Chevron must pay Ecuador $8 billion, says court

A court in Ecuador has ordered Chevron, America's second biggest oil company, to pay at least $8.2 billion for environmental damage caused in the Amazon River basin.

Chevron has vowed to continue fighting the lawsuit, which is seen as a global test case.

“The case really sends a message that companies operating in the undeveloped world cannot rely on a compliant government or lax environmental rules as a way of permanently insulating themselves from liability,” Robert Percival, a law professor and director of the environmental law program at the University of Maryland School of Law in Baltimore, told Bloomberg.

The lawsuit on behalf of Ecuadorian Amazon communities is for damage made more than 20 years ago by Texaco, a company Chevron acquired in 2001. Texaco allegedly dumped oil drilling waste in hundreds of ponds, leading to water and soil contamination that caused disease and death.

“The Ecuadorian court’s judgment is illegitimate and unenforceable,” Chevron said in a statement. “It is the product of fraud and is contrary to the legitimate scientific evidence. Chevron will appeal this decision in Ecuador and intends to see that justice prevails.”

Chevron has no assets in Ecuador and believes it is unlikely to ever pay even if it does lose its appeal, Reuters reports.

The plaintiffs originally demanded $27 billion in the lawsuit and were disappointed with the lesser fine.

The $8 billion fine ranks second in environmental damage cases after the $20 billion Gulf Coast Claims Facility, which was set up after the Gulf Coast oil spill.

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