Sunday, November 22, 2015

Chevron vs. Ecuador: Class Action Lawsuit (2003 - Present Time)

Chevron Oil & Gas Company logo

Chevron Oil and Gas Company has been accused and have been sued via legal affirmative action by the country of Ecuador. Chevron has been illegally drilling and contaminating soil, vegetation, and water supplies. Humans and animals of all kinds in this outlet of the Amazon Rain Forest have been using contaminated supplies, which have either seriously sickened the people and animals, and in many cases, fatalities have been caused (Hong & Mackrael). This allegation has been going on for over 50 years, with each year bringing new information. The court case is still ongoing, with recent court verdicts and appeals occurring in May of 2014 and August and September of 2015 (B&HRRC).
In 1964, Texaco Oil Company was in full swing of drilling and farming oil in Ecuador. While drilling and performing other activities common in the oil industry, some pollution started to occur. Crude oil and slicks began to surface in water sources and on the land, which then started to sicken and kill animals and vegetation. Texaco cont united to do these same actions, which did not stop until 1992 when Texaco left the area. The oil slicks and crude oil started to damage the rain forest nearby. The contamination killed many different kinds of animals indigenous to the land. Another problem that occurred was the oil contaminated the water supply, and that area of Ecuador is not developed like the rest of the country. The inhabitants of the area are mainly villagers whom live off the land. The meat and vegetation gathered were contaminated, along with the water. The oil in these products then entered the bodies of the villagers, and would make them sick and deteriorate the health of the villagers. Due to the lack of medical advances in that area, those whom were extremely ill from the oil contamination are either experiencing extreme illness now or have passed away from complications (BBC) (Paz Y Mino). After Texaco vacated the area, locals thought the problems would go away. The area never revitalized itself because Texaco did not clean the land properly. When Chevron decided to acquire Texaco in 2001, the case was dismissed by the United States. Two years went by, and Chevron began to do the same actions that took place while Texaco was the oil producer of Ecuador. In 2003, Ecuador sued the Ecuadorian government and the Texaco lawyers for falsification of data and distribution of proper due process from the 1995 suit. After application of arbitration was filed, which meant Chevron asked for a third part to settle the case, a documentary named Crude was released and was then used as evidence in the case. The following case apparatus is from Environment and Energy Publishing INC, a company that brings important environment cases and situations to the internet’s attention, and details the actions taken in 2011.
In early February, based on the evidence it obtained from Donziger and others, Chevron files a federal racketeering claim against the plaintiffs and their lawyers, alleging the entire case is an extortion racket. U.S. District Judge Lewis Kaplan imposes a temporary restraining order that would prevent the plaintiffs from enforcing a favorable judgment in U.S. courts and possibly elsewhere. Around the same time, the international arbitration panel asks Ecuador not to immediately enforce a court judgment against Chevron. Days later, Judge Nicolas Zambrano issues the long-awaited ruling in Ecuador, awarding the plaintiffs up to $18 billion in damages: $8.6 billion, plus an additional 10 percent to the plaintiffs, to be doubled if Chevron doesn't immediately apologize. As of May 2014, the plaintiffs say that the oil company knowingly dumped 18 billion gallons of toxic waste water and spilled 17 million gallons of crude oil into the rain forest during its operations in North East Ecuador.
They say the affected area covers 4,400 sq. km (1,700 sq. miles) on the border with Colombia. Local residents believe the pollution has led to health problems such as cancer and birth defects (BBC). The people of Ecuador have re-applied and re-issued a lawsuit to Chevron for the lack of clean up that has continued to damper the life of the people of Ecuador. On September 2015, the highest court in Canada on Friday ruled that villagers can move forward with an effort to seize assets tied to the oil company (Hong & Mackrael). This means that the newest class action lawsuit will be held and heard for the next coming months on whether Chevron has a liability and an ethical responsibility to solve the oil spill and contamination in the 4,400 sq. km of Ecuadorian rain forest.

John Watson, CEO of Chevron Oil & Gas Co.

