In 1964 Ecuador invited TexPet, a subsidiary of Texaco, to drill for oil in the Amazon rain forest of the country's east. Texaco and Ecuador's Government, its partner, made Ecuador into a major oil exporter -- but at a price.
Now a group of indigenous people who live in the rain forest are suing Texaco over environmental damage, which they say has contaminated their water, killed their food supply and caused disease.
The question before United States District Judge Jed Rakoff is whether he should heed the plaintiffs and hear the case in Manhattan -- Texaco is based in nearby White Plains -- or send it to Ecuador, as Texaco prefers. Judge Rakoff dismissed the suit once, but it was reinstated by an appeals court. Now he should allow the case to be heard in the only forum that can provide a fair trial and enforce penalties, an American court.
The plaintiffs contend that the practices used in disposing of waste oil and oil-contaminated water caused skin and respiratory infections and other diseases.
While there has been no major scientific study of health conditions, researchers from the Harvard School of Public Health, whose work was financed in part by the plaintiffs, found that the local water contained dangerous levels of carcinogens.
Environmental damage is visible -- the soil is covered with a salty crust and dotted with viscous black pools, which sometimes overflow or burn and fill the air with black particles. Residents say the aquatic animals they used to eat have died and that child malnutrition is widespread.
Texaco questions the validity of the studies and maintains that some of the destruction may be due to the influx of people to the zone as it developed economically.
One of the issues before Judge Rakoff is whether the decision on waste disposal was made by officials of the drilling partnership in Ecuador, as Texaco contends, or by Texaco officials in the United States. This will be settled during the trial, but the plaintiffs argue that Texaco closely managed even small decisions in its Ecuador operations.
A $40 million payment that Texaco made to Ecuador's Government in 1995 for cleanup has not eliminated the problems and does not absolve the company of further responsibility to assist the local population.
Ecuador's courts cannot handle the case or enforce a judgment.
Ecuador does not admit class-action suits, has no experience with cases like this one and relegates all environmental disputes to an administrative tribunal, where the largest fine has been a few thousand dollars. This case belongs in an American court, where the contesting claims can be fairly weighed.
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