Betrayed By An Oil Giant
By Andrew Gumbel
25 March 2004
The IndependentShortly after the Exxon Valdez oil spill in 1989, a senior Exxon representative visited the devastated fishing communities of southern Alaska and promised them the company would do everything in its power to restore their livelihoods and "make them whole".
"We're Exxon, we do it right," is the slogan that has stuck in the mind of Dune Lankard, a local Native American activist.
But 15 years to the day since a drunken sea captain drove his oil tanker on to a reef in Prince William Sound, covering one of the world's most pristine stretches of coastline with at least 11 million gallons of crude, the feeling among fishermen, environmentalist activists and the lawyers representing them is that Exxon has not only broken its original promise but has gone out of its way to betray them in pursuit of broader corporate interests.
Exxon, whose net income for 2003 is expected to top $21bn, has not paid out a penny of the $5bn (£2.7bn) in damages originally awarded to the fishing communities a decade ago, launching appeal after appeal and deluging the courts with paperwork. Despite intensive clean-up efforts, Prince William Sound remains polluted by large oil deposits that have destroyed its herring fisheries and wreaked havoc with the once-flourishing wildlife.
The town of Cordova, whose fishermen could once count on earning $100,000 a season, has become an outpost of despair, where debt and destitution have given rise to alcoholism, drug abuse, broken marriages and numerous suicides. About 1,000 of the original 32,000 plaintiffs in the class-action suit against Exxon have died, many of them succumbing to respiratory illnesses, brain tumours and cancers that a growing body of scientific evidence has linked to the spill and the subsequent clean-up.
Of the survivors, many hang on, ever more despondently, for the Exxon settlement money to arrive. Others have been forced to sell up and move away, returning in the summer months to fish what they can from the Snake river as the debt on their boats and their once highly valuable fishing permits continues to accumulate.
"Exxon has dodged its responsibility every step of the way," Mr Lankard said. "The company had every opportunity to go beyond the call of duty. Instead, they've understood that their hand gets stronger the longer they wait. And in the meantime, people are dying."
Yesterday, a large delegation of Cordovans and their supporters were in Washington to lobby the Bush administration to reopen the federal government's own suit against Exxon and force the company to pay out an extra $100m in environmental damages. That extra money was written into the original 1991 settlement for environmental damages - worth $900m - in the event that oil damage proved more extensive than foreseen.
The fear of environmental activists, however, is that both the Bush administration and Alaska's leading elected officials would prefer to defer to the oil industry and let Exxon off the hook. Alaska's attorney general, Craig Tillery, has said it may be "premature" to present a case for the extra $100m, which must be claimed by 2006.
Among those in Washington was Kory Blake, a third-generation Cordovan known before the spill as a "highliner" because he was one of the most productive commercial fishermen pulling herring and salmon out of the Sound. He had about $500,000 invested in his boat and in three commercial licences when the disaster struck.
At first, he was kept busy with the clean-up, on which Exxon spent an initial $2bn. Exxon also voluntarily paid an initial $300m in compensation to 11,000 individuals. But then in the early 1990s, just when everyone expected to start fishing again, it became clear that the herring stocks had not returned and the price of salmon - also slow to recover - started to go through the floor as canneries turned to other sources in Chile and Norway. Mr Blake had to sell his home to meet the annual $50,000 payments on his boat, and moved his family to a suburb of Anchorage, where his wife got a job as a school administrator.
Exxon's stonewalling - or what one expert, Steve Picou, professor of sociology at the University of South Alabama, calls "adversarial legalism" - goes back to the earliest days of the legal battles in 1990, when a company lawyer argued that the crude oil was not a pollutant under the Clean Water Act since it was a valuable commodity, not a waste product. In the class-action suit, Exxon threw up so many obstacles after the initial $5bn judgment that the case generated more than 7,700 docket entries. In a letter written to the company in 1999 by the National Association of Attorneys General, the company was accused of actually profiting from the delay in payment because of the difference between the interest rate being charged by the courts and the much higher rate it enjoyed through its own internal financing systems. "Each year Exxon delays payment of its obligation," the letter said, "it earns an estimated $400m."
In 2001, the Ninth Circuit Court of Appeals overturned the damages award, prompting Cordova's mayor to kill himself. The award was largely reinstated a year later, but remains tied up in the appeals process for the foreseeable future.
Exxon's critics say the government missed several opportunities to pressure the company into settling, especially in 1999 when the Federal Trade Commission was considering Exxon's proposed merger with Mobil. The merger was approved without reference to the Exxon Valdez.
Exxon's attitude is that it has already done its duty. It strongly disputes suggestions that the spill involved significantly more than the acknowledged 11 million gallons, and has rebutted scientific evidence of continuing damage to marine and bird life with its own scientific studies demonstrating the opposite. "The environment in Prince William Sound is healthy, robust and thriving," a recent company statement said. "That's evident to anyone who's been there, and it is also the conclusion of many scientists who have done extensive studies of the Prince William Sound ecosystem."
Not only do the environmentalists strongly disagree, they see the events of the past 15 years as an ominous sign of how corporations will feel entitled to behave in future.
"They are making all these promises about treading with a light footprint and respecting the environment if they open up the Arctic National Wildlife Refuge to oil and gas exploration, yet they refuse to settle up on a mess they've already made," Dune Lankard said.
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