Pension Funds Fret as Chevron Faces Ecuador Ruling
Posted by Big Gav in chevron, ecuador
The WSJ has an article on Chevron's legal woes in the wake of the environmental damage they have caused in Ecuador - Pension Funds Fret as Chevron Faces Ecuador Ruling.
Big public pension funds are raising concerns about an impending court judgment that could hold Chevron Corp. liable for billions of dollars in alleged environmental damages in the Ecuadorian jungle.
The funds, which together hold $1 billion in Chevron shares, are worried that the oil giant could face as much as $27 billion in damages in the 15-year-old class-action case, which was filed by a U.S. law firm on behalf of thousands of indigenous Ecuadorians.
The lawsuit, being tried in the Amazonian town of Lago Agrio, alleges that Texaco polluted waterways and wells across a vast area of Ecuador by dumping billions of gallons of oil waste into leaky pits during 20 years of operations there. Chevron acquired Texaco in 2001 for about $30 billion.
The potential damages in the case, which were tallied by a court-appointed expert, could dwarf the $3.5 billion Exxon Corp. had to pay for cleanup, fines and damages after the 1989 Valdez oil spill.
Chevron has said the lawsuit is baseless, and has attacked the assessment of its potential damages as flawed.
The long legal fight has spilled over into Washington. Chevron is pushing the U.S. Trade Representative's office to strip Ecuador of a range of trade preferences. It says the Ecuadorian government and state-owned oil company PetroEcuador haven't lived up to agreements indemnifying Chevron against future liabilities in the case. The USTR hasn't acted on Chevron's requests, the most recent of which came in a letter last month.
Eric Bloom, a lawyer who represents Ecuador in Washington, dismisses the Chevron petitions as "an attempt to use political muscle to shut down a legal case."
Others have urged the trade agency to stay out of the matter, including then-Sen. Barack Obama, who wrote a letter to the Bush administration in 2006 saying the Ecuadorian plaintiffs "deserve their day in court."
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