Chevron in Ecuador

The archive of the Clean Up Ecuador campaign website

Ecuador Court Awards $200 Million in Chevron Receivables to Plaintiffs

Dow Jones Newswires
16 October 2012

Quito, Ecuador – An Ecuadorean court ruled that plaintiffs of an environmental lawsuit against Chevron Corp. (CVX) should receive about $200 million in receivables that the company stood to collect in the South American country.

Chevron, which denies responsibility for environmental contamination in Ecuador, doesn't have assets in the Andean nation.

According to the order, issued Monday by Judge Wilfrido Erazo Araujo and reviewed Tuesday by Dow Jones Newswires, Chevron trademarks affected include Texaco, Ursa, Havoline, Doro, Geotex, Meropa, Motex, Multigear, Regal, Toro, Texathern, Thuban, and others. All are used in Ecuador under licensing arrangements with local distributors.

The court also ordered a freeze on all bank accounts related to Chevron, Texaco, and any subsidiary in the country.

Ecuadorean indigenous groups are seeking compensation from Chevron for contamination of their land as a result of Texaco's operations in the country from 1964 to 1992. Chevron, which strongly denies the accusation, inherited the lawsuit in 2001, when it acquired Texaco.

Pablo Fajardo, a lawyer for the plaintiffs, said in a press release Tuesday that included among the receivables and assets ordered to be turned over are a $96.3 million debt that Ecuador's government owes Chevron, funds in various bank accounts held in Ecuador by Chevron and its subsidiaries and licensing fees generated by the use of Chevron trademarks in the country.

"The total amount in assets could generate an estimated $200 million for the plaintiffs, who won their case in 2011 after an eight-year trial," the release said.

Last July, an Ecuadorean judge said Chevron must pay $19 billion for environmental damages in the country's Amazon region, nearly $1 billion more than previously stated.

"This is a huge first step for the rainforest villagers on the road to collecting the entire $19 billion judgment," said Mr. Fajardo.

Mr. Fajardo also said plaintiffs reiterate their goal of collecting the entire $19 billion by seeking to seize Chevron assets in countries around the world.

This strategy has yet to pay off, as third-party countries so far haven't acted on behalf of the claimants.

The $96 million debt stems from an international arbitration in favor of Chevron related to numerous commercial disputes between the oil giant and Ecuador's state-owned oil company, Petroecuador.

Those funds will have to be transferred by the government to the rainforest villagers as part of the collection effort, Mr. Fajardo said.

Chevron spokesman Kent Robertson said the order is not surprising.

"The Lago Agrio court's action puts Ecuador in further breach of international law. Chevron intends to challenge the Lago Agrio court's unlawful action through all available remedies – inside and outside of Ecuador," said Mr. Robertson.