Chevron in Ecuador

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Chevron Loses in New York Lawsuit Against Ecuador

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A federal court in New York has rejected a lawsuit filed by Chevron (formerly Texaco) seeking to subject the Ecuadorian government to arbitration proceedings in the US, thus evading the jurisdiction of the Ecuadorian courts in a case in which 30,000 Ecuadorians are suing the oil giant for environmental damages.

According to Judge Leonard Sand, who issued the ruling, Chevron is bound by Ecuadorian law and any decisions emitted by the Ecuadorian court, based in the Amazonian town of Nueva Loja, where the 30,000 plaintiffs are demanding billions of dollars in damages for the 18.5 billion gallons of toxic wastewater dumped by Texaco as it drilled for oil from the 1960s to 1990s.

The ruling, said Judge Sand, recognizes the jurisdiction and capability of the Ecuadorian justice system in this lawsuit. The judge added that there was no joint operating agreement between the Ecuadorian Government and Texaco, a fact which prevents any possibility of arbitration.

Judge Sand's ruling represents a serious setback for Chevron, ending one of the corporation's best chances of getting the Ecuadorian government to assume the costs of the oil company's bad practices.

It comes as the judge in the Nueva Loja court ordered the start of the "global forensic" phase of the Ecuadorian lawsuit, in which a forensic scientist will identify the damage caused by Chevron's hydrocarbon operations in the provinces of Sucumbios and Orellana and quantify the monetary damages that Chevron will have to pay.

Together, the decisions from the two courts "have produced great commotion for Texaco, which has in recent years attempted to delay the trial and avoid responsibility, by arguing that Ecuador had no jurisdiction in the matter," said Luis Yanza, Coordinator for the plaintiffs' umbrella group.

The plaintiffs' lead lawyer, Pablo Fajardo, said the New York courtcase was another example of "Texaco's desperation in the face of the overwhelming evidence against them."

Mr. Fajardo denied the existence of any pressure placed on the court in Nueva Loja, saying: "It is Texaco which has exerted pressure and obstructed justice in order to impede the forensic scientist from doing his job, thereby unnecessarily delaying trial proceedings.

"What worries them is that they haven't been able to control the Ecuadorian or the US justice systems. The only existing pressure stems from the facts and the evidence, which proves the existence of serious environmental, human, cultural and social impacts. These impacts are leading to the deaths of hundreds of Ecuadorians."