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They Knew What They Did: Texaco in Ecuador

by Theresa Leisgang Thursday, May. 24, 2018 at 4:31 PM

The world has created a system where businesses only have rights but no obligations. There is no internation al tribunal that can make businesses liable for human rights violations abroad. What is perverse is that Terxaco knew it polluted the land.


Texaco left an unparalleled destruction in Ecuador. Pablo Fajardo fights for compensation

By Theresa Leisgang

[This article published in April 2018 is translated from the German on the Internet, The company will acknowledge the judgment when hell freezes over. Pablo Fajardo has much to do.]

May 1 was intense with the following traumas: uncertainty in the streets. Pablo Fajardo had accepted the idea that his adversaries wanted to kill him. He would not give up. However, he had become more cautious since the first murder threat. For example, he reserves bus tickets three hours before the departure. "I could never forgive myself if a bomb blew up on my account and some innocent person died," he said.

Pablo Fajardo, 45, a family man happiest when on his way with a bicycle, is the man who battles the fifth-largest company of the world. For that, he studied law and became a lawyer. All the people in the village raised the money to finance his study. They wanted something to finally change. The soil on which their house stands is poisoned. The groundwater is contaminated. The cancer rate of their province is the highest in the country.

Fajardo fights for compensation for the afflicted from the oil company Texaco which in the meantime was bought by Chevron. There is no international tribunal that can make businesses liable for human rights violations abroad. A group of states under the auspices of the United Nations urge an agreement for enforcing the global liability of businesses but the negotiations are sluggish.

25 Years of Litigation

Pablo Fajardo jointly created the initiative. The Ecuadorian sits in a cramped office in the north of the capital Quinto. Health reports, technical literature from biology and chemistry and a letter to the president of the republic are stacked on a desk. His cell phone rings every five minutes. The loud chicken clucking resounds a silly melody that makes Fajardo laugh. He has maintained his optimism although the litigation has already lasted `25 years.

At the beginning of the 1960s, engineers from Texas drilled for oil in the Amazon basin for the first time. When their firm Texaco withdrew from Ecuador in 1992, they left behind the greatest oil catastrophe of the world up to then, an "Amazon Chernobyl." According to studies, around 65 million liters of crude oil and 70 billion liters of toxic waste water seeped into the soil. No one warned the natives that the groundwater could be polluted with heavy metals, benzyl, and other cancer-causing substances. They had no medicine for the skin rashes of babies, for chronic diathermia and proliferating tumors.

"What is perverse is that Texaco knew that they had polluted the land," Fajardo opened a PDF document on his laptop. A less environmentally-harmful technology for oil production already existed in the 1960s that was patented by Texaco in the US. It was used in the US. But the engineers channeled all the residues into unsafe containers to save costs. "The world has created a system where businesses only have rights but no obligations," Fajardo criticized. The problem is global. In 2012, a fire broke out in the Ali Enterprises textile factory in South Pakistan. 254 persons died more than 50 endured serious wounds. 70 percent of all clothes for the German discounter K.K. were knit here. Still today, the families are waiting for a long-term compensation from the company. They have documented the lack of safety precautions. But no one can force K.K. to fulfill its promises.

Free trade agreements enable businesses to sue states. That happened recently to Australia and Uruguay. The Philip Morris Company sued the governments for protecting their populations from lung cancer with intensified tobacco laws. In Uruguay, the tobacco sought million compensation for future revenue losses. The lawsuit was rejected. But that companies have the possibility to sue foreign states is most important for Fajardo. Citizens cannot sue multinational businesses for their rights.

Fajardo knows this because he tried this everywhere, first before a New York court. Ecuador's highest law court ruled for the indigenous petitioners and ordered Chevron to pay .5 billion compensation. But Fajardo's feeling of success did not last long. The world corporation refuses to accept responsibility. "Hell will freeze over before we recognize this verdict," one of the hundred Chevron lawyers commented. Since the company withdrew all business assets from Ecuador, Fajardo submitted the lawsuit in Argentina, Brazil, and Canada. He even brought the case before the International Criminal Court in the Haag and the Latin American tribunal for human rights.

"There is no justice for the victims of such crimes," says Fajardo. This makes him furious and more resolved to change something. He lost his best friend Maira and many fellow-combatants through cancer. As long as the oil multinational does not clean up its toxic waste, the region will continue suffering under the consequences of crude oil production. At the beginning of March, Fajardo flew to Geneva to report on the case to the UN Human Rights Commission. In 2014, Ecuador and South Africa urged a binding treaty of the United Nations. This agreement should create an obligatory legal framework to call the firms to account. In addition, the initiators want to establish an International Tribunal for Human Rights. Besides governments, 200 organizations from civil society collaborated in the draft. One of them is the union of the concerned from Ecuador.

The US and other big industrial nations like Russia, China and Germany rely on voluntary business responsibility. In 2011, the United Nations passed its guiding principles for the economy and human rights. They should be realized in national action plans.

The European Union is the Biggest Hurdle

The German government presented such an action plan in December 2016. The processing cost over two million euros. Businesses shared the costs. The idea was that the guidelines would then be realized. Critics said this would not work.

Most of the advocates of a binding agreement are governments of poorer countries. Their citizens suffered most under the evaded liability of foreign firms. However, the agreement will only bind states that ratify it. Therefore, it is important to Fajardo that as many states as possible sign it. Vital questions are still open: to what should businesses be obligated? Does the agreement only obligate multinational companies or all firms with foreign subcontractors? With regard to Chevron, how can the judgments of poor countries be carried out in industrial nations?

Pablo Fajardo wanted to discuss these questions with colleagues from the study group. Then they will present a draft of the agreement to the UN High Commissioner for Human Rights. The lawyer sees the critical attitude of the EU as the greatest hurdle for the process. In the end, the EU put the legitimation of its study group in question. Only France accepted a special role. After 2017, French companies must fulfill internationally their human rights duty of care. "This can work," Fajardo says. But Europe must finally show its true face. "The EU must at least openly admit when human rights are not actively protected," the lawyer insists.

The meeting in Geneva showed: it is a long way until European elites support a binding UN agreement. For Fajardo, this is not a reason for giving in. He knows this from the long drawn-out struggles.

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What Will Kill Neoliberalism?

by Saturday, May. 26, 2018 at 12:20 AM

What Will Kill Neoliberalism?

A roundtable on its fate. May 4, 2017

Paul Mason

Take the State

I wrote in Postcapitalism: A Guide to Our Future that if we 
didn’t ditch neoliberalism, globalization would fall apart—but I had no idea that it would happen so quickly. In hindsight, the problem is that you can put an economy on life support, but not an ideology.

After the 2008 financial crisis, quantitative easing and state support for banks kept the patient alive. As the Bank of England governor Mark Carney said last year at the G20 summit in Shanghai, central banks have even more ammunition to draw on should they need it—for example, the extreme option of “helicopter money,” in which they credit every bank account with, say, ,000. So they can stave off complete stagnation for a long time. But patchwork measures cannot kick-start a new era of dynamism for capitalism, much less faith in its goodness.

The human brain demands coherence—and a certain amount of optimism. The neoliberal story became incoherent the moment the state had to take dramatic steps to support a failing financial market. The form of recovery stimulated by quantitative easing boosted the asset wealth of the rich but not the income of the average worker—and rising costs for health care, education, and pension provision across the developed world meant that many people experienced the “recovery” as a household recession.

The one big cause that needs to animate us in the future is a systemic project of transition beyond capitalism.

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