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  HOME | Ecuador (Click here for more)

Ecuador Gets OPEC’s Support in Dispute with Chevron

VIENNA – The Organization of the Petroleum Exporting Countries on Friday expressed support for Ecuador in an ongoing arbitration process brought against that member nation by U.S. oil supermajor Chevron Corp.

“The Conference (the oil cartel’s top authority) expressed its support to Ecuador in the exercise of its sovereign rights over its natural resources, in accordance with international law,” OPEC said after a ministerial meeting in the Austrian capital.

OPEC called for “amicable negotiations and a good faith resolution for the dispute, within a framework of utmost respect for the sovereignty of Ecuador and without resorting to ex parte (for the benefit of only one party) pre-judgment measures that would make impartial solutions more difficult.”

U.S. oil company Texaco, which Chevron acquired in 2001, was accused by residents of the northeastern village of Lago Agrio of dumping billions of gallons of crude residue and toxic waste water in a nearby area of the Ecuadorian Amazon between 1964 and the early 1990s.

After a decades-long legal fight in the United States and Ecuador, a Lago Agrio court ordered Chevron in 2011 to pay $19 billion in damages for that pollution.

In a November 2013 decision, Ecuador’s highest court, the National Court of Justice, upheld the earlier verdict but lowered the damages award to $8.6 billion.

Chevron, which has no assets in Ecuador, has refused to pay, saying the court rulings against the company there lack merit and are the result of an unprecedented fraud.

Besides fighting the case in Ecuador, Chevron filed an international arbitration claim against Ecuador in 2009 before the Permanent Court of Arbitration in The Hague, accusing the country of violating its obligations under the U.S.-Ecuador bilateral investment treaty, investment agreements and international law.

Through that process, it is seeking to hold Ecuador accountable for what it describes as the “denial of justice” that occurred with the multi-billion-dollar pollution verdict.

Separately, Chevron secured a favorable ruling in March 2014 by a New York federal court, which found that the Ecuadorian judgment was the product of fraud and racketeering activity.

The oil company says on its Web site that Texaco ceased operating in Ecuador in 1992 and that state-owned oil company Petroecuador, which it says should be the target of the plaintiffs’ legal action, 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 Rafael 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.

Chevron, however, says that 1990s agreement also released Texaco from any liability for collective third-party claims.

The Ecuadorian plaintiffs have sought to enforce the judgment in countries including Argentina, Canada and Brazil by asking courts in those nations to seize Chevron’s assets.

 

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