The 10 Biggest Chevron Lawsuits in Company History
Chevron deals with every aspect of crude oil and natural gas, including exploration, manufacturing, production, power generation, sales, geothermal, marketing, and transportation of byproducts. However, the company finds itself most of the time in the receiving end when it faces numerous lawsuits for causing pollution in areas where it has set some of its production sites which are causing vast effects on humans and animals, which is resulting in global warming. Occasionally, Chevron has been blamed for promoting fossil fuels which cause global climate change in their production, which at times they have to be liable for damages. This article will look at 10 of the most prominent case Chevron has faced in the company history.
10. Chevron vs. Angola Fishermen in oil Spillage Case ($2M)
About 500 fishermen in Cabinda province were affected when Chevron Corp entered their region. They filed a lawsuit against the company. They were demanding compensation for the damage that the company oil spillage presented to them. It is believed the oil deposited in the water body prevented them from their fishing activity for about two weeks, which was a significant loss to them. According to Reuters report, environmental bodies in the region of this southern African Country in their assessment found traces of oil which were deposited in the water for more than two weeks on the shores of beach around northern Cabinda Province. At first, they did not know the size of the spillage or the person responsible. The fishers’ representative was filing for about 500 anglers affected to be compensated with $2,000 by Chevron Corp for the two-week period their fishing activity was concerned. Chevron spokesperson, in a statement, said the company was not liable for the leak. Still, it will carry out the oil cleanup exercise to show its commitment to preserving the environment. However, the Environmental Minister in Angola reiterated that the responsible company was going to clean the waters, pay the fine imposed by the government and compensate all the affected farmers.
9. Richmond VS Chevron in California ($5M)
A large fire broke out in Chevron base in California in 2012, which discharged a cloud of toxic smoke around the area that affected so many people who had to go to the hospitals with breathing complications. The city sued Chevron for the damage it caused to the people in the region. However, Chevron Corp agreed to compensate the city of Richmond for the injuries and pay $5 million to settle the lawsuit over the serious fire incident witnessed in the Bay Area. The city council members of Richmond voted unanimously in one of their sessions to approve the deal they had been struck with Chevron to conclude the litigation effect of the fire incident, which is believed to have sent about 15,000 residents to seek medical treatment in the area’s local health facilities. The mayor of Richmond acknowledge a settlement has been reached with Chevron and the money will be used to rehabilitate some of the city buildings and parks. The State will also set aside some of that funds to conduct public safety, economic and educational development. From the investigation report presented, it is believed that the fire that broke out in some of the pipeline pipes that were brutally corroded started leaking in one of the crude unit areas. The California Division of Occupational Safety and Health cited 25 instances that Chevron broke. The agency believed that was the highest penalty fine they had made in its history. Chevron, on its part, believes the settlement was fair to both parties.
8. Chevron Tax Bill Evasion in Australia ($ 340m)
In a case against Chevron Australia for failing to break tax bills, a federal court full bench which was listening to the appeal case unanimously dismissed the appeal case against an ATO ruling. Chevron used an intra-company loan to evade high taxes and shift profits offshore on the company’s income in Australia. Chevron was supposed to apply for special leave in the High court to avoid paying high interest for the $ US 2.5 billion loans it took to exploit the massive gas and oil reserves in Australia on the Northwest shelf. This was when Chevron acquired Texaco Australia, and then Chevron merged with Texaco. This loan was charged at a 9 percent interest rate, which applied to its nominal Australian parent company. The loan affected the amount of tax that Chevron was to submit to the Australian government and made the company make big profits in the end, considering the company did not pay tax in the US from the profits it realized. Chevron’s appeal case challenged the application regarding the transfer pricing ruling used to limit the income tax deduction by the commissioners.
7. Metsagharun vs. Chevron Nigeria ($1.5 billion)
The plaintiff, in this case, Dr. Foster Ogala, sued Chevron Oil Company in Nigeria in January 2014. The claim was that Chevron’s operation in the Niger Delta Region in Southern Nigeria affected about 65,000 residents. Most of them encountered health complications and lost their daily income from their farming and fishing businesses which were affected due to contamination that resulted from an oil blast. Chevron was drilling natural gas in five different nautical miles when the blast occurred on January 16, 2012, which caused a massive fire that lasted about 46 days. Gala sued the company to compensate $1.5 billion to the directly affected people. Chevron Corps, Chevron U.S.A (CUSA) and Chevron Investments were the defendants in the case and not Chevron Nigeria Ltd which was a subsidiary company of the Chevron Investments. This case was settled out of court when Chevron agreed to hand over the requested documents.
6. Chevron vs. Human Rights in Ecuador ($8 billion)
The case against Chevron and human rights in Ecuador took around eighteen years in the corridors of courts in Ecuador. Chevron Oil Company was sued for contaminating the land in question for three decades when they were operating in the area. Some of the destruction they caused included dumping oil drilling waste in places with unlined pits, contaminating the amazon forest land, which caused a vast effect on the health of the local inhabitants that led to death cases. The Ecuadorian plaintiffs argued that Chevron acceded to responsibility for the harm that Texaco Oil Company acquired had caused. Chevron was found guilty in court and slapped with a fine of $8 billion for the pollution their activity generated in the region, which amounted to an ecological disaster serious harm to the residents of a small and sensitive part of the Amazon rainforest area.
