Source: Financial Times
In 2003, Silvia Garrigo, then a US lawyer for Chevron, was preparing to go into the Ecuadorian rainforest to collect soil samples for testing. She was accompanied by plaintiffs accusing the US’s second biggest oil company of having left a swathe of environmental destruction when it left the country in 1992.“The plaintiffs’ entire technical team showed up in moon suits, with gas masks, put up red tape and said it was a dangerous zone,’’ recalls Ms Garrigo, now Chevron’s manager for global issues and policy.
“It was comical. The rest of the people who were in the ‘toxic zone’ did not have masks, including the judge. This was when we realised this was about theatrics, trying the case in the press.”
That day marked a turning point in Chevron’s strategy. It decided to come out fighting – in effect deploying similar tactics to the plaintiffs. In pursuing such an unusual strategy it hopes to harness public opinion.
Because the lawsuit is a class action, or a popular action, as it is called in Ecuador, anyone affected by the contamination is a plaintiff. So it has been in the plaintiffs’ interest to galvanise as much support as possible.
The battle for popular support has gained momentum in the last year as a decision is likely in the next few months. With each passing month, the fight has grown only more theatrical, including protesters burning effigies of Chevron’s legal team on top of one of the contaminated pits.
The stakes are high. The plaintiffs are seeking $27bn (€19bn, £17bn), making it the biggest environmental lawsuit in history, with potential damages representing roughly one-fifth of Chevron’s market capitalisation of $159bn.
“If it were $27m, this thing would have gone away a long time ago,’’ says Robin West, chairman of PFC Energy, the consultancy.
Instead of reserving comment for the courtroom, Chevron has taken the unusual step of elevating the case on the world stage by hiring a former CNN reporter to tell its side of the story and creating a dedicated YouTube channel.
Chevron’s strategy is in sharp contrast to BP’s defence against charges of failings across its US operations following a major leak in Alaska, a fatal refinery explosion in Texas and a propane trading scandal. While BP shunned public attention, Chevron has sought it.
In fact, this is the first time a major company has been so aggressive in defending itself. While other companies have taken to the internet in the past, none has gone to these lengths.
Gene Randall, the former CNN reporter who founded GRE public relations after leaving the news business seven years ago, explains his role: “They felt the internet was so saturated with anti-Chevron stories, they hired me to get out their story.”
So he spent six months with a camera crew, producers, video editors and translators, travelling to the region and shooting dozens of hours of material, which he pulled into a 14-minute documentary, along with a series of shorter pieces, which Chevron put out in April on YouTube and its website. A search for key words “Chevron Ecuador” points users to the film.
The plaintiffs claim viewers could be misled into believing the film is an independent piece of journalism. Mr Randall denies he has misrepresented himself as a reporter and points to the Chevron tagline on the site.
Amy Myers Jaffe, energy expert at the James A. Baker III Institute for Public Policy, says Chevron has had no choice but to fight back. “In the court of public opinion, proliferation wins. People tend to believe something if they read it on 17 blogs.’’
Meanwhile, the Amazon Defense Coalition, representing the indigenous groups on behalf of the plaintiffs, has employed its own publicist to hit back at the oil company’s claims: Karen Hinton, of Hinton Communications.
“The only reason the plaintiffs hired me was to respond to Chevron’s attacks in the press, not the other way around,” Ms Hinton says. “Chevron has six PR firms on the payroll working on the lawsuit defence, and I stay very busy knocking down erroneous and misleading information shopped by these firms to certain reporters and bloggers.’’
Chevron insists Texaco, which it bought in 2001, thereby inheriting the pollution alleged in the lawsuit, spent $40m on clean-up when its contract ended and it was asked to leave Ecuador in 1992. The Ecuador government had released Texaco in writing from further responsibility.
Yet the plaintiffs say Chevron’s exit agreement did not absolve it of third-party claims, which it has filed on behalf of anyone affected by the oilfield ruin.
They say the company is responsible even for the wells and waste pits that Petroecuador, the country’s national oil company, agreed to clean when it took over from Texaco in 1992 – Texaco had established the operation there and operated it until just before it left.
The case has damaged Chevron’s reputation, given the heavyweights who have backed the Amazon Coalition, ranging from Congressman Jim McGovern to celebrities, including Daryl Hannah, the actress, Bianca Jagger, a human rights activist and former model, and Kerry Kennedy, a human rights advocate and daughter of the late Robert F. Kennedy. The company has also had to contend with a documentary Crude, which opened in the US in October and last week in the UK. It chronicles – against the backdrop of the open oil pits – cancer victims, polluted drinking water and the fight by Ecuador’s indigenous people to hold Chevron accountable, and has gained a wide following.
Chevron’s biggest defence is not that the pollution does not exist but that it did not create it.
“There is no question at all that there is a mess in Ecuador,” says Charles James, Chevron’s executive vice-president. “But we haven’t operated in that country in nearly 20 years.’’
Bill Doyle was responsible for executive oversight of Texaco’s operations in Latin America and Africa from 1987 to the end of 1990 and believes the company is justified in defending itself against the lawsuit.
Nonetheless, he says the company could do its reputation good by putting more emphasis on being conciliatory toward the indigenous people. “Could they shell out $10m for the Indians?” he asks. “That wouldn’t be a bad place to put some humanitarian money.”