Lago Agrio: My Visit to Aguarico 4

Since returning from Ecuador, I’ve had two jobs: digging out from the pile of emails and papers that taking a week off from work generated, and doing my best Woodward and Bernstein imitation. I’ve tried to gather some more information about the sites we saw before writing about them. I’ve spent a fair amount of time speaking with folks about one of the two polluted sites we visited, known as Aguarico 4. This post tries to do two things. First, I want to give you a sense of what I saw at the site. Second, I want to ask a question that I think hasn’t gotten enough attention. The pollution at Aguarico 4 and other sites has been there for decades. Why is it still there? Why hasn’t anyone cleaned it up?

What I saw

CotopaxiWe were up very early to take a bus to a small airport about an hour from Quito. Along the way, we had a great view of Cotopaxi, a beautiful volcano more than 19,000 feet high. Cotopaxi is active, but not this week, fortunately. Our outbound flight was upgraded. I believe we were supposed to fly on one of the little planes that we flew for the rest of the trip, but I heard that one of the military pilots was so eager to fly Ambassador Cely, who was with us and who is a highly popular figure in Ecuador, that he pulled rank and made sure that we were on his 727 rather than on the little plane we were meant to fly. I don’t know if that’s true or not.

Lago Agrio courthouseWe flew to Nueva Loja, better known to you and me as Lago Agrio, where we caught a bus to a PetroAmazonas facility. There we had brunch with the Ambassador and the Minister of the Environment. Then we caught a second bus for the drive to the Aguarico 4 site. The drive took us through downtown Lago Agrio, and I was lucky enough to get a shot of the courthouse where it all went down, though unfortunately we weren’t able to stop.

The roads got rougher and rougher until finally we were bumping along dirt roads into the forest. We arrived at a large field where PetroAmazonas workers, soldiers, Ministry of the Environment officials, and reporters milled around. Agua Rico 4 reinjection well In the center of the field was an oil well, which, we were told, PetroAmazonas used to re-inject production water from other, active wells deep underground, into the reservoirs from which the well had previously been used to extract oil. I am told that this kind of reinjection is accepted industry standard and that according to geologists, the oil is injected so deep below the ground that it does not pose an environmental risk. I understood that the main reason PetroAmazonas wanted us to know that the well was being used for reinjection rather than for extraction was that PetroAmazonas was keen for us to understand that in its view all of the production activities that had produced the pollution we were about to see were done on Texaco’s watch. Chevron spokesman Morgan J. Crinklaw disputed this and suggested that the pollution at the Aguarico 4 pit could have been caused by later operations undertaken by Petroecuador. “Suggested” here is not the same as “proved.” Chevron has pointed me to information about various spills and environmental incidents that have taken place on Petroecuador’s watch, but none as far as I can tell at Aguarico 4, and since I am focusing on Aguarico 4 in this post, I think it would be wrong to infer from issues at other sites that Petroecuador was guilty of polluting the Aguarico 4 site.

Agua Rico 4It was time to don our hard hats and industrial-grade yellow boots, apply the bug repellent, and walk a short distance into the forest to see the pit. We stopped three times altogether, each time lower in elevation than the one that came before. The third stop was the open pit. I remember it as being roughly the size of, say, a soccer field, though I didn’t measure. The oil was plain to see, right on the surface even after all these years. The vegetation was coated with it. I heard that in some cases oil could be found in the vasculature of the leaves of the plants, but I wasn’t able to see that for myself. Agua Rico 4

As we were in the middle of the forest, there were no houses very close by (by contrast, at the Yuca 6 site, we could see the house of an indigenous farmer very near to one of the pits). However, we could see the groundwater flowing around and through the polluted pit. We were told that the groundwater carried the pollution generally downhill and into the waters that formed the drinking water supply for the local people. We did not hear a technical presentation from a water scientist, but just by looking it seemed obvious to me that the groundwater was moving through the area and probably carrying along some of the pollutants we could see.

USS Abraham Lincoln with "Mission Accomplished" banner
Credit: US Navy
My first reaction to seeing the pits up close was that if I lived near one of them, and it was contaminating my drinking water supply, I would be hopping mad. If the government’s intention was to show the world that there is pollution in the rainforest that is a product of past oil extraction, then “Mission Accomplished.” I say this without trying to make any point at all about attribution of fault or responsibility.

