Chevron May Face Biggest Fine Ever as 16-Year-Old Case Nears Judgment

Thursday, April 30, 2009

When Chevron acquired Texaco in 2001, the oil giant also bought responsibility for a lawsuit that now threatens to yield the largest penalties ever in an environmental case. In 1993 lawyers in Ecuador filed suit claiming Texaco had caused widespread pollution as part of its oil development operations—pollution that wound up not only soiling an area the size of Delaware, but also caused 1,401 cancer deaths. Texaco began oil drilling in 1972 in the northern Ecuadoran rainforest and dumped tons of toxic sludge into open pits, some of which found its way into local waterways. Although the company spent $40 million and three years cleaning up the mess in the 1990s, Ecuador’s populist president, Rafael Correa, claims Texaco did little more than cover over the pits with dirt, leaving behind a still dangerous swath of territory.

Chevron argues that Texaco complied with Ecuadoran law and that the case is driven more by emotion than science. Chevron also blames Texaco’s successor and former partner, Petroecuador, saying that the state oil company is responsible for hundreds of oil spills since it took over operations in 1990.
If Chevron loses the civil case, it faces a judgment of $27 billion, which would far surpass the penalty of $3.9 billion levied against ExxonMobil for the 1989 spill in Alaska.
-Noel Brinkerhoff
In Ecuador, High Stakes in Case Against Chevron (by Juan Forero, Washington Post)


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