HOW 60 MINUTES MISSED ON CHEVRON – COLUMBIA JOURNALISM REVIEW

A piece on the oil giant and the rainforest last year relies too much on innuendo

By Martha M. Hamilton
Columbia Journalism Review

“Chevron is America’s third-largest company, behind ExxonMobil and WalMart,” intones correspondent Scott Pelley. “One way it got that big was by buying Texaco in 2001. Now that purchase of Texaco has pulled Chevron into a titanic struggle in the Amazon.”

Rusted barrels. Scene after scene of what appear to be contaminated well sites. Oozing oily black water and blazing flares from natural gas. And a campesino named Manuel Salinas scooping up black goo with a small stick, saying that he can’t drink the water from his well. The imagery is clear in the 60 Minutes segment that aired May 3, 2009.

THE ARROW IS SUPERIMPOSED ON AN IMAGE OF OLD, RUSING OIL BARRELS EMBALZENED WITH TEXACOS’ NAME
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The problem is the facts aren’t. There is no way to tell watching and listening to 60 Minutes production “Amazon Crude” where or whose responsibility most of the apparently polluted sites are. Although the segment mentions that Texaco left the area in 1992, scant attention is focused on state-owned Petroecuador, which has been the sole operator of former Texaco sites for the past twenty years

The backdrop to the segment is a lawsuit filed by plaintiffs lawyers in New York on behalf of Ecuadorian inhabitants of the area. The lawsuit started out in New York but ended up in the courts in Ecuador, which was where Chevron had argued it should be decided. Now it appears likely that Chevron could lose this case, in which a court-appointed expert has claimed that Chevron is liable for a staggering $27.3 billion in damages. Chevron has aggressively fought and continues to fight the claims of the lawsuit in virtually every forum it can find or create. And it argues that, despite repeated efforts, it wasn’t given a fair shot to make its case to 60 Minutes.

A few months ago, Chevron turned to The Audit, the business-news desk of the Columbia Journalism Review. As part of its mission of covering business news and its upholding standards, The Audit from time to time has taken up complaints of business news subjects who feel they’ve been treated unfairly by news outlets. Now we’ve formalized the process with the creation of a dedicated Audit Arbiter. That would be me. In each case, I’ll look at the facts and render a judgment.

But first let’s be clear what it is I’m judging. I’m not rendering a judgment on whether Texaco/Chevron is responsible for the pollution. I’ll leave that to the ongoing litigation and arbitration, which may outlast us all. The idea that a U.S. oil giant may indeed have committed environmental predations in an impoverished South American country, then used its economic clout to try to escape with the smallest possible cleanup bill, is hardly beyond the realm of the possible. It’s an entirely legitimate area of inquiry. But looking at the journalism itself, in his particular story, does Chevron have a beef? In my opinion, it does.

Based on a review of documents provided by Chevron and publicly available information from other sources in this matter, I find that the main Chevron complaint is warranted, namely, that 60 Minutes leads the segment by showing a polluted well that wasn’t Chevron’s responsibility to clean and which Chevron says is not polluted by petroleum at all, but rather by fecal matter. In back-and-forth emails between the news organization and oil company, provided by Chevron to me, 60 Minutes journalists don’t address Chevron’s assertion about the source of the pollution, except to say that Salinas believes his well is polluted by oil.

Overall, while a few of Chevron’s complaints are minor or can’t be substantiated, and while 60 Minutes never directly says Chevron is responsible for the pollution, 60 Minutes gives the clear impression that Chevron trashed the place and left, while downplaying the fact that Petroecuador has been operating alone at the former Texaco sites since 1990.

60 Minutes declined to discuss Chevron’s criticism. “We don’t see a need to discuss this any further than the story we put on the air, which we stand firmly behind,” wrote Kevin Tedesco, executive director of communications for CBS News/60 Minutes, after I sent him, at his request, a list of questions.

