Lawyer says judge embargoes Chevron assets in Argentina over Ecuadorean oil spill

BUENOS AIRES, Argentina – An Argentine judge embargoed Chevron Corp.'s assets in Argentina to carry out an Ecuadorean court order that awarded $19 billion to plaintiffs in an environmental damage lawsuit in the Amazon, a lawyer said Wednesday.

Judge Adrian Elcuj Miranda ordered the freezing of Chevron's assets in Argentina as plaintiffs try to collect the judgment won in Ecuador last year, Argentine lawyer Enrique Bruchou told reporters in a conference call.

The order states that all the cash flows from sales and bank deposits be frozen until the $19 billion is collected, Bruchou said. The order applies to 100 percent of Chevron's capital stock in Argentina, 100 percent of its dividends and its entire minority stake in Oleoductos del Valle. It also includes 40 percent of any current or future money that Chevron Argentina holds as well as 40 percent of all its crude sales.

Bruchou said the decision in the largest environmental suit in the world should send a strong message to foreign investors that they must apply the same environmental standards wherever they do business. Similar lawsuits have been filed this year in Canada and Brazil.

"We're making history in the preservation of the environment," Bruchou said.

"This is a ruling that sets an example. What we're telling the world is that in Latin America we want to demand that whoever comes to exploit does it following the same health an environmental standards as they do in their countries of origin," he said.

Chevron officials said the company knew of neither a filing by the plaintiffs nor an order from a court in Argentina. They also said Chevron's operations in Argentina had nothing to do with the case in Ecuador.

"The plaintiffs' lawyers have no legal right to embargo subsidiary assets in Argentina and should not be allowed to disrupt Argentina's pursuit of its important energy resources," said James Craig, a Chevron spokesman for Latin America and Africa. "The Ecuador judgment is a product of bribery, fraud, and it is illegitimate."

Chevron has refused to pay the sum stemming from waste water pollution and oil industry waste, saying that fraud marked the trial and that Texaco Petroleum Co. mitigated the environmental damage long before 2001, when it became a Chevron subsidiary.

Ecuador's highest court has upheld the ruling, while the plaintiffs have accused Chevron of dirty tricks designed to subvert the lower-court ruling.

The plaintiffs say Texaco, and now Chevron, remain responsible for environmental contamination and illnesses resulting from the operations of an oil consortium from 1972 to 1990 in Ecuador's rainforest.

"We're really pleased with the start of the embargo on Chevron's assets in a country outside of Ecuador," said Pablo Fajardo, a lawyer for the Ecuadorean plaintiffs in the case told the Associated Press.

"The fact that an Argentine judge has decided to accept the embargo order shows that the ruling by the Ecuadorean court can be enforced and today Chevron is forced to pay up to the last cent its debt owed to the Amazon."

The plaintiffs will begin a suit in Colombia in the coming days and are also preparing legal actions in Asia, Europe and elsewhere, Fajardo said.

"Environmental crime will not go without punishment and we're going to chase them anywhere in the world," he said.

Chevron argues that a 1998 agreement Texaco signed with Ecuador after a $40 million cleanup absolves it of liability and that Ecuador's state-run oil company is responsible for much of the pollution in the oil patch Texaco quit more than two decades ago.

Chevron is a major player in Argentina producing about 26,000 barrels of crude and 4 million cubic feet of natural gas daily, the plaintiffs have said.

The company is also key for the South American country's future energy needs, especially after it agreed to work with the state-run YPF energy company to develop shale reserves that could be the third-largest in the world.

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Associated Press writers Gonzalo Solano in Quito, Ecuador, and Luis Andres Henao in Santiago, Chile, contributed to this report.