Chevron in Ecuador

The archive of the Clean Up Ecuador campaign website

For Second Time, Ecuador Appellate Panel Rejects Chevron Attempt to Block $18 Billion Judgment For Dumping Toxic Waste

Amazon Defense Coalition

Amazon Defense Coalition
Contact: Karen Hinton at +1.703.798.3109

Quito, Ecuador – A three-judge appellate panel Thursday denied for the second time a Chevron motion to block Amazon communities from enforcing their $18 billion judgment in countries around the world, moving the long-warring parties one step closer to a global judicial showdown that pits some of the most impoverished indigenous groups against one of the world's biggest oil giants.

The appellate panel in Ecuador ruled that a second interim award from a panel of international investor arbitrators, which asked Ecuador's government to suspend the litigation, could not stop enforcement of the judgment given that the rainforest communities were not a party to the proceeding. The panel also found that human rights law obligated Ecuador's government to protect the rights of the country's citizens to pursue their legal claims without outside interference.

Chevron had sought to have the trial in Ecuador, but stripped its assets from the country when the scientific evidence pointed to extensive toxic contamination at dozens of its former well sites. The company also launched a political and diplomatic campaign to evade the judgment, prompting the local communities to accuse the oil giant of being a "fugitive from justice."

Pablo Fajardo, the lead lawyer for the 30,000 Ecuadorians who originally filed the suit in U.S. federal court in 1993, called on Chevron "to stop playing the game of endless litigation and respect the order of the court where it wanted the trial to be held."

"Our people are dying because of the failure of Chevron's current management team to live up to its legal obligations," said Fajardo. "We will not stop until every last penny of this judgment is collected and those in Chevron who are responsible for the company's environmental contamination and fraudulent cover-up are held accountable for their misconduct."

"The court has determined Chevron broke the rainforest of Ecuador," said Fajardo. "Now it must fix it."

Once the trial judgment against Chevron was affirmed by the same appellate panel in early January, Chevron failed to request a bond which under Ecuadorian law was the only way to suspend enforcement of the judgment, the court ruled.

In an earlier decision, on February 17, the three-judge panel rejected Chevron's request for a special waiver of the bond requirement and denied the oil giant's attempt to use an earlier version of the interim arbitral award to block enforcement of the judgment. The three arbitrators have been subject to withering criticism for acting in secret and outside the scope of their authority under the U.S.-Ecuador Bilateral Investment Treaty, for violating the due process rights of the Ecuadorians, and for having personal conflicts of interest given that each stand to make millions of dollars in fees for asserting jurisdiction over the case where none exists. See here, here and here.

In the decision issued Thursday, the Ecuador appellate panel "denied the revocation of the earlier decision per Chevron's request."

"In no part of its request did Chevron dispute the supreme authority of international human rights law," it wrote. It then listed various human rights protecting the rainforest communities that Chevron's request would violate under international treaties which bind governments throughout the world.

Among the human rights Chevron's request would violate were the right of its citizens to seek legal redress, the right to access a national court system, and the right to non-discriminatory treatment of litigants. It also ruled that Chevron's request would require it to violate the country's Constitution by letting the private arbitral panel override the nation's public court system, itself a violation of international law.

In its earlier February 17 decision, the court had ruled that international law cannot be interpreted "to permit any person (such as Chevron or the Arbitral Panel) to interfere with the enjoyment and exercise of rights and liberties recognized in the Convention, nor can it override other rights and guarantees that are inherent in the rights of all men."

"A simple arbitral award ... cannot obligate judges to do violence to the human rights of the citizens of the country where it sits," said the panel.

A representative of the rainforest communities said the decision protects the independence of Ecuador's courts and ensures that a private investor treaty cannot trump the fundamental human rights of ordinary citizens.

"The Ecuador appellate panel spoke in a way that is consistent with both Ecuador's laws and the country's international treaty obligations," said Karen Hinton, the U.S. spokesperson for the rainforest communities. "It shows that Ecuador's independent courts will not succumb to Chevron's political pressure nor its request for special treatment."

The appellate ruling comes at a time when Chevron officials are furiously trying to cut a side deal with Ecuador's government to illegally quash the environmental case, said Fajardo. The company apparently offered $1 billion to the government to end-run the legal process, an act that could expose Chevron to criminal liability under various anti-bribery statutes in the United States and other countries, he added.

The Ecuador trial court in February 2011 found overwhelming scientific evidence that Chevron deliberately dumped billions of gallons of toxic waste into Amazon waterways when it operated in Ecuador under the Texaco brand from 1964 to 1992. The dumping decimated indigenous groups and caused an outbreak of cancer that could lead to thousands of deaths in the coming years, according to evidence before the court. See here and here.

A video that tells the story of the environmental disaster and of Chevron's fraudulent cover-up can be seen here.

The amount of damages set by the Ecuador court is modest compared to the potential liability of BP in the much smaller Deepwater Horizon disaster in the Gulf of Mexico, said Hinton. BP already has committed $20 billion in compensation for the Gulf spill, an amount that does not include an estimated $60 to $80 billion in additional liability from civil lawsuits now pending in U.S. federal courts.