Ecuador Court Fines Chevron Billions for Amazon Contamination

A court in Lago Agrio, Ecuador on Monday ruled in favor of the farmers in Ecuador’s Amazon region who have spent the last 18 years seeking damages for crude oil pollution.

Chevron (NYSE: CVX) inherited the suit when it bought Texaco in 2001, and has denied the allegations of environmental damage.

The court awarded damages of $8.6 billion, but residents want at least $27 billion and plan to appeal. Chevron plans to fight back. It denies any health problems there and says it’s unlikely to pay anything.

The case could instigate claims against companies that have contaminated natural resources.

Non-profits Amazon Watch and Rainforest Action Network, heralded the decision.

"Today’s case is historic and unprecedented. It is the first time Indigenous people have sued a multinational corporation in the country where the crime was committed and won," the groups said in a joint release.

The lawsuit claims that Texaco Petroleum Company, now a Chevron subsidiary, dumped more than 16 billion gallons of toxic "formation water" into Amazon streams and rivers from 1964 to 1990. The company withdrew from the country in 1992.

"Today’s ruling in Ecuador against Chevron proves overwhelmingly that the oil giant is responsible for billions of gallons of highly toxic waste sludge deliberately dumped into local streams and rivers, which thousands depend on for drinking, bathing, and fishing," the non-profit groups added. "It is time Chevron takes responsibility for these environmental and public health damages."

"The Ecuadorian court’s judgment is illegitimate and unenforceable," Chevron said in a statement. "It is the product of fraud and is contrary to the legitimate scientific evidence. Chevron will appeal this decision in Ecuador and intends to see that justice prevails."

The law suit was moved from U.S. federal court to Ecuadorian courts upon Chevron’s request. The company filed sworn affidavits praising Ecuador’s court system.

Judge Nicolas Zambrano, who handed down Monday’s decision, said he will double the damages figure, if Chevron does not apologize publicly for the contamination within 15 days.

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