Oh No, Chevron!

The Wall Street Journal
In response to "Chevron Hit With Record Judgement"
February 15, 2011

Well this is not about another oil spill in the Gulf, but Chevron is facing charges as a result to environmental damages in Ecuador. An Ecuadorian judge has charged Chevron with a whopping $8.6 billion; and if Chevron does not publicly apologize within fifteen days of the charging, the fine will double. So far, officials representing Chevron say that they will appeal and that they will not pay or apologize. 


Chevron acquired this litigation when it took over Texaco in 2001, but the issue is been in debate for eighteen years. The Ecuadorians say that Texaco caused much damage to the Amazon during its time in the country from 1965 to 1992. Chevron had no ties to Ecuador until to took over Texaco. Chevron's officials say that there is no scientific proof that the damage was done by Texaco, but the Ecuadorians say otherwise. This has been a bitterly fought battle with each side accusing the other of improprieties. 


Each side is using its own court system in attempts to get its own way. Also, Chevron is suing the Ecuador for breaking trade agreements. Each side is appealing and threatening in order to stall. Although this whole situation may be a huge public relations nightmare for Chevron, the investors have not responded negatively, for Chevron's shares rose 1.3%. When the suit was first handed to Texaco in 1993, they decided that it should be heard in Ecuadorian courts; for at the time, American business interests were supported. In 2007, there was a transfer in power, and the new leader supports the Ecuadorian side. Now, each side is preparing financially for the next phase in the battle, for it is not over. 






The article informs the reader about the entire issue. The writer should be applauded for scaling the story down to this word limit without losing the meat of the story. It is good that both sides have adequate coverage and that sufficient quotes were pulled from each party. It is an interesting story that hopefully will have a follow-up soon. While reading this article, I cannot help but to question Chevron's judgement on acquiring Texaco. Was this case not public knowledge? Did Chevron think it could handle the case? It would have been nice to have read a short segment where Chevron answered that question. I guess I could do some research to check on archives from 2001.