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Who Signed-Off On Texaco’s Remediation?

“Well, our clients never released Texaco.” – Steven Donziger, 60 Minutes, May 3, 2009

The U.S.-based trial lawyers in the lawsuit against Chevron claim their clients never signed-off on Texaco Petroleum’s remediation, giving them standing to sue the company.

Mr. Donziger fails to mention, however, that this could have never been the case, because the remediation work was conducted on State-owned lands and was reviewed and approved on behalf of the plaintiffs, and every other Ecuadorian citizen, by Ecuadorian officials. According to the law, Ecuadorian officials represent all Ecuadorian citizens.  Otherwise any release would have required the individual consent of every Ecuadorian. Mr. Donziger also fails to mention that none of his 48 clients have filed claims for personal injury or property damage.

When the oil production concession between Texaco Petroleum and Petroecuador ended in 1992, Texaco Petroleum agreed to perform a $40 million remediation program to remediate sites mutually agreed to by both parties and the Government of Ecuador.

During the remediation, dozens of government inspectors, laboratory personnel, and State representatives reviewed the remediation and granted Texaco Petroleum, and all its respective principals and subsidiaries, a full and complete release from any remaining environmental liability.

In addition, four different lawsuits for environmental harm that were filed in 1994 by the municipalities of la Joya de los Sachas, Shushufindi, Lago Agrio and Orellana were settled in 1996. The jurisdictions of these municipalities cover the entire area of the former concession. All four settlements were approved by Ecuadorian courts therefore putting an end to any future environmental claim on those territories under the jurisdiction of such municipalities.

Click on map for larger image:

At the time, under Ecuadorian law, only the government had the right to bring claims for environmental impacts to the state-owned land where the oil operations took place.   Another problem for Mr. Donziger and his colleagues was that they could not file an American styled class action as they do not exist under the Ecuadorian law system.  So, according to press reports, they lobbied Ecuador’s legislature and convinced officials to write a new law to allow collective lawsuits for damages by private citizens when environmental harm had been caused.  In 1999, a year after Texaco Petroleum completed its remediation and was granted a full release by the government, the Environmental Management Act (EMA) was passed.

Still, the 1999 EMA cannot be applied retroactively to a matter already fully settled with the Government of Ecuador. Moreover, the EMA does not grant the clients of Mr. Donziger or any individual “the right” to unrestrictedly sue for environmental harm. This “right” can only be exercised to the extent that plaintiffs have sustained a direct harm (no such claim has been made or proven by any of the 48 plaintiffs). Thus, the plaintiffs are trying to improperly apply the 1999 EMA law in an attempt to extort a settlement from Chevron.

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