Ecuador Plaintiffs to Sue Chevron in Argentina, Colombia

Suit against Chevron in Argentina and Colombia follows similar attempts in Brazil, Canada

By Taos Turner, Dow Jones
1 November 2012

Buenos Aires, Argentina – A multibillion-dollar legal battle between Ecuadorean indigenous groups and Chevron Corp. (CVX) has moved to Argentina and Colombia, where lawyers say the company can be held responsible for environmental damage claims in Ecuador.

Last year, a court in Ecuador found Chevron liable and levied an $18.2 billion judgment. In July, an Ecuadorean judge raised that amount to $19 billion.

Lawyers for the plaintiffs say they will ask courts in those countries to embargo what they say amounts $2 billion in Chevron assets in Argentina and an undisclosed amount in Colombia.

Enrique Bruchou, lead attorney for the Ecuadoreans in Argentina, said a treaty between Argentina, Colombia and Ecuador should help the plaintiffs get local courts to embargo Chevron's assets in the countries.

Chevron said it does not believe that the Ecuador ruling can be enforced in these countries. "The Ecuador judgment is a product of bribery, fraud, and it is illegitimate," the company said in a statement.

The suit is the latest development in an almost 20-year legal dispute over claims that Texaco Inc., which Chevron bought in 2001, contaminated parts of Ecuador's Amazon region when it was operating in the country.

Luis Yanza, an Ecuadorean who represents indigenous and mestizo groups in the Amazon region, said Texaco's alleged pollution of the area has directly affected 30,000 people, raised cancer rates and caused other problems.

"For us, what Texaco did is a crime against nature and against humanity," he said Wednesday.

The start of litigation in Argentina comes just as the country's state oil company, YPF SA (YPFD.BA, YPF), is courting Chevron to help it explore for potentially massive, but as yet untapped, unconventional oil and gas resources.

In September, Chevron and YPF signed a memorandum of understanding to explore for unconventional energy in the South American nation.

Chevron is an active investor in Colombia, which has experienced an energy boom over the last decade. The company is the largest producer of natural gas in the Andean nation, where it operates in one offshore and two inland natural gas fields. It also has a Texaco gas station network and interests in product terminals.

Last year, a court in Ecuador found Chevron liable and levied an $18.2 billion judgment. In July, an Ecuadorean judge raised that amount to $19 billion.

Chevron doesn't have significant assets in Ecuador, but the plaintiffs have been trying to seize the company's assets in other countries to enforce settlement on the judgment.

"We're going after Chevron wherever in the world it has assets," said Pablo Farjado, an Ecuadorean attorney representing the plaintiffs.

In June, lawyers for the Ecuadoreans filed a lawsuit in Brazil one month after they launched a similar suit in Canada.

Chevron, which is the second-largest U.S. oil company after Exxon Mobil Corp. (XOM), has repeatedly denied the claims.

Earlier this month, an Ecuador court ruled that the plaintiffs could collect the oil company's assets and receivables in the country that were related to Chevron trademarks licensed in the Andean nation.

Lawyers for the plaintiffs estimated those assets to be worth around $200 million, though Chevron said at the time it hadn't calculated its exposure in Ecuador.

The court also ordered a freeze on all bank accounts related to Chevron, Texaco and any subsidiary in the country.

Courts in Brazil and Canada have yet to rule on the suits brought against Chevron.

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