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.

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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.

[vanbbbb]

I also am also amazed at some people here making claims that Chevron is right somehow and talking semantics about oil not being toxic. Are you kidding me??? Claiming 60 minutes was biased....Do you realize how biased Chevron is and how they are not telling the whole truth? My god. That's like giving AIG a pass. Would you like that pollution in your backyard? Easy to say since you are not the natives living there. Unbelievable!! Do you people work for oil companies? Like the man said, that would have never happened here. Chervon has more money that that whole country. give me a break!!

[rocks56]

QUITO, May 6 (Reuters) - Ecuador's state oil company, Petroecuador, received $281 million for its exports in March compared with $563 million during the same month a year ago, the central bank said on Wednesday.

Petroecuador's export income was $199 million in February.

Oil is Ecuador's main export and a key source of revenue to finance its national budget. The sharp drop in oil income could curb President Rafael Correa's heavy spending on the poor that has made him widely popular in the OPEC-member nation.

Petroecuador's exports include crude and oil products. (Reporting by Alexandra Valencia; Editing by Marguerita Choy)

[nospinzone]

This piece has sure kept you Chevron spokespeople busy! I love patrak's "scientific facts". Maybe if Chevron actually tested for the right heavy metals, used an EPA test that was actually designed for oil instead of the TCLP (but that fact doesn't get in the way of Chevron touting its use of "an EPA" test), or took samples from sites based on logic like, downstream from contamination sources instead of upstream. Good thing Chevron took samples from hill tops, you know, just in case the contamination defied gravity and migrated upwards--anything is possible.

Sure, sounds like 60 Minutes spent a lot of time with Chevron. And precisely, because their investigative journalism is balanced and thorough, they didn't fall for the company spin. And they should be congratulated for that.

[woahwack]

Unfortunately, this ridiculous performance by Chevron's spokeswoman -- who compares the oil in her make-up to the chemical traces found in people's drinking water due to toxic waste pits constructed by Texaco -- is just another example of Chevron's corrupt and absurd defense. In fact, this is the norm for even Chevron's lawyers in the case. Just this past month, at an official judicial inspection in front of the judge of the case, Chevron lawyer Diego Larrea elaborately compared a person bathing to dumping contaminated oil water of formation into rivers... and even went on to say that oil production water is the same as ocean water, except with more salt. Where is the logic in this?

You can see for yourself here this ridiculous performance of not just a Chevron spokesperson, but a lawyers:

http://www.youtube.com/watch?v=0jmB9iG6B9k

[patraq]

Journalism aside, here are the scientific facts: (1) occasional skin contact with crude oil and inhalation of crude oil vapors does not cause cancer in humans, period. Simple epidemiology proves this: There would have been hundreds of cases of cancer throughout the over 100 years of oil production in the world as in the early days, workers used to immerse themselves in crude oil regularly. Laboratory testing also confirms this. The cancer cases found are due to other causes; (2) Petroecuador continued to pollute the region with bad operating practices and poor enforcement of environmental laws, typical of 3rd world countries. It is hypocritical for the govt to support this baseless lawsuit on the one hand, while on the other, failing to improve the operating practices of it's own national oil company...and they are obviously going after the deepest pockets they can find;

[patraq]

I have watched and enjoyed 60 minutes for over 30 years and have respected it as true investigative, balanced journalism; but I was appalled at the blatant bias in this story -- Chevron has stated that they worked long and hard with 60 minutes to get the facts straight but 60 minutes ignored them. Until 60 minutes directly answers Chevron's list of errors and omissions, their story has no credibility; the longer the silence, the more damage 60 minutes will do to their hard-earned reputation...

[mauriciopaz]

We at the Business & Human Rights Resource Centre have been tracking this lawsuit against Chevron for many years now. In our portal you can find further information about the lawsuit and links to the pleadings and court decisions:
http://www.business-humanrights.org/LegalPortal/Home
Thanks,
Business & Human Rights Resource Centre
501(c)(3) tax-exempt non-profit in USA

[LetsTryLogic]

Roxy0608 - "Toxic" is a word that gets thrown around a lot by people who do not know what they are talking about or who are deliberately trying to inflame public opinion. I looked it up and "Toxin" is defined as "A poisonous substance produced during the metabolism and growth of certain microorganisms and some higher plant and animal species". So how, exactly, is crude oil a toxin?

