The Permanent Court of Arbitration in The Hague has ruled in favor of oil giant Chevron and declared Ecuador guilty of violating a bilateral investment treaty signed with the United States in 1997, of withholding justice from the company, and for not providing Chevron with “just and equitable” treatment.
The announcement was made Friday morning by Ecuador’s Solicitor General Iñigo Salvador, who gave a statement on the main points of the ruling in a press conference.
The court also ruled that Ecuador will have to pay economic compensation to the corporation that dumped 16 billion gallons of toxic wastewater into waterways and open pits in the Ecuadorean Amazon between 1964 and 1992, affecting over 30,000 Indigenous people and Campesinos in the area.
The amount has not been established yet, but Chevron requested that Ecuador assume the US$9.5 billion that the provincial court of Sucumbios in Ecuador sentenced Chevron to pay to the affected communities. This July, Ecuador’s Constitutional Court ratified the ruling against Chevron, but compensation to the affected communities seems unlikely.
The amount Ecuador will need to pay Chevron will be settled within the next 90 days, during which Chevron and Ecuador will have to present their cases and evidence to determine the amount.
The lawsuit against Chevron began in 1993 when the communities affected by Chevron-Texaco’s pollution sued the company for environmental damages in a New York court. According to the oil company, the state of Ecuador violated a 1995 agreement stipulating that Petroecuador, the state’s oil company, would assume all responsibilities for environmental damages by allowing Indigenous communities to sue Chevron-Texaco.
The arbitration court ruled that Ecuador violated the 1997 bilateral investment treaty despite Ecuador’s arguments that the treaty came into effect after the communities’ lawsuit. The case was moved from New York to Ecuador in 2002 upon Chevron's request.
The government of President Lenin Moreno announced Thursday that the state will sue former President Rafael Correa and his government officials if Ecuador lost the international arbitration process.
The current government is accusing Correa of failing to defend the country’s interests correctly and spending money on the international campaign “The Dirty Hand of Chevron,” which according to the government sought to “manipulate national and international public opinion.”
The Union of the Affected by Texaco’s Oil Operations announced they will hold a press conference Monday to discuss how the ruling affects their lawsuit against the corporation.