Or, as the Chevron-Texaco case turns the world upside down,
celebrating a defeat as if it were a victory is abhorrent. That’s exactly what just happened in Ecuador. The government of Daniel Noboa and the Attorney General’s Office celebrated as a success the fact that the Ecuadorian state only has to pay $220 million to the oil company Chevron, successor to Texaco. The transnational corporation’s goal was to obtain some $3.3 billion through a new international arbitration. It’s true that this amount was considerably reduced. But that’s not the point: the oil company was sentenced in Ecuador to pay at least $9.5 billion for the undeniable and documented damage it caused in the Amazon.
That fact is the starting point, or at least it should be, understanding that the victims—represented by the Ecuadorian State—should not have to pay anything… on the contrary, it is the oil company that must assume responsibility for repairing and restoring the damage caused.
The magnitude of the environmental disaster left by Texaco has even led to it being described as one of the greatest environmental catastrophes associated with oil activity, as recognized in The New York Times. The legacy of pollution and ecological destruction constitutes a veritable Amazonian Chernobyl. In fact, between 1964 and 1992, Texaco, directly responsible for all operations within its concession, even used drilling and waste disposal practices that had been prohibited in the state of Texas since 1939.
Aside from the environmental devastation, the human impact was brutal. Indigenous communities such as the Tetete and Sansahuari disappeared. Cruel impacts were inflicted on the health, food security, territorial rights, dignity, and culture of the Siona, Secoya, Cofán, Kichwa, and Waorani peoples, as well as on the lives of settler communities.
The inaction and even complicity of the State have prevented the transnational corporation from compensating the affected communities and restoring the natural environment. In short, beyond the legal debates, the underlying issue is the undeniable social and environmental disaster caused by Texaco, now Chevron-Texaco, during its operations in the Ecuadorian Amazon.
As a consequence of such widespread destruction, a lengthy legal process ensued, led tirelessly by the affected Indigenous peoples and settler communities. After gathering evidence of the socio-environmental disaster described above, on November 3, 1993, a group of 88 Indigenous people and settlers filed the first lawsuit against Texaco in the White Plains court in New York (where the oil company’s headquarters were located), representing 30,000 Amazonian inhabitants affected by the company’s activities. While the Southern District Court of New York initially accepted jurisdiction over the case, Texaco’s pressure led to the rejection of U.S. jurisdiction in 2002. However, the New York court ruled that the company must submit to the jurisdiction of the Ecuadorian courts and comply with their judgments.
In 1995, seeking to avoid the lawsuit, Texaco carried out a supposed “environmental remediation” costing a mere $40 million, which only covered 16% of the 916 waste pits the oil company had abandoned. This “remediation,” carried out under a “Contract for the Execution of Environmental Remediation Work and Release from Obligations, Responsibilities, and Claims,” was accepted by the government, to the point that in 1998 a final handover document was signed, releasing Texaco from all liability. And since then, almost without exception, the norm has been the complicit stance of Ecuadorian government officials and various state institutions.
Years later, on February 14, 2011, the Superior Court of Nueva Loja ruled in favor of the plaintiffs and ordered Chevron to pay $9.5 billion, an amount that would double if Chevron did not apologize within two weeks of the ruling (which the oil company failed to do). The ruling included the obligation to seize any assets Chevron might hold in Ecuador and even abroad—something that was attempted but failed in Ecuador, as we will see below, and even abroad due to the complicity of other governments with Chevron, as happened in Canada and Brazil, and even in Argentina during Cristina Kirchner’s progressive government.
Since then, Chevron has unleashed a campaign—often rife with falsehoods and disinformation—seeking to undermine the ruling by accusing it of procedural fraud; arguments readily embraced by the local defenders of transnational interests. These defenders have no qualms about constructing a biased interpretation, blaming Rafael Correa for the current ruling and the defeat in the arbitration… for having orchestrated the “Dirty Hand of Chevron” campaign during his administration, just after authorizing oil exploitation in the Yasuni-ITT National Park in August 2013. It is worth noting that the arbitration award contains no allegations of political interference in the proceedings challenged by Texaco. Furthermore, the arbitration award is based on documents signed by the State and Texaco in the 1990s, during the administrations of Sixto Durán Ballén and Jamil Mahuad.
What these cronies serving transnational interests are trying to do is protect foreign capital, ensuring, in this specific case, that the brutal destruction caused by Chevron-Texaco, and indeed the complicit actions and omissions of previous and subsequent governments, are completely ignored. All this to maintain a favorable image for foreign investment.
It’s worth remembering that in 2016, during Correa’s administration, one of the arbitrations against the State ordered a payment of $112 million to the transnational corporation ($96 million in compensation and $16 million in interest). This money never reached those affected, since the government pressured those impacted by Chevron to lift an embargo on the oil company’s assets in Ecuador—assets that legally belonged to them. Using the flimsy argument of preventing Chevron from “bankrupting” the country and disrupting international financial negotiations, the government avoided the embargo and was able to place $2 billion in sovereign bonds on the market.
It’s worth recalling that failing to comply with the 2011 court order set a dangerous precedent in 2016: by not enforcing the embargo, the State accepted the arbitration process, even though the Montecristi Constitution—in effect since 2008, Article 422—prohibits such international arbitration proceedings; a prohibition that has been reaffirmed twice in the popular referendums of April 2024 and November 2025.
Failure to comply with the 2011 ruling has once again reinforced a legal aberration: let us remember that Texaco ceased operations in 1992 and that the Bilateral Investment Treaty with the United States, signed in 1993, entered into force in 1997. In fact, the arbitrations stemming from this treaty have, in practice, allowed Texaco to evade its obligations to communities and the environment; arbitrations against the State in which, to complete this perverse scheme, the affected people have no right to participate.
Let us hope that what happened in 2016 is not repeated. The courts must immediately order the seizure of the $220 million. In compliance with the 2011 ruling, ratified by the Constitutional Court in 2018, the money that the arbitration award orders the State to pay the transnational corporation constitutes an asset that must be seized for the benefit of those affected, especially considering that the ruling takes precedence over the arbitration award.
The worst thing that could happen is that silence and complicity allow the country’s sovereignty to be trampled once again. The Chevron-Texaco case reveals the perverse logic by which transnational capital operates, often with the complicity of national leaders, accompanied by the chorus of neoliberal fanatics and the unfailing support of the mainstream commercial press. This logic is also expressed in the systematic destruction of the Amazon, transformed into a sacrifice zone in the pursuit of impossible development.
READ MORE: https://rebelion.org/imposible-tapar-el-chernobil-amazonico-con-arbitrajes/
