Showdown Between Chevron Oil and the Third World

July 21, 2009

(ChattahBox)—Chevron, America’s third largest oil company is facing a potential judgment of $27 billion from an environmental lawsuit brought by residents of Ecuador sixteen years ago for damages from oil spills left behind by Texaco, which Chevron purchased in 2001.

The long-running and contentious lawsuit began in the U.S. in 1993 and ended up in a court in the small town of Lago Agrio, where the two parties have engaged in numerous counter claims, with both parties making use of the media to win in the court of public opinion.

Chevron is determined not to pay any judgment issued by the Ecuadorian court, promising its shareholders it will not pay. “We’re not paying and we’re going to fight this for years if not decades into the future,” said Chevron spokesman Don Campbell. Chevron likens the lawsuit to extortion, while the plaintiffs claim the environmental contamination is poisoning its residents.

Chevron denies the allegations in the lawsuit, claiming Texaco performed a $40 million clean up of its operational sites in the 1990s, before it left Ecuador and that the government signed off on the cleanup efforts, releasing Texaco from any further liability.

Any residual oil spills and pollution were caused by Petroecuador, the state-run oil company claims Chevron.

The plaintiffs in the lawsuit contend Texaco left behind environmental contamination that damaged the sensitive ecosystem of the Amazonian rain forest and caused deadly health problems among the native population. Chevron assumed liability for Texaco’s unlawful actions when it bought the company, plaintiffs say.

The plaintiff’s lawyers also have accused Chevron of participating in a massive cover up of Texaco’s environmental crimes. The plaintiffs include nearly 30,000 people in the Lago Agrio area who claim they suffered health problems and were forced to move from their homes, because of the oil spills.

Chevron further claims that it can’t receive a fair hearing when the President of Ecuador, Rafael Correa blatantly and publicly sides with the plaintiffs in the case.

At a time when Chevron is engaged in an environmentally friendly public relations campaign, the looming Ecuadorian judgment would harm the company’s reputation, as it seeks to extract oil in other Third World countries.

And the lawsuit could continue for another 10 years, as the plaintiffs armed with a judgment seek to enforce it in the U.S. by attaching Chevron’s American-based assets. The plaintiffs are banking on the fact that Chevron will eventually cave in to public pressure and settle with the Ecuadorians.

The public relations hit could be as costly as the record-breaking $27 billion judgment, with some developing countries backing away from business dealings with Chevron. Some shareholders are advising the company to settle, but Chevron is holding firm.

“We’re not going to be bullied into a settlement,” said Chevron spokesman Campbell.

Source


Comments

One Response to “Showdown Between Chevron Oil and the Third World”

  1. Anna on July 22nd, 2009 10:01 pm

    Chevron tried manipulating, denying, hiding the truth and it has not worked. Now, when it looks like justice will be served, Chevron announces it won’t pay for the damages in Ecuador, even if found guilty! This is absurd!!
    Read more about the contamination here: http://www.thechevronpit.blogspot.com

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