Managerial ethics - Texaco in the Ecuadorean Amazon

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Case Study #2

Texaco in the Ecuadorean Amazon

Submitted by: Aaron Rogers

On: October 29, 2004

To: Dr. Gary Barfoot


Case Study #2: Texaco in the Ecuadorean Amazon

Executive Summary

Recent lawsuits filed by various Ecuadorean and Peruvian natives to make ChevronTexaco Corporation financially responsible for its alleged involvement in Ecuadorean and Peruvian rainforest pollution have been denied by a U.S. District judge.  The plaintiffs allege that ChevronTexaco has violated both oil industry contamination standards and international environmental standards such as the 1972 Stockholm Declaration on the Human Environment to the tune of more than $600 million worth of cleanup costs.

Answers to Questions

When the Ecuador contract was originally negotiated, Texaco officials surely would have had to have been aware of the political situation in the country.  If then, does the awareness of a weak and corrupt government undermine the fact that Texaco followed the laws they were instructed to follow?  They answer is “no”.  Texaco’s actions in the Ecuadorean region, though reprehensible, were morally justifiable because they met the “moral minimum” of obeying the law.

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While Texaco was within the bounds of Ecuadorean law in their practices, they should extend a helping hand in cleaning up the mess they made and they should provide medical care for the residents in the effected regions.  The reason is financial.  It is in Texaco’s best financial interest to appear to the world to be a caring and environmentally sensitive organization.  The money spent cleaning up the effected areas and providing medical care to the residents will be far less, in the long run, than the potentially devastating media aftermath and of taking the “low road” and fighting with ...

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