flips about these people. I?m sure he was the mastermind behind the scheme to bilk Chevron out of billions of dollars.

""At the end of the day, it might be a situation where a U.S. court enforces the judgment, and the marshals have to go to Chevron and seize their assets," he replied."

Instead of people always thinking the corporations are bad, look at the people driving the charge and their motivation. Do you truly believe that his main concern is the villagers? No.

Since Mr. Pelley won?t be updating this story, here are some events that have transpired since this story:

Ecuadorean judge presiding over a $27 billion environmental lawsuit against Chevron has recused himself.

Earlier this week, Chevron released a video in which the magistrate allegedly told a businessmen he had already made up his mind to rule against the company.

He has denied allegations of misconduct made by the San Ramon, California-based company and told The Associated Press on Friday that the tapes were "edited and manipulated."

Chevron says it did not doctor the tapes and that it welcomes the investigation.

The president of the provincial court must approve Nunez's recusal.

Video: http://www.youtube.com/watch?v=var67Gg9rKs

[tejhoustontx]

""Yeah, but you know what Chevron says. They say that this is being driven by a New York plaintiff?s lawyer, and they don't mean that as a compliment," Pelley pointed out. It is. He disputes that."

When an attorney from NY digs to find people in REMOTE villages in another country that he has no jurisdiction in to sue a company, it?s all about the money. He could give two flips about these people. I?m sure he was the mastermind behind the scheme to bilk Chevron out of billions of dollars.

""At the end of the day, it might be a situation where a U.S. court enforces the judgment, and the marshals have to go to Chevron and seize their assets," he replied."

Instead of people always thinking the corporations are bad, look at the people driving the charge and their motivation. Do you truly believe that his main concern is the villagers? No.

Since Mr. Pelley won?t be updating this story, here are some events that have transpired since this story:

Ecuadorean judge presiding over a $27 billion environmental lawsuit against Chevron has recused himself.

Earlier this week, Chevron released a video in which the magistrate allegedly told a businessmen he had already made up his mind to rule against the company.

He has denied allegations of misconduct made by the San Ramon, California-based company and told The Associated Press on Friday that the tapes were "edited and manipulated."

Chevron says it did not doctor the tapes and that it welcomes the investigation.

The president of the provincial court must approve Nunez's recusal.

Video: http://www.youtube.com/watch?v=var67Gg9rKs

[avidwatcher]

Chevron withdraws key claim in US that Ecuador's government released them of liability in 1995. http://tiny.cc/1Fr7z

[drivin98]

Why doesn't the video work anymore?

[tylerdurdenpcb]

What an awful piece of biased journalism. I guess Pelle wants to be the great environmental crusader.

There were contracts. Those contracts state who is responsible. Mr. Pelle should have related the responsibilities from there rather than the biased opinions of those who have to gain. All this will be is a money grab from chevron/texaco/usa who was the JUNIOR partner. And yes, most lawyers are scum bags who will say and do anything for money.

We have corrupt politicians running amok in DC and the best your program can do is this pseudo journalism??? I'm afraid my 35 year viewership is over.

[ahoffmanCJD]

The fact that Chevron deemed it appropriate to create its own 60 Minutes-style "news-like" report to counter the bad publicity resulting from this story was beyond pathetic--and screaming to be satirized. To that end, for those wishing to inject a bit of levity into your day, you are officially invited to ThePopTort to see a copy of Chevron's "leaked" PR meeting transcript...http://tinyurl.com/r8zbd3

[tyoungos]

If unscrupulous American corporations like Chevron didn?t exploit the poor people in South America, this 60 Minutes story would not have happened. The story reminds me of another unscrupulous American corporation Smithfield Foods which is the true culprit of the current Swine Flu. See the article
http://www.financialsense.com/editorials/engdahl/2009/0429.html

[mlcb]

I would like to express my deep and heartfelt thanks to 60 minutes for giving such important coverage to an all but voiceless people. Having personally seen the pits, and having stayed with the families who have lost children, parents, siblings, and friends to the fatal diseases caused by this waste I cannot stress enough the catastrophic situation 'on the ground'. Thank you to everyone who watched and who gives witness to their struggle.

[Sh9nagawa]

While I question if Chevron is responsible for all the amount of $27 billion to clean up the mess, the amount of 27 billion is relatively minor for the firm.

For example, during the 2008 fiscal year, Chevron made 273 billion in revenue, $43 billion in pretax, and $24 billion in Net Profit After Tax. Chevron is liable to pay the cost to clean up in proportion to what much the firm benefited from operating in the Ecuador.

By the way, what happened about conclusion of the case of crude oil spill in Alaska by Exxon Valdez. Did Exxon pay the cost to clean up and restore the environment and compensate the fishermen and women, who suffered from the Valdez incident? Exxon Mobil pay some $400+ million in 2008 (+) for the retiring CEO in that year, including paying his country club membership fees after he retired from Exxon Mobil while the firm appears to be still dragging to settle the case. Your update is appreciated.

[trikikuestion]

If 60 Minutes is biased, then CNN, the GoldmanPrize, Vanitty Fair, etc, etc, etc. must also be biased.
Not a long time ago, Pablo Fajardo, the main attorney for the plaintiffs, received the "HERO'S AWARD" by CNN. Then the GOLDMAN PRIZE was given to him the next year.
It's also important to remember that VANYTTY FAIR also dedicated to him an extensive section on the case.
are you really saying that all of these respected sources got the story wrong????
are you saying Fajardo tricked every one?? haha then Fajardo must be really something...
do you realize that Chevron has attacked every single article or news report that fails to show only their side of the story - according to them every one is wrong but them... but, could it be the opposite? I think 60 minutes shows both sides, but it's not the reporter's fault that Garrigo did such a terrible job defending their arguments.
how is that no one (but the people working for Chevron) is defending Chevron?
how can you dare to say Unce Sam is on Chevron's side?? As far as I know, Uncle Sam respects lives over profits.
you should be ashamed for trying to make this an "American cause" when most of the Americans are shamed of this company's behavior abroad.