Texaco On Trial (Page 4)

In Texaco's view, even if all of the plaintiffs' allegations were true--which the company vehemently denies--the case should still not be tried in the United States. Like nearly all companies that have been sued in this country for their actions abroad, Texaco has sought to have the suit sent back to Ecuador on the grounds of forum non conveniens, arguing, in essence, that holding the trial in the United States, thousands of miles from where the alleged misconduct took place, would be inconvenient. "The Ecuadorian judicial system," the company explains, "is fully capable of fairly adjudicating this issue."

In late March I traveled to Lago Agrio, an oil town perched on the Oriente's northern edge (where Texaco first struck oil in the Amazon), to inspect the courthouse where the trial will take place if the case is returned to Ecuador. After repeated inquiries, I discovered that there is no courthouse in Lago Agrio. I did find the judge who would be assigned to the case, Dr. Luis Naranjo Jara. A polite, soft-spoken man, Jara works out of a small office on the third floor of a brown cinderblock building off the main road in town, a building that, he informed me, has one computer, no fax machine, no Internet connection and no law clerks to assist with paperwork.

Since Ecuador has no equivalent of a class-action lawsuit, how, I asked Jara, would he be able to handle the tens of thousands of cases that would likely flood his office were the suit sent back to Ecuador? He smiled politely and explained that in such a situation he would have to work "late into the nights." Would the government of Ecuador increase his office's budget if this were to happen? "No," he flatly replied.

"It's very clear why Texaco wants to have this sent back to Ecuador," says Bonifaz, who, as it happens, wrote his master's thesis on the issue of forum non conveniens. Bonifaz points to the affidavit submitted by Dr. Alberto Wray, a noted authority on Ecuador's judiciary and now the government's top legal adviser. Judges in Ecuador, Wray noted, almost never compel witnesses to testify if they don't want to and require all questions to be submitted in writing, which would make it virtually impossible to extract any meaningful confessions from Texaco's officers. In addition, if the company wished to withhold any subpoenaed documents from the court in Ecuador, it could simply do so and pay a paltry $180 fine--whereas in the United States such an action would likely land the company's officers in jail.

Beyond the inadequacies of Ecuador's judicial system, there is another reason, in the plaintiffs' view, the trial should be held in New York. What the plaintiffs intend to prove, after all, is that the decisions that led to the destruction of the Oriente were made not in Ecuador but at Texaco's headquarters in White Plains.

Texaco strongly denies this, explaining that the company "operates through subsidiaries" that "are empowered and held responsible for managing their businesses wherever they are located," as Faye Cox told me over the phone. Yet documents obtained by the plaintiffs' lawyers in the initial round of discovery (allowed by Judge Broderick) indicate that even minor expenditures of $5,000 had to be approved in New York. Bertha Margarita Yepez Silva, an Ecuadorean citizen who worked for Texaco from 1973 to 1989 and was responsible for overseeing issues related to workers' health, says that all the department heads in Ecuador sought authorization virtually "every day" from their Texaco superiors in the United States, for everything from minor expenditures to the enrollment of employees in scholarships for technical training programs. Given all of this, it would be odd indeed if nobody in White Plains knew about--or gave the orders for--the dumping of oil production waste, which, if reinjected into the ground, would have cost the company up to three extra dollars for every barrel that was extracted over the twenty-year period.

Despite all of this, in November 1996 Judge Rakoff dismissed the lawsuit on forum non conveniens and other grounds. The case seemed destined to return to Ecuador. But last October the US Court of Appeals for the Second Circuit, in a unanimous decision, reversed Judge Rakoff's ruling, instructing the district court that the lawsuit could not be dismissed until it was clear that an adequate "alternative forum" existed.

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