by Dominic Rushe
September 22, 2011
Dominic Rushe is
the U.S. business correspondent for The Guardian.
A New York appeals judge unfroze
an $18 billion damages award over contamination of an
indigenous tribe's land in Ecuador.
A U.S. court has dealt oil giant
Chevron a severe blow after lifting a ban on an $18bn
judgment against the firm for contaminating the Amazon.
A New York appeals court has
reversed an earlier order freezing enforcement of the record
damages award. It is the latest reversal in a nearly two
decade-long legal battle over pollution in the Amazon
rainforest in Ecuador.
In February, a judge in Ecuador ordered
Chevron to pay damages to the
plaintiffs, but both Chevron and the residents appealed, and the
case has yet to make its way to Ecuador's highest court.
In anticipation of the judgment, however, Chevron had filed court
papers asking district judge Lewis Kaplan to freeze any
possible enforcement of payment anywhere outside Ecuador. Kaplan,
who presides over a chunk of the litigation in Manhattan federal
court, issued the now-reversed preliminary injunction in March.
Karen Hinton, spokeswoman for the plaintiffs, said the
appeals court order meant it had recognized that Kaplan had acted
too fast in issuing an injunction.
"Chevron abused the law, and Judge
Kaplan rushed to judgment without considering the overwhelming
evidence against the oil giant," she said in a statement.
"We can now at least dream there will be justice and
compensation for the damage, the environmental crime, committed
by Chevron in Ecuador," lead lawyer for the plaintiffs, Pablo
Fajardo, told the Associated Press.
In a statement, the company said:
"Chevron remains confident that once
the full facts are examined, the fraudulent judgment will be
found unenforceable and those who procured it will be required
to answer for their misconduct."
The Ecuadorian rainforest residents say
oil giant Texaco, which was bought by Chevron in 2001, is
responsible for hazardous waste dumped on indigenous land in the
1970s and 80s.
Chevron says Texaco cleaned up all waste pits for which it was
responsible before turning the sites over to state-owned oil company
Petroecuador, which still operates in the area.
An international arbitration tribunal also last month found that
Ecuador must pay $96m to Chevron because Ecuador's courts had
violated international law through their delays in resolving
commercial disputes involving Texaco.
Appeals court judges Gerald Lynch, Rosemary Pooler and
Richard Wesley also granted the plaintiffs' request to stop a
November bench trial before Judge Kaplan, who was to determine
whether to extend his injunction.
Chevron has accused the Ecuadorians and their longtime legal
adviser, Steven Donziger, of illegally pressuring the
Ecuadorian legal system to render a judgment in their favor.
The oil company has pilloried Donziger for his comments on
corruption in Ecuador's judicial system, and his purported efforts
to intimidate officials. The remarks came to light in an acclaimed
documentary, Crude, and its outtakes, which were subpoenaed in U.S.
The appeals court order came after the judges heard oral arguments
The judges said they would issue a full
opinion at a later date.
The Real Price of Oil
The story of lawsuit by tens of
thousands of Ecuadorans against Chevron...
This is a Documentary about Ecuadorian
villagers suing the big oil... An inside look at the infamous $27
billion "Amazon Chernobyl" case...