By JUAN FORERO OCT. Like thousands of other people here, he suspects the water was fouled by the waste an American oil company dumped across miles of Amazonia in its 20 years of operations.

After all, he and his five children live across from a separation plant once operated by a Texaco affiliate, their house built on a mound of dirt that covered a pit where wastewater was dumped. But we drink it. What else can we do?

Now, about 30, people affected by the waste are hoping that a lawsuit, accusing ChevronTexaco of dumping This week, the California-based company, an energy giant created in when Chevron merged with Texaco, went on trial here in a case that, if successful for the plaintiffs, could establish a new way for American companies to be held accountable for environmental degradation in foreign countries.

That is because a United States Court of Appeals in New York ruled last year, after reviewing a lawsuit first filed in , that the case should be heard in Ecuador. While American multinationals often prefer to have lawsuits handled in developing countries, where weak legal systems mean trials can languish, in this case the New York court said any final ruling and financial penalty imposed against ChevronTexaco would be enforceable in the United States.

ChevronTexaco, though, vigorously denies polluting, or dumping hazardous wastes. The company says it cannot be liable because it was the Texaco Petroleum Company, a fourth-tier subsidiary that operated here, that should have been sued.

ChevronTexaco also says that the Ecuadorean government has absolved the company of liability. The company does not deny having deposited the waste that came up through the oil drilling process. Company officials argue that depositing the watery sludge in open pits was, in its time, standard operating practice.

Texaco, through the Texaco Petroleum Company, developed Ecuador's oil industry, helping this country become an important oil producer in Latin America, a region increasingly significant as an energy source for the United States. After arriving here in the 's, the Texaco Petroleum Company drilled more than wells and built a network of pipelines, separation plants and, the plaintiffs say, more than pits to discard wastewater.

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Though in partnership with the state oil company, Texaco was the lead company in projects that produced 1. But in its quest to produce oil and profits, lawyers for the plaintiffs say, the Texaco Petroleum Company systematically dumped oily waste. Another 16 million gallons of oil, the lawsuit contends, was spilled directly into the ground, rivers and estuaries, what lawyers for the plaintiffs say was 50 percent more than was spilled in the Exxon Valdez disaster.

Though Ecuador had no environmental laws governing the disposal of waste -- a point Texaco lawyers have used to make their case -- the lawyers for the plaintiffs say the company ignored long-established practices of reinjecting waste back into wells. In the United States, most major oil companies have been reinjecting waste back into wells since at least the 's.

View all New York Times newsletters. The plaintiffs said those wastes caused maladies ranging from rashes to deformities and cancer, mostly caused from polluted waste water, since the communities outside Lago Agrio depend on the same waterways for their drinking water. No comprehensive study of the region has been done, but surveys of some communities show what the plaintiffs contend are high incidences of cancer.

The latest survey, a 1,page study financed by Petroecuador, the state oil company, found that of 1, families living near wells and pits, said they were in some way hurt by pollution. Most reported that fields and streams were polluted. The survey also showed that at least 55 people had died of some form of cancer, though no comparative data has been offered.

ChevronTexaco says two independent audits done by companies contracted by Texaco found no lasting environmental damage. The company says that some waste pits were left uncapped so Petroecuador and other companies could use them after Texaco left Ecuador in Donziger, a New York lawyer representing plaintiffs, said the cleanup was poorly done and that ChevronTexaco was responsible for the uncapped pits. He said the pits remained a danger to residents, with residue leaching into the soil and water.

In an hours-long trip into the countryside, the lush jungle appears untouched at first, with brightly colored parrots squawking in the distance and children playing in green fields. But pipelines snake along roadsides, and murky pools gurgling with oily waste are easy to find. Poor farmers try to keep their livestock out of the muck, while looking for water as far away as possible from the pits.

But it is not easy. At least cover it up because it is all covered in crude. That one of the biggest oil pollution trials in recent years is taking place here, in a honky-tonk border town known for its poverty and violence, was never really expected.

The judicial system here is poor and archaic, based on 17th-century French law. This week, lawyers for the plaintiffs simply presented the judge with a list of witnesses who should be called. For environmental advocates, the case is shaping up as a major fight against energy projects in Latin America.

Poor villagers, organized by international environmental groups, have been increasingly fighting in Latin America against such projects as a natural gas pipeline in Peru and exploration of Amazonian rain forests here. Ecuador is a major battleground, since Petroecuador is planning to increase its production from , barrels a day to , daily in three years. A decision against ChevronTexaco, oil analysts say, could prompt companies that are considering investing here into rethinking their position.

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