Why Is Aguarico 4 Still There?

The central question that naturally occurred to me and to the other participants in our trip was simple: why is the Aguarico 4 pit still there? Why wasn’t it cleaned up as part of the remediation Texaco did in the 1990s, and why hasn’t Petroecuador or the government cleaned it up since? I want to devote the rest of this post to this question, rather than to the question of Chevron’s liability or lack of liability for damages arising out of the pollution at the site. I spoke with representatives of all parties in an attempt to get to the bottom of this question, which, from the perspective of the health of the environment and of the residents of the area, if not from the perspective of the law, seems to be the question worth asking.

From Chevron’s perspective, as outlined by Crinklaw, the issue is pretty simple. Texaco did not clean up the Aguarico 4 site in the 1990s because under the remediation plan, it was required to clean up soil contamination around the well itself, but it expressly was not required to clean up the pit. No one seems to dispute that that’s what the remediation plan says on its face, though the plaintiffs and the government would have things to say about it (e.g., the plaintiffs would argue that they were never parties to the remediation agreement or to the release). Chevron’s view, simply put, is that remediation of the pit was beyond what it agreed to do, and that having completed the agreed remediation, it was released by the government from further liability.

Paola Carrera
Assistant Secretary Paola Carrera. Credit: Korea Times
But on the government’s view, according to Paola Carrera, the Assistant Secretary for Environmental Quality, the reason why Aguarico 4 was not on the list of pits to be remediated was that Texaco had covered the pit with dirt and vegetation when it ceased operations in order to conceal the pollution. When PetroEcuador began to recommission the well for reinjection in 2003, it explored the area and found that the soil was “floating” on top of the pit, and it discovered the crude byproducts beneath. So it removed the vegetation and soil. In other words, on the government’s view, it’s true this pit wasn’t on the list to be remediated, but its absence was due to wrongful concealment of the pit by Texaco.

Aguarico 4
Aguarico 4 in 1990. Credit: Ecuador Ministry of the Environment
Chevron did not outright deny that it covered the pit, but according to James Craig, another Chevron spokesman, “There’s no indication in aerial photographs that the pit at Aguarico 4 was ever covered.” The government has provided me with three aerial photographs of the site, taken in 1976, 1986, and 1990, but to be honest it’s difficult for me to derive much information from them. According to Assistant Secretary Carrera, a comparison of the 1976 and 1986 photos shows that two of the three pits that were at the site originally have disappeared. I think the presence of the blue overlays on the 1986 photo, which mark the locations of the two pits, makes it difficult to see whether this is so. The third pit seems clearly visible in the 1986 photo and the 1990 photo, though between 1986 and 1990 it appears its shape and dimensions may have changed; but again, it’s hard to know.

Let’s leave to the side the question of why Aguarico 4 wasn’t on the original remediation list. What’s kept the government or PetroEcuador from remediating the site since then? When considering this question, bear in mind the following clause from Article 397 of Ecuador’s 2008 constitution:

In case of environmental damages, the State shall act immediately and with a subsidiary approach to guarantee the health and restoration of ecosystems. In addition to the corresponding sanction, the State shall file against the operator of the activity that produced the damage proceedings for the obligations entailing integral reparation, under the conditions and on the basis of the procedures provided for by law.

Joseph Stalin
If your middle name is “Stalin”, expect your opponents to use your full name at every opportunity.
According to Chevron’s Crinklaw, PetroEcuador had planned a large-scale remediation, but it stopped remediating due to political pressure from Donziger and his team. Chevron points to Donziger’s “Plan Anti-PEPDA” (“PEPDA” was the name of the early remediation plan) and to correspondence in which Donziger, seeking to stop the remediation, tells Juan Pablo Sáenz, one of the Ecuadoran lawyers on the team: “You have to go to Correa to put an end to this shit once and for all.” Chevron also points to a letter from Richard Stalin Cabrera Vega, the supposedly independent expert, to the Lago Agrio court asking that the remediation at Agrarico 4 and several other sites be stopped so as not to impede his inspections. Since we know that the plaintifs’ team ghostwrote Cabrera’s report, the implication is that they ghostwrote this letter, too. Chevron even points to its expert linguist, Gerald McMenamin, who testified that in his opinion Pablo Fajardo wrote the Cabrera letter. Maybe so: I’ve previously expressed skepticism about this kind of expert testimony, and unlike the Cabrera report itself, there does not seem to be any direct evidence that the Cabrera letter was ghostwritten.

