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Local justice in Ecuador advances global struggle for corporate accountability



A provincial court in Ecuador this week ordered U.S. oil giant Chevron to pay more than US$9 billion in compensation for the environmental and health impacts of oil contamination in the Ecuadorian Amazon. The decision comes after an 18-year struggle by the affected communities, mostly indigenous, who have been seeking damages from the company and redress from the Ecuadorian government.

CESR was part of a coalition of human rights, indigenous and environmental groups which supported their cause. In 1994, shortly after the communities filed their lawsuit for damages, CESR published a report, “Rights Violations in the Ecuadorian Amazon: The human consequences of oil development,” (PDF download) documenting the devastating impact on the population of the billions of gallons of crude oil discharged into the rainforest and water supply in the Oriente region by national and multinational oil companies, including Texaco (which was acquired by Chevron in 2001).

The report concluded that the Ecuadorian government’s failure to prevent the oil contamination, to regulate the operations of oil companies and to provide victims with effective legal redress, constituted a violation of the rights to health and a healthy environment of members of the affected communities. Indigenous and environmental leaders welcomed CESR’s human rights approach as a significant contribution to their efforts to end corporate abuses in the Amazon.

While concentrating on the Ecuadorian government’s human rights obligations, CESR also signaled the need for multinational corporations (MNCs) to be held accountable, in view of the tremendous power they exerted over people’s lives. (Texaco’s annual revenues at the time, for example, were more than three times Ecuador’s GDP.) The report called for Texaco and other private companies to be held civilly liable, and to be held directly accountable to their human rights obligations:

“The role played by MNCs and the international community in contributing to human rights violations in the Oriente carries a corresponding responsibility to help resolve them… Efforts must be made towards extending human rights law beyond individual governments to include MNCs and other powerful international actors.”

It has taken 18 years for the communities’ claim for redress to be heeded. There have been many obstacles along the way, including jurisdictional challenges and smear campaigns by Chevron, which has fought the case all the way and has condemned this week’s judgment as “illegitimate and unenforceable.” The company has vowed to appeal the ruling.

While welcoming the judgment, the plaintiffs have stressed that no amount of damages can restore the lives and livelihoods lost through contamination.

It has also taken decades for the international community to affirm the need for companies to be held accountable under binding human rights standards, as CESR called for in its 1994 report.

The process towards the adoption of a normative human rights framework applicable to companies has been slow and controversial. At the end of 2010, John Ruggie, the UN Special Representative for Business and Human Rights, invited comments on a set of draft guiding principles addressing the respective human rights responsibilities of states and companies. A joint statement signed by over 100 civil society organizations including CESR voiced serious concern that the regressive approach of the draft principles could undermine existing standards rather than reinforcing them.

The Ecuadorian court judgement against Chevron shows how tortuously slow the uphill struggle for corporate accountability can be. But the case also demonstrates that a progressive and transformative approach to human rights can be a powerful support to marginalized communities seeking to take on the might of multinational corporations.

Visit CESR's Ecuador page for more information.