In any event, “Amazon Crude” is an interesting study in appearance and reality in a TV news documentary and how the one doesn’t always add up to the other.

First, a little background. Texaco and Ecuadorian Gulf Oil signed a contract with Ecuador in 1964 to help explore for and develop the country’s oil reserves in a large tract in the Amazon. In 1974 Petroecuador acquired a 25 percent stake in the project. And in 1977 Petroecuador boosted its stake to 62.5 percent. In 1992 Petroecuador took 100 percent control over everything. Until 1990, Texaco’s role in the consortium included building and operating oil production facilities, a role that Petroecuador took over in 1990. In 1993, a lawsuit filed in New York alleged that Texaco was responsible for damage to the environment and to human health resulting from its operations. In 1994, Ecuador, Petroecuador, and Texaco signed a memorandum of understating that committed Texaco to perform cleanup at 133 of the consortium’s 321 well sites, which cost $40 million. And in 1998, after an analysis by the laboratory of the Central University of Ecuador, the Minister of Energy and Mines, the president of Petroecuador and the general manager of Petroproduccion, the operational division of Petroecuador, signed a “final release of claims and equipment delivery” recognizing that Texaco had fulfilled its remediation efforts. More recently, in 2008 the administration of President Rafael Correa initiated criminal indictments against two Chevron attorneys and former government officials, claiming that the 1998 release was fraudulently secured.

Now to Chevron’s complaints:

Let’s start with Mr. Salinas. One of Chevron’s complaints is that Manuel Salinas is not among the forty-eight plaintiffs suing Chevron. In a lawsuit that claims to represent 30,000 people in the area around Texaco’s former and Petroecuador’s current operations, that doesn’t seem to invalidate interviewing Salinas, who does live in the area.

Chevron’s complaint here seems legalistic. The issue isn’t whether Salinas is named plaintiff&mdash it’s whether Chevron polluted his well and failed to clean it up.

And that’s an issue where Chevron has a stronger case. Chevron provided me with a map, which it said it also provided to 60 Minutes, along with analyses of Salinas’s well water. The map clearly indicates that Petroproduccion, a unit of Petroecuador, was responsible for the cleanup of the site, known as Shushufindi 38, that was near the Salinas property. The map, published in the 2007 PEPDA annual report and a public record, was produced by Petroproduccion, Petroecuador’s production subsidiary, as part of Petroecuador’s Pit Remediation Project of the Amazon District program (PEPDA). In addition, Petroecuador operated the site after Texaco left the country, according to Chevron. When Donald Campbell, manager of external communications for Chevron, emailed the producer of the segment, Draggan Mihailovich, requesting a correction, Mihailovich responded that Texaco was the operator at Shushufindi 38. That was true twenty years ago, but has not been since. What’s more, according to the map, Chevron was never responsible for cleaning up the site in the first place. (The email exchange was included in the documents Chevron gave me; I began my efforts to talk to 60 Minutes with Mihailovich, who referred me to Tedesco.)

Campbell also noted that tests by both Chevron and the plaintiffs in the lawsuit found that the Salinas well was not contaminated by petroleum waste. Instead, tests by Chevron found high levels of E. coli fecal bacteria in the well water. The goo on the stick? Unknown.

Milhailovich’s response to Chevron was that the nearby pit was not cleaned up and that the story accurately reflected Salinas’s words and beliefs. “As for Mr. Salinas’s well, the statement in the story ‘he says pollution leaked into his water well’ accurately captures what he said in the interview and what he believes about the quality of the water.”

Sorry, but that’s not a high enough standard to justify using Salinas’s remarks as evidence that Texaco failed to clean up a site it had polluted, much less using them to lead into the segment.

This isn’t a matter of belief. It’s a checkable fact. Either the well was or wasn’t part of Texaco’s responsibility under the 1994 deal and was or wasn’t polluted by oil. In this case, available evidence says the answer to the first question is no and the answer to the second is maybe not.

