Ecuador judge closes proof phase of Chevron suit

LAGO AGRIO, Ecuador Fri Dec 17, 2010 4:09pm EST

Ecuadorean workers clean up an oil waste pit owned by state petroleum company Petroecuador in Shushufindi, some 410 km (254 mi) east of Quito December 8, 2009. Residents in the country´s Amazon region are suing Chevron, accusing the U.S. company of doing environmental damage while it operated in a consortium with Petroecuadro in the 1970s and 1980s. REUTERS/Guillermo Granja

Ecuadorean workers clean up an oil waste pit owned by state petroleum company Petroecuador in Shushufindi, some 410 km (254 mi) east of Quito December 8, 2009. Residents in the country´s Amazon region are suing Chevron, accusing the U.S. company of doing environmental damage while it operated in a consortium with Petroecuadro in the 1970s and 1980s.

Credit: Reuters/Guillermo Granja

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LAGO AGRIO, Ecuador (Reuters) - The Ecuadorean judge hearing a $27 billion environmental damages case against oil producer Chevron Corp told Reuters on Friday that he has closed the evidentiary phase of the trial.

Local farmers and indigenous tribes in Ecuador's Amazon region want the company to pay for the cleanup of areas they say were polluted by faulty drilling practices in the 1970s and 1980s.

"The proof phase has been concluded," Sucumbios Provincial Court Judge Nicolas Zambrano said. "I have to read what there is in these proceedings and, based on this criteria, issue the corresponding decision."

A ruling is widely expected next year. Should the court decide against the company, which is also widely expected, the company has said it would appeal.

As Zambrano's decision looms, each side accuses the other of presenting fraudulent evidence while a slew of related legal actions are played out in the United States and Europe.

"This decision should put an end to Chevron's continued abusive litigation tactics intended to perpetually delay the resolution of claims that affect the lives of thousands of innocent people," said Karen Hinton, spokeswoman for the Ecuadoreans suing Chevron.

"The potential survival of Ecuador's rain forest and its inhabitants in the face of Chevron's deliberate contamination now depends on a prompt and considered decision by the court," she said.

Chevron has accused Ecuador and its legal system of siding with the plaintiffs.

"No one should be surprised by the judge's order," said Chevron spokesman James Craig.

"The evidence of fraud, collusion and judicial intimidation on the part of plaintiffs' lawyers is growing by the day. While the court in Ecuador continues to turn a blind eye to this criminal enterprise, Chevron remains committed to exposing this fraud through every means at its disposal," he added.

Investors and the petroleum industry are watching to see if Chevron will have to pay massive damages, setting a precedent that could fuel other big lawsuits against oil companies accused of polluting countries around the world.

Plaintiffs say Texaco wrecked wide areas of Ecuador's jungle by dumping drilling waste into unlined pits and leaving them to fester, an accusation that the company denies.

Chevron inherited the case when it bought Texaco in 2001. It says the company cleaned up all pits it was responsible for before turning them over to Ecuador's state-owned oil firm.

(Reporting by Victor Gomez. Writing by Hugh Bronstein. Editing by Gerald E. McCormick and Robert MacMillan)

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