Texaco is under no legal or ethical obligation to honor the wishes of the people as long as it is not

mentioned in the contract, as long as the contract has been fair. The Government of Ecuador,
PetroEcaudor and Texaco have entered into a contract in 1960s without taking into account the wishes
of the local people. The people were neither informed nor were they compensated for the use of lands
to extract oil. Texaco and all signatories of the contract had failed to ensure a fair contract had been
drawn. Government of Ecaudor has failed in particular to fulfil its duty to advocate the people it is
representing. Hence, as all parties effected by the contract have not been consulted a fair contract has
not been drawn.
It is also revealed that Texaco had an Environmental clause by which it would have to preserve the flora
and fauna of the forest. Evidence had shown that Texaco had violated this clause multiple times during
its operations. We believe that Texaco has failed to act ethically by Contractarianism model by failing to
uphold its own end of contract and also by failing to ensure that a fair contract has been drawn.
In 1992, when activists filed a complaint against TexPet Corporation that environment has been
completely polluted due to its extraction and waste disposal methods , Texaco has entered into another
legal contract with Government of Ecuador that they would clean up all the oil dumps they have created
over the years and pay $ 40 million as compensation. In exchange Government of Ecuador has freed
them of legal or any liability. Texaco has used this contract to argue against any Class-action penalties as
it has no obligation.
However, evidence of Texacos failed clean-up surfaced when news reports emerged of moving houses
which were built on oil dumps. Instead of following 7 steps to clean-up an oil dump which begins by
removing oil from the ground, Texaco has covered the oil dumps with dirt. It has failed to honor its
commitments in the contract and broken the contract.
Texacos decision would be justified by utilaritarianism if the net utility was positive and it contributed
to the greater good. The net value created by Texaco in creating jobs, bringing technology into the
country and the investing in Ecuador should not be ignored. But these are not sufficient enough to offset
their toxic waste pits, rainforest deforestation, and poisoning of communities.
Looking at their decisions from a consequentialism perspective, the decisions of Texaco affected scores
of people living in the mining area and people who live near rivers which are polluted by Texacos
dumps. There is spike in the cancer rate among the affected areas and people are still being effected by
the polluted water. The positive utility of generating jobs as a consequence of Texacos decision is
significantly offset by the negative utility of its consequences.
From an End-Statisim perspective, Texaco has been able to earn profits which benefitted the
shareholders of the company and Government was able to earn Tax which benefitted the people of
Ecuador. While these end states produced positive utility, the environmental havoc, the displacement
and loss of livelihood of people have more than nullified it. Looking from consequentialism or End-
Statism, Texaco has acted in an unethical manner.