Ecuador Court Upholds Historic Environmental Case Against Chevron
January 4, 2011 | Jim Wyss | Source: Miami Herald
Humberto Piaguaje, a school teacher in Ecuador's Amazon, says he has lost eight family members to cancer. He blames the rash of deaths in his village of San Pablo de Kantesiya – close to Colombia and Peru – on river water contaminated by upstream oil operations.
On Tuesday, an Ecuadoran appeals court agreed, upholding an $18 billion judgment against Chevron Corp. saying it was liable for the shoddy environmental practices of its predecessor, Texaco, which dumped millions of gallons of oil-tainted waste water in streams and creeks. Texaco operated in Ecuador from 1960 to 1992 and the two companies merged in 2001.
The judgment – thought to be one of the largest environmental verdicts in history – was doubled from $9 billion as Chevron has refused to offer a public apology.
The case has dragged on for more than 18 years in U.S. and Ecuador courts, and still isn't over. Chevron called the ruling "illegitimate" and said it will continue to fight the case in international tribunals and the U.S. courts. Company Spokesman Kent Robertson said Chevron was still analyzing the ruling and had not decided if it will take the case to Ecuador's Supreme Court.
But the plaintiffs' lawyer, Pablo Fajardo said the appellate decision makes the judgment enforceable even before a higher court ruling.
Chevron has no operations in Ecuador, but Fajardo said the plaintiffs are prepared to seize Chevron assets abroad if necessary.
"Finally, there will be justice and hopefully [the] repair of the Ecuadoran Amazon," Fajardo said. "It's not going to be easy to enforce this judgment, but even if hell freezes over, we are going to try."
First brought to trial in 1993 on behalf of some 30,000 Ecuadoran villagers, the case has only grown more contentious over the years. Both sides accuse each other of lying and resorting to fraud.
Chevron claims the Ecuadoran judges and plaintiffs' lawyers colluded to shakedown the company. Last month, Chevron asked Ecuador's prosecutor general to investigate allegations that Fajardo and others secretly wrote large portions of the original judgment, which was handed down in February.
The company is also pursuing racketeering and corruption charges against the plaintiffs' legal team in U.S. court.
Tuesday's "decision is another glaring example of the politicization and corruption of Ecuador's judiciary that has plagued this fraudulent case from the start," the company said in a statement. "Their misconduct includes fabricating expert reports, manufacturing evidence, bribing and colluding with court officials, waging a campaign of intimidation against judges, and even ghostwriting parts of the verdict itself."
The plaintiffs say Chevron is abusing the international court system to try to duck its responsibilities.
Texaco began operating in the Andean nation starting in the 1960s and helped it earn a seat on the Organization of Oil Producing Countries.
When it left in 1992, it spent $40 million to clean up its share of the operations, and the government absolved it of any further legal responsibilities in 1998.
But Ecuador's courts found that the government deal did not cover third-party claims. So when Chevron and Texaco merged in 2001, Chevron inherited the legal battle. And the plaintiffs claim the remediation was a sham and needs to be done properly.
Tuesday's decision comes as Chevron is facing billions of dollars in fines for an oil spill off the coast of Brazil. It's also being accused of lying about the size of the accident.
Fajardo said the company is resorting to the same tactics in Ecuador.
"Chevron doesn't want to acknowledge that indigenous communities and poor people have a right to access justice," he said. "Chevron wants to avoid a precedent that could serve for other communities around the world."
Piaguaje, 47, said he had been trying to call people in his remote village all day to share the verdict.
"We've lost so many people in the community," he said, "and it's a shame they couldn't be with us to hear the good news."