Chevron faces $18 billion in Texaco-related damages

 Texaco and Ecuador

Big Oil litigation is in the news as BP agrees to pay $7.8 billion to settle with plaintiffs over its 2010 oil well spill in the Gulf of Mexico. BP has already set aside $20 billion to cover costs. However, the results of still-to-be-resolved spill-related federal, state, and local government lawsuits could add scores of billions of dollars in additional costs to BP.

A less well known, but still significant legal showdown is taking place thousands of miles to the south, where last week an Ecuadorian federal appellate panel rejected Chevron’s motion to block Amazon communities from enforcing an $18 billion judgment against the company.

In February 2011 a trial in Ecuador found evidence that Chevron deliberately dumped billions of gallons of toxic waste into Amazon basin rivers when it operated in Ecuador under the Texaco brand from 1964 to 1992. The court found that there was sufficient scientific evidence to support the case that the dumping decimated indigenous groups and caused an outbreak of cancer that could lead to thousands of deaths. Some 30,000 Ecuadorians originally filed the suit in US federal court in 1993.

For its part, Chevron claims that Texaco remediated its share of environmental impacts prior to 1992 and that the Ecuadorian government signed off on this work, long before Chevron bought Texaco in 2001. It also claims that there is no scientific evidence to support the alleged environmental and health impacts by Texaco; that subsequent damage has been caused by and is the responsibility of national oil firm Petroecuador; and that a fraud is being perpetrated.

Nevertheless, in 2011 an Ecuadorian judge ruled against Chevron and awarded more than $18 billion — nearly half of it in punitive damages. Subsequent appeals have not overruled the finding.

Is the ruling enforceable? Chevron says no. But will Chevron have the final word?

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Photo by Rupert Ganzer used under a Creative Commons license.

 

Stuart Hampton

British editorial veteran Stuart Hampton has been covering oil and gas companies for Hoover's since the Neogene-Quaternary period. Well, actually, since the early 1990s. For the best overview of the oil industry and its history he recommends Daniel Yergin's "The Prize." You can also follow Stuart on Twitter.

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