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Chevron will appeal 8.6 billion ‘extortive’ fine imposed by Ecuador judges

Wednesday, February 16th 2011 - 06:01 UTC
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The US oil giant blames local Petroecuador for its “deplorable” environmental record The US oil giant blames local Petroecuador for its “deplorable” environmental record

US oil giant Chevron says it will appeal against an 8.6 billion US dollars fine imposed by Ecuador judges, carrying on a long-running row over pollution. Chevron's Kent Robertson told the BBC the case was an “extortion scheme”, and accused Ecuador's state-run firm of polluting the country's Amazon region.

The legal wrangle has been going on for almost two decades, and has spawned lawsuits in the US and Ecuador. Analysts say further appeals are likely to drag on for years.

The oil firm Texaco, which merged with Chevron in 2001, is accused of dumping billions of gallons of toxic waste into unlined pits and Amazon rivers between 1972 and 1992.

Campaigners say crops were damaged and farm animals killed, and that local cancer rates increased.

But Chevron says Texaco spent 40 million cleaning up the area during the 1990s, and signed an agreement with Ecuador in 1998 absolving it of any further responsibility.

Mr Robertson, the firm's spokesman, told the BBC's World Today program that Texaco had “operated admirably” and blamed Ecuador's state-run firm Petroecuador for any ongoing problems.

“The oilfields in question have been solely operated by the government of Ecuador's own oil company Petroecuador for the last 20 years,” he said. “Petroecuador has a deplorable environmental record and Chevron is getting blamed for actions in a country that we've never even operated in”.

He accused Petroecuador and Ecuador's government of failing to live up to their responsibilities. Neither has responded to the claims.

The lawsuit was brought on behalf of 30,000 Ecuadoreans, and their lawyer Pablo Fajardo described the court ruling as “a triumph of justice over Chevron's crime and economic power”.

But he said the damages were not enough, and pledged to appeal.

Environmentalists hoped the case would set a precedent, forcing companies operating in developing countries to comply with the same anti-pollution standards as in the industrialised world.

US-based lobby groups Amazon Watch and Rainforest Action Network said in a joint statement that the decision was “historic and unprecedented”.

“Chevron has spent the last 18 years waging unprecedented public relations and lobbying campaigns to avoid cleaning up the environmental and public health catastrophe it left in the Amazon rainforest,” the groups said.

But analysts say Chevron is determined that it will not pay the fine.

Earlier this month, the firm took its case to the Permanent Court of Arbitration in The Hague, which ordered Ecuador to suspend enforcement of any judgement against Chevron to allow arbitration to continue.

Separately, Chevron has also filed a case in the US courts accusing the claimants and lawyers in the case of racketeering, tampering with witnesses and obstructing justice. (BBC).-
 

Categories: Environment, Latin America.

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  • GeoffWard

    So, as I read it……
    1. Texaco spent 40 million cleaning up the area during the 1990s, and signed an agreement with Ecuador’ Government in 1998 absolving it of any further responsibility. Then Chevron merged with Texaco. Now Chevron have been fined $8.6bn by Ecuador judges
    2. The oilfields have been solely operated by the government of Ecuador's own oil company Petroecuador for the last 20 years.
    3. Chevron has been fined by a country that it has never operated in. The Permanent Court of Arbitration in The Hague has ordered Ecuador to suspend enforcement to allow arbitration to continue, and Chevron have counter-claimed citing corruption.

    Well….. legally, Chevron appear to be in the clear. The Ecuador Government would have to show that the 1998 Agreement was illegal, it was not entered-into in good faith, and/or it was pressured into it through an imbalance of power (Texaco being more powerful than Ecuador).

    Morally (environmentally) there is a continuing need to fund clean-up and, although Chevron have no need in law to contribute - especially to the last two/three decades of further pollution by Petroeccuador – an arbitration agreement could pave the way to future state-Chevron exploitations.

    Chevron’s environmental record – especially in New Guinea rain forests - is very good indeed. The world needs to support good-performers, not stick it up them with massive law-suites.

    Feb 16th, 2011 - 04:53 pm 0
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