Globalization is bringing into sharper focus the question whether multinational corporations should adhere to the same high environmental standards they are subject to in the developed world when they operate in developing countries.  One approach for pursuing such an objective has been to bring lawsuits in U.S courts under the Alien Tort Claims Act seeking to hold companies liable for harm caused in other countries.  For decades multinational corporations based in the United States have argued that lawsuits brought against them for environmental harm caused abroad should be dismissed on grounds of forum non conveniens (that the U.S. is not the proper place to hear the case).  This strategy usually was successful in ensuring that the companies faced little or no liability because the cases were dropped once they were dismissed by U.S. courts due to the perception that courts in the countries where the damage occurred were not capable of holding companies accountable.  As developing countries upgrade their legal systems and their environmental standards, the day may come when multinationals actually prefer to have such cases heard in their home countries rather than where the damage occurred. 

Beginning in 1993 Texaco (now owned by Chevron) has been the defendant in a series of cases seeking to hold it liable for environmental damage to the Oriente region of Ecuador allegedly caused by its drilling and waste disposal practices during the period from 1964 to 1992 when it ceased operations in the country.  Texaco’s defense is that the practices were legal under the law that prevailed in Ecuador at the time and that it cleaned up all contamination in accordance with a 1998 agreeement with its former partner, PetroEcuador, the Ecuador state oil company.  U.S. courts ultimately dismissed the litigation in 2002 on forum non conveniens grounds, but insisted that Texaco agree to accept the jurisdiction of courts in Ecuador as a condition for dismissing the litigation in the U.S.  In July 2003 a class action was brought against Texaco in Ecuador on behalf of 30,000 affected people.  The trial commenced in October 2003 in the Superior Court of Lago Agria, Ecuador.  In the first two phases of the trial, both sides presented evidence and the court ordered more than 100 field inspections to assess the extent of contamination of the Oriente area.  The trial has proceeded slowly as both sides battle over the interpretation of sample results, the accreditation of laboratories processing samples, efforts to force recusals, and Chevron’s recent unsuccessful effort to have a U.S. court require that the dispute be submitted to international arbitration.  In March 2007 Ecuadoran Judge German Yanez appointed Richard Cabrera to conduct the third phase of environmental assessments after the two sides were unable to agree on who should conduct the assessments. A website presenting the plaintiffs’ side of the case is at: http://www.texacorainforest.org. A website established to give Chevron’s side of the case is located at: http://www.texaco.com/sitelets/ecuador/en.

Another illustration of how globalization is highlighting the consequences of differential environmental and safety standards is the recall of products made in China that are found to contain hazardous substances, such as lead in children’s toys.  The recent controversy over such products has highlighted the need for increased inspections to ensure that imports meet U.S. safety standards.  At the same time, however, U.S. manufacturers generally are allowed under US. law to make products that do not meet U.S. health and safety standards if they are made solely for export.  The Washington Post reported last week that U.S. companies have been increasing their export of products that do not meet U.S. safety standards.  In 2006 the U.S. Consumer Product Safety Commission was notified 97 times that U.S. companies planned to export products that did not meet U.S. safety standards an increase over 57 such notifications in 2002.  Renar Merle, “Products That Miss Safety Standards Sent Overseas by U.S. Companies,” Wash. Post, Sept. 1, 2007, at D1.  The products included toys, chemicals, clothing, fireworks, carpets and pacifiers shipped  to countries including the Phillippines, Colombia, Ireland, Belgium, the Czech Republic and New Zealand.

Tseming Yang is in China this week for work with the Vermont Law School/Sun Yat-Sen University (SYU) partnership.  EPA General Counsel Roger Martella, Jr., Region 8 Regional Counsel Bob Ward and EPA attorney Steve Wolfson will be participating in a program at SYU.  Tseming has promised to post a report about the trip next week after he returns.