I also did a search and pulled up two Material Safety Data Sheets for crude oil, neither from Chevron, which identify crude oil as being non-carcinogenic. It does seem to cause skin tumors on mice if applied over time without washing between applications, but this is non-indicative of a human carcinogen. The primary hazard associated with crude oil, apart from its flammability, is the presence of trace amounts of benzene. But benzene is a volatile substance which, as oil degrades in the environment, is one of the first elements to disappear. I didn't hear "60 Minutes" say anything about benzene, if it's even there at all.

So, again Roxy0608, please explain to me how you can conclude that crude oil is "toxic".

And, nospinzone - your diatribe certainly sounds like "spin" to me. "Don't bother me with facts", you say, "I'm on a roll!".

[jbwillis96]

Good investigative journalism should always take a fair and balanced approach to reporting. It should always show both sides to the story to allow viewers to make their own conclusions. This case in Ecuador is very complex and has many, many issues which could not possibly be covered in a fair and balanced way in 15 minutes. But you would still hope that "60 Minutes" would make every attempt to do so, unfortunately they clearly took the plaintiff's side in this case as they conveniently left out many facts that not only dispute the plaintiffs claims but disprove them. Just a few of those facts:

-The "independent" court appointed expert has assigned claims of $9 billion against Chevron for excessive cancer deaths. However, there is not a single cancer victim identified, a single medical report nor any evidence linking Texaco's activities to any cases of cancer in his findings. In fact the Ecuador's own health statistics show the cancer rate in the areas of Texaco's operations to be no higher (and in some cases lower) than other parts of the country. So I'm not sure how you can assign $9 billion in damages when you have offered no evidence of those damages. As a side note, the lawyer who originally brought this lawsuit against Texaco in 1993 was reprimanded by a San Francisco court in 2007 and was ordered to pay Chevron $45,000 for brining a number of other false cancer lawsuits against Texaco.

-During the program, "60 Minutes" showed a number of pits that clearly were contaminated. What they did not say is that the clean-up of these pits were the responsibility of Petroecuador under the terms of the remediation plan. Petroecuador has stated on numerous occasions that it has FAILED to remediate many of the pits it has responsibility for (even after 19 years). So let me see, they admitted to not performing the remediation but apparantely have immunity for any environmental damage caused by this. Oh and Petroecuador has one of the worst environmental records in the world, having thousands of documented spills over the last decade or so.

-One last point to make. "60 Minutes" interviewed an Ecuadorian who talked about his drinking water being contaminated. His water was contaminated all right, by fecal coliform, not by hydrocarbons. This is no "junk" science either, the plaintiffs own records show this. Perhaps it is possible that oil contains fecal matter but no hydrocarbons. Also what "60 Minutes" did not show was the raw, untreated municipal sewage that get's dumped into the rivers and streams on a daily basis in these areas of the Amazon. Just a hunch, but I'm guessing this is where the fecal matter came from that contaminated this person's drinking water. So it is interesting once again that one of the claims is for Chevron to pay billions to provide water systems, something the government of Ecuador has never provided to it's people.

I could go on and on but it is clear that "60 Minutes" approach to this issue was not fair or balanced and simply ignored many blantant facts that countered the plaintiffs claims.

[nospinzone]

Oh rocks56. A government can enter a contract with a foreign oil company that specifically stipulates that it use the most modern technology and protect the environment. When that company doesn't do so, conducts a sham clean up, refuses to even attempt to clean up the rest, uses junk science to hide the evidence, delays a lawsuit for 15 years while the pollution gets worse, and then said company tries to wash its hands and cry foul, and in its spare time lobbies the USTR to try to meddle in the case, it's a sweet deal. For Chevron.