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Up to $16 billion fine against Chevron advised

A court-appointed expert said Wednesday that Chevron Corp. should pay up to $16 billion for allegedly polluting Amazon areas lived in by 30,000 natives and settlers.
Rafael Correa.
Ecuadorean President Rafael Correa surveys oil-saturated soil in the Amazon on Thursday, as workers from the state-owned company Petroecuador clean up the area.Dolores Ochoa / AP
/ Source: The Associated Press

A court-appointed expert said Wednesday that Chevron Corp. should pay up to $16 billion for allegedly polluting an Amazon area that is home to 30,000 natives and settlers.

The San Ramon, California-based company is being sued over billions of gallons of toxic wastewater left as muck over three decades.

The damage total was added up geological engineer Richard Cabrera. The court confirmed to The Associated Press that he turned in his report, which has not yet been approved by a judge.

Plaintiffs lawyer Pablo Fajardo said Cabrera recommends that Chevron pay at least $8 billion in damages, and possibly another $8 billion representing company savings by operating recklessly.

The oil was extracted by Texaco, which ended its operations there in 1992, and merged with Chevron in 2001.

'Trial is a farce,' Chevron says
Chevron countered that Cabrera is not qualified to make the analysis and has questioned his impartiality.

"This trial is a farce," said Ricardo Reis Veiga, Chevron's vice president for Latin America.

Chevron, which has the right to appeal the findings, has complained that Cabrera sees Texaco as the only company that could have polluted the jungle, even though it was a minority shareholder in an agreement with state oil company Petroecuador.

"The court's appointee has knowingly violated the judge's orders and delivered a report that is biased and scientifically indefensible," Veiga said. "No legitimate court in the world would permit such a charade."

He said Chevron will ask the court to throw out the case on the basis that Chevron was not informed of when the report would be presented.

Fajardo called Chevron's attacks on Cabrera an act of desperation.

"I think that anyone who tells the truth in this trial will be poorly viewed" by Chevron, he said.

Ecuadorean President Rafael Correa last year visited the area to show his disdain for Chevron.

“Soil with oil, friends,” Correa said at the time, lifting a fistful of greasy dirt from a small farm in the rain forest where Texaco extracted oil.

Correa is the first Ecuadorean president to support the plaintiffs in their long legal battle.

He accused the company of causing 30 times more damage than the 11-million gallon Exxon Valdez spill off the Alaskan coast in 1989. “But it would seem that what happens in the Third World doesn’t matter,” the president said.

Cancers, illnesses alleged
Farmers say the oily muck keeps them from cultivating their land and has caused stomach and skin ailments among the area’s residents.

Plaintiffs' lawyers have presented studies showing elevated cancer rates in the area.

Chevron says there is no proof oil contamination caused the cancers and that Texaco met Ecuadorean environmental laws in a $40 million cleanup that began in 1995.

“There was no cleanup here,” Correa countered, alleging that the damage was simply covered up with dirt dumped over contaminated soil and wastewater ponds.

The Indians tried for a decade to have their case heard in U.S. federal court before shifting their battle to a makeshift courtroom in the ramshackle jungle town of Lago Agrio, which means “sour lake”.

Chevron, which said it won’t settle the case out of court, has expressed concern that political pressure might threaten its chances for an impartial trial in Ecuador.