Ecuador plaintiffs seek more from Chevron

LAGO AGRIO, Ecuador (Reuters) - Residents of Ecuador's Amazon region vowed on Tuesday to fight for more after CHEVRON (CVX.NY)Corp was told to pay $8.6 billion for pollution in one of the world's biggest environmental damages rulings.

The indigenous farmers said the award would not cover cleanup costs and that they plan to press for more money at a provincial court in the heart of the jungle later this week.

"It's not fair to us because the tribes have suffered a lot," plaintiff Justino Piaguaje said of Monday's ruling by Sucumbios provincial court. The 17-year-old legal saga is being closely watched for precedents by the global oil industry.

"Our families have died, and our rivers have deteriorated."

Piaguaje is one of 47 named plaintiffs in the lawsuit and a member of the Secoya indigenous group, which has said there is a higher incidence of cancer in the Rhode Island sized area named in the case.

Chevron denies responsibility for any damages and has rejected the ruling as illegitimate and unenforceable.

The plaintiffs' lead lawyer, Pablo Fajardo, did not reveal details of the appeal, but his team had been seeking at least $27 billion and may seek to pursue Chevron assets abroad.

The company has also vowed to appeal the ruling and has claimed fraud on the part of the plaintiffs and their lawyers.

The case has spawned a plethora of international legal actions.

A resolution could take years, and few analysts expect the U.S. oil company to pay anything soon.

Leftist President Rafael Correa defended the independence of Ecuador's courts despite accusations from Chevron of government interference by siding with the plaintiffs.

"It was the most important judgment in the history of the country," he said.

According to the ruling, about $5.4 billion of the award is to go toward restoring polluted soil, $1.4 billion for improving health services in affected areas, $800 million to treat sick people and $600 million for water supplies.

The ruling also includes a payment of $860 million for plaintiffs' lawyers and other trial costs.

Nicolas Zambrano, a judge at the court in the jungle town of Lago Agrio, also said in his ruling that Chevron must apologize within 15 days for the contamination from oil wells dug decades ago, or face a doubling of the damages figure.

Zambrano told Reuters both sides have until Thursday to present appeals against his ruling.

Chevron, which made $19 billion in net profit last year, has no assets in Ecuador and believes it is unlikely ever to pay. It plans to block enforcement in U.S. courts.

The company, based in San Ramon, California, denies that any health problems in the region are its fault and has said it cleaned up any pollution for which it was responsible.

'OIL IN THE RIVERS'

Despite disagreeing with the size of the award and wondering whether any money would ever be paid, some farmers were nevertheless pleased that Chevron was found guilty.

"Over and above the amount in damages, we believe that Chevron has been sanctioned. This is a hard blow to Chevron and an important step for the indigenous people of Ecuador," Piaguaje said.

Zambrano's ruling specifies the damages should be put into a trust fund managed by an independent body.

Investors and the oil industry believe the Ecuador case could set a precedent leading to other large claims against companies around the world that have been accused of contaminating countries where they operate.

"It is the first time that indigenous people have sued a multinational corporation in the country where the crime was committed and won," environmental group Amazon Watch said.

Piaguaje's farm, in an area called Shushufindi, produces yucca and corn for his family to eat as well as cocoa, which he sells in the local market.

He and other plaintiffs have said that Texaco, which Chevron bought in 2001, polluted their lands and water with faulty drilling practices in the 1970s and 1980s.

Texaco struck oil in Ecuador in 1967 and started pumping in 1972 as part of a consortium with the state. The company operated in Ecuador until 1990. Soon after, it turned its share of the consortium over to the Ecuadorean government.

State oil company Petroecuador has continued drilling in the area over the 20 years since Texaco pulled out.

"Although Chevron has demonstrated that Petroecuador is responsible for environmental damages ... Petroecuador was never sued," Zambrano told Reuters. "The ruling was exclusively to judge Texaco."

Chevron has said that it cleaned up all the drilling waste pits that it was legally required to remediate. Regardless of who is responsible, the dirt just under the surface around some of the former pits still has a black sheen and emits an eye-watering stench of oil.

Farmers have said they cannot raise crops or livestock in these areas because of the contamination.

"It seems very little (money), considering that the whole eastern part of the country is contaminated," said Julio Jaramillo, another plaintiff.

"How many people have died of cancer? The gringos pumped oil into the rivers without giving it a second thought."

(Additional reporting by Hugh Bronstein, Alexandra Valencia, Maria Eugenia Tello and Santiago Silva, Writing by Hugh Bronstein; Editing by Frank Jack Daniel, Kieran Murray, Toni Reinhold)

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