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Chevron Hit With $18 Billion Canadian Court Case Over Ecuador Pollution

QUITO, Ecuador

Lawyers representing four Ecuadorian tribes last week presented Chevron with a collections action for $18 billion USD, to be heard in Canada’s Superior Court of Justice.

An Ecuadorian court originally awarded the plaintiffs the huge sum in February 2011 over claims of catastrophic pollution to a region of the Amazon by the oil giant.

Chevron has no assets in Ecuador, so the ruling had little leverage after the U.S. company refused to comply; however, the plaintiffs believe Chevron is more vulnerable in Canada.

Alan Lenczner, the Canadian lawyer who filed the enforcement action during Chevron’s annual general meeting on May 30, said the Ecuadorians would be targeting Chevron’s assets, “including Canada's largest offshore drilling project and new investments in oil sands in the province of Alberta,” according to a press release from the Amazon Defense Coalition.

This might be just the first such litigation against Chevron outside of Ecuador.

Pablo Fajardo, who represents the indigenous communities, said: “We plan to exercise our legal right to collect every penny of the legitimate judgment from Ecuador, even if we have to drag Chevron kicking and screaming into courts around the world.”

BusinessWeek quoted Chevron spokesman Kent Robertson as saying in response to the new challenge in Canada: “The company does not believe that the Ecuador judgment is enforceable in any court that observes the rule of law.”

The Ecuadorian court found that Chevron had intentionally dumped 16 billion gallons of toxic wastewater in an area of rainforest called the Orient from 1964 through 1990.

The Amazon Defense Coalition reported evidence during the eight-year trial that included more than 64,000 soil and water samples, which pointed to extensive contamination at more than 350 Chevron well sites and oil production stations.

Chevron claims the polluted area was cleaned up in 1992. It has consistently and vociferously rejected the Ecuadorian court’s ruling, which was the highest ever made.

Robertson condemned the judgment as “a product of bribery and fraud, and it is illegitimate.”

The company has gone on the offensive, accusing the Ecuadorian judge of fraud and breach of trust, and launching its own racketeering lawsuits against the plaintiffs and their lawyers.

The company claims these suits are the reason the case is not being heard in the United States.

“In the United States … the plaintiffs’ lawyers would be confronted by the fact that seven federal courts have already made findings under the crime/fraud doctrine," the company stated on receipt of the Canadian developments.

The protracted case began in 1993 and has become a public relations disaster for Chevron’s leadership.

At the annual general meeting last week, a group of shareholders challenged John Watson’s role as CEO and chairman because of his governance of the case.

Last month, another group of investors called on the company to settle with the indigenous communities, citing the “significant reputational damage” it has incurred in the case.