Ecuador top court: Chevron must pay for pollution

The Constitutional Court of Ecuador has issued a long-awaited ruling in favor of those affected by the transnational oil company Chevron, which operated through its subsidiary Texaco in Ecuador between 1964 and 1990. The court rejected the protection action that the company filed in 2013. In the 151-page ruling, the court denied Chevron’s claim of violation of constitutional rights. Chevron will now have to pay $9.5 billion for the repair and remediation of social and environmental damage that,¬†¬†according to audits and expert reports,¬†were a result of oil company operations in the Amazonian provinces of Sucumb√≠os and Orellana. The¬†court found that Texaco deliberately dumped billions of gallons of toxic oil waste on indigenous lands¬†in the Amazon rainforest.

The news was announced by members of the Union of Affected by Petroleum Chevron (UDAPT) on July 11. UDAPT represents a group of indigenous people of the Cofan, Secoya and Kichwa nationalities, and mestizo¬†settlers n the rainforest. UDAPT coordinator William Lucitanda said in an interview that it was a “historic day for the resistance of indigenous peoples in defense of collective rights.”¬†According to Lucitanda, at least 30,000 people have been impacted.

Pablo Fajardo, who was affected by Chevron and became a lawyer on the case said in a telephone interview that the ruling “means a lot”¬†to them. Fajardo said they can now focus on how to validate or approve it in other jurisdictions in order to execute and collect the funds. “One argument put by Chevron [to not comply with the order]¬†was to say that there was still a…pending procedure in Ecuador and that it was not appropriate to standardize the sentence outside because a ruling was pending,”¬†Fajardo said.

Chevron has said that its assets in Ecuador are not enough to cover the amount ordered by the court. They unsuccessfully tried a similar approach in Argentina and Brazil. According to Fajardo, the argument used in both countries was that Chevron operates a subsidiary in Ecuador, and the parent corporation is not responsible for the debts of subsidiaries.

Ironically, two years ago Ecuador lost an arbitration against Texaco (later bought by Chevron) and had to pay $112 million dollars.

“What they are doing is that when they have to collect their debt, that is their company, but when they have to pay, they say no, that it is a company that is not theirs, that is autonomous, independent,”¬†Fajardo said. “[I]t is a legal trap.”¬†(Mongabay, Aug. 3)

Ecuador had to pay $112 million to Chevron in 2016 following a ruling by an arbitration panel at The Hague in a contract dispute. (AP, July 28, 2016) That same year, a US federal court barred Ecuadoran plaintiffs from collecting their judgment in the United States i the oil pollution suit.

Photo via Mongabay

  1. Reversal for Ecuador at The Hague

    The Permanent Court of Arbitration in The Hague has ruled in favor of oil giant Chevron and declared Ecuador guilty of violating a bilateral investment treaty signed with the United States in 1997, and for not providing Chevron with "just and equitable" treatment. The court also ruled that Ecuador will have to pay economic compensation to the corporation. The amount has not been established yet, but Chevron requested that Ecuador assume the $9.5 billion that the provincial court of Sucumbios ordered Chevron to pay to the communities impacted by oil pollution. (TeleSur)

    Note: The original sum set by the Sucumbios court in 2011 was $8.6 billion, but it was re-set by the Ecuador Constitutional Court in July at $9.5 billion. Numerous erroneous reports (BBC News, Reuters) are saying that the 2011 ruling was issued by Ecuador's "Supreme Court." There is no such body. Ecuador's highest court is the Constitutional Court—and in any case, the 2011 ruling was issued by a local Sucumbios court, and only raitified by the high court this year.