There are two main stake holders for this situation. There are those that have all connection to the company, which is Chevron, its workers, its buyers and sellers, and all whom have invested with the company for a monetary or endorsing aspect. The other stake holders are the people from Ecuador whom were affected from the illegal actions in the Ecuadorian rain forest.
For the ones connected through the company, they all face risks in monetary and reputation. Because of the potential suit price and the freezing of accounts, those who profit from the Chevron actions will see a direct correlation to their income. The reputation of all of these people will also be tarnished. As a society, companies and individuals will look at those connected to Chevron as unethical workers and a burden to the ethical responsibilities of companies.
Those who live in the area where these allegations have taken place are also stakeholders. A stakeholder is someone who is directly affected by a company’s actions, and Ecuador fits that definition perfectly. The people were supplied with contamination from the Chevron/Texaco actions, and have left the people sick, deprived, and defeated. The actions have left hundreds of thousands of people without the proper essentials for a decent life, so they are directly affected. Although no monetary or investing principles have been tarnished or deprived from the people, their way of life and pursuit of happiness has been damaged beyond repair.

We need to respect people’s rights to pursuit their choices so we can all live in the ways we want (Salazar Individualism). From the individualism standpoint, Chevron is wrong. Chevron pursued their own interests and should do so, however they did not respect the choices of the Ecuadorian people. Did the Ecuadorians want to live with deformities? Cancer? Death? No water or food? The answers to these questions are no. No one wants to harm their living quarters and ruin the potential of life and happiness by letting a company illegally drill and dispose/spill over 30 billion gallons of oil in their land.
Milton Friedman, a Noble Prize winning economist says that “The only goal of a business is to profit, so the only obligation that the business person has is to maximize profit for the owner or the stockholders (Salazar Individualism). Friedman would disagree with Chevrons actions because, as stated above, Chevron did not maximize the profit of the stockholders when looking at the citizens of Ecuador. Chevron failed to maximize the profit of the citizens, which was the safety and peace of mind of the people. Chevron’s actions harmed the stakeholder more than helped, which goes against Friedman’s theory and the Individualism theory.

A utilitarian theory is explained in the PowerPoint supplied by Heather Salazar. It states that a utilitarian believes that “happiness or pleasure are the only things of intrinsic value. We ought to bring about happiness and pleasure in all beings capable of feeling it (and do so impartially). If happiness is valuable, there is no difference morally-speaking between my happiness and yours.” (Salazar Utilitarian).
The utilitarian ideology would disagree with the Chevron actions due to the lack of happiness or pleasure that the citizens of Ecuador have now. They ways of life of the people of Ecuador were forever changed when Chevron and Texaco committed illegal drilling and waste management actions in the area. The Amazonian tribes have had medical and safety issues for the past 50 years, and none of which were wanted by the people. The lack of clean up or maintenance of the oil rig mechanisms has led to death, destruction, and sorrow for the people. Their happiness was not considered valuable to the Chevron Company, and that proves that under the utilitarian viewpoint, Chevron acted unethically and morally improper. No matter what the potential gain from the actions committed by Chevron, it is not justified to the utilitarian. So, in the federal lawsuit case of the Ecuadorians vs Chevron, a utilitarian would side with Ecuador.

Thick oil found in Ecuador cleanup of Chevron's oil spill in 2011

Kantianism revolves around the Good Will. The Good Will are actions that are right by doing the correct thing- you have abstained from impermissible actions and have done what is morally permissible or morally required. One has to act rationally, allow and help people to make the rational decisions, respect people and their autonomy, and to do what is right because it is right. (Salazar Kantian). Chevron did not act rationally. Chevron was inconsistent as they promised to do everything by the book and take action when something negative occurs. As the case states, they did not clean their mess and lead to deprivation to people and supplies of the people. The failed the second step by not helping people make the rational decisions. When the people wanted to clean up the area, Chevron said that the water was rich in mineral supply and that it wasn’t a harm to the people (ChevronToxico). The company failed the third step by not respecting the life and expectations of the people of Ecuador. For the fourth step, which is the Good Will, Chevron failed immensely. Chevron did nothing that was right because it was right. When it comes down to back and white text, Chevron threw caution to the wind in order to produce more economic growth at the expense of the people of Ecuador, making a Kantian disagree with Chevron's actions.

