November 30, 2007
Chevron Responds to Ecuador Ambassador's Letter to The Wall Street Journal
H.E. Luis Benigno Gallegos Chiriboga
Embassy of Ecuador
2535 - 15th Street NW
Washington DC 20009
Fax: 202-667-3482
Dear Mr. Ambassador:
Your letter published in the November 6 edition of The Wall Street Journal is misleading and inaccurate.
While your letter suggests that the Government of Ecuador and the state-owned oil company, Petroecuador, lack responsibility for environmental and health conditions in the Oriente region, the facts of the case clearly show the opposite.
As the Journal's editorial pointed out, Texaco Petroleum Company (TexPet) acted as the operator for a consortium in which Petroecuador was the majority equity owner. Even more important, TexPet's operations in Ecuador ceased in 1990. Since then, Petroecuador has been operating the former consortium fields exclusively, and the record shows that hundreds of oil spills occurred as the result of Petroecuador's poor operating practices. Furthermore, by your own Energy Minister's admission—Petroecuador has done "absolutely nothing to remediate those pits under its responsibility." Instead of addressing these facts, your letter suggests that a United States court has absolved the Government and Petroecuador of any liability.
In reality, Judge Sand's recent decision, which Chevron is appealing, merely prevents Chevron and TexPet from resolving their claims against Petroecuador in a New York arbitration. The decision expressly leaves open the claims against the Government and Petroecuador for breach of the 1995 settlement agreement and 1998 release. Through the 1995 settlement, TexPet completed a $40 million program of environmental remediation and related projects and, in exchange, received a complete release of any environmental liabilities resulting from the former consortium operations in the Oriente region of Ecuador. These facts leave the Government and Petroecuador with sole responsibility for the environmental claims being asserted against Chevron in Lago Agrio.
Judge Sand's decision certainly says nothing about whether Chevron, as opposed to the Government and Petroecuador, validly can be held liable in the Lago Agrio lawsuit. The case against Chevron suffers from a number of threshold legal defects, including but not limited to the failure by plaintiffs to address Petroecuador's responsibility due to its majority participation in the former consortium through 1992, its sole control of those operations for the last 17 years, and TexPet's complete discharge of its responsibility through the 1995 settlement and 1998 release. The Lago Agrio court's failure to take any action on these dispositive legal defenses, which Chevron first asserted more than four years ago, refutes your assertion that "Chevron has been afforded ample due process over legal issues" in that case.
Furthermore, while you imply that the matter should be left to the Lago Agrio court, the Government continues to undermine the integrity of those proceedings by openly and publicly siding with the plaintiffs, which ultimately constitutes undue interference with the independency of the judiciary. Such interference is one of the reasons that the trial has deteriorated into a judicial farce, with the court overruling its own prior orders, violating its own established procedures, and abandoning basic principles of due process.
The Government's actions are impermissible not only because they subvert justice, but also because they seek to shift back onto Chevron the precise responsibility that the Republic and Petroecuador have already publicly acknowledged, and for which Chevron and Texpet were already released as per the 1995 settlement and the 1998 release. As the Journal's editorial demonstrates, the true facts about the handling of this matter are not being missed by the rest of the world.
Sincerely,
Edward B. Scott
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