Chevron Ecuador Case