Why were the plaintiffs opposed to the PEPDA remediation? The truth is much more nuanced than Chevron suggests. It’s true that Donziger wanted the PEPDA remediation stopped, but as the emails Chevron has cited show, his team’s motives were mixed. On the one hand, they seemed to think that the remediation would not be high-quality and effective: “The remediation they do isn’t good,” Pablo Fajardo wrote. “What’s going to happen is that they’re going to veneer more or less what Texaco did.” But on the other hand, Donziger’s team had strategic reasons, too, for wanting the remediation not to go forward. Fajardo wrote that “The financial cost is extremely low,” which to me suggests the plaintiffs thought that their damages case might be harmed if the remediation came too cheaply. He also wrote that the remediation would allow “Texaco to say that the State finally assumed its duty and is going to clean up what it ought to.” This suggests a PR concern—a concern that a government clean-up would allow Chevron to deflect blame.

I asked Donziger about this email, and he sent me the following written statement:

At the time of the emails, our legal team had concluded based on a variety of observable facts that Chevron was trying to seduce corrupt elements within Petroecuador to work with it to undermine the legal claims of the villagers by getting it to undertake a sham remediation by covering toxic waste pits with dirt. Chevron’s plan was to point to the sham remediation to tell the world that Ecuador’s government was assuming responsibiity for damage that Chevron had caused. Indeed, this is exactly what happened at the time. Any opposition by the communities to the Petroecuador clean-up was based on the fact that it was grossly inadequate, ignored the wishes of the affected communities, and was part of a subterfuge by Chevron to get out of its own legal obligations. If Chevron, Petroecuador or any other party wants to work with the communities to design and finance an actual and comprehensive remediation of the damage caused by Chevron, the communities and their counsel of course would be committed to doing so at the first possible opportunity.

But whatever Donziger’s motives, according to the government they had nothing to do with the reasons why the site is as it is today. The government’s case, according to Carrera, is that Petroecuador had a plan for remediation and that it has remediated hundreds of sites out of the more than 2,000 sites that ultimately must be remediated (though here the government and Petroecuador are not perfectly aligned: the government has been critical of the quality of some of Petroecuador’s initial remediation efforts and sent it back to do more). But the process was slow, and as I noted in my prior post, unspecified “legal problems” (I believe these must relate to the BIT arbitration between Chevron and Ecuador that is still pending) have led the Republic to maintain the status quo.

As I noted in the prior post, on the one hand, it isn’t clear to me what those legal problems were, but on the other hand, I am not privy to the government’s legal advice. I suppose the main concern is spoliation of evidence. It’s not clear to me why the answer isn’t simply for the government to invite Chevron to test the sites and to do its own testing, and then to remediate them.

I asked Chevron to comment on the reasons for the lack of government remediation: as far as Chevron knows, is there any reason why the government couldn’t or shouldn’t simply remediate the Aguarico 4 site today? No, according to Chevron spokesman Craig: “Ecuador can and should complete the remediation of its share of former Consortium sites, including the pit at Aguarico 4. It has on several occasions acknowledged that it has this responsibility.” So the legal reasons for not remediating today, which seem to be the only reasons keeping the remediation from going forward, remain shrouded in mystery.

Except as noted, the photographs included in this post are © 2014 Ted Folkman

About Ted Folkman

Ted Folkman is a shareholder with Murphy & King, a Boston law firm, where he has a complex business litigation practice. He is the author of International Judicial Assistance (MCLE 2012), a nuts-and-bolts guide to international judicial assistance issues, and of the chapter on service of process in the ABA's forthcoming treatise on International Aspects of US Litigation, and he is the publisher of Letters Blogatory, the Web's first blog devoted to international judicial assistance, which the ABA recognized as one of the best 100 legal blogs in 2012, 2014, and 2015.

