Chevron has been slapped with an $8.6 billion penalty, in what is suspected to be the largest environmental fine in history – and the amount could double.
An Ecuadorian judge yesterday ordered Chevron to pay $8.6 billion to clean up oil pollution in the country’s rain forest, the Wall Street Journal reports. This includes $5.4 billion to restore polluted soil and $1.4 billion to create a community health system, plus $860 million to plaintiff coalition the Amazon Defense Front.
If the company doesn’t publicly apologize in the next 15 days, the judge ruled, the fine will double.
Judge Nicolas Zambrano said that the environmental damage was "not only foreseeable, but also preventable."
But the oil company denies responsibility for the pollution, calling the court’s judgment illegitimate, unenforceable and the result of fraud. It also said the ruling is contrary to scientific evidence. Chevron is refusing to pay the fine, and plans to appeal the ruling.
"Chevron intends to see that the perpetrators of this fraud are held accountable for their misconduct,” the company said in a statement.
The company has alleged that a report supposedly by a court-appointed expert was actually written by experts hired by the plaintiffs. But the judge said in his ruling that he did not take that report into account when making his decision.
Yesterday's judgement is just the latest chapter in a saga that has carried on since 1993, when the plaintiffs – resident of the Amazon rain forest – first sued oil company Texaco in New York. They say Texaco caused environmental damage there from 1965 to 1992. Chevron inherited the case when it bought Texaco in 2001.
And the case appears far from over. Chevron has sued in the U.S. courts and has also sued Ecuador under terms of a trade agreement between the two countries. Arbitrators in The Hague last week ordered Ecuador to take all measures to block enforcement of any ruling until the arbitrators rule on the case.
Despite the ruling, Chevron’s shares rose yesterday, 1.3% to $96.95 in 4 p.m. composite trading on the New York Stock Exchange.
Chevron has said for more than a year that it expects to lose the case, the WSJ said.
