Monday, February 14, 2011

Ecuadorian court fines Chevron $8.6B

Do you usually view the glass half-full or half-empty? Depending on your perspective a key Ecuadorian court ruling made on Monday is either historic or a Pyrrhic victory.

The eighteen-year lawsuit against Chevron came to a climax when a judge ruled that Texaco (now owned by Chevron) was liable environmental damages in the Ecuadorian rainforest. The court decreed that the oil company pay a reported $8.6 billion fine and apologize publicly or risk doubling the damages figure.

Naturally representatives for the plaintiffs and the defendant viewed things differently. “The Ecuadorean court’s judgment…is the product of fraud and is contrary to the legitimate scientific evidence,” according to a statement from Chevron. Indeed, the company may not have to pay it since arbitrators ordered Ecuador to "take all measures” to suspend the enforcement of any fine against Chevron. Furthermore, Chevron has no assets in Ecuador and the company is expected to appeal the case.

Meanwhile, a joint statement from Amazon Watch and Rainforest Action Network praised the court decision as one that punishes Chevron for “waging unprecedented public relations and lobbying campaigns to avoid cleaning up the environmental and public health catastrophe.” More importantly, however, the court’s decision may have serious repercussions for the future conduct of major multinationals:
"This ruling is an intermediate step. The appeals could go on for many years," said John van Schaik, oil analyst at Medley Global Advisors in New York.

"But the fact that the Lago Agrio court ruled in favor of the plaintiffs sends a signal to oil companies that, more than ever, they need to be good corporate citizens," he added.

"The ruling shows that times have changed, and companies need to take environmental concerns seriously."
The marathon-like lawsuit in Ecuador has gone through plenty of twists and turns that at times made it look more like a soap opera than a legal proceeding. Earlier this month, for example, Chevron failed a federal racketeering lawsuit against Fajardo and other attorneys representing the Ecuadorian plaintiffs.

Image- El Universal (Mexico)
Online Sources- Bloomberg, Reuters, AFP, MSNBC, The Latin Americanist,

No comments: