The people of Ecuador are rising up to refound their country as a pluri-national homeland for all. This inspiring movement, with Ecuador's indigenous peoples at its heart, is part of the revolution spreading across the Americas, laying the groundwork for a new, fairer, world. Ecuador Rising aims to bring news and analysis of events unfolding in Ecuador to english speakers.

Saturday, December 06, 2008

Court to hear 1.6 bln dollar Chevron case against Ecuador

An international court has agreed to hear a 1.6-billion-dollar case brought by US oil giant Chevron against Ecuador in a long-running dispute over alleged environmental damage, the company said Thursday.

Chevron filed the complaint at the Permanent Court of Arbitration in The Hague arguing that Quito had violated a bilateral investment agreement.

Under the contract signed with Ecuador, Quito was barred from selling abroad crude oil delivered by Chevron, company spokesman James Craig told AFP.

"They had subsidized oil prices, which were supposed to be for the domestic market, but then they sold it on foreign markets, making a gain," he said.

The US firm also said Quito had demonstrated "legal irregularities" in seven large commercial claims for damages on production contracts now before Ecuadorean courts.

"This ruling is of utmost importance to Chevron since this matter can be evaluated by a qualified and neutral forum outside Ecuador," the company said in a statement to AFP.

It added that Ecuador faces arbitration in other international disputes. "The total demand easily exceeds five billion dollars," the company said.

In April, Chevron rejected a court report holding it liable for 16.5 billion dollars in alleged environmental damage when Texaco, bought by Chevron in 2001, was extracting crude in the Amazon jungle between 1964 and 1990.

Several indigenous communities filed a class-action lawsuit against Chevron in 2003 seeking compensation for soil pollution in their Amazon homelands.

Quito has also sued Chevron for widespread contamination allegedly caused by the Texaco subsidiary's oil-drilling operations in Amazon territories before the subsidiary was sold to Ecuador's state-run oil company Petroecuador.

The Amazon Defense Coalition has led a 27-billion-dollar compensation claim on behalf of dozens of rainforest communities and five indigenous groups.

The coalition says some 18.5 billion gallons of toxic "produced water" was dumped in the Amazon waterways, pits were filled with toxic sludge and at least 17 million gallons of crude oil were spilled, affecting 30,000 rainforest residents.

In 1990, a New York court ordered Texaco to stand trial in Ecuador on environmental charges, the first time a US oil company was told to answer to charges in a foreign country.

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