Orders That Damage Claim Be Submitted In 120 Days
20 March 2007 - FOR IMMEDIATE RELEASE
Contact: Karen Hinton at +1.703.798.3109
The Ecuador judge hearing a $6 billion class-action environmental lawsuit against Chevron for contamination of the Amazon rainforest has ordered that the final phase of the trial, which includes a damage assessment, be completed in 120 days.
The order, made over Chevron's objection, poses new legal challenges for CEO David O'Reilly and company management as they face what experts believe could turn out to be the largest judgment against an oil company in history. Chevron is currently battling to avoid liability from its Ecuador operations in two different courts and before three investigative bodies, including the Securities and Exchange Commission and the U.S. Department of Justice.
Just last week, the leader of Ecuador's largest indigenous federation called for a criminal investigation of top-level Chevron employees over the contamination, which experts consider to be among the most extensive in the world. The judge in the Ecuador case, German Yanez, on March 19 ordered that the final phase of the trial - which includes a damage assessment - be completed within 120 days.
The judge appointed an Ecuadorian technical expert, Richard Cabrera, to conduct the report. The ruling means that the evidentiary portion of the case should end by this summer, with a decision by the beginning of 2008. Filed in Ecuador in 2003, the lawsuit alleges that Texaco (now Chevron) dumped 18 billion gallons of toxic waste into Ecuador's rainforest and abandoned roughly 1,000 open-air toxic waste pits, causing widespread health problems for indigenous peoples and other communities living in the area.
The only independent damage assessment, by the U.S. firm Global Environmental Operations, puts clean-up costs at $6.14 billion, exclusive of personal damages to thousands of residents of the area. Total damages could easily top more than $10 billion once economic losses and pain and suffering to individuals is taken into account, according to Pablo Fajardo, the lawyer for the plaintiffs.
The court's order is the latest setback in the case for Chevron. The company also faces many other legal problems relating to Ecuador, as follows:
- In the U.S., a federal court in New York thus far has refused to grant Chevron's motion to force Ecuador's government to pay for any judgment stemming from the Ecuador trial. Instead, the court ordered Chevron to produce additional evidence or have its lawsuit dismissed.
- Also in the U.S., Chevron has admitted that federal regulators from the SEC have sought information from the company relating to Ecuador. Chevron spokesman Kent Robertson admitted as such in an article published Dec. 23 in the San Francisco Chronicle.
- The U.S. Department of Justice has received a formal request by Ecuador's Attorney General that Chevron be investigated for defrauding Ecuador's government over a purported clean-up in the mid 1990s.
The request for a criminal investigation by the indigenous federation, CONAIE, was made against Ricardo Reis Veiga, a Chevron vice president in charge of downstream operations for Latin America, and Rodrigo Perez Pallares, Chevron's legal agent in Ecuador. The request asserts that both Reis Veiga and Perez Pallares lied to Ecuador's government about clean-up results from the mid 1990s by deliberately distorting lab results.
Environmentalists called on the company to deal with the new challenges constructively, instead of continuing to fight multiple legal battles that it appears to be losing. "Chevron's burgeoning legal problems in two countries over its horrific practices in Ecuador underscores that energy giants that refuse to deal with their environmental liabilities will end up paying a very heavy cost over the long run," said Atossa Soltani, the Executive Director of Amazon Watch, an environmental group that has been urging Chevron to remediate the toxic contamination in Ecuador.
"We again call on Chevron management to meet its corporate governance responsibilities and work with the affected communities and indigenous groups on a comprehensive clean-up solution to avoid further suffering to all involved," said Soltani.