Chevron in Ecuador
October 9, 2014
Chevron, formally Texaco, has been operating in the Ecuadoran Amazon since 1964. After an eight year trial, in 2011 Chevron was found guilty of dumping 18.5 billion gallons of toxic oil waste into the Ecuadorian Amazon Lago Agrio region between 1964 and 1990. The legal battle began in 1993 when some 300,000 local residents from five different Amazonian tribes filed a lawsuit against Texaco. They claimed the company knowingly dumped toxic waste water and crude oil into the Amazon rain forest, leading to health problems such as cancer and birth defects, while also affecting cultural practices and disrupting indigenous lands. The extensive pollution has also led to soil contamination, water pollution, and deforestation.
In 2011 Ecuadoran courts awarded the affected communities a multi-billion dollar judgment, giving the Ecuadoran plaintiffs the right to seize Chevron’s assets in Brazil, Argentina, and Canada as Chevron has no substantive assets in Ecuador. Last year the amount was reduced from $18.2 billion to $9.5 billion. However, Chevron refuses to pay as they claim locals bribed courts in Ecuador to rule in their favor. In a controversial ruling in March 2014, a U.S. court declared the Ecuadorian judgment illegitimate as Chevron lost due to coercion, bribery and money laundering in Ecuador.
But in a new development, the Ecuadorians may finally receive some of their compensation. Last week in Dutch courts, Chevron won $106 million in an arbitral award from Ecuador under the U.S.-Ecuador Bilateral Investment Treaty in an unrelated series of commercial disputes dating to the early 1990’s between the American company and Ecuador’s state-owned oil company, Petroecuador. This award conflicts with a local Ecuadorian court order from June 2013 stating that villagers have the right to collect any Chevron assets in Ecuador to satisfy the $9.5 billion judgment. It is expected that Chevron will continue to refuse to pay.
A step in the right direction, this latest ruling may begin to resolve Chevron’s systematic and deliberate pollution. The affected communities will put the money to good use. Remediation of oil pollution is already underway through the organization Clean Water and their efforts can be strengthened through new funding. Additionally, the award can be used to fund new legal battles against Chevron to collect assets outside Ecuador to fully collect the $9.5 billion.
Author – Attiya Sayed, EDN Intern