Chevron in Ecuador

The archive of the Clean Up Ecuador campaign website

Chevron Suffers Further Setbacks in $27 Billion Ecuador Environmental Trial

Court Fines Chevron Lawyer for Causing Delay; Criminal Prosecution Gains Steam

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LAGO AGRIO, Ecuador - An Ecuadorian trial judge dealt Chevron another setback when he fined the company’s local counsel for trying to delay the end of a $27 billion environmental trial and referred a court-ordered report to Ecuador’s national prosecutor for possible use in a criminal prosecution of the company, according to court papers made available this week.

The fine, imposed on Chevron lawyer Patricio Campuzano, was the result of a regular practice by the oil company of re-filing legal motions that already had been denied, according to an order issued by trial judge Juan Nunez. A final decision in the case was expected in November but because of Chevron’s delays will now happen in 2010, said lawyers for the Amazon communities that are suing the company.

The judge also granted a request from the Fiscalia, Ecuador’s national prosecutor office, for a certified copy of a court-ordered damages assessment that contains evidence that oil sites certified by Chevron as remediated in the mid-1990s are extensively contaminated. The prosecutor is investigating two Chevron lawyers and seven former Ecuadorian government officials on charges they conspired to lie about the results of the limited clean-up in exchange for a release from liability from government claims.

The damages report, which contains 4,000 pages of data and was prepared by a team of 15 experts, found that Chevron could be liable for up to $27.3 billion for dumping billions of gallons of toxic waste into Amazon waterways and abandoning more than 900 unlined waste pits when it operated a large oil concession in the Amazon rainforest from 1964 to 1990. Five indigenous groups have been decimated by the contamination, while experts believe a clean-up would dwarf the largest decontamination effort ever undertaken.
In the order, Judge Nunez found that Chevron was filing repetitive motions to “deceive” the court so it would commit errors that the company could then use as part of an appeals process. Chevron already has announced that it expects an adverse decision by the trial court.

Lawyers for the rainforest communities had a mixed reaction to the court’s decision.

“This latest order nails Chevron for abusing the judicial process in Ecuador but it comes too late,” said Julio Prieto, an Ecuadorian lawyer representing the rainforest residents in the lawsuit. “For far too long the trial court in Ecuador has permitted Chevron’s lawyers to undermine the due process rights of the local communities to delay a final resolution of the claims. In fact, Chevron’s main strategy is to delay because it has no credible defense to the underlying charges.”

The judge’s decision comes at a time when Chevron is reeling from several legal setbacks in various U.S. courts.

In July, Chevron’s U.S. lawyers abandoned a lawsuit in U.S. federal court in New York that attempted to shift liability in the case to Petroecuador, Ecuador’s state-owned oil company. Chevron had determined it could not win the case and preferred to fold its cards early rather than suffer additional embarrassment, said Prieto.
Chevron has been dealt five straight defeats in U.S. federal courts over the Ecuador issue, including one in June when the Supreme Court turned down a Chevron petition.
The fine imposed on Campuzano -- five dollars – was more symbolic than substantive and was not a sufficient deterrent for Chevron, said Prieto.
Prieto said Chevron’s delaying tactics include the following:

    •    Chevron is currently “finishing” two expert reports on the impact of oil contamination on fish and agriculture, even though the company had the right to submit them since 2003.
    •    The trial judge this year allowed Chevron to conduct eight redundant field inspections even though the inspections phase of the trial began in 2004 and ended in 2006. Reports from the eight inspections are still pending.
    •    Chevron induced a local Ecuadorian army official to fabricate a security threat against Chevron lawyers to delay a key inspection where members of an indigenous group planned to testify. Chevron was never sanctioned.
    •    The court has permitted Chevron to continually submit irrelevant but time-consuming evidence, such as soil samples taken far from contaminated sites.

The lawsuit, originally filed in U.S. federal court in 1993, was transferred to Ecuador at Chevron’s request. Chevron agreed to jurisdiction and to abide by any ruling in Ecuador as a condition of the transfer, which took place in 2002.
Once the evidence in the Ecuador trial pointed to Chevron’s culpability, the company launched a public relations and lobbying campaign to delay the case and to discredit the Ecuador courts that it had previously praised.