Chevron seeks Ecuador liability in pollution case

SAN RAMON, Calif. — Chevron Corp. sought Wednesday to force Ecuador into international arbitration for alleged trade violations, an apparent effort to protect itself against a feared negative ruling in a $27 billion lawsuit over environmental damage.

Chevron accuses Ecuador of "exploitation" of a civil suit filed over environmental damage that plaintiffs allege Texaco caused in the Amazon rainforest between 1964 and 1990. Chevron, the second-largest U.S. oil company, acquired Texaco in 2001.

Texaco spent millions to clean up the region as part of a 1998 agreement with the government and Chevron says it is not liable for further damages. Company officials say Texaco's former partner, state oil company Petroecuador, continued to pollute the region after Texaco departed.

Wednesday's move was Chevron's third attempt to force Ecuador into arbitration related to the lawsuit, which was first filed in a New York court in 1993 and in which a ruling is expected in a matter of months.

"This is a long-expected development, another attempt by Chevron to avoid its own potential liability," Eric Bloom, a U.S.-based lawyer for Ecuador, told The Associated Press. "Isn't it terribly ironic that Chevron fought for 10 years to move this case out of the United States to Ecuador and now that the parties are on the eve of judgment Chevron claims it cannot get a fair trial."

In one attempt by Chevron to force Ecuador to share in the liability, a New York federal court ruled against Chevron and its decision was upheld last year by a U.S. appeals court. Another arbitration claim is pending before the same international court in which Wednesday's case was filed.

An attorney for the plaintiffs in the civil suit, Steven Donziger, called Chevron's filing Wednesday "a sign the company is getting more and more desperate to avoid its legal responsibilities in Ecuador."

He said it reflects the company's failure "to mount a credible defense to charges that they caused massive contamination in Ecuador's rainforest."

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Chevron's complaint against Ecuador was filed with the Permanent Court of Arbitration in The Hague, Netherlands. It says the nation's conduct – leftist President Rafael Correa has expressed sympathy for the plaintiffs – has violated a U.S.-Ecuador investment treaty and other trade agreements.

"Because Ecuador's judicial system is incapable of functioning independently of political influence, Chevron has no choice but to seek relief under the treaty between the United States and Ecuador," Chevron's general counsel, Hewitt Pate, said in a statement.

It claims Ecuador is trying to shift its share of liability to Chevron, as well as liability for Petroecuador's own oil operations since 1992 and damage caused by "government-sanctioned colonization and agricultural and industrial exploitation of the Amazonian region."

Chevron officials say Ecuador encouraged people from all over the country to settle in the area without providing them adequate health care or sanitation.

Earlier this month, an Ecuadorean judge presiding over the environmental lawsuit against Chevron asked to be recused after the San Ramon, Calif.-based company released video recordings in which the judge, Juan Nunez, allegedly told two businessmen that he had already made up his mind to rule against the company.

The plaintiffs say they suspect the businessmen may have been colluding with Chevron in a bribery scheme aimed at discrediting both the judge and Correa's government.

Chevron shares fell $1.26 to close at $71.37 on Wednesday.

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Associated Press writer Frank Bajak contributed to this report from Bogota.