Chevron vows to fight $9.5B judgment

Feb. 15, 2011 at 4:00 AM
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SAN RAMON, Calif., Feb. 15 (UPI) -- Chevron Corp. said it would appeal a $9.5 billion ruling to clean up Ecuador's rain forest, vowing not to pay the fine or apologize as the judge demanded.

The Ecuadorian ruling, which said Chevron was responsible for chemical-laden wastewater dumped in the Amazon River basin more than 20 years ago, is "illegitimate and unenforceable," the company said in a statement.

"It is the product of fraud and is contrary to the legitimate scientific evidence," the statement said.

Judge Nicholas Zambrano of Nueva Loja Court in Lago Agrio -- an Amazonian city founded in the late 1960s as a Texaco Inc. base camp -- said Chevron, which inherited the case when it bought Texaco in 2001, must pay $5.4 billion for soil and water cleanup and $1.4 billion for a local healthcare system.

Zambrano also ordered Chevron to pay the Amazon Defense Front, a coalition of 30,000 residents of Ecuador's oil-rich Amazon rain forest, an additional 10 percent in damages, or about $860 million, which would bring the total judgment to $9.5 billion. If the U.S. oil giant doesn't publicly apologize in the next 15 days, the company is to pay twice that amount, Zambrano ordered.

Texaco had the knowledge and technical ability to avoid damages, Zambrano said in his 187-page ruling, adding the damages "were not only foreseeable, but also preventable."

The judgment would rank as No. 2 in environmental-damage cases behind the $20 billion BP PLC agreed to pay to compensate victims of last year's Gulf of Mexico oil spill, The New York Times said.

BP expects the gulf spill to cost it $41 billion, The Financial Times reported Tuesday.

Chevron said it had no assets in Ecuador and vowed to fight any efforts to seize its property overseas.

The No. 2 U.S. oil company, based in San Ramon, Calif., sued the 30,000 residents, who are the plaintiffs, and their lawyers in New York, and U.S. District Court Judge Lewis Kaplan last week imposed a temporary restraining order on the plaintiffs' U.S. lawyers from seeking to enforce any ruling against Chevron.

International arbitrators at The Hague, Netherlands, also granted Chevron a preliminary injunction blocking plaintiff efforts to enforce the judgment. Ecuador challenged the panel's jurisdiction.

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