First, a little background. Texaco and Ecuadorian Gulf Oil signed a contract with Ecuador in 1964 to help explore for and develop the country’s oil reserves in a large tract in the Amazon. In 1974 Petroecuador acquired a 25 percent stake in the project. And in 1977 Petroecuador boosted its stake to 62.5 percent. In 1992 Petroecuador took 100 percent control over everything. Until 1990, Texaco’s role in the consortium included building and operating oil production facilities, a role that Petroecuador took over in 1990. In 1993, a lawsuit filed in New York alleged that Texaco was responsible for damage to the environment and to human health resulting from its operations. In 1994, Ecuador, Petroecuador, and Texaco signed a memorandum of understating that committed Texaco to perform cleanup at 133 of the consortium’s 321 well sites, which cost $40 million. And in 1998, after an analysis by the laboratory of the Central University of Ecuador, the Minister of Energy and Mines, the president of Petroecuador and the general manager of Petroproduccion, the operational division of Petroecuador, signed a “final release of claims and equipment delivery” recognizing that Texaco had fulfilled its remediation efforts. More recently, in 2008 the administration of President Rafael Correa initiated criminal indictments against two Chevron attorneys and former government officials, claiming that the 1998 release was fraudulently secured.
Now to Chevron’s complaints:
Let’s start with Mr. Salinas. One of Chevron’s complaints is that Manuel Salinas is not among the forty-eight plaintiffs suing Chevron. In a lawsuit that claims to represent 30,000 people in the area around Texaco’s former and Petroecuador’s current operations, that doesn’t seem to invalidate interviewing Salinas, who does live in the area.
Chevron’s complaint here seems legalistic. The issue isn’t whether Salinas is named plaintiff&mdash it’s whether Chevron polluted his well and failed to clean it up.
And that’s an issue where Chevron has a stronger case. Chevron provided me with a map, which it said it also provided to 60 Minutes, along with analyses of Salinas’s well water. The map clearly indicates that Petroproduccion, a unit of Petroecuador, was responsible for the cleanup of the site, known as Shushufindi 38, that was near the Salinas property. The map, published in the 2007 PEPDA annual report and a public record, was produced by Petroproduccion, Petroecuador’s production subsidiary, as part of Petroecuador’s Pit Remediation Project of the Amazon District program (PEPDA). In addition, Petroecuador operated the site after Texaco left the country, according to Chevron. When Donald Campbell, manager of external communications for Chevron, emailed the producer of the segment, Draggan Mihailovich, requesting a correction, Mihailovich responded that Texaco was the operator at Shushufindi 38. That was true twenty years ago, but has not been since. What’s more, according to the map, Chevron was never responsible for cleaning up the site in the first place. (The email exchange was included in the documents Chevron gave me; I began my efforts to talk to 60 Minutes with Mihailovich, who referred me to Tedesco.) (Update May 4 from The Audit’s editor, Dean Starkman: For an exchange between Mihailovich and Hamilton, see the comment posted under my name below.)
Campbell also noted that tests by both Chevron and the plaintiffs in the lawsuit found that the Salinas well was not contaminated by petroleum waste. Instead, tests by Chevron found high levels of E. coli fecal bacteria in the well water. The goo on the stick? Unknown.
Milhailovich’s response to Chevron was that the nearby pit was not cleaned up and that the story accurately reflected Salinas’s words and beliefs. “As for Mr. Salinas’s well, the statement in the story ‘he says pollution leaked into his water well’ accurately captures what he said in the interview and what he believes about the quality of the water.”
Sorry, but that’s not a high enough standard to justify using Salinas’s remarks as evidence that Texaco failed to clean up a site it had polluted, much less using them to lead into the segment.
This isn’t a matter of belief. It’s a checkable fact. Either the well was or wasn’t part of Texaco’s responsibility under the 1994 deal and was or wasn’t polluted by oil. In this case, available evidence says the answer to the first question is no and the answer to the second is maybe not.
In addition, according to Campbell, Chevron didn’t know that Salinas and his well would be featured in the segment until they saw it aired. As a result, Chevron had no chance to make the points it made after-the-fact in unsuccessfully requesting a correction. If true, that doesn’t pass the basic fairness test.