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30,000 people, including indigenous tribes, suing Chevron (for toxic waste discharges by its predecessor, Texaco) obtained an $8.6 billion judgment this week from the Provincial Court of Justice of Sucumbios in Lago Agrio, Ecuador.  The penalty is reportedly to be doubled if Chevron does not apologize within 15 days. Just days earlier, Chevron obtained orders from a New York judge and from an international panel of arbitrators in the Permanent Court of Arbitration in The Hague, temporarily prohibiting enforcement of the judgment. Chevron alleges that the Ecuador decision is the result of fraud, and has filed a civil lawsuit under the Racketeer Influenced and Corrupt Organizations Act against the plaintiffs in the Ecuador lawsuit.

The case has already been winding through various courts for 17 years. According to Chevron, the vast environmental pollution in the area is the sole responsibility of the government of Ecuador’s own oil company, Petroecuador, which has owned and operated the oilfields for the last 15 years. In 1998, the Ecuador government certified that Texaco had performed a satisfactory $40 million remediation, and released Texaco Petroleum from future claims and obligations. Chevron claims to have video recordings “implicating the judge presiding over the environmental lawsuit against Chevron” in a “$3 million bribery scheme”..

Even if the Ecuador judgment is ultimately upheld in Ecuador, the plaintiffs could have major challenges in collecting any judgment. But investors cannot simply ignore the decision. For one thing, there might be some countries in the world, containing Chevron assets, willing to enforce an Ecuadorian court decision. Venezuala is an obvious possibility, especially if Chevron ever falls out with their government.

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