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Chevron in Ecuador: pay, baby, pay

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After years of legal battles, oil giant Chevron was finally ordered by court to pay for its mess in Ecuador’s Amazon. Irene Caselli traveled to the region.

When Donald Moncayo heard that US oil company Chevron had been fined $9bn for the environmental damages created in Ecuador’s Amazon region, he couldn’t hold back the tears.

‘I cried out of joy, I couldn’t believe it,’ he says.

Moncayo was born in the town of Lago Agrio, in north-east Ecuador, in 1973, when oil company Texaco (now owned by Chevron) was operating in the area. He is a member of the Amazon Defense Coalition, which represents 30,000 local residents who filed a lawsuit against Texaco in 1993. They say the company knowingly polluted their land and rivers by dumping millions of gallons of crude oil and billions of gallons of toxic water in the rainforest.

Photo by Irene Caselli
Donald Moncayo shows a piece of soil contaminated with petrol. Photo by Irene Caselli
Photo by Irene Caselli
It's dirty. Photo by Irene Caselli

After a long legal battle that lasted over 17 years, on 14 February a judge in Lago Agrio ruled that Chevron must pay damages of $8.6bn (£5.4bn), plus a further 10 per cent of that sum in reparations to the Amazon Defense Coalition. Moreover, says the ruling, if Chevron doesn’t publicly apologize within 15 days, the damages will be doubled to $17.2 billion.

This is the largest award ever handed down in an environmental lawsuit so far – it exceeds by far the initial $5 billion award against ExxonMobil for the 1989 Alaska oil spill. But this is only the beginning of yet another chapter in this long-lasting legal dispute, as both sides are appealing.

Chevron considers the ruling ‘illegitimate’ and ‘unenforceable.’ They say that Texaco operated in the country until 1990 and after it left operations it spent $40 million in the clean-up work requested by the Ecuadorean government. In 1998, the government signed a document releasing Texaco of all further responsibility.

Surprisingly, the plaintiffs have appealed too. They say that $9bn is not enough to cover all the damages caused. They refer to the report by a court-appointed expert that fixed the total amount of reparations at $27bn.

Over the years, Moncayo has seen many friends and neighbours die of cancer. He says that his own mother died of a petrol-induced intoxication when he was 13, leaving another four brothers and sisters, including an 11-month-old baby girl. The family lived by the Teteye River, one of those that were polluted by Texaco, according to the plaintiffs. His mother would regularly wash clothes and bathe in the river, and they would all drink its water.

‘Texaco used our country as a dump,’ says Moncayo during one of the so-called ‘toxi-tours’ of the affected areas.

Chevron says that cancer and other diseases detected in the area are the result of the lack of water treatment and sanitation systems, and that there is no real science behind the plaintiffs’ claims.

Ultimately, this dispute is far from over.

Chevron has no assets in Ecuador, and the company has said it will fight any attempts to what spokesperson James Craig says is ‘an extortionate scheme to force the company to pay up money.’

The plaintiffs also know there is still a long way to go.

‘We went to war, and we’ve won a battle so far – an important battle to go ahead and win this war,’ says Moncayo.

For more please see: ‘Toxic blocks’ by David Ransom on the terrible record and destructive potential of the oil business in Ecuador. Campaign for justice in Ecuador: ChevronToxico.

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  1. #1 Giedre 21 Feb 11

    Great progress!

    But I suspect Chevron will fight against this ruling to its last breath: if it's forced to pay for its own mess, this could mean some bad, bad times for other dirty businesses on the horizon.

  2. #2 samy 22 Feb 11

    Now pay the bill

    They need to pay that bill....when they assumed that company....they also not only assumed its assets...but also assumed its debts and liabilities. This is one of those liabilities. Do the right thing...and pay it....You will be viewed at a far higher standard than if you reneg on this damage that was done back then...in that area. If you don't pay it...you will be marked for [a href=’http://www.jobster.lk/’]life as the company that pollutes and walks away...leaving others holding the bag.....that wont be tolerated forever.

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