Indigenous and rural communities in Ecuador’s Amazon have condemned an international arbitration ruling that ordered Ecuador to pay more than $220 million to U.S. oil giant Chevron. The sum is to compensate the company for alleged denial of justice in a trial that found Chevron, operating through its predecessor Texaco, guilty of widespread environmental damage in northeastern Ecuador.
The Union for People Affected by Texaco’s Oil Operations (UDAPT), which represents six Indigenous nations and 80 communities, said the decision forces the Ecuadorian public to compensate a company after it caused one of the worst environmental disasters in the region’s history.
“It is neither appropriate nor fair. Chevron came to Ecuador, took more than $30 billion from the oil it extracted, polluted the Amazon, caused the extinction of peoples and the deaths of hundreds of people from cancer,” the organization wrote in a statement. “The affected communities took the company to court and won, yet now the entire country has to pay.”
In 1993, residents in the Lago Agrio oil basin sued Texaco, later acquired by Chevron, for environmental damage caused during its operations from 1964-1992. Ecuadorian courts found the company had opted for a substandard oil waste disposal system, which dumped more than 16 billion gallons (61 billion liters) of toxic water in at least 880 unlined open pits across the Amazon Rainforest. These pools contaminated groundwater, soil and rivers that local communities depended on for drinking, fishing, bathing and more, the rulings said. Oil spills and gas flaring were also frequent.
From 2011 to 2018, several Ecuadorian courts found Chevron guilty. The company was ordered to pay $9.5 billion to repair the damage done to the environment and impacted communities.
A U.S. court in 2014 refused to accept or enforce the ruling, calling the trials fraudulent. Chevron also sued Steven Donziger, a U.S. lawyer who represented the impacted Ecuadorian communities, in a New York court for allegedly financially benefiting from the Ecuador case. Donzinger was subsequently jailed for criminal contempt.
During the trials, Chevron took the case to the Permanent Court of Arbitration in The Hague, claiming Ecuador had violated its bilateral investment treaty with the U.S., and that one of the Ecuadorian judges had engaged in “corrupt collusion” with the plaintiffs. In 2018, the court sided with Chevron. The same year, Ecuador terminated its bilateral investment treaty with the U.S.
On Nov. 17 this year, the court’s arbitrators ruled Ecuador must pay Chevron more than $180 million in legal costs and more than $40 million in interest.
Chevron’s initial claim was for more than $3.35 billion Ecuador’s Attorney General’s Office celebrated the arbitration court’s decision, saying it spares the nation from paying $3.13 billion.
Nataly Morillo, Ecuador’s minister of government, called the decision unjust, while Amazon Watch, a nonprofit, called it “the epitome of environmental racism.”
Banner image: Ecuador’s former President Rafael Correa visits a contaminated site in 2013. Image© AP Photo/Dolores Ochoa.
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