Chevron Ordered to Pay Ecuador $8.6 Billion for Environmental Damages
Those of us who have seen the film documentary “Crude” — as well as millions of others following the story — were heartened today as a court in Ecuador has ordered the oil giant Chevron to pay $8.6 billion for dumping billions of gallons of toxic oil waste into Ecuador’s rain forest. The judgement is one of the largest ever imposed for environmental contamination in any court.
However, we were not at all surprised to hear that Chevron said it would appeal the ruling. Hell, ExxonMobil robo-appealed the Valdez judgement, consistently postponing the payment of damages.
The Exxon Valdez tanker spilled more than 11 million gallons of crude oil into Alaska’s Prince William Sound, and eventually contaminated approximately 1,300 miles of shoreline. Yet, according to Climate Change, the group Time Magazine hails as “Internet’s most influential climate-change blogger,” Exxon fought paying damages and appealed court decisions multiple times, and they have still not paid in full.
“Years of fighting and court appeals on Exxon’s part finally concluded with a U.S. Supreme Court decision in 2008 that found that Exxon only had to pay $507.5 million of the original 1994 court decree for $5 billion in punitive damages. And as of 2009, Exxon had paid only $383 million of this $507.5 million to those who sued, stalling on the rest and fighting the $500 million in interest owed to fishermen and other small businesses from more than 12 years of litigation.
“Twenty years later, some of the original plaintiffs are no longer alive to receive, or continue fighting for, their damages. An estimated 8,000 of the original Exxon Valdez plaintiffs have died since the spill while waiting for their compensation as Exxon fought them in court.”
Is there any reason to expect that Chevron will behave any differently? Sure, the cases have some radically different features. In particular, Chevron’s acts were not simple accidents stemming from negligence on its part; they were willful acts of criminality, deliberately and brazenly perpetrated against a people whom Chevron (then Texaco) erroneously presumed to be too weak and poorly represented to defend themselves. One could argue that Chevron would be well advised to get this atrocity out of the news and safely behind them so that they can immediately hire some high-priced public relations firm and get to work rebuilding some sort of credibility as a decent corporate citizen. It’s going to be a very long road — why not start now?
But that won’t happen; I would have found it astonishing to hear that Chevron had taken a different tack here. They made a cool $5.3 billion last quarter, and they employ the very best lawyers on Earth. Why pay up — and clean up — when you can put that legal team to good use?
And it will be equally amazing if they don’t ultimately enjoy a similar experience to Exxon’s thrill of victory in abusing the legal system until this judgement is overturned or reduced to a tiny sliver of the $8.6 billion.
It’s shameful stuff. But sadly, it’s the new standard.
Btw, in addition to comments supporting what I’ve written here, I’m fully expecting the normal barrage of hate mail that I receive every time I send out a post like this, suggesting that I’m a “lefty” or somehow “unAmerican.” I couldn’t be less concerned; please feel free to express your true feelings. But please don’t try to tell me that behavior like this is what America stands for in the world; this garbage most positively does not represent the country for which our forefathers fought and died.
Thank you, Craig, for yet again demonstrating your courage and conviction as you share with us your sense of moral outrage at the cruel and wanton behavior of this paper creature, and of the wayward and callous individuals who control it. I too am hoping the flagrancy and colossal nature of their crimes will serve to tighten the snare and bring them to suffer a modicum of justice.
It is a little something I have to find more information about, many thanks for the article.
This decision is very encouraging. No comes the hard part. Getting Chevron to actually PAY the amount!!. Ecuador Has to exact some other punishment as long as the money is not paid. I have not kept up with this, but I hope that Ecuador has prohibited and further activities of Chevron in this country and that they closely monitored the activities and any other oil company operating in Ecuador. Only punishments that are IMPOSED work.
OIl companies, and other companies, are environmentally and socially responsible only when they are forced to be. When they are not forced to be responsible, there is no limit to the damage they will do in pursuing profits. Perhaps the best example is the extreme environmental damage that oil companies have done to the gulf area of Nigeria. The pollution is so great that the people living there can no longer support themselves by their traditional means. Moreover, the extreme pollution is severely damaging their health. When they attempt to defend their right to end the pollution, they are actually killed. The oil companies bribe the government officials to do nothing.
Ecuador may be able to stop the pollution problem in Ecuador, but it will continue elsewhere unless or until governments take draconian action to stop it.
A step in the right direction for Ecuadore. I support the effort with a personal boycott of gasoline. I drive an EV using solar power. The only reason the oil companies are so bold is their confidence that we are addicted to their product and will pay any price.
I file this under our mindless slavery to petrochemical companies and the hidden costs of using internal combustion engines. We are each responsibile for our loss of reputation to such people for permitting companies we call “American” to get away with such crimes. When GM did not like the zero emission mandate in California they sued the board and each member individuality. It is only a fiction that “the company makes decisions to pollute.” In fact it is people who feel that there are no personal consequences. When people make such decisions in the military we call them war crimes or crimes against humanity. I don’t see how this is anything less and should receive similar punishment.
