hLpb5

Ecuador further informed TexPet that Petro ecuador would not participate with TexPet in
conducting environmental remediation because it lacked the necessary money to fund its share of
the work. Thus, instead of identifYing remediation work to be funded jointly, Ecuador insisted
that the parties identify a set of remediation obligations corresponding to TexPet's share of
responsibility.
44. On or about December 14, 1994, Ecuador, Petroecuador, and TexPet entered
into a Memorandum of Understanding ("MOU") in which they agreed to define TexPet's "Scope
of the Work of Environmental Reparation" with respect to the "biotic" and "abiotic"
environment, and also secured from TexPet a commitment to "carry out socio-economic
compensation projects in order to address problems ... stemming from the oil operations .... "
This compensatory effort would accrue to the benefit not ofthe government in a narrow sense,
but rather of the larger population. In fact, elsewhere, the document expressly underscores that
these projects had to "tak[e] into consideration the inhabitants of the Oriente Region." In
exchange, the MOU obligated Ecuador to "negotiate the full and complete release ofTexPet's
obligations for environmental impact arising from the operations of the Consortium."
45. The MOU furthered Ecuador's own constitutional duties toward its citizens.
Under Article 19(2) of the extant Constitution, the authority to vindicate any environmental
rights on behalf of the Ecuadorian people was held exclusively by the government of Ecuador.
According to the Ecuadorian Ambassador to the United States, "It is the Republic's obligation to
become involved in matters that directly impact the welfare of Ecuadorian citizens, territory and
natural resources, and the very sovereignty of the Republic of Ecuador. The recent agreement
between the Republic, Petroecuador and Texaco Petroleum Company, which was reviewed and
supported by the Ecuadorian Congress, ... demonstrates the Republic's determination to fulfill
this obligation."
46. Thus, as TexPet was winding down its operations, an Environmental Committee
of the Ecuadorian Congress insisted that any settlement agreement between TexPet and Ecuador
"indemnify or alleviate the negative environmental effects caused ... to the Ecuadorian
22