In addition, according to Campbell, Chevron didn’t know that Salinas and his well would be featured in the segment until they saw it aired. As a result, Chevron had no chance to make the points it made after-the-fact in unsuccessfully requesting a correction. If true, that doesn’t pass the basic fairness test.

The segment continues after its footage of Salinas with a conversation with a scientific expert for the people who are suing Chevron, clearly identifying him as such. He and correspondent Pelley examine a pit that they describe as designed to overflow into streams. Since the pit has been there for twenty-five years, it clearly was operated at one point by Texaco, but 60 Minutes fails to identify the site or say whether Texaco or Petroecuador was responsible for cleaning it up. Chevron says 60 Minutes wouldn’t disclose where the pit was located. That doesn’t seem fair, either.

“If you smell the water you can clearly smell the oil pollution in it, says Pelley who notes that in Texas such pits are supposed to be temporary and isolated from fresh water, whereas this one runs down to a stream. “When we stirred the bottom of the nearby stream, oil floated to the top.”

Right, but was the site Texaco’s responsibility under the 1994 cleanup deal? Unknown.

Then, about three and a half minutes into the segment, 60 Minutes notes: “Texaco left Ecuador in 1992 and today, Texaco’s owner, Chevron says the pollution is now the responsibility of Petroecuador, Texaco’s former partner. That dispute is at the heart of the lawsuit.”

Admittedly, television journalism has different rhythms and requirements from print journalism, but as a former newspaper editor for The Washington Post’s Wall Street and corporate crime coverage, I would have put that dispute higher up in the story. 60 Minutes does elaborate on Chevron’s argument later in the segment, however.

60 Minutes notes that the people who live near the oil production facilities use the river for washing clothes, bathing, and drinking. “Texaco acknowledged that it dumped into the rain forest, billions of gallons of what is called production water. Production water is waste that comes up with the oil. In fact, it’s often salty and laced with chemicals.”

But Chevron’s manager of global issues and policy Silvia Garrigo told Pelley during a two-hour interview made available to me by Chevron was that production water was only released or discharged “when it is safe to do so.” That part was not aired on the 60 Minutes segment; whatever you think of the denial, she should have been allowed to express it.

60 Minutes travels down a river with colorfully painted indigenous people and meets in their community hut with plaintiffs lawyer Stephen Donziger, of whom 60 Minutes says, “Make no mistake—Donziger would be wealthy if he wins. But he says that most of the money would go to environmental clean up.” Fair enough. Plaintiffs attorneys do often get rich through their work, but, in doing so, they also often expose wrongdoing.

Following that, 60 Minutes gives Chevron’s Garrigo some time to make an argument that the judicial system is corrupt and politicized. “When she says ‘politicized,’ she points to the top—Ecuador’s president who visited the waste sites and called the people who brought the suit heroes. A message, Garrigo says, that can’t be lost on the judge.”

When 60 Minutes goes to see the Judge Juan Nunez, Pelley observes, “Nunez struck us as serious and thoughtful. He’s been on the case for a year and he’s been out to the waste pits.” For all I know, Nunez may be serious and thoughtful, but it seemed an oddly out-of-place subjective evaluation in a news program. A few months later, last October, the court was forced to accept Nunez’s recusal from the case last October after Chevron released videos that appear to show Nunez telling two contractors that he will rule against Chevron. Nunez has said that the videos were doctored. Still, this shows the disadvantages of subjective musings compared to fact-based reporting.

60 Minutes did include about fifty seconds of footage of a grassy green tropical area that Garrigo identified as a site cleaned up by Texaco. However, it was only included after heavy lobbying from Chevron, which complained that CBS had spent time with the plaintiffs in Ecuador and should spend time with its representatives there. Mihailovich’s first offer was to let Chevron shoot its own footage of its cleaned up sites. Chevron’s reaction was that company video would not be as credible as 60 Minutes video.

