Ex-Energy Minister Says Texaco Knew it was Polluting Amazon

Texaco knew it was damaging the environment when it launched operations in the Amazon jungle three decades ago, a former energy minister testified Monday in a civil trial against California-based ChevronTexaco.

Retired army Gen. Rene Vargas, who headed Ecuador's Energy Ministry during a military dictatorship in the early 1970s, said that state-owned Petroecuador lacked environmental engineers and relied on the U.S. company to make decisions.

Among those decisions, plaintiffs allege, Texaco chose to dump 18.5 billion gallons of oily water brought up during drilling into some 350 open pits and streams instead of reinjecting it deep underground in order to cut costs.

"Texaco knew that these methods were damaging," Vargas told reporters, summarizing his testimony in the trial being held in the oil production town of Lago Agrio, some 110 miles northeast of Quito. "If Texaco had done the same thing in the United States, they would all be in prison."

The lawsuit, brought by 88 people representing 30,000 poor jungle settlers and Amazon Indians, came to Ecuador after the case spent a decade winding through U.S. courts.

It seeks to force San Ramon-based ChevronTexaco to clean up contamination that Texaco allegedly left behind when it withdrew from Ecuador. Texaco merged with Chevron in 2001.

The week-old trial marks the first time a multinational oil company has been subjected to Ecuadorean jurisdiction for alleged environmental damage. Lawyers for the plaintiffs estimate it will cost $1 billion to clean up and provide medical care for the region's inhabitants.

ChevronTexaco lawyers have argued that the lawsuit should instead target Petroecuador because it was the majority shareholder during Texaco's 1972-1992 participation in the oil-production consortium.

Lawyers for the plaintiffs have said that Petroecuador led the project on paper only, with Texaco providing technological expertise and calling the shots.

The plaintiffs' lawyers originally wanted the case tried in U.S. courts, arguing the Ecuadorean government's dependence on oil revenues would make the country's courts unlikely to deliver justice. Oil exports account for about 40 percent of Ecuador's revenue.

The opening phase of the trial – in which both sides submit evidence – is expected to wrap up on Wednesday, with a ruling to come at least six months later.

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