Identify the problems identified in the case.

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Ecuador is a small nation on the northwest coast of South America. During its 173-year history, Ecuador has been one of the least politically stable South American nations. In 1830 Ecuador achieved its independence from Spain. Ecuadorean history since that time has been characterized by cycles of republican government and military intervention and rule. The period from 1960 to 1972 was marked by instability and military dominance of political institutions. From 1972 to 1979 Ecuador was governed by military regimes. In 1979 a popularly elected president took office, but the military demanded and was granted important governing powers. The democratic institutional framework of Ecuador remains weak. Decreases in public sector spending, increasing unemployment, and rising inflation have hit the Ecuadorean poor especially hard. World Bank estimates indicate that in 1994, 35 percent of the Ecuadorean population lived in poverty, and an additional 17 percent were vulnerable to poverty.

The Ecuadorean Amazon is one of the most biologically diverse forests in the world and is home to an estimated 5 percent of Earth's species. It is home to cicadas, scarlet macaws, squirrel monkeys, freshwater pink dolphins, and thousands of other species. Many of these species have small populations, making them extremely sensitive to disturbance. Indigenous Indian populations have lived in harmony with these species for centuries. They have fished and hunted in and around the rivers and lakes; and they have raised crops of cacao, coffee, fruits, nuts, and tropical woods in chakras, models of sustainable agroforestry.

Ten thousand feet beneath the Amazon floor lies one of Ecuador's most important resources: rich deposits of crude oil. Historically, the Ecuadorean government regarded the oil as the best way to keep up with the country's payments on its $12 billion foreign debt obligations. For 20 years American oil companies, led by Texaco, extracted oil from beneath the Ecuadorean Amazon in partnership with the government of Ecuador. (The United States is the primary importer of Ecuadorean oil.) They constructed 400 drill sites and hundreds of miles of roads and pipelines, including a primary pipeline that extends for 280 miles across the Andes. Large tracts of forest were clear-cut to make way for these facilities. Indian lands, including chakras, were taken and bulldozed, often without compensation. In the village of Pacayacu the central square is occupied by a drilling platform.

Officials estimate that the primary pipeline alone has spilled more than 16.8 million gallons of oil into the Amazon over an 18-year period. Spills from secondary pipelines have never been estimated or recorded; however, smaller tertiary pipelines dump 10,000 gallons of petroleum per week into the Amazon, and production pits dump approximately 4.3 million gallons of toxic production wastes and treatment chemicals into the forest's rivers, streams, and groundwater each day. (By comparison, the Exxon Valdez spilled 10.8 million gallons of oil into Alaska's Prince William Sound.) Significant portions of these spills have been carried downriver into neighboring Peru.

Critics charge that Texaco ignored prevailing oil industry standards that call for the reinjection of waste deep into the ground. Rivers and lakes were contaminated by oil and petroleum; heavy metals such as arsenic, cadmium, cyanide, lead, and mercury; poisonous industrial solvents; and lethal concentrations of chloride salt, and other highly toxic chemicals. The only treatment these chemicals received occurred when the oil company burned waste pits to reduce petroleum content. Villagers report that the chemicals return as black ...