Chevron accused of racism as it fights Ecuador pollution ruling

Oil giant vows to continue fight after appeals court rules it must pay $18bn for dumping toxic waste in Amazon basin

Lawyers representing Ecuadorian plaintiffs in their long-running suit against Chevron over the dumping of toxic waste in the Amazon river basin have accused the oil giant of racism. The allegation comes as Chevron vows to fight off a ruling that said the oil giant must pay $18bn for causing pollution in the Amazon rainforest more than 20 years ago.

An Ecuadorian appeals court upheld the case against Chevron on Tuesday, following an eight-year legal battle. The ruling was the latest leg in a decades-long legal dispute.

Chevron, which has accused the plaintiffs of submitting fraudulent evidence, has publicly vowed to continue the fight. "Chevron does not believe that the Ecuador ruling is enforceable in any court that observes the rule of law. The company will continue to seek to hold accountable the perpetrators of this fraud," the company said in a statement.

Pablo Fajardo, the lead Ecuadorian lawyer, said Chevron was guilty of "a racist attitude" and said that it was clear the judgment could now be enforced. "Chevron does not want to ever recognise that indigenous or poor people have the right to access justice," he said.

"Despite all the efforts of Chevron to floor this case, we have won. What that means is justice does exist. We are happy because after 18 years of battle and 40 years of suffering finally there will be justice and hopefully repair of the Amazon."

A Chevron spokesman dismissed accusations of racism and said the ruling was the "product of fraud". The company is currently pursuing a fraud case against the plaintiffs and their lawyers, accusing them, among other things, of faking evidence and bribery. "The plaintiffs lawyers have engaged in well documented fraudulent behaviour. Justice procured through fraud is not justice," he said. "We are prepared to resists any enforcement action."

The Ecuadorian plaintiffs said in a statement earlier this week that the decision was based on scientific evidence presented at trial, proving that waste had poisoned the water supply. Fajardo said the latest ruling from the provincial court of justice of Sucumbios in Lago Agrio, Ecuador, was enforceable wherever the oil firm has assets.

The vicious legal fight dates back to the 1970s and 80s when Texaco, now part of Chevron, discharged billions of gallons of toxic waste into an area affecting over 1,500 square miles of what has become known as the "Amazon Chernobyl".

The plaintiffs assert the pollution triggered a spike in cancer rates, destroyed locals' livelihoods and habitats, and killed flora and fauna. Chevron claims Texaco cleaned up everything it was responsible for, before turning the sites over to state-owned oil company Petroecuador.

Chevron, America's second largest oil company, is now expected to appeal to Ecuador's supreme court. But the plaintiffs lawyers said the company would have to put up a substantial bond in order to pursue another appeal and neutralize the plaintiffs' threat to go after Chevron's assets in courts across the world. Chevron would lose that bond money if the appeal was unsuccessful.

"The wise thing to do is to settle. But they should make sure the money goes to the people who suffered, not the lawyers," said Fadel Gheit, an oil analyst at Oppenheimer. Gheit expects Chevron will try to settle for $2bn-$3bn.

The ruling comes at a sensitive time for Chevron in South America. The company is under fire from regulators in Brazil and facing a $20bn civil lawsuit over a 2,400-barrel oil spill at the Frade offshore oil field last year.

(By Dominic Rushe, The Guardian, 04/01/2012)