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  HOME | Ecuador (Click here for more)

Chevron Opposes Plan to Use Damages Owed by Ecuador to Aid Pollution Victims

QUITO – Chevron Corp. on Thursday rejected a proposal whereby $106 million in damages owed by Ecuador to the U.S. oil supermajor for breach of contract would be paid out to Amazon communities affected by the dumping of billions of gallons of toxic waste.

The company said it learned Wednesday that those communities, which have won pollution verdicts in recent years in Ecuador against Chevron, had presented the request to President Rafael Correa’s administration.

Those communities want the $106 million – which the Dutch Supreme Court last year ordered Ecuador to pay Chevron – rerouted to them as partial payment of a much larger judgment against the oil supermajor that Ecuador’s National Court of Justice handed down in 2013.

Chevron has almost no assets in the South American nation.

In its November 2013 decision, the National Court of Justice upheld an earlier pollution verdict against the U.S. oil company handed down by a court in northeastern Ecuadorian city of Lago Agrio (also known as Nueva Loja).

It lowered the damages award but still ordered Chevron to pay a $9.5 billion penalty for the dumping of billions of gallons of crude residue and toxic waste water in the rainforest between 1964 and the early 1990s by Texaco, which Chevron acquired in 2001.

Chevron spokesman James Craig, who cited, among other decisions, a September 2013 ruling by a Netherlands-based arbitration panel clearing the company of liability for collective environmental claims, said Thursday that granting the communities’ petition “would be another violation of the arbitration court’s orders to suspend the execution of the Lago Agrio sentence.”

An attorney who represented the plaintiffs in the Lago Agrio case, Pablo Fajardo, told Efe Wednesday that the plan is for the $106 million to be used to finance environmental reparation plans in polluted areas of the Amazon.

Chevron says on its Web site that Ecuadorian state oil company Petroecuador should be the target of local communities’ legal action.

It notes that Texaco ceased operating in Ecuador in 1992 and that Petroecuador has been “the sole and exclusive owner and operator of greatly expanded operations in the area from (that year) to the present.”

The pollution case was initially filed against Texaco in New York in 1993, but after inheriting the lawsuit Chevron succeeded in having it moved from the United States to Ecuador in 2003, four years before President Correa came to power amid voter anger at corruption and traditional politicians.

Chevron, however, later said the case had become politicized under the leftist Correa and that it could not receive a fair trial.

Although the oil company maintains that Texaco was cleared of any liability for damages after performing remediation work in the mid-1990s, plaintiffs say that 1998 agreement with the Ecuadorian 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 the Ecuadorian courts.


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