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Sunday, August 02, 2009

Chevron: ‘We’re not paying’ $27B fine for Ecuador rain forest contamination

July 30th, 2009 at 5:05 am |

U.S. oil company Chevron said Monday that it expects to lose a case which charges the company’s Texaco branch with polluting Ecuador’s rain forest with oil-contaminated water for nearly two decades.

An expert appointed by Ecuador’s courts assessed the damages to the locals’ health and environment to be $27 billion: A sum which Chevron spokesman Don Campbell bluntly told The Wall Street Journal, “We’re not paying and we’re going to fight this for years if not decades into the future.”

It will be the largest award ever in an environmental lawsuit, even if it goes uncollected.

“Chevron intends to fight enforcement by claiming the trial was unfair, in part because Ecuador’s president has publicly supported the plaintiffs,” noted Business Insider’s Erin Geiger Smith.

The Journal reported: “Chevron denies the allegations, arguing that Texaco’s operations in Ecuador met local and international standards, that a $40 million cleanup effort in the 1990s resolved any environmental liability the company had there, and that any remaining problems are the responsibility of Petroecuador, the state-run oil company that took over Texaco’s operations.”

The case was originally filed in U.S. courts, but Texaco pushed to have it moved to Ecuador because “the oil company thought it would be able to take advantage of Ecuador’s legal system,” wrote Smith.

Chevron said it plans an appeal to a higher court in Ecuador but does not expect a victory.

However, once the ruling is handed down from Ecuador’s courts, citizens in the South American nation will be forced to take their complaint to U.S. courts because Texaco ceased Ecuador operations in 1992, moving all its assets out of the country. Chevron purchased Texaco in 2001.

Only a ruling from a U.S. court would allow Ecuadorians to collect. A ruling from Ecuador is expected some time this year.

By Stephen C. Webster

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