Ecuador - Source: Monga Bay

Despite its small area, Ecuador is the eighth most biodiverse country on Earth. Ecuador has almost 20,000 species of plants, over 1,500 species of birds, more than 840 species of reptiles and amphibians, and 341 species of mammals.

Ecuador also has the distinction of having the highest deforestation rate and worst environmental record in South America. Oil exploration, logging, and road building have had a disastrous impact on Ecuador's primary rainforests, which now cover less than 15 percent of the country's land mass.

Logging in Western Ecuador (coastal and low Andean) areas is responsible for the loss of 99 percent of the country's rainforest in this region. Historically, after an area has been selectively logged and abandoned, settlers follow logging roads and set up homesteads, slashing and burning the surrounding forest for agriculture and cattle pasture.

The impact of oil exploitation in Eastern Ecuador is now notorious as a result of a long-running $6 billion lawsuit involving 30,000 Amazon forest dwellers and Texaco, once one of the world's largest energy companies but now part of Chevron. In the 25 years that Texaco operated in the Oriente region of the Western Amazon, the oil company spilled 17 million gallons of crude oil into the local river systems (by comparison, the Exxon Valdez only spilled 11 million gallons in Alaska in 1989), dumped more than 20 billion gallons of toxic drilling by-products, and cleared forest for access roads, exploration, and production activities. As of the mid-1990s, lands once used for farming lay bare and hundreds of waste pits remained. In August 1992, a pipeline rupture caused a 275,000-gallon (1.04 million L) spill which caused the Rio Napo to run black for days and forced downstream Peru and Brazil to declare national states of emergency for the affected regions.

Originally it appeared that Texaco might pull out of the Oriente without reparations to the people whose environment was so seriously degraded, but widespread protests by indigenous peoples, environmentalists, and human-rights organizations forced Texaco into negotiations. Texaco projected its clean-up costs at a moderate US$5-10 million.

In response to the insufficient clean-up gesture, along with widespread environmental degradation and serious health problems among local peoples, a class-action lawsuit was filed against Texaco in the United States on behalf of 30,000 people affected by the oil company's operations. Previous suits against Texaco filed in Ecuador failed due to Texaco's political influence with the Ecuadorian judiciary.

By the close of 2005 the case against parent company Chevron was still being fought in U.S. courts and was beginning to become an issue for shareholders in the oil company. Facing a six- billion dollar liability, the company has also seen shareholders file three new resolutions asking Chevron's management to take various steps to protect human rights, the environment, and shareholder interests. The United Nations has also gotten involved in the case, calling on the Ecuadorian government to guarantee the safety of lawyers and leaders involved in the lawsuit after a series of threats.

According to an update by Amazon Watch, an organization tracking the suit, the case is not going particularly well for Chevron:

The escalating shareholder concern comes as Chevron's defense faces significant hurdles in the lawsuit in Ecuador. Water and soil samples submitted to the court by both the plaintiffs and Chevron from all 18 well sites inspected by the court overwhelmingly have shown illegal levels of toxic contamination, often by orders of magnitude.

The legal case is the first time a transnational oil company has been subjected to legal jurisdiction in the courts of a developing nation for massive environmental damage. A New York court has already confirmed the Ecuadorian ruling will be enforceable in the United States, where Chevron's operations are based. . .

. . . Citing a June 2004 Supreme Court ruling upholding the 1789 Alien Torts Act, the resolution also warns Chevron executives that, in "a post-Enron environment," they could be found personally liable in a U.S. court for human rights abuses committed abroad, such as those in the Ecuadorian rainforest.

Excerpt from a December Amazon Watch news release

Despite the complicit role of the Ecuadorian government in the environmental degradation from oil operations, the government has taken some steps to conserve what remains of Ecuador's wildlands. According to the ITTO, the government subsidizes the establishment of plantations of native species in danger of extinction and establishment of protection forests. This incentive could prove promising since more than 50 percent of Ecuador's land is degraded and suitable for reforestation. As of 2004, 15.6 percent of Ecuador was officially protected, though timber harvesting and other forest exploitation in protected areas is not uncommon.

In total, between 1990 and 2005, Ecuador lost about 21.5 percent of its forest cover. The deforestation rate has increased by 17 percent since the close of the 1990s.