Political Risk Latin America Blog @PolRiskLatam

Monster or victim?

Posted in News and Articles, Political Risk by politicalrisklatam on February 22, 2011

by The Economist, February 17th, 2011.

A court in Ecuador controversially fines Chevron a whopping $9 billion

Chevron is a “multinational monster”, says Ecuador’s populist president, Rafael Correa. Various celebrities agree. And at first glance, it does look like the story of a nasty big American corporation polluting a poor country and then refusing to pay for the damage. But the case is in fact rather more complicated than that.

On February 14th a court in Ecuador walloped Chevron, an oil giant based in California, with a $9.47 billion fine. If upheld, this will be the highest-ever damages award in an environmental case, according to Pablo Fajardo, a lawyer for the plaintiffs. If Chevron does not apologise within 15 days, the fine may be hiked to an incredible $17.2 billion.

Yet Chevron shows no sign of contrition. On the contrary, it is fiercely contesting the verdict and hopes to persuade courts in New York and The Hague that it is the innocent victim of an attempted shakedown based on a spectacular fraud by the plaintiffs’ lawyers and members of the Ecuadorean judiciary. (continue reading… )

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