When $27 billion is at stake, some companies would pay big bucks to win a PR battle, but one side of an environmental lawsuit doesn’t have to, since CBS is pushing its position for free.
On CBS’s May 3 “60 Minutes,” correspondent Scott Pelley, who once compared global-warming skepticism to Holocaust denial, gave the plaintiff of a $27-billion frivolous lawsuit against Chevron a public relations victory with his report.
Pelley’s report featured a suit filed by the Amazon Defense Coalition, a group described as “eco-radicals,” who are trying to squeeze $27 billion from Chevron for environmental cleanup that the nation’s government signed off on more than a decade ago. Pelley described ADC as working on behalf of 30,000 villagers, although there are only 48 named plaintiffs, to win funds for so-called environmental damage in Ecuador’s rain forest from then-Texaco Petroleum’s (Texpet) operation of oil well sites.
Pelley left out everything from huge problems in the Ecuadorian courts to the close ties the lead attorney has with a prominent former U.S. senator – President Barack Obama.
In 1998, the government of Ecuador certified that Texpet, a minority partner in an exploration and production venture with PetroEcuador, Ecuador’s state-owned oil company, had met Ecuadorian and international remediation standards and had released Texpet from future claims and obligations. Texpet had cleaned up more than 100 sites in the area as part of that effort, leaving the remainder to PetroEcuador for cleanup.
Nonetheless, a suit led by Steven Donzinger, a New York plaintiff’s lawyer, Democrat contributor and former Harvard Law School classmate of President Barack Obama, against Texaco, now part of Chevron (NYSE:CVX), is entering its critical stage and could be ruled on by a court in Ecuador very soon.
Pelley gave a heavily one-sided report and featured six individuals who had a stake in the outcome against Chevron, versus just one spokeswoman for the defendant – Silvia Garrigo, Chevron’s manager of global issues and policy who called the case "frivolous" and a "fraud." Chevron has posted it's own response about the case on Youtube.
The “60 Minutes” segment included footage from a native Ecuadoran, Manuel Salinas, who contended that pollution from one of the oil well sites in question made his water undrinkable.
“Manuel Salinas’ house is next to one of those pits,” Pelley said. “He’s one of 30,000 people suing Texaco’s owner, Chevron. He says the pollution leaked into his water well.”
However, Salinas lives next to a PetroEcuador site and tests from both Chevron and the plaintiff suing Chevron’s show Salinas’ well (see Table 1, GW-1 Sample) was not contaminated with hydrocarbons, but fecal coliforms (see Table 3A).
That was just part of the flawed evidence Pelley relied on for the “60 Minutes” segment. The entire $27-billion suit centers around the report of Richard Cabrera, who conducted tests for the Ecuadorian government.
“Why $27 billion?” Pelley said. “That astounding figure comes from Richard Cabrera, a geological engineer, appointed by the Ecuadorian court who conducted field inspections to assess the oil damage.”
However, as pointed out by Donald Campbell, a representative from Chevron, and ignored by “60 Minutes,” there are flaws and conflicts of interest that would put the credibility of Cabrera’s report in question:
Major sections of Cabrera’s report are copied directly from plaintiff’s lawyers’ filings;
Members of the Amazon Defense Coalition, an environmental activist organization, staffed Cabrera’s field team and paid him $200,000 for his report;
He proposes a fine associated with cancer impacts, despite not identifying a single individual with a cancer diagnosis or medical documentation to support this claim.
Footage Not Texaco Sites, but PetroEcuador sites
Throughout Pelley’s account, footage was shown that included at least 13 images of currently polluted pits, none of which were Texaco-remediated sites, but weren’t attributed to PetroEcuador either. According to Campbell, the polluted sites Pelley featured were PetroEcuador’s Lago Agrio 5 and one of the Shushufindi sites.
Only 10 seconds of footage was shown from only one Texaco-remediated site, but Pelley had told Chevron he was too busy to visit a Texaco-remediated site personally.
“If Pelley would have spent 60 minutes at a Texaco-remediated site, he would have had a different story,”
That’s in part because PetroEcuador has a horrendous environmental record with more than 1,000 oil spills since 2000. In 2006, BusinessWeek said the company had “suffered an oil spill every two days this year.”
The case will be heard by Juan Nunez, a judge in
“So who is the $27-billion judge? We found Juan Nunez in his court on the third floor of this shopping mall in the Amazon town of
Pelley inquired to Nunez if Chevron would get a fair hearing, explaining Chevron felt otherwise.
“That is not the case,” Nunez replied through a translator. “I believe that justice has to be given to everyone as they deserve – like a good father of a family, to give a child what a child is entitled to.”
However, there is no independent rule of law in
A report by the U.S. State Department issued in March 2008 gives the Ecuadoran judiciary very low marks.
“Systematic weakness and susceptibility to political or economic pressures in the rule of law constitute the most important problems faced by
It also states “criminal complaints and arrest warrants against foreign company officials have been used to pressure companies involved in commercial disputes” and notes its susceptibility to bribery.
Other criticisms of the country’s judiciary have come from the International Bar Association and the United Nations Commission on Human Rights. Yet, Pelley didn’t press Nunez on perceived weaknesses of the Ecuadoran courts.
Cancer Claims Neglected
One-third of the award proposed by Cabrera in the suit, $9 billion is slated for cancer claims, even though no cancer claims are made in the suit. That component was glossed over by Pelley but it is the heart of the claims against the firm.
“Cabrera figures $9 billion should go to clean up, plus new health and water systems,” Pelley said. “He says another $9 billion should compensate for cancer deaths, even though the lawsuit doesn't make any cancer claims.”
However, as Michel Kelsh, a health researcher and professor at UCLA’s School of Public Health and Chevron consultant discovered, there’s no evidence of this has created a spike in cancer – making Cabrera’s $9-billion figure a gross exaggeration.
“We looked at cancer mortality rates in the Amazon region in general, and we compared those rates to
Cancer awards had been sought from Chevron before and have been knocked down by a federal judge in the
In September 2007, a