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Chevron Fined $9.5 Billion in Ecuador Contamination Case

Oil giant Chevron Corp. was hit with a $9.5 billion fine yesterday by an Ecuadorean judge who ruled that the California-based company is responsible for widespread and devastating oil drilling contamination in the South American country. According to Time, the amount was far lower than the $27.3 billion recommended by a court-appointed expert but it’s still the largest-ever damage award in the history of environmental lawsuits. The case has been lumbering through US and Ecuadorean courts since 1993, with Chevron doing everything in its power, both legal and otherwise, to avoid this outcome.

The company responsible for the actual contamination, Texaco, was bought by Chevron in 2000. In Ecuador, Chevron inherited a shocking legacy of environmental despoilment by Texaco that included toxic produced water heavy in cancer-causing pollutants standing in open pits laid out over a vast swath of what was once pristine rainforest. Billions of gallons of highly toxic waste sludge were also deliberately dumped into rivers and streams where  tens of thousands of Ecuadoreans, most of them indigenous people, swim, drink, bathe and fish. More than 1,400 people have died from pollution- caused cancer.

The Ecuadoreans affected by this devastating contamination appeared satisfied with the ruling. “We can now tell our neighbors and those affected that justice exists,” said local indigenous leader Guillermo Grefa of the Kichwa people. “They can now dream of drinking clean water that doesn’t have petroleum residues like what we’ve had to drink up until now.”

Chevron, for its part, called Judge Nicolas Zambrano’s ruling “illegitimate and uneforceable” and vowed to appeal. The San Ramon, California-based company, which earned a whopping $19.1 billion last year, had resorted to an arsenal of dirty tricks in its attempt to beat the lawsuit. Corporate espionage and secret videotapes involving a convicted drug trafficker all added to the case’s significant intrigue, but in the end justice prevailed. Now Chevron must pay.

Getting the behemoth corporation to do so will be no easy task. They will in all likelihood appeal, and even if they do pay, it is unlikely they will have to cough up the full amount. Five billion dollars was originally awarded to the victims of the 1989 Exxon Valdez spill in Alaska. But the corporate-friendly US Supreme Court reduced that amount by nearly 90%, to $507.5 million.

Wall Street seemed to be of the opinion that the Ecuadorean ruling won’t hurt Chevron much; shares of the oil company closed up $1.22 in trading yesterday.

Trailer from Joe Berlinger’s 2009 documentary Crude:

 

 

 

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