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Saturday, December 06, 2008

Chevron Accuses Court Expert Of Violating Law In Ecuador Case

QUITO Dec 5, 2008-(Dow Jones)- Chevron Corp. (CVX) on Friday charged that Richard Cabrera, a court-appointed expert in an environmental damage case in Ecuador, exceeded his mandate.

The U.S.-based company said that Cabrera, appointed by the Court of Nueva Loja, had violated Ecuadorian laws and the court's mandate.

Last week, Cabrera told the Nueva Loja court that Chevron should pay more than $27 billion in compensation for environmental damages in the Andean country.

This amount is higher than the amount initially estimated by Cabrera in April.

Chevron is facing a lawsuit in Ecuador's Court of Nueva Loja for alleged contamination in the Amazon region of Lago Agrio by Texaco, which Chevron acquired in 2001.

The company is accused of having used out-of-date technology that led to environmental damage.

"At the urging of the plaintiffs, Cabrera vastly exceeded his mandate, in violation of the court's specific order and the law. This is an environmental lawsuit that seeks three things: remediation, reforestation and health monitoring," said James Craig, Chevron's media adviser for Latin America.

The court order instructed Cabrera to examine alleged contamination and inform the court of the technical facts of the case. He went beyond that in assigning responsibility, affixing monetary damages and in the broadened scope of his work, Craig said.

The court said that Cabrera should evaluate environmental damage and specify the origin of the damages as well as specifying actions to repair the damage.

Craig said that more than 90% of Cabrera's findings are outside the court's instructions, including the assessment of $18 billion in damage for indemnification for cases of cancer.

Pablo Fajardo, one of the plaintiffs' lawyers, said that Ecuadorian environmental law requires an economic estimate of damages, "otherwise, Cabrera's report won't be valid."

Plaintiffs said that "the $27 billion number is reasonable when one considers the extent of the damage caused by Chevron and the decades that the soil and water relied upon by tens of thousands of people have been exposed to hydrocarbons."

According to the plaintiffs, "Chevron's attacks on the Cabrera report have no basis in science and show a profound disrespect for the rule of law."

Fajardo said that there were a lot of damages that were not calculated in the first report from the court-appointed expert due to a lack of information.

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