Chevron ordered to pay $8 billion by Ecuador court
Victor Gomez
Reuters
02/14/2011
A court in Ecuador's Amazon told Chevron Corp on Monday to pay more than $8 billion in environmental damages, the plaintiffs' lawyer said, but the U.S. oil giant will fight on in a suit seen as a global test case.
Chevron vowed to appeal, meaning the long-running case -- which dates from drilling in the Andean nation during the 1970s and 1980s and has spawned accusations of dirty tricks and bribery -- could drag on for years more.
Activists portray the case as a fight for justice against rich polluters but Chevron says it is more to do with opportunism and greedy trial lawyers. It has triggered related legal action in U.S. courts and international arbitration.
"In many moments of this long, difficult and costly battle, it appeared impossible to make the dream a reality ... apparently this story is beginning to change," Pablo Fajardo, a lawyer for the plaintiffs, said in an emailed statement.
"First, (the judge) has found that Chevron is responsible and guilty for the existing environmental damage in the Amazon. Second, it has ordered Chevron to pay the sum of more than $8 billion to repair the environmental damage."
Chevron, however, has no assets in Ecuador, plans to appeal, and believes it is unlikely ever to pay.
Its shares traded 1.3 percent higher to close at $96.95 on Monday as investors shrugged off news of the court ruling. The stock had been lifted by gains in crude oil, and analysts said a final verdict in the court case was likely years away.
The plaintiffs, who originally demanded $27 billion in the lawsuit, had said they would try to grab Chevron assets around the world once armed with a favorable judgment from the Lago Agrio court.
But their case is complicated by a ruling last week from international arbitrators ordering Ecuador to suspend enforcement of any judgment.
The saga is being monitored by the oil industry for precedents that could lead to other large claims against oil companies around the world that have been accused of contaminating the countries where they operate.
