Ecuador Plaintiffs to Seek Damages from Chevron Abroad

By Alexandra Valencia and Edouardo Garcia | January 5, 2012

Ecuadorean plaintiffs who won an $18 billion environmental case against Chevron Corp will pursue legal action against the company overseas in a bid to collect the damages, their lawyer said on Wednesday.

An appeals court in the OPEC nation upheld a ruling on Tuesday that the U.S. oil giant should pay up, after a local judge found it guilty last February of polluting the Amazon jungle and damaging the plaintiffs’ health.

Chevron, the second biggest U.S. oil company, has denounced the latest decision as fraudulent and “another glaring example” of the politicization and corruption of Ecuador’s judiciary.

“We’re going to start the necessary actions for the ruling to be enforced in several continents and countries where Chevron has assets,” said Pablo Fajardo, a lawyer for the plaintiffs.

“We’ll go to many courts in the world to demand that Chevron pays for the crime it committed in the Amazon.”

Chevron no longer has assets in Ecuador, so questions surround the enforcement of the original ruling. A lawyer for the company accused the plaintiffs last May of planning to seek enforcement in countries hostile to Chevron.

The litigation between the U.S. oil major and Ecuador has jumped from court to court in the Andean country, the United States and international tribunals for almost two decades.

It is being watched closely by the oil industry for precedents that could influence other claims against companies accused of pollution in the countries where they operate.

Speaking in Lago Agrio, a city deep in the Amazon where both the original case and appeal were heard, Fajardo acknowledged that it will likely take years for the plaintiffs to collect.

“We won’t give up, nor will we forgive a cent (of the money) that Chevron has to pay for the crime it committed,” he said.

SUPREME COURT TO RULE?
Ecuador’s leftist President Rafael Correa, who has had fraught relations with foreign investors since taking office in 2007, has depicted the case as a “David and Goliath” battle.

The plaintiffs said they represent local farmers and indigenous communities in the jungle who accuse Texaco, which was bought by Chevron in 2001, of wrecking the area with faulty drilling practices in the 1970s and 1980s.

They say that rather than cleaning oil waste pits, Texaco left them open or simply spread dirt on top, allowing contamination to seep into the ground and local water sources.

Chevron denies the accusations. It says Texaco did not pollute the jungle, and that it properly cleaned up all the pits for which it was responsible.

A Chevron spokesman said on Wednesday that the company was still considering its options in Ecuador, which include “clarification and amplification” of Tuesday’s ruling, and then possibly an appeal to a higher court.

The appellate court’s verdict gives the parties three days to request more information about the decision, after which they can ask Ecuador’s Supreme Court to rule on the case.

Chevron has already said it is pursuing an action in a U.S. District Court against the plaintiffs’ representatives regarding violations of the federal racketeering statute and fraud.

Its spokesman said it would contest the case before an arbitration tribunal in The Hague in the Netherlands, and in any other country where the plaintiffs tried to seek enforcement. It believes the proper venue for any enforcement would be the United States.

The Hague’s Permanent Court of Arbitration is expected to decide this month if it will also weigh in. It ordered last February that Ecuador suspend enforcement of any judgment in the case, pending a decision by its panel.

Chevron has also been under pressure recently over environmental issues in Brazil, where it faces a $20 billion civil lawsuit filed by public prosecutors over an oil spill at an offshore field in November.

(Additional reporting by Victor Gomez in Lago Agrio and Braden Reddall in San Francisco; Writing by Eduardo Garcia; Editing by Daniel Wallis and Paul Simao)

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