Virtue Theory Virtue theory consists of four main virtues of character used in business, which are courage, honesty, temperance/self-control, and justice/fairness. When looking at the four main virtues, Chevron has failed immensely. Chevron did not function off of the right ideas and actions. The right ideas and actions that are virtuous would be those that instill the best potential for all participators. Chevron failed to respect the actions that best influenced the people of Ecuador. Chevron was not honest in telling the people of Ecuador that there could potentially be a risk in their life and sustainability of life. According to Solomon, as supplied by the information in the virtues slides from Heather Salazar, virtues of a business persona are equivalent to those of a citizen. Clearly, the people of the indigenous area of Ecuador where the waste and neglect happened did not ask for it, therefore the business of Chevron acted under false-temperance. The final part, justice, is the most clearly seen flaw with Chevron. Justice focuses on fair practices and hard work and quality products. Nothing in the 4,400 sq. km of destruction show fair practices and hard work. According to Chevron Toxico, “to save money, Texaco chose to use environmental practices that were obsolete, did not meet industry standards, and were illegal in Ecuador and the United States. (Chevron Toxico)”

Justified Ethics Evaluation In my opinion, I side with the people of Ecuador. I would understand this situation of it was a mistake like Exxon Mobil when the Exxon Valdez had an oil spill. Exxon Mobil responded and cleaned the spill because it was brought to the company’s attention and they acted ethically in order to try to save as many animals and water as possible. In Chevron’s case, they purposely ignored the affects the hazardous waste and oil was doing to the land. Their ignorance in cleaning the spill has left many people in pain and shows the immense unethical actions of the company. In addition, the fact that Chevron fails to take blame for the spills and continue to slow down and counter the lawsuit. Chevron Toxico states that this current case is “one of the worst environmental disasters on the planet. Contamination of soil, groundwater, and surface streams has caused local Indigenous and Campesino people to suffer a wave of mouth, stomach and uterine cancer, birth defects, and spontaneous miscarriages. Chevron has never cleaned up the mess it inherited, and its oil wastes continue to poison the rain forest ecosystem (ChevronToxico).
This case is ethically wrong and form a major company, expectations for ethical action is high. The fact that Chevron has been conducting this malpractice for over 50 years, while under Chevron and Texaco, is frightening as to why they are still a major leader in the oil industry and 16 on Forbes list. This company is unethical and immoral, and should have this mentality and business plan erased from their mission statement.


"Canada's Top Court Rules in Favor of Ecuador Villagers in Chevron Case." WSJ. N.p., n.d. Web. 24 Oct. 2015.

"ChevronToxico | About the Campaign." ChevronToxico. ChevronToxico, n.d. Web. 24 Oct. 2015.

"Ecuador Lawsuit." Ecuador Lawsuit. N.p., n.d. Web. 24 Oct. 2015.

"E&E Publishing ." E&E Publishing. E&E, n.d. Web. 24 Oct. 2015.

"Endgame in Ecuador ." Chevron in Ecuador: A Timeline of Events. EEC LLC, n.d. Web. 24 Oct. 2015.

Miño, Paul Paz Y. "Canada Decision Is Message to Chevron: Stop Deaths in Ecuador Now!" The Huffington Post., n.d. Web. 24 Oct. 2015.

Salazar Individualism PowerPoint

Salazar Kantianism PowerPoint

Salazar Utilitarian PowerPoint

Salazar Virtue Theory PowerPoint

"Texaco/Chevron Lawsuits (re Ecuador) | Business & Human Rights Resource Centre." Texaco/Chevron Lawsuits (re Ecuador) | Business & Human Rights Resource Centre. BHRRC, n.d. Web. 24 Oct. 2015.

"US Judge Annuls Ecuador Oil Ruling against Chevron - BBC News." BBC News. N.p., n.d. Web. 24 Oct. 2015.

No comments:

Post a Comment