In one of the largest settlements ever handed down in an environmental pollution case, a judge in Ecuador has ordered oil giant Chevron to pay more than $9 billion in damages and legal fees for polluting a stretch of the Amazon decades ago.

 

Chevron has 15 days to publicly apologize for its actions or else the damages could double, ruled Judge Nicolás Zambrano in Lago Agrio. But an apology is unlikely to come anytime soon, given the corporation’s aggressive position in the case.

 

Chevron spokesman Kent Robertson called the ruling “illegitimate and unenforceable.” The company plans to appeal through the Ecuadorean legal system and avoid paying the damages. “This is the product of fraud,” he said. “It had always been the plan to inflate the damages claim and coordinate with corrupt judges for a smaller judgment.”

 

From the mid-1960s to the early 1990s, Texaco drilled for oil in the Oriente, a corner of northeastern Ecuador, in partnership with state-owned Petroecuador. As part of its operations, Texaco dumped a mixture of petroleum and water into open pits near the oil wells. When Texaco pulled out of the country, it agreed to clean up a portion of the wells, while Petroecuador continued to operate the rest.

 

The lawsuit was first filed by villagers against Texaco in 1993 in New York. Chevron bought Texaco in 2001 and managed to move the case to Ecuador two years later. Chevron has admitted that Texaco’s operations contaminated the rainforest, but contends it fulfilled its clean-up obligations under a previous agreement with the Ecuadoran government.

 

According to Amazon Watch, “Chevron constructed more than 900 unlined, open-air toxic waste pits in close proximity to areas inhabited by thousands of people. These pits, which by design leach into surrounding soil and overflow into nearby rivers during heavy rainstorms, have contaminated the groundwater and the wells of local residents for decades.” They claim that the Chevron cleanup only covered a fraction of the damage caused by the pits.

 

The plaintiffs are also appealing the ruling because they claim that the $9 billion award is insufficient for the damage done. Meanwhile, Chevron is pursuing its own lawsuit against people involved with the plaintiffs, charging them with conspiracy to commit extortion.

 

Chevron reported a net profit of $19 billion for 2010.

-Noel Brinkerhoff, David Wallechinsky

 

Ecuador Judge Orders Chevron to Pay $9 Billion (by Simon Romero and Clifford Krauss, New York Times)

Ecuadoran Court Slaps Chevron with $8 Billion Fine (by David R. Baker, San Francisco Chronicle)

Cautionary Tales and Lessons from the Amazon (Amazon Watch)

Illegitimate Judgment against Chevron in Ecuador Lawsuit (Chevron)