Chevron in Ecuador

The archive of the Clean Up Ecuador campaign website

Chevron Faces Critical Hearing over Ecuador Rainforest Contamination in New York Federal Court

Oil Giant Charged With Forum Shopping and Violating Promises to Litigate Claims in Ecuador

Amazon Defense Coalition

Amazon Defense Coalition
Contact: Karen Hinton at +1.703.798.3109

Chevron's hearing is scheduled for 2 p.m. on March 10 before Judge Leonard B. Sand in courtroom 15A of the United States Courthouse at 500 Pearl St. in Manhattan.

New York – Chevron will be forced to explain to a U.S. federal judge this Wednesday why it believes it has the right to take the seven-year Ecuador environmental case (Aguinda v. ChevronTexaco) to a closed-door binding arbitration where the rainforest communities cannot appear, in apparent violation of the company's previous promises that it would litigate the case in its requested forum of Ecuador.

The trial judge in the environmental case – where Chevron faces damages of up to $27 billion for allegedly poisoning an area the size of Rhode Island -- has yet to rule in what experts believe is one of the most extensively litigated environmental trials ever. Because Chevron expects to lose the trial due to indisputable scientific evidence proving extensive contamination, it is trying to use the arbitration to force Ecuador's government to quash the case before it can end, according to representatives of the rainforest communities.

Chevron is trying to abandon the trial even though over the last seven years the parties have produced more than 64,000 chemical sampling results, conducted 103 court-supervised inspections of former Chevron well sites scattered throughout the rainforest, and created a trial record than runs to more than 200,000 pages.

"Chevron acts like a fugitive from justice in Ecuador because the evidence establishing the company's misconduct is overwhelming," said Jonathon Abady, an American lawyer representing the rainforest communities in the federal court action.

"We plan to explain to the court that Chevron has no legal basis for the arbitration and is engaging in blatant forum shopping to avoid responsibility for an environmental disaster," added Abady, of the law firm Emery, Celli, Brinckerhoff & Abady in New York City.

The hearing before Judge Sand will examine whether Chevron should be enjoined from initiating a private arbitration against Ecuador's government under the U.S.-Ecuador Bilateral Investment Treaty. In what the plaintiffs describe as a "radical" maneuver that undermines the rule of law, Chevron claims the trade treaty gives it the right to force Ecuador's government to order its courts to extinguish the Aguinda case on the grounds Chevron has been treated unfairly in the trial even though Chevron has yet to actually lose.

The arbitration is Chevron's primary attempt to "escape" from an adverse judgment in Ecuador that would significantly increase its financial exposure, said Illann Maazel, who is litigating the case with Abady. "Chevron is contriving the argument it is being treated unfairly to avoid its legal obligations," he said.

The Aguinda plaintiffs and the government of Ecuador have filed separate petitions with the New York court claiming there is no legal basis for Chevron's hoped-for arbitration because it violates the company's earlier promises to the same court to subject itself to jurisdiction in Ecuador and abide by any judgment there. The promises induced the U.S. court to transfer the case to Ecuador in 2002 over the objections of the rainforest communities, who had filed their action in the U.S. in 1993.

From 1993 to 2002, Chevron submitted 14 sworn affidavits to the U.S. court praising Ecuador's judicial system in an effort to induce the court to transfer the case to the South American nation.

After Chevron won the battle over venue, the plaintiffs re-filed the lawsuit in Ecuador in 2003 only to find on the first day of trial that Chevron tried to fight jurisdiction in violation of its earlier promises to the U.S. judge. In 2004, as the evidence against it mounted, Chevron initiated a previous arbitration against Ecuador's government claiming it should bear all liability in the case.

In 2007, Judge Sand (the same judge presiding over the hearing on March 10) permanently stayed Chevron's first attempt at arbitration. Chevron also lost unanimously on appeal and the U.S. Supreme Court rejected its petition for review.

The plaintiffs plan to tell the court that Chevron is violating the rule of law by trying to again start an arbitration that essentially will hijack their claims into another court where they cannot appear, said Maazel.

"Chevron apparently thinks it is above the law and therefore does not need to be held accountable in any public court," said Maazel. "But no company should be allowed to evade accountability for an egregious wrong just because it has an unlimited budget to litigate the same issues endlessly."

The Aguinda lawsuit charges that Texaco (which Chevron bought in 2001) created a system of oil extraction in the Amazon rainforest that deliberately discharged billions of gallons of toxic wastewater into streams and rivers and abandoned more than 900 unlined waste pits filled with toxic sludge. In 2008, a Special Master appointed by the Ecuador court found that the pollution had caused 1,401 excess cancer deaths and decimated indigenous groups, leading to a host of oil-related illnesses.