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Chevron Awaits Verdict in Environmental Damage Case

QUITO - Parties to a case in which Chevron is accused of responsibility for environmental damage in Ecuador's Amazon rainforest are regrouping ahead of a potential verdict that could involve record compensation.

The US company faces claims it is responsible for damage caused by oil extraction between 1964 and 1990 by Texaco, a company that Chevron bought in 2001.

Chevron has denied the charges in the long-running case and has made its own allegations of corruption against Judge Juan Nunez, who is overseeing the procedures.

The oil giant posted on its website Tuesday videos it says shows members of President Rafael Correa's Alianza Pais party promising a three million dollar "commission" to Nunez once he hands down a verdict against Chevron.

The videos provoked a firestorm and rebuttals by government officials, and prompted Nunez on Thursday to offer to recuse himself from the case.

Chevron's release of the footage, shot on hidden cameras, came shortly before Nunez was expected to announce his verdict on the case in October.

The stakes are high, with experts estimating in 2008 that Chevron could be liable for damages of up to 27 billion dollars.

If correct, the figure would be significantly higher that the record five billion dollars, later reduced to 500 million dollars, that ExxonMobil was ordered to pay after an oil spill in Alaska.

The case comes against the backdrop of increasingly tense relations between Ecuador's left-leaning president and foreign oil companies in the country, who are reassessing their operations.

In 2007, shortly after taking office, Correa did not hesitate to characterize Texaco's actions in Ecuador as a "crime against humanity," suggesting that "entire villages in the Amazon" has been wiped out as a result of their environmental damage.

The indigenous communities who first filed the case said they will continue to pursue Chevron, even seeking to have the company's US assets seized, if the court does not rule in their favor.

Ecuador's government on Wednesday denied allegations of impropriety, and said Chevron's accusations were intended solely to "put pressure on the judge."

Nunez told Ecuadoran radio station Sonorama that he has "handed over the proceedings to the president (of the court) so that decisions can be made... without concerns about transparency."

He told AFP that he offered to recuse himself "because of the accusations I am facing."

"In four years, there have been four judges in charge of this case, and I am the fifth," he said.

If Nunez is removed a final verdict would be delayed further while a replacement judge is found.

Pablo Fajardo, a lawyer for the plaintiffs, told AFP that Nunez's resignation could be a "small victory" for Chevron because of the delays it is likely to cause.

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