5. The Hague Court acquits Chevron in Ecuador Dispute ($9.5 billion)
The case against Chevron Corporation in the dispute resolution against the Republic of Ecuador was ruled in favor of Chevron in the District Court of The Hague on September 16, 2020. This was a relief to this multinational organization as its upholder; the previous award was slapped on them in 2018 arbitration by an international tribunal court. In its ruling, the judges hearing the case unanimously gave the award after finding out that the $9.5 billion fine imposed on Chevron was procured through egregious fraud and corruption activities carried out by the plaintiff’s legal team by an American lawyer Steven Donziger. It was also found that presiding judges in the previous case were brides, and there were instances where ghostwriting in the judgment reports took place. Further, the tribunal rejected some of the environmental allegations filed against Chevron. Therefore, the tribunal sums the judgment as not forcible under international law. In its award, the Hague court tribunal discovered that the environmental remediation program that was supposed to be conducted by the Chevron subsidiary company as per government regulation was appropriately done and approved by the relevant Republic of Ecuador agency. The agency released the claims where they used fraudulent suspicious activities to reach the judicial decision. The District Court of The Hague sustained the entire judgment and further rejected the attempt by the Republic of Ecuador to set it aside.
4. Rhode Island vs. Chevron Company ($9.5)
The State of Rhode Island filed for a lawsuit against Chevron Energy Company and other similar companies in the region, which were contributing to the vast distraction of climatic change. The State filed this case to be compensated and pay for the damages caused which were contributing to all kinds of human and animal displacement and resulting in deaths and extinction of certain plants and animals. The State of Rhode believed that the defendant knew the consequences of its actions when the company was transitioning from using fossil fuels to renewable forms of energy. Further, even after being warned, the State believes the defendant went out to ignore the emerging scientific consensus that led to many injuries in Rhode Island. The plaintiff was seeking compensation for Chevron for being a public nuisance, Impairment of Public Trust Resources, Negligent of Design Defect, Trespass, Failure to warn the public, and violating the state Environmental Rights Act. The State included non-federal property and every natural resource in the island as casualties, including manufactured infrastructure, bridges, dams, businesses, dams, railroads, homes, and electric grids. Another inclusion was wildlife, which was affected by mild summers and winters, which were becoming an unbearable cause of the company activity in the region.
3. Chevron Lawsuit in Argentina ($9.5 billion Appeal case)
A court in San Ramon, Argentina dismisses a case file in Argentina to disregard the judgment, which was to enforce a fraud case of $ 9.5 billion judgment in Ecuador court against Chevron. In the 22 page ruling, the ruling was that the plaintiff could not prove that the case had any significant connection to Argentina. The court ruled that Chevron Corp was not a domicile entity and did not have any assets in Argentina. Chevron Argentina SRL was entirely a different entity from Chevron Corp. Therefore, it did not connect to the Ecuadorian lawsuit. This case dismissal in Argentina was a setback to Chevron in its attempt to appeal the fraudulent lawsuit that the company was facing in the Ecuador case.
2. Chevron Lawsuit Case in Oil Spill in Rio Brazil 2011($10.6 billion)
On November 7, 2011, one of the oil wells in Rio, which Chevron owns, started leaking, which led to about 32,000 -52,000 liters of crude oil finding its way into the sea per day. Because of the damage experience, Chevron was facing a lawsuit of $10.6 billion from prosecutors for the damages caused. Further, the prosecutor requested the court to suspend Chevron operations in the region. Additionally, the prosecutor stated that Chevron and Transocean were not well equipped to handle environmental planning and management, resulting in over 3,000 barrels of oil into the ocean. According to the Wall Street Journal report, Chevron Corp agreed to settle 95.2 million Brazilian reais ($42million) for the damage caused in the offshore oil spill. Chevron lawsuits representative stated that the company was liable for the damage. It underestimated the pressure coming from the underwater oil deposits when they were carrying out their drilling, which led to the oil rushing up to find an escape.
1. Kazakhstan’s Atyrau region vs. Chevron led Tengizchevroil($74.4 billion)
In Astana, Kazakhstan, Chevron-led Tengizchevroil(TCO) was sued for violating the oil production sharing agreement. Chevron violated the deal and produced excess oil of over $1.4 billion liters above what was stipulated in the production license agreement with the government. A court in Kazakhstan that handles economic crimes imposed a fine of 74.4 billion levied for the violation offense to Chevron consortium firm operating in the country. The environment protection department in the Atyrau region filed a lawsuit because the cooperation activities in the area were causing environmental damage. They accuse Chevron of storing 2.8 million tons worth of bulk sulfur from 2003-to 2006 without acquiring government permission. According to the company spokesperson, the economic court in the Atyrau region later reduced the fine by 50 percent. Chevron was planning to appeal further to reduce the penalty from 37 billion tenges. Overall, from the numerous lawsuits that Chevron Corp was involved in, most had to do with compliance to environmental laws and damages the company activities caused in areas where they are based. It would be best for the company to follow the rules and prevent, remedy, and minimize the damages it can cause to avoid facing hefty fines.