Chevron Refuses to Apologize for Ecuador Pollution

Date of publication: 
6 February 2012

The refusal doubles the damages award to more than $18 billion in a long-running court battle pitting the company against plaintiffs representing some 30,000 Amazon peasants and Indians
QUITO – U.S. oil supermajor Chevron Corp. refused to issue a public apology for pollution in Ecuador’s Amazon region before a court-imposed deadline, saying it is not responsible for toxic drilling waste that has spoiled ecosystems and harmed local communities’ health.
The refusal doubles the damages award to more than $18 billion in a long-running court battle pitting the company against plaintiffs representing some 30,000 Amazon peasants and Indians.
Chevron’s position merely demonstrates its “arrogance and high-handedness” in the face of a clear-cut verdict, plaintiffs’ attorney Pablo Fajardo said on Friday, referring to two court decisions handed down against the U.S. multinational in the northeastern Ecuadorian province of Sucumbios.
Chevron has appealed a January ruling by the appellate court of Lago Agrio, Sucumbios, to the National Court of Justice in Quito – Ecuador’s highest tribunal – and is also attempting to block plaintiffs’ attempts to collect on the damages award through separate court battles in the United States and The Hague, Netherlands.
James Craig, the company’s spokesman, said in a statement that heeding the court’s order to apologize for the pollution would be tantamount to admitting responsibility for environmental impacts that the company did not cause.
He said the rulings in Ecuador violate international standards of due process and that Chevron is well positioned to defend itself on multiple fronts against any attempt to enforce a “corrupt” sentence.
The U.S. company had until Friday to apologize for environmental damage that the Sucumbios courts ruled Texaco (acquired in 2001 by Chevron) caused between 1964 and 1990.
In the appeals court ruling in January, Chevron was ordered to pay $9.5 billion in remediation costs and plaintiff damages and an additional $8.6 billion if it refused to apologize to the affected communities.
In total, Chevron must pay more than $18 billion for “the serious environmental damage” Texaco caused in the Ecuadorian Amazon, Fajardo said.
The Ecuadorian attorney said the refusal to issue a public apology “is a serious mistake on Chevron’s part, which shows its arrogance and its high-handedness, its discrimination against the peoples of the Ecuadorian Amazon” affected by the pollution.
Chevron maintains that the adverse rulings in Ecuador were marred by fraud and that they ignored the fact that a previous government in the late 1990s had certified Texaco’s clean-up efforts and released it from liability from any future claims.
It has brought legal action against the Ecuadorian government before an arbitration tribunal in The Hague for violation of a bilateral investment treaty and against the Lago Agrio plaintiffs’ representatives for violations of the federal racketeering statute.
Among other accusations of fraud, Chevron alleges in the racketeering case in New York that a court-appointed expert’s report, which estimated the cost of cleaning up the area of northeastern Ecuador affected by the dumping of toxic waste at $27 billion, was drawn up in conjunction with the plaintiffs and therefore corrupted.
It also noted that the arbitration tribunal has ordered the Ecuadorian government to halt enforcement of the judgment while the arbitration proceedings are ongoing.
The penalty handed down against Chevron was imposed for irreversible damage to the ecosystem in a 480,000-hectare (1,850-sq.-mile) area of the Amazon rainforest and serious illnesses and deaths suffered by local inhabitants from toxic waste.
During much of the period from 1964-1990, Texaco was the operator of a consortium that drilled in that area of Ecuador’s northeast and which also included state-owned oil company Petroecuador as majority owner.
The pollution case was initially filed in New York in 1993, but Chevron succeeded in having it moved from the United States to Ecuador in 2003, four years before President Rafael Correa came to power amid voter anger at corruption and traditional politicians.
But Chevron now says that the case has become politicized under the leftist Correa and that it cannot receive a fair trial.
Although the oil company maintains that Texaco was cleared of any liability for damages after remediating its share of environmental impacts, plaintiffs say that agreement with the government of the time did not release it from third-party claims and that Chevron is reneging on its pledge to abide by whatever decision was handed down by Ecuadorian courts.
Chevron says on its Web site that Petroecuador should be the target of local communities’ legal action, noting that Texaco ceased operating in Ecuador in 1992 and that the state oil firm has been “the sole and exclusive owner and operator of greatly expanded operations in the area from (that year) to the present.”
The oil supermajor has no assets in Ecuador, but the 47 named plaintiffs in the case could seek to collect the damages award through courts in countries where it does have operations.