Ecuador court upholds $18 bln ruling against Chevron

Rafael Correa

LAGO AGRIO (Reuters) – An Ecuadorean  appeals court yesterday upheld a ruling that Chevron Corp   should pay $18 billion in damages to plaintiffs who  accused the U.S. oil giant of polluting the Amazon jungle and  damaging their health.

Rafael Correa

A local judge ordered Chevron to pay $8.6 billion in  environmental damages last February, but the amount was more  than doubled to about $18 billion because Chevron failed to make  a public apology as required by the original ruling. “We ratify the ruling of February 14 2011 in all its parts,  including the sentence for moral reparation,” the court in the  Amazonian city of Lago Agrio said in its ruling, which was  obtained by Reuters.
The events are being watched closely by the oil industry for  precedents that could impact other big claims against companies  accused of pollution in the countries where they operate.
Chevron swiftly denounced the decision, calling it  “illegitimate” and a “fraud,” and saying it would continue to  seek recourse through proceedings outside the Andean country.

“Chevron also is pursuing an action in the U.S. District  Court for the Southern District of New York against the Lago  Agrio plaintiffs’ representatives for violations of the federal  racketeering statute, common-law fraud and other relief based  upon the overwhelming evidence of their fraud and corruption,”  the company said in a statement.

The second largest U.S. oil company could also call for the  intervention of Ecuador’s Supreme Court in the case, which would  open a new chapter in the 18-year-old legal saga.

The plaintiffs accused Texaco, which was acquired by Chevron  in 2001, of dumping oil-drilling waste in unlined pits,  polluting the forest and causing illness and deaths among  indigenous people. They appealed the original court ruling,  claiming more money would be needed for the cleanup.

“This (ruling) confirms and ratifies that the company  polluted and affected the Amazon,” the plaintiffs said in a  statement. “It is necessary to clarify that no amount will be  enough to repair all the crime they did in our area, nor will it  be enough to bring the dead back to life.”

Chevron had also appealed the ruling, arguing that Texaco  cleaned up all waste pits for which it was responsible, and said  the Ecuadorean judge in the original case had ignored evidence  of fraud on the part of the plaintiffs.

 ‘JUSTICE HAS BEEN DONE’     

Commenting on the appellate court’s decision, Ecuador’s  leftist President Rafael Correa said he was happy, and he  described the dispute as a “David and Goliath” battle.

“I think justice has been done. The harm that Chevron caused  to the Amazon cannot be denied,” Correa told reporters in the  coastal city of Guayaquil.

Chevron has also been under pressure recently over  environmental issues in Brazil. Last week, Brazil’s oil industry  watchdog issued a third citation against the company for an oil  spill at an offshore field in November.
The company has also been cited in a $20 billion civil  lawsuit filed by public prosecutors over that spill. Brazilian  federal police have indicted Chevron, the drilling company  Transocean and executives from both companies in a criminal case  alleging environmental crimes and obstruction of justice.