Thursday, June 17, 2010

Chevron Should Follow BP’s Lead

In its negotiations with the White House to fund a $20 billion escrow account, BP could have stuck to its legal guns and followed Chevron's example of thumbing its nose at victims of its environmental practices in Ecuador. Instead, BP distanced itself from Chevron's strategy of blaming anyone but itself for the extensive oil contamination it caused to Ecuador's rainforest.

We will see how BP handles liability issues going forward, but this is a step in the right direction.

Chevron should accept what the BP spill makes abundantly clear: profits over safety is not a business plan. In fact, it could put you out of business.

That is proving true for Chevron in Ecuador, where an independent court expert has determined that the company faces more than $27 billion in damages for illegally dumping billions of gallons of oil-related toxins directly into the Amazon from 1964-1990. Audits conducted by Chevron, as well as the company's own sampling results, overwhelmingly prove the company's culpability.

While the BP disaster was an accident, Chevron's dumping was done intentionally as part of a plan to cut costs.

In regard to Chevron's Ecuador liability, two other things have become abundantly clear:

  • Had oil companies like Chevron been held accountable for what happened in Ecuador the likelihood of accidents like the one in the Gulf would have been drastically reduced. Incentives would be different. Companies would have been forced to invest in safety, because they would have known they could not externalize environmental damage to local inhabitants, as has been done in Ecuador and the Gulf.

  • The $27 billion in damages for the Ecuador mess is beginning to sound modest considering the astounding scope of the toxins that Chevron has admitted to dumping in Ecuador. Chevron refers to the number as a "shakedown." But in light of the $60 billion (and growing) price tag of the BP liability and cleanup, $27 billion sounds like a bargain given that the contamination in Ecuador is far larger than the Gulf spill estimates.

How many more Ecuadors and Gulf of Mexicos do we need to suffer through before the oil industry is held accountable?