6 thoughts on “Lago Agrio: My Visit to Aguarico 4

  1. Let me begin by saying I am the former spokesperson for the Ecuadorians and, even though I no longer am in this role, I continue to write and speak out against Chevron for its effort to evade responsibility in Ecuador. I also share information and work with Steven Donziger and his attorneys pro bono. I have not been paid for my work since March 2013. And, if anyone from the DOJ is reading this, the Government of Ecuador has never paid me.

    With that out the way, Ted asks the question why no one has cleaned up Aguarico 4. Five things are clear to me: 1) Texaco could have prevented the pollution by using widely-accepted drilling & exploration procedures, instead of working on the cheap. 2) Texaco’s remediation, which is Chevron’s main line of defense, was worthless. 3) Chevron could have ended this long ago by doing the right thing. 4) Previous Ecuador governments were both inept and corrupt. They didn’t care about the poor people trying to live with Texaco’s mess. 5) Under Correa, more pits have been cleaned than ever before. It’s not perfect but it’s a start.

    And, who are we to question the government when the US government allowed BP to spoil the Gulf Coast by lax oversight. And, last I read, BP paid for the vast majority of the cleanup costs, not the American taxpayers.

    But in Ecuador, Chevron, its supporters and most reporters believe the Ecuadorian people—via their government—should pay for all or part of the cleanup, medical care and clean water. If someone wants to help me understand that, OK, but I really don’t get that.

    In its arbitration, Chevron is asking that the entire damage award be paid by the Ecuadorians, causing further pain, because $9 billion is a lot of money in Ecuador, tho, it’s chump change for Chevron.

    Ted writes most people wouldn’t want to live near an oil-filled pit, IF it were contaminating the water. Well, I say most people would not want to live near an oil-filled pit period. If the pit is not contaminating the water, it is a safety hazard for many other reasons and should be cleaned and covered. This lowering of standards by US observers because the damage is in the jungle and impacts poor, uneducated people speaks volumes about Chevron’s effectiveness indoctrinating some observers and reporters about how its rights have been violated, when the real victims are the Ecuadorians.

    Clearly, the Government is partly to blame in the same way the US government is to blame for allowing oil companies to do shoddy work offshore. The only difference is the US has the power to, as the Obama Administration said, “put its boot on the throat” of BP, while Chevron sneers at and ignores its legal obligations in Ecuador.

    Finally, Ted, whatever you do, don’t stop quoting James Craig. His latest leaps to the top of my “Stupid Things Chevron Says” list. Instead of just denying that Texaco covered with dirt an oil-filled pit to hide it, he says, “There’s no indication in aerial photographs that the pit at Aguarico 4 was ever covered.”

    Right. That’s the best you got, Craig?

    1. Thanks for commenting, Karen. I think you misread me when you claim that I think people living near oil pits have cause for complaint only if the pits are contaminating their drinking water. Of course that’s not what I think. That said, it was not clear to me that anyone actually lived near the Aguarico 4 pit, so it seemed to me that if anyone did suffer an individualized harm on account of that pit, it would have been through, e.g., pollution of drinking water sources. That’s not a statement about the law (it may not be necessary for an individual to be able to show individualized harm in order to hold a polluter liable), but just about the facts.

      I don’t think it’s just US commentators who think the Ecuadoran government or Petroecuador could or should do the clean-up. I think that’s the view of the Ecuadoran government itself, which—if I understand its position correctly—says it wants to do the remediation but can’t for legal reasons. And, as I point out, I think Ecuadoran law contemplates the state doing the cleanup and looking to the responsible party for payment thereafter.

  2. When I say “most reporters” believe Ecuadorians should pay for part of the cost to clean up, I mean most U.S. reporters.

    And, to answer Ted’s questions as to why Aguarico 4 hasn’t been cleaned, I would say, there are a lot of reasons but the better question is who is going to clean it up now and who is going to pay for it.

    1. Respectfully, Karen, I think you missed the point of the post, which was precisely to put aside the question of who should pay and ask a different question: why hasn’t the site been cleaned up, regardless of legal liability? I’ve written lots and lots of posts about various aspects of the legal case: this one intentionally deals with a different issue.

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