Chevron: Ecuador Tests Flawed - LATIN BUSINESS CHRONICLE STAFF

Chevron: Ecuador Tests Flawed

REAL CULPRIT: Chevron says Ecuador's inefficient state oil company Petroecuador is to blame for any contamination in the Amazon. (Photo:Petroecuador)

Chevron denounces faulty "evidence" and "expert" bias in the $6 billion contamination case in Ecuador.
BY CHRONICLE STAFF

They want U.S. oil company Chevron (CVX) to pay for alleged damages in the Ecuador Amazon. But their tests are flawed and they have blocked eight attempts to inspect the laboratory they use for their tests. Welcome to the $6 billion case against Chevron in Ecuador, which the U.S. oil company says is increasingly becoming "a judicial farse".

More than 75 percent of the laboratory data presented by the group suing Chevron in Ecuador comes from the Havoc laboratory located in Quito. However, an independent test of soil and water samples by the laboratory shows results that are seriously flawed, Chevron says.

"This independent analysis verifies what we have suspected and what the plaintiffs are clearly trying to hide – the Havoc lab is incompetent and the reports they have prepared [on] behalf of the plaintiffs cannot be trusted," Ricardo Veiga Managing Counsel for Chevron Latin America, said in a statement last week.

Chevron has presented the results to the Superior Court of Nueva Loja. U.S.-based laboratory Wibby Environmental at Chevron’s request sent water and and soil samples spiked with specific, known amounts of hydrocarbons and metals to Havoc laboratories to determine if Havoc could get the correct results. "The Havoc laboratory’s analysis showed levels of barium, cadmium, copper & nickel that exceeded the concentrations in the samples they were sent," Chevron says in a statement. "Havoc’s analysis for polycyclic aromatic hydrocarbons, or “PAHs” (petroleum compounds) was incomplete. The lab's analysis of soil samples showed “unacceptable” results for barium, cadmium."

The source of the samples, and the sponsor of the analysis, was withheld from Havoc in order to ensure an unprejudiced result, the statement says.

HIDING SOMETHING?

Meanwhile, even local Ecuadorian authorities have been unable to inspect the Havoc laboratory. The eighth attempt by the 20th Civil Court of Pichincha since February 2006 was scheduled to occur three weeks ago, but was like the previous attempts - blocked by the attorneys for the group suing Chevron.

"Plaintiffs’ lawyers are afraid that if the truth were exposed about this lab, the Court and the world would see that their allegations against Chevron are made up of nothing but lies and fabrications," Veiga said. "We insist that the plaintiffs’ attorneys and the activist groups that have brought this baseless lawsuit be called to explain the deceit and the fraud they have perpetrated against the Court, their clients, and Ecuador."

The U.S. oil company calls the last-minute maneuvers to prevent a judge of the Civil Court of Pichincha from inspecting the laboratory "a shocking and deliberate attempt to obstruct justice."

The inspection was aimed at determining whether the Havoc lab was qualified and had the necessary equipment and technology to undertake the required analysis of water and soil samples from oil sites in the Oriente region. The Civil Court of Pichincha ordered the first inspection last year after Chevron had noted to the Superior Court of Lago Agrio that the laboratory was not properly accredited by the Ecuadorian Accreditation Organization (OAE) to perform the necessary analyses required in the environmental trial against Chevron.

CHRONICLE OF BLOCKED ATTEMPTS

On the first attempt - on February 17, 2006 - the Civil Judge of Pichincha, Dr. Germán González del Pozo, went to the Havoc laboratory himself on the day of the officially scheduled inspection only to find its doors locked and access to the laboratory's facilities denied. The same happened when he tried to inspect the lab the following month. Thereafter, the attorneys for the group suing Chevron presented him with motions to stop his next two attempted inspections in March and May.

In August last year, the judge requested both parties to appoint the experts for the next inspection. Havoc failed to appoint an expert, and, therefore, once again the judge was forced to cancel the inspection, Chevron points out. Then - in October - another inspection was scheduled, but a few days before, the lab's attorneys filed a recusal claim, which forced suspension of the inspection. The seventh attempt - scheduled for April 24 this year - was stopped when attorney's for Havoc and the group suing Chevron filed a legal motion to stop the court from carrying out the inspection.

Chevron is also denouncing that Richard Cabrera, the court-appointed engineer responsible for overseeing the ongoing expert determination in the suit - is using unsanctioned teams to conduct unsupervised and unapproved field research, in clear violation of court directives.

In a petition to the Superior Court of Nueva Loja, Chevron has detailed how Cabrera has deployed unidentified teams of researchers to search for evidence of environmental impacts outside the scope of his court-mandated obligations without first receiving the necessary judicial approvals. The teams began their work in advance of Cabrera even being appointed to and days before his official inspection began, Chevron says.

NULL AND VOID

The U.S. oil company has therefore asked the court to declare the evidence collected by the teams to be considered null and void. Chevron has previously denounced Cabrera's bias against the company (see Chevron: US Victory, Ecuador Doubts). However, its petitions urging the court to reconsider Cabrera's appointment have gone unanswered, as have its requests seeking that he be required to comply with court orders regarding how his work should be carried out.

Separately, several Ecuadorians have also sued Chevron in the United States alleging they got cancer as a result of Chevron-instigated contamination in the Oriente region of Ecuador's Amazon. Their case was thrown out last month by a U.S. federal court.

Last week an independent study released by Chevron showed that the consensus view of leading epidemiologists and tropical health experts is that there is no evidence to support the claim that the Oriente region is experiencing higher rates of cancer, or that cancer in the region is the result of exposure to oil field sites.

"There is no question that the people of the Oriente face a series of challenges regarding their personal and community health," Silvia Garrigo, a Chevron attorney, said in a statement. "However, these people are being deceived in the worst possible way by the lawyers and activists who have brought this lawsuit."

ECUADOR'S RESPONSIBILITY

The major health concerns in the Oriente region are not the result of oil operations, but the lack of water treatment infrastructure, the lack of sufficient sanitation infrastructure and inadequate access to medical care, Chevron says.

Texaco operated an oil field consortium with Petroecuador from 1964 to 1990, when the Ecuadorian company took over management of the oil field. Texaco continued with a minority stake in the consortium until 1992. In 1995, Texaco agreed with the Ecuadorian government to conduct a $40 million environmental remediation in the area of the former concession. Three years later, the government of Ecuador declared that the remediation was completed according to the terms and parameters agreed upon and released Texaco from any future liability.

In 1993 a group of Indians in the affected areas filed a lawsuit against Texaco in the United States, claiming the U.S. company had contaminated the area. That case was dismissed by the U.S. Court of Appeals of the Second Circuit in 2002, but another lawsuit was filed in Ecuador.

Chevron also says Petroecuador - widely considered one of the most inefficient state oil companies in Latin America - has to take the blame for any oil contamination. In the seven-year period from 2000 to 2006, Petroecuador was responsible for a total of 882 oil spills, Chevron points out.