Chevron is back up against the ropes after a United States federal court judge denied a bid made by the corporation to stop Ecuadorian plaintiffs from collecting a damages award of $18 billion. Federal court judge Lewis Kaplan was asked to freeze assets owned by the plaintiffs until the result of a fraud lawsuit against the Ecuadorians was known. Unfortunately for Chevron, the bid was denied.
Adding to that, just a few days before the bid to freeze assets was made, Chevron was hit with one more nail in the coffin. An Ecuadorean appeal court upheld the $18 billion judgement over the oil damage in the county’s Amazon region. If the fraud lawsuit against the Ecuadorian plaintiffs fails, the oil giant has just one more option left, and that’s to make an appeal to Ecuador’s Supreme Court.
What caused the polution?
The exact circumstances of the pollution in question happened under Texaco, which has been part of Chevron Corporation since 2000. Texaco developed and operated the Lago Agrio oil field in the country from 1972 up until 1993, and during that time it is alleged that they did not dispose of industrial waste safely. It has been claimed that Texaco released up to 18 billion gallons of produced water into the Amazon rainforest, leaving a toxic trail that damaged vegetation, killed wildlife, and caused a variety of sicknesses in the local indigenous population. An environmental audit of the area pressured Texaco and Petroecuador, the two companies that extracted oil from the Lago Agrio oil field, to fund a $40 million remediation program from 1990 onwards. In 1998 a scientific team took water and soil samples only to find that around half of the samples analysed still had unsafe levels of petroleum hydrocarbon in them.
Action taken against Chevron
After years and years of campaigning, the Ecuadorian people finally managed to bring a case against Chevron in 2003. 30,000 Ecuadorean people were responsible for creating enough pressure and finding enough money to take on the multi-national corporation, and it paid off 8 years later. On the 15th of February 2011, an Ecuadorian court fined the oil company $8.6 billion for polluting the Amazon rainforest and the consequences of the damage. It was claimed during the lawsuit that local cancer rates increased, and crops and livestock were lost to the pollution.
The penalty rose to $9.5 billion dollars once an additional 10 per cent for reparations was included, but the total sum requested by Ecuadorian plaintiffs ended up being $27 billion. The court granted $18 billion, and the result of the case set a precedent, because it was the first instance of indigenous people suing a multinational corporation in a court located within the country the pollution actually happened in. Environmental activists celebrated and saw it as a start to charges being brought against other companies that pollute developing countries without punishment.
Chevron fights back
Chevron has opposed the fine since it was imposed, and filed a lawsuit against the Ecuadorian plaintiffs for fraud. The corporation believes that they have cleaned up their part of the damage to the rainforest, and they are being charged too much for the damages that have been claimed against them. Chevron has claimed that fraud and corruption have been used by the Ecuadorian plaintiffs, and the racketeering lawsuit they filed in New York in 2011 has yet to be decided.
This is not the first time that Chevron has been accused of illegal pollution, and they have even broken laws in America concerning pollution, namely the Clean Air Act. Other notable incidents were the 2002 oils spills in Angola that resulted in a claim for $2 million by the government of Angola for the damage. Only last year Chevron were prohibited from activities in Brazil after over 400,000 litres of oil were leaked into the ocean off the coast of Rio de Janeiro. The legal act that is being brought against Chevron in the Brazil case is demanding that $10.6 billion is paid in damages.
The controversy over Chevrons actions in Ecuador and whether they have been treated unfairly has been debated many times, but perhaps this new ruling is the beginning of the end to the case. What is certain is that no amount of money can turn the clock back and make good the damage done to the Amazonian rainforest.
This is a guest post.
Olivia Lennox is a green freelancer from London. Normally she'll be extolling the virtues of tempurpedic products or the latest organic soaps, but she has her finger on the pulse of international environmental law too.