Amazon region

Lawyers for both Chevron and the plaintiffs embroiled in a lawsuit that has lasted nearly 18 years were told by an Ecuadorian judge that they have until February 17 to present appeals against his ruling. On February 14, Nicolas Zambrano, a judge at a provincial court in the town of Lago Agrio in Ecuador's Amazon region, ordered Chevron to pay $8.6 billion in damages to indigenous communities for drilling-related contamination - one of the biggest environmental rulings in history.

Of the $8.6 billion, $860 million is to be paid directly to the Amazon defence coalition, the group formed to represent 47 Ecuadorian plaintiffs who argued that Chevron is responsible for environmental damage and health problems, including a higher incidence of cancer, in an area of the Amazonian jungle roughly the size of Rhode Island. The judge has also said that if Chevron does not issue a public apology within 15 days of the ruling, the fine will be doubled.

According to experts, it is unlikely that the payment - or the apology - will ever be issued.

Chevron is receiving backing from the US and international court arbitrators, and lawyers for the California-based company are appealing the order, saying the case was fraudulent, driven by greed and politics.

"The objective, of course, is to overturn this illegitimate ruling that is the product of fraud and collusion and divorced from all legitimate scientific evidence presented in the case," said Chevron spokesman James Craig.

Chevron, which does not operate in Ecuador today, maintains that it is not responsible for any health problems in the area. The company inherited the lawsuit when it bought Texaco in 2001.

In the 1970s, Texaco partnered with Ecuador’s state oil company to conduct oil exploration and extraction operations in the jungle. Texaco paid $40 million to the government to compensate for environmental damage before it left Ecuador in 1992, but this did not satisfy villagers. They filed a lawsuit against the company in 1993.

Ecuador's government angered; plaintiffs to appeal

Ecuador's president Rafael Correa has responded angrily to charges from Chevron that his government unduly influenced this week's ruling. He says his government had nothing to do with the decision.

"It was the most important judgment in the history of the country," Correa said.

Lawyers for the plaintiffs in the case are also returning to court to try and increase the amount of money Chevron has been ordered to pay.

Although some plaintiffs said they felt validated by Monday's ruling, they argue that $8.6 billion is not enough to clean up the contaminated water supplies and pollution they maintain is causing widespread health problems in their communities.

"The judge recognized the crime committed," said Guillermo Grefa, head of a Quichua Indian community who claims that Texaco's contamination created respiratory problems among his people. "For us, this is very little. For us, the crime committed by Texaco is incalculable."

"We want to ensure the damage award will adequately remediate all the contamination that Chevron is responsible for," said Karen Hinton, a Washington-based spokeswoman for the plaintiffs.

The plaintiffs, who had originally sought damages of $27 billion, have not indicated how much they will ask for in additional damages.

Historic ruling could set a precedent

The lawsuit's ruling is the largest environmental award on record, and would account for roughly half of Chevron's annual revenues. The company brought in $19 billion in revenues in 2010.

The case has been keenly observed by investors and the oil industry, who believe it could set a precedent for other large claims against companies accused of polluting the environment in countries where they have operations. For environmental activists, the case represents an important victory.

"It is the first time that indigenous people have sued a multinational corporation in the country where the crime was committed and won," environmental group Amazon Watch said.

Report: Deanne Corbett (Reuters, AP, IPS)
Editor: Anke Rasper