60 Minutes deserves credit for agreeing to shoot the footage, even if it wasn’t its first instinct.

Mihailovich did make good points in an email to Chevron’s Campbell about why it was less inclined to spend time interviewing Chevron representatives in Ecuador. “We’ve met with you extensively three times already. We went to Ecuador so we could speak with the characters who are in the country, many of whom we were meeting for the first time. We can’t shoot the Secoya Indians in New York. The same goes for the judge, President Correa, the folks at Petro Ecuador or some of the settlers who claim they have been affected by contamination…..We’ve been told repeatedly that you all have no assets in Ecuador” and that Coral Gables, Florida, where 60 Minutes interviewed Garrigo, was Chevron’s headquarters for the case. However, 60 Minutes did shoot New York attorney Donziger in a straw hut in Ecuador. “Stephen Donziger, a New York lawyer, far from home.” Chevron’s complaint here is about process, not the actual issues, and therefore not the main point. Another trip to Ecuador would have been nice, but not essential for 60 Minutes’ reporting. Put it this way: 60 Minutes could have made another trip to the country and still turned in an unfair report, and it didn’t need another trip to have done a more fair report.

Chevron has other bones to pick with 60 Minutes’s coverage, many of which frankly fall into the category of mind-numbing details.

But others seem relevant. Although Chevron talked to 60 Minutes about Petroecuador’s poor environmental stewardship (an average of three spills a week since 2000, according to Garrigo), 60 Minutes never got into that issue except briefly, noting that “Chevron says anything left behind now is Petrecuador’s problem.” It adds, after a quick quote from Garrigo about Petroecuador’s responsibility: “Petroecuador, which has been running oil operations since Texaco left in 1992, is cleaning some of Texaco’s old pits—slowly. But other pits remain like open sores in the rain forest.”

However, the insistent focus is on Chevron (twenty-five mentions, by my count) and Texaco (twenty-seven mentions) compared with six mentions of Petroecuador. 60 Minutes also spends time on the notion that, because Texaco built and operated the fields until 1990, that it alone, not the consortium in which it was a minority partner, was responsible for any problems.

There was also a “gotcha” moment in which 60 Minutes noted that it had asked for a master list of the storage pits at the drilling sites. “Last week Chevron told us, there is no master list.” What Chevron said was that the remediation work was organized around a list of well sites, not a list of storage pits.

Does Chevron have anything to answer for in the Amazon? As I said above, that possibility should never be discounted. I grew up in Houston in the 1950s and ’60s, near the polluted Houston ship channel (“Too thick to drink, to thin to plow,” as one Texas legislator once said.), surrounded by a petrochemical swamp full of refineries. It wasn’t an environmental wonderland (although I’m sure it’s cleaner now). I wouldn’t want to bet that oil exploration and production in the Amazon decades ago met today’s standards in the U.S.

But that’s not the issue I’m grappling with. The issue is journalism. Although the segment reflected some of Chevron’s arguments about the lawsuit, a viewer could be forgiven for concluding that the mess shown was caused by Texaco, now merged into Chevron, and, more importantly, is its responsibility to clean.

And that’s where I find fault.

It did end with one striking image of pollution that was more clearly identified than the others in terms of responsibility. “On our way out of the forest, we just happened on a major oil pipeline break,” said Pelley, over footage of oil flowing in a river. “It wasn’t Chevron or Petroecuador. This time it was a Chinese-led consortium.”

Texaco may have trashed sites and then failed to clean them up in violation of the 1994 agreement. The 1998 release granted Texaco by the previous government may have indeed been corrupt, as the current government says.

60 Minutes could have shed light on the issue by finding an unremediated site for which Texaco was responsible, identifying it as such, and laying out the facts.

But it didn’t do that. Instead, its segment was an exercise in innuendo.

Even in these days of cutbacks to news operations, 60 Minutes could have—and should have—done better.

See Related: CHEVRON ECUADORAN JUDICIAL SCANDAL ARCHIVE


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