Photo by Lita V. Some rights reserved.
In February of 2011, American gas giant Chevron (you know, the one with the cute cartoon cars) was ordered to pay $8.6 billion in pollution damages to by a provincial court the relatively small city of Lago Agrio, Ecuador, which claimed that Chevron (the 2nd largest oil company in the U.S.) had done irreparable damage to the area between 1964 and 1992 under the Texaco banner, another oil company that Chevron now owns. The lawsuit was launched in 1993, and the area affected by the damages has since come to be known as “the Amazon Chernobyl.” Chevron at the time responded by calling the ruling “illegitimate and unenforceable,” countering by suing the plaintiffs (the indigenous villagers of Lago Agrio) for racketeering, and requesting a stay of judgment from an international tribunal in the Hague. A federal judge in New York issued an injunction on the dispute in March 2011, blocking any enforcement on the judgment, which was later overturned by the 2nd U.S. Circuit Court of Appeals on January 26th, 2012.
Fast forward to yesterday, October 9th, 2012. The U.S. Supreme Court heard Chevron’s appeal, and ultimately ruled that it would not intervene and block the collection of legal penalties and damage fees, which now total $18.2 billion, as the original $8.6 billion figure was doubled by the Ecuadorian court when Chevron failed to make a public apology. The Supreme Court ruling came despite the fact that Chevron was backed by the National Association of Manufacturers and the U.S. Chamber of Commerce. The fight over environmental reparations will now continue in district courts in New York, Brazil, and Canada, and may end up back at the Supreme Court before a final verdict is reached. If Chevron is strong-armed into paying the $19 billion in damages, it will be the largest judgment of its kind in history.
Read our previous coverage of this case here.
Photo by Peter π. Some rights reserved.
On Tuesday, Chevron Corporation was ordered by Ecuadorian courts to pay $9 billion in damages for massive environmental contamination of the Amazon rainforest. The lawsuit was filed in 2003 by Ecuadorian citizens, many of whom are representatives of multiple indigenous groups from northeastern Ecuador. The litigation was originally brought against Texaco Petroleum Company in a Manhattan court some 18 years ago, and was inherited by Chevron when it acquired Texaco in 2001.
Critics like Amazon Watch and Rainforest Action Network say that Texaco “dumped 18.5 billion gallons of toxic wastewater into streams and rivers, spilled some 17 million gallons of crude oil, and left behind more than 1000 waste pits that continue to leech toxins into surrounding soil and water. The pollution has caused a spike in cancer rates and decimated the cultures of various indigenous groups in the area.”
But Chevron denies these allegations. In the company’s most recent quarterly report, it states that Texaco Petroleum subsidiary Texpet carried out a $40 million remediation program, after which the Ecuadorian government granted “a full release from any and all environmental liability arising from the consortium operations.” Disclosure of this litigation is qualified with the claim that “Chevron believes that this lawsuit lacks legal or factual merit.”
In a recent press release, Chevron states that much of the evidence provided in this suit “shows an elaborate criminal scheme involving fraud, extortion, collusion, forgery and witness tampering,” and is already taking steps to prevent enforcement of the ruling: the company was granted a temporary restraining order against the plaintiffs, barring them from taking enforcement action. Chevron has also filed a racketeering suit against the plaintiffs’ legal team.
In the history of environmental damage cases, this judgment is second only to the $20 billion BP Gulf spill settlement; it is also the first time a foreign court has held an American corporation accountable for its environmental impact abroad. Chevron will appeal the decision; the Ecuadorian judge who issued the verdict says that Chevron has 15 days to issue a public apology after which the fine will be doubled.