Ecuador upholds Chevron oil pollution fine

An Ecuadorean appeals court on Tuesday upheld a ruling that Chevron Corp should pay $18 billion in damages to plaintiffs who accused the U.S. oil giant of polluting the Amazon jungle and damaging their health.

A local judge ordered Chevron to pay $8.6 billion in environmental damages last February, but the amount was more than doubled to about $18 billion because Chevron failed to make a public apology as required by the original ruling.

"We ratify the ruling of February 14 2011 in all its parts, including the sentence for moral reparation," the court in the Amazonian city of Lago Agrio said in its ruling.

The events are being watched closely by the oil industry for precedents that could impact other big claims against companies accused of pollution in the countries where they operate.

Chevron swiftly denounced the appellate court's ruling, calling it "illegitimate" and a fraud.

"Today's decision is another glaring example of the politicization and corruption of Ecuador's judiciary that has plagued this fraudulent case from the start," it said.

"The Lago Agrio judgment was procured through a corrupt and fraudulent scheme, much of which was captured on film and memorialized in the plaintiffs' representatives' own emails and correspondence."

In a statement, the company said it was pursuing an action in the U.S. District Court for the Southern District of New York against the plaintiffs' representatives regarding violations of the federal racketeering statute and common-law fraud.

The second largest U.S. oil company could also call for the intervention of Ecuador's Supreme Court in the case, which would open a new chapter in the 18-year-old legal saga.

The plaintiffs accused Texaco, which was acquired by Chevron in 2001, of dumping oil-drilling waste in unlined pits, polluting the forest and causing illness and deaths among indigenous people. They appealed the original court ruling, claiming more money would be needed for the cleanup.

"This (ruling) confirms and ratifies that the company polluted and affected the Amazon," the plaintiffs said in a statement. "It is necessary to clarify that no amount will be enough to repair all the crime they did in our area, nor will it be enough to bring the dead back to life."

Chevron had also appealed the ruling, arguing that Texaco cleaned up all waste pits for which it was responsible, and said the Ecuadorean judge in the original case had ignored evidence of fraud on the part of the plaintiffs.