Ecuador’s Highest Court Halves Chevron’s Fine to $9.5 Billion

By James Burgess:

Chevron’s court battle against Ecuador over pollution caused in the Lago Agrio region of the country has been well documented over the years, and recently there has been a development that could well be the largest to have occurred in some time.

In 2001 Chevron bought Texaco. Texaco had been accused of causing huge levels of pollution whilst working in Ecuador from 1964 to 1992, and this case passed onto Chevron along with all other facets of Texaco’s business.

In 2011, a lower court in Ecuador ruled that Chevron must pay $9.5 billion damages to help the affect communities and pay for the clean, and then an extra $9.5 billion fine for refusing to publically apologise for the pollution.

Chevron has always argued that Texaco paid $40 million to help clean up the area and remove it from liability before leaving the country, and that the state run oil company, Petroecuador, is responsible for the pollution that Chevron is now being told to pay for.

Chevron has tried to get the verdict overturned in various courts in Ecuador and the US, adamant that the whole decision is corrupt and illegal. In a case in New York, Chevron has claimed that the US lawyer, Steven Donziger, who represented the plaintiffs, had resorted to fraudulent activities in order to secure a favourable verdict for his clients. In October the former Ecuadorian judge, Alberto Guerra, testified in court that he had been paid to ghost write the rulings handed out at the Ecuadorian trial, giving the financial compensation to the Ecuadorian villagers.

Now, the highest court in Ecuador has reviewed the case and just made a decision to uphold the initial verdict blaming Chevron for the pollution, but it has halved the imposed fine to just $9.5 billion. On Tuesday the National Court of Justice announced that there was no legal basis with which to levy additional fines against Chevron just because it had not made a public apology.

Chevron is still refusing to accept the decision, with James Craig, a spokesman for Chevron, stating that“the only decision that the Court of Justice could have taken … was to declare the trial null and void and leave this illegitimate sentence without effect.” The ruling is “as illegitimate and unenforceable today as it was when it was issued nearly three years ago.”

This piece is cross-posted from OilPrice.com with permission.