Chevron sues Ecuador under international trade law

Chevron Corp. sought Wednesday to force the government of Ecuador into international arbitration for alleged trade violations, an apparent effort to protect itself against a feared negative ruling in a $27 billion lawsuit over environmental damage.

Chevron accuses Ecuador of "exploitation" of a civil suit filed over environmental damage that the plaintiffs allege Texaco caused in the Amazon rain forest between 1972 and 1990. Chevron, the second-largest U.S. oil company, acquired Texaco in 2001.

Chevron claims Texaco already paid millions to clean up the region as part of a 1990s agreement with the government and is not liable for further damages. Company officials also have said Texaco's former partner, state oil company Petroecuador, continued to pollute the region after Texaco departed.

Wednesday's move was Chevron's third attempt to force Ecuador into arbitration.

"This is a long-expected development, another attempt by Chevron to avoid its own potential liability," Eric Bloom, a U.S.-based lawyer for Ecuador, told The Associated Press. "Isn't it terribly ironic that Chevron fought for 10 years to move this case out of the United States to Ecuador and now that the parties are on the eve of judgment Chevron claims it cannot get a fair trial."

In one case, a New York federal court ruled against Chevron and was upheld last year by a U.S. appeals court. Another case is pending before the same international court in which Wednesday's case was filed.

An attorney for the plaintiffs in the civil suit, Steven Donziger, called Chevron's latest filing "a sign the company is getting more and more desperate to avoid its legal responsibilities in Ecuador."

"This latest move is the result of multiple legal defeats of Chevron in U.S. courts and the failure of the company to mount a credible defense to charges that they caused massive contamination in Ecuador's rain forest," he said.

Chevron's complaint against Ecuador was filed with the Permanent Court of Arbitration in The Hague, Netherlands. It effectively seeks international arbitration of the environmental dispute, which would be legally binding.

In the filing, Chevron says Ecuador is trying to shift its own share of liability for any remaining environmental damage to Chevron, as well as liability for Petroecuador's own oil operations since 1992 and damage caused by "government-sanctioned colonization and agricultural and industrial exploitation of the Amazonian region."

It says the nation's conduct has violated investment agreements and Ecuador-U.S. trade agreements.

Earlier this month, an Ecuadorean judge presiding over the environmental lawsuit against Chevron recused himself after the San Ramon, California-based company released video recordings in which the judge, Juan Evangelista Nunez, allegedly told two businessmen that he had already made up his mind to rule against the company.

"Because Ecuador's judicial system is incapable of functioning independently of political influence, Chevron has no choice but to seek relief under the treaty between the United States and Ecuador," Chevron's general counsel, Hewitt Pate, said in a statement.

Chevron shares fell $1.26 to close at $71.37 on Wednesday.