I feel that perhaps the only effective method of punishment in an instance like this would be to revoke the charter of the firm in question, seize and liquidate it’s assets at market value to those firms that constitute it’s most ethical competition, and use the proceeds to mitigate the damage that the criminal entity has caused. State and federal courts have consistently recognized the authority of attorneys general to revoke corporate charters. However, sadly, the last time a corporate charter was revoked in California was in 1976.
Polluters must be forced to pay for damage to environment.
And just where do you yo-yo’s think the corporation will get the bread to pay the fine? Seen any increase in your fuel prices LATELY???
I agree with Gary they’ll just raise the prices on us consumers to make up the loss. Rather than fines what’s your idea on how to keep them inline Gary?
Interesting that Chevron’s TV ads lately tout “People power” as their greatest asset. Perhaps it should read “Attorney power”. It is laughable, tho. Only when the majority of people truly see the falsity of monetary gain beyond their maintenance will those of big $$ be squeezed out of control of government. I say “truly” because tho many people decry the extravagant corruption of many of the super rich, most people privately suck for the trappings of wealth. Most senators and Reps are millionaires. Seven of the ten wealthiest multimillionairres in Congress are Democrats. How can they be expected to represent the needs of the common people. Perhaps we could appreciate a new political party, like the Progressive movement of Russ Feingold. I’d call it the “Progressive Labor Party”, to see if that flies.
Craig,
You could hardly call your opinion piece either balanced or objective.
It’s not for me to call you either un-American or leftist. Nor do I condemn you for writing such a highly biased, emotional, commentary, full of the usual old one-eyed assumptions and indignation at the assumed motives of US corporations.
Nowhere in your article do you make any pretence to hide your bias, for that I commend you on your honesty.
You have received praise and support from the usual hate capitalism, hate US, hate corporate factions, one poster even going so far as to praise your ‘courage’ and ‘conviction for moral outrage’ .
Is this really the overblown rhetoric you seek? what do your supporters think Chevron will do? Send a hit squad?
Skipping over all the hyperbole, there are two issues, far more important than bashing Chevron to be considered:
The first is the principle of justice and a fair trial before an impartial Judge/Jury.
The second is a fair and open-minded appraisal of all issues raised by the parties.
Your article suggests that some companies and individuals should not be afforded equal rights before the law. Instead, these accused should be assessed on philosophical grounds alone. Surely that does not represent the country for which ‘your forefathers fought and died’?!
Is Chevron a Monster or a Victim?
Well its obvious that some people don’t need to an understanding of the facts. Chevron must be guilty, because its Chevron.
But the matter is not as simple as that. Your statement, [quote]Chevron’s acts were not simple accidents stemming from negligence on its part; they were wilful acts of criminality, deliberately and brazenly perpetrated against a people whom Chevron (then Texaco) erroneously presumed to be too weak and poorly represented to defend themselves.[/quote] is both inaccurate and disingenuous.
You fail to mention that a major beneficiary of this judgement will be the State owned Ecuadorian oil company. Nor do you mention the massive political and financial corruption involved in the disbursement of these funds, if they were paid.
Nowhere in your article do you mention that some of these claims date back to 1964. Nor do you mention that Texaco was in partnership with Petroecuador, and the responsibility for who polluted what, is far from clear.
Chevron when it purchased Texaco and as a condition for withdrawal from Ecuador (including handing over billions of dollars of oil reserves to Petroecuador) reached a legal settlement with the previous Ecuadorian government, that makes this litigation very dubious.
Chevron claims it is a victim of a massive fraudulent shakedown, by a rival oil company and a corrupt government and Judiciary, along with a large number of vested interests. Much as you may not like the prospect, Chevron’s claims are not without merit.
Judges. officials, pollution consultants, witnesses, plaintiffs, victims, and ‘experts’ were all caught describing the workings of the plot against Chevron ,and who would get what share. Ecuador’s Presidential family was not exempt from charges of corrupt conspiracy along with most ministers and politicians of the ruling party. The Judge’s ruling to accept testimony from such tainted witnesses, is unacceptable in any judicial system that seeks to uphold the right to a fair trial.
This is a far cry from your portrayal of a David and Goliath moral contest.
None of these facts are mentioned in your article. The film ‘Crude’ was exactly that, sensationalist, biased and totally inaccurate.
I am not a supporter of anyone, be they individual or Corporation, deliberately or recklessly polluting the planet. But if we abandon the principles of justice , just because we dislike one litigant over another , we are abandoning 400 years of hard won legal process.
It’s always easier to take the side of the most likable party, but that isn’t justice! Even Chevron has a right to a fair trial and equality before the law.
Equally, Chevron has a right to fair and unbiased reportage, not rampant propaganda, masquerading as reportage.
This does not include your article since as I say, you make no attempt to pretend to be impartial.
Marcopolo: I knew you’d be along presently. All I can say is that I’ve spoken extensively with the “Crude” film-makers, and I find their position more than credible.
Craig, I’m not denying that the film makers are probably very sincere and believe in the integrity of their cause. As do you. I was perfectly sincere when I said you had no obligation to be fair or objective since your article was written as opinion not reportage.
But that’s not my point, can you honestly say that you approached the matter with an open-mind? Can you really tell me that when watching the film, you didn’t have a preconception that Chevron must be the bad guy and that the motives of some Ecuadorians couldn’t be less than angelic?
Did none of the issues raised by Chevron, give you even the slightest desire to ensure justice is executed fairly, despite the repulsive nature of the crime, and your prejudice against a fairly detestable defendant?
Do you dismiss out of hand, all the issues raised by Chevron? Or in the end, do you think it doesn’t matter if Chevron is right or wrong, the judgement is still right because’ the end justifies the means?’
Now that’s a slippery slope….
You have a good point. And I suppose that’s the danger of all documentaries. The filmmaker tells a story that’s almost impossible to disbelieve. I’ve seen 60 Minutes do hatchet-jobs that utterly destroyed the reputations of people and organizations that I know for a fact to be essentially good. It is, indeed, a slipperly slope — one that illustrates the power, and thus the profound responsibility, of the media.
Fair. A place to take your pigs and goats to win ribbons! Lawyers are at the bottom of most all our big problems today! Lawyers don’t go to fair’s:•)
Taken from Wikipedia:
The company is developing technology for alternative energy, including fuel cells, photovoltaics, advanced batteries, and hydrogen fuel for transport and power.
[edit] Electric Vehicles
Chevron is currently squelching all access to large NiMH batteries through its control of patent licenses in order to remove a competitor to gasoline.[13] This culminated in a lawsuit against Panasonic and Toyota over production of the EV-95 battery used in the RAV4 EV. However the Lithium-ion battery appears to be making up for this despite Chevron’s best efforts, albeit, at a higher price.
[edit] Biofuels
Chevron is investing $300M USD a year into alternative fuel sources, and has created a biofuels business unit.[14][15]
Chevron and US-DOE’s National Renewable Energy Laboratory (NREL) announced that they had entered into a collaborative agreement to produce biofuels from algae. Chevron and NREL scientists would develop algae strains that can be economically harvested and processed into transportation fuels, such as jet fuel.[16]
[edit] Solar Power
Chevron has invested in Solar Power such as the 500 kW Solarmine photovoltaic solar project in Fellows, California.
[edit] Controversies
[edit] Great American streetcar scandal
In 1950, then “Standard Oil” along with General Motors and Firestone were charged and convicted of criminal conspiracy for their part in the Great American streetcar scandal. The scandal included purchasing streetcar systems throughout the United States and dismantling and replacing them with buses,[17] in order to increase their sales of petroleum, automobiles and tires.
[edit] Tax evasion
Chevron was found to have evaded $3.25 billion in federal and state taxes from 1970 to 2000 through a complex petroleum pricing scheme involving a project in Indonesia.[18] [19] Chevron and Texaco, before they merged in 2001, each owned 50 percent of a joint venture called Caltex, which pulled crude oil from the ground in a project with the Indonesian state oil company, Pertamina. Chevron was accused of reducing its tax liabilities in the U.S. by buying oil from Caltex at inflated prices. One internal Chevron document set the price it paid Pertamina for oil at $4.55 a barrel higher than the prevailing market price. Chevron was then able to overstate deductions for costs on its U.S. income tax returns. Indonesia appeared to levy tax on this oil at 56%, a rate far higher than the corporate tax rate in the U.S. Because the United States gives companies a credit for taxes paid to foreign governments, tax paid to the Indonesian government reduces tax to the U.S. government.
Caltex transferred fund out of the U.S. to Indonesia, because the Indonesian government compensated Caltex for the excessively priced oil and the extra taxes paid by giving oil for free. Because Caltex had to pay taxes on that oil, too, the Indonesian government gave it even more oil to cover the taxes.
[edit] Environmental damage in Ecuador
From 1972 to 1993, Texaco operated development of the Lago Agrio oil field in Ecuador. Ecuadorian farmers and indigenous residents accused Texaco (now Chevron), of making residents ill and damaging forests and rivers by discharging 18 billion gallons of formation water into the rainforest, without any remediation. They sued Chevron for extensive environmental damage caused by these operations, which have sickened thousands of Ecuadorians and polluted the Amazon rainforest. The Ecuadorian court could have imposed a legal penalty of up to $28 billion in a class action lawsuit filed on behalf of Amazonian villagers in the region. Chevron claimed that agreements with the Ecuadorian Government exempted the company from any liabilities.[5][20][21] A documentary on the issue, Crude, premiered in September 2009.
From 1977 until 1992 Texaco (Texpet), a subsidiary of Texaco Inc., was a minority member of this consortium with Petroecuador, the Ecuadorian state-owned oil company, as the majority partner. Since 1990, the operations have been conducted solely by Petroecuador. At the conclusion of the consortium and following an independent third-party environmental audit of the area, Texaco formally agreed with the Republic of Ecuador and Petroecuador to conduct a three year remediation program at a cost of $40 million. After certifying that the sites were properly remediated, the government granted Texpet and all related corporate entities a full release from any and all environmental liability arising from its operations.[5] Based on the history above, Chevron believes that “this lawsuit lacks legal or factual merit.”
In mid-February 2011, a court in Ecuador fined Chevron $8.6 billion over pollution to the country’s Amazon region by Texaco between 1972 and 1992, with campaigners claiming loss of crops and farm animals as well as increased local cancer rates.[22][23] The action was brought against Chevron by 30,000 Ecuadorean people.[22] The trial had begun in 2003.[24] The total penalty imposed on Chevron is $9.5 billion as it was ruled that the oil company must pay an additional 10 per cent legally mandated reparations fee.[22] $27 billion was the sum total requested by plaintiffs, $18.4 billion more than was eventually granted by the court.[23] The Ecuadoreans expressed happiness that Chevron was declared guilty, though also expressed dismay that the award of $8.6 billion would not be enough to make up for the damage caused by the oil company.[25] However, environmental activists wish this case to serve as a precedent against pollution causing business being carried out by firms in developing countries.[22] Nonprofit organisation Amazon Watch described the outcome of the case as “unprecedented”.[25] Despite the guilty verdict it is considered unlikely that any of the fine will be paid. Chevron has no international obligation to pay the fine, and no assets in Ecuador for the government to seize.
[edit] Pollution in Richmond, California
Chevron’s activities in Richmond, California, have been the subject of ongoing controversy. The project generated over 11 million pounds of toxic materials and caused more than 304 accidents.[26] Chevron’s Richmond refineries paid $540,000 in 1998 for illegally bypassing waste water treatments and failing to notify the public about toxic releases.[27] Overall, Chevron is listed as potentially liable for 95 Superfund sites, with funds set aside by the EPA for clean-up.[28] In October 2003, the state of New Hampshire sued Chevron and other oil companies for using MTBE, a gasoline additive that the attorney general claimed polluted much of the state’s water supply.[29]
[edit] Oil spills in Angola
Chevron’s operations in Africa have also been criticized as environmentally unsound.[30] In 2002, Angola became the first country in Africa ever to levy a fine on a major multinational corporation operating within its borders, when it demanded $2 million in compensation for oil spills allegedly caused by Chevron.[31]
[edit] Violation of the Clean Air Act in the USA
On October 16, 2003, Chevron U.S.A. settled a charge under the Clean Air Act, which reduced harmful air emissions by about 10,000 tons a year.[32] In San Francisco, Chevron was filed by a consent decree to spend almost $275 million to install and utilize innovative technology to reduce nitrogen and sulfur dioxide emissions at its refineries.[33] After violating the Clean Air Act at an offline loading terminal in El Segundo, California, Chevron paid a $6 million penalty as well as $1 million for environmental improvement projects.[34] Chevron also had implemented programs that minimized production of hazardous gases, upgraded leak detection and repair procedure, reduced emissions from sulfur recovery plants, and adopted strategies to ensure the proper handling of harmful benzene wastes at refineries.[32] Chevron also spent about $500,000 to install leakless valves and double-sealed pumps at its El Segundo refinery, which could prevent significant emissions of air contaminants.[34]
Defenders of Chevron’s environmental record point to recent changes in the corporation, particularly its pledge in 2004 to combat global warming.[35]
How very persuasive, and so unexpected! Wikipedia, well that settles it. Absolute proof!
Look don’t get me wrong, I like Wikipedia, but its not really an authoritative source.
But then, nor is the issue about the integrity of Chevron, who have in the past been generally one of the more reprehensible of the oil giants.
But, just because we don’t like the defendant, is exactly why we must insure that a fair trial is procured, not for the benefit of Chevron, but as a protection for all of us.
Who would like to live in a society run by people with Cris Lincolns sense of lynch mob justice?
This is why in most justice systems a defendants past offences cannot be considered during trial.
Chevron is just as entitled to tell its story, as any other defendant. The motives and actions of all the parties in the conflict must be examined equally.
Even the Devil (especially the devil is entitled to a fair,and unprejudiced hearing.