Chevron’s Hubris in the Amazon: Failure to Publicly Apologize for Damage Will Cost Oil Giant $10 Billion


It’s been called the worst environmental crime ever perpetrated, anywhere in the world. Billions of gallons of toxic oil-drilling waste indiscriminately dumped into pristine Amazon waterways used for drinking, fishing and bathing by tens of thousands of Ecuadorians. Three decades of “deliberate” contamination laid waste to an expanse of lush rainforest comparable to the size of Rhode Island. Today, noxious pools of oily sludge still drain into local rivers and streams. Cancer, lung disease and chronic skin lesions now run rampant through the indigenous population, creating a massive public health crisis in a remote area of the Amazon where medical resources (not to mention hope) are scarce.

The good news in this otherwise bleak situation is that it appears the perpetrator – after an 18-year legal battle – will finally be punished for the environmental crime of the ages. Earlier this month, an appeals court in Ecuador upheld a ruling that Chevron, one of the world’s wealthiest corporations, pay $18 billion in damages to plaintiffs who accused the U.S. oil giant of polluting the Amazon rainforest and ravaging their health. It is the largest “environmental damages” award ever handed down.

The huge award is certainly warranted and welcomed, but the real story is that it could have been dramatically reduced, cut in half in fact, had Chevron done one seemingly simple thing – apologize. From a Jan. 3 Reuters report:

A judge ordered Chevron to pay $8.6 billion in environmental damages last February, but the amount was more than doubled to about $18 billion because Chevron failed to make a public apology as required by the original ruling.

“We ratify the ruling of February 14 2011 in all its parts, including the sentence for moral reparation,” said the ruling issued on Tuesday, which was obtained by Reuters.

The court viewed Chevron’s actions in the Amazon as so reprehensible and so heinous that the original ruling included a “moral reparation” stipulation, requiring the oil giant to apologize publicly for the enormous damage it caused. Chevron refused – and in so doing added nearly $10 billion to its payout.

Chevron’s hubris and lack of contrition are epic, particularly in the face of the immense devastation the company wrought in Ecuador. Those potentially fatal flaws aren’t confined to one oil company or one environmental crime. They can be applied across the board to all the major oil companies operating around the world. As far as examples go, you need look no further than BP’s hardball position in refusing to accept any blame for its 200-million-gallon Gulf oil spill.

Chevron and BP (among others) have mountains of damage and anguish to apologize for. Consider this from a Jan. 16 Huffington Post article by Kerry Kennedy, president of the Robert F. Kennedy Center for Justice & Human Rights, who took her family to Ecuador to bear witness to Chevron’s crime:

We looked at pools of oily muck abandoned in the early 1970s that still drain toxic soup into nearby streams used for drinking water, fishing, and washing. We visited the home of an elderly woman who told us about the skin lesions that covered the bodies of her son, daughter, and grandson. She had built the family home on a field Texaco [bought by Chevron in 2001] claimed to have cleaned. In fact, the oil giant had merely covered up the poisonous pond with four feet of dirt and a thin layer of grass. We smelled the fumes emanating from water Chevron claims is now clean. All this is part of the massive environmental damage and accompanying cancer clusters, lung disease, skin lesions and other injuries left behind by a U.S. multinational corporation.

The hubris and admit-no-fault mentality embraced by Chevron, and Big Oil at large, may be the ultimate undoing of the most powerful industry on the planet. As tapping alternative energy sources becomes an increasingly urgent priority around the world, Big Oil’s arrogance and lack of contrition will only intensify. Most of us view oil companies as a necessary evil, but that mindset seems to be turning a corner. It could be that we’re entering a new era in which courts and juries will extract larger and larger damage awards, both compensatory and punitive, against these self-anointed “masters of the universe.” More from Ms. Kennedy’s HuffPo piece:

Over the years, Chevron has behaved in a way that reinforces the worst stereotypes about large corporations: it has cynically avoided responsibility for its past and watched in indifference as more people become sick and die because of its failure to deal with its legacy environmental issues. Today’s public distrust of large corporations obviously can go too far, but it is often rooted in real abuses of the type Chevron engages in to cover up its obvious misconduct in Ecuador. Chevron’s failure to adhere to basic standards of decency undermines the credibility of our capitalist model and diminishes confidence that our judicial system can serve the poor as well as the rich. Chevron’s conduct in Ecuador has been so reprehensible and profoundly cynical that it reflects poorly on our country and its values. I would call that kind of behavior unpatriotic. Chevron must mend its ways in Ecuador or risk being viewed by peoples worldwide as a rogue oil company unworthy of a license to operate in oil-producing nations.

The courts have ordered Chevron to pay $8.6 billion for environmental damage to Ecuador’s environment and its people. Another $10 billion was tacked on because the company refused to publicly apologize for its sins. We’ll see how BP, which up to this point has exhibited Chevron-like hubris, fares when the company goes to trial next month for its part in the worst environmental disaster in U.S. history.

Read the Reuters report here:

Read Kerry Kennedy’s disturbing HuffPo piece:

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Stuart H. Smith is an attorney based in New Orleans fighting major oil companies and other polluters.
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