The Brazilian who wants to jail Chevron oilmen

RIO DE JANEIRO/NEW YORK Wed Mar 21, 2012 7:47pm EDT

1 of 3. Brazilian federal prosecutor Eduardo Santos de Oliveira listens to a question during a news conference, as he discusses the oil leak around Chevron's deep-sea well, in Rio de Janeiro March 21, 2012.

Credit: Reuters/Sergio Moraes

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RIO DE JANEIRO/NEW YORK (Reuters) - When federal prosecutor Eduardo Santos de Oliveira heard in November about an oil spill in a Chevron field off Brazil's coast, he was determined that, this time, the polluters wouldn't wiggle from his grip.

Time and again over the past decade, targets of his civil and criminal cases have used Brazil's legal system -- with its generous appeals process and rampant delays -- to avoid penalties or escape justice, Oliveira told Reuters in two recent interviews. Undeterred, he is now in another major battle.

Oliveira on Wednesday brought criminal charges against Chevron, the second-largest U.S. oil company, Swiss rig-operator Transocean, and 17 of the companies' employees, adding the threat of jail terms to an earlier civil lawsuit seeking more than $11 billion in damages.

He accused the oilmen of creating a "contamination time bomb." While the spill was 3,000 barrels or less, Oliveira says Chevron's subsea oil reservoir was damaged by reckless drilling, raising the specter of future catastrophic leaks. Chevron called the criminal charges "outrageous" and a long legal battle seems likely. Oliveira, 47, does not shy away from high-profile legal brawls against corporations or political bigwigs.

From his base in the hot, tropical interior of Rio de Janeiro state, he pursued hundreds of millions of dollars in damages for a deadly 2001 oil spill by Petrobras, the state-run oil giant, and in 2003, against a paper industry firm that fouled a nearby river, leaving millions without drinking water. In 2008, he prosecuted the man who was then the most powerful politician in Rio de Janeiro -- former state governor Antony Garotinho -- on corruption and armed racketeering charges, eventually winning convictions. To this day, Petrobras and the paper industry firm are still appealing Oliveira's suits. Despite court rulings in the prosecutor's favor, he says few damages have yet been paid. Garotinho remains free and may soon run for governor again. The Chevron spill "is not an isolated incident, it's the third serious environmental accident in my area that I've handled in a decade," Oliveira said from behind a desk piled high with Chevron drilling diagrams and hundreds of pages of evidence he has received from environmental investigators. "I'm tired of companies looking at my efforts as just another cost of doing business." In Brazil's constitution, drafted in 1988, federal prosecutors were granted near total autonomy to file suit against alleged polluters. But Oliveira says the charges rarely lead to big damage awards or prison sentences, and that the appeals process usually whittles down penalties to irrelevance. "We need to change the parameters," he said. "If companies don't listen to millions, we have to ask for billions."

BIGGEST-EVER ENVIRONMENTAL SUIT The civil case Oliveira filed against Chevron and Transocean is the largest environmental lawsuit in Brazil's history. It has since been shifted by a judge to state capital Rio de Janeiro, where it will be taken up by another prosecutor.

If Oliveira's charges are accepted by a judge, the criminal case could be in federal courts for years. Guilty verdicts could bring prison sentences of up to 31 years for some of those charged, Oliveira said in a statement on Wednesday, vowing to seek the firmest sentences allowed by law.

That marked an escalation in his tone. He told reporters in his office early this year that jail terms are a "last resort".

"These people don't have criminal records and courts are generally lenient to first time offenders," he said then. Critics have accused Oliveira of overreach because Chevron's November spill was less than 0.1 percent of the massive 4.9-million-barrel 2010 BP disaster in the Gulf of Mexico. A congressional leader of Brazilian President Dilma Rousseff's Workers' Party called the lawsuits over-aggressive.

"If Chevron failed to comply with their licenses or drilling plans, they should be punished," said Adriano Pires, a former board member at government oil regulator ANP who now heads Brazil Infrastructure Institute, an energy think-tank. "But the prosecutor is moving far too fast ... He has little or no technical experience." Oliveira says he has evidence that reckless drilling by Chevron caused the November spill and a subsequent oil seep at Frade, discovered this month.

But Chevron spokesman Kurt Glaubitz said Oliveira's charges "are not consistent with the facts of the incident and there have been no coastal or wildlife impacts." Transocean said it has cooperated with authorities and will defend its employees.

A HISTORY OF FRUSTRATION Oliveira's cramped office in the downtown of Campos, the administrative center of Brazil's oil patch, looks out over a cathedral and the banks of the Paraiba do Sul River. His desk is perched in front of a large Brazilian flag. The son of a chauffeur and housewife in Belo Horizonte, Brazil, Oliveira is a former law clerk who got his law degree part time. His career path is unusual in a legal profession dominated by the sons and daughters of Brazil's elite. He is also one of Brazil's relatively few Afro-Brazilian prosecutors. Oliveira says he doesn't aspire to be an "activist" prosecutor but hopes the Chevron suit will set new legal precedents and says any settlement "would have to be in the billions." He was appointed almost a decade ago by popular former President Luiz Inacio Lula da Silva, a leftist ex-union leader. During Lula's term, around 50 billion barrels of oil were found offshore Brazil, the world's biggest discoveries in decades. "Ever since Lula, the oil issue has become increasingly political," Pires said. "These charges are being used by those who want to shut out foreign investment and vilify foreign companies." Oliveira insists he isn't motivated by nationalism. "I don't care if the company is American or Brazilian or whatever," he says. "This is about protecting the environment where I live." In 2003, Oliveira saw the wide Paraiba do Sul River run red with toxic waste after a dam at an upstream paper pulp mill broke, discharging chemicals into the waterway that provides water for 12 million people. The region lost its main source of drinking water for weeks and residual damage has lasted years, he says. He launched a landmark case against the mill, but even after winning several judgments, no damages were collected and employees convicted of crimes haven't been jailed, he says. In his other big case, Oliveira has long been pursuing civil damage awards against state-run oil firm Petrobras after its P-36 oil platform exploded and sank in 2001, killing 11 workers and triggering an oil spill about three times larger than Chevron's Frade incident. He says Petrobras has succeeded in deferring most payments in that case. "Our previous efforts succeeded on paper but nobody has been punished," he said. "I want to do better than that."

(Reporting by Jeb Blount and Joshua Schneyer in Campos de Goitacazes and Rio de Janeiro; Editing by Ed Tobin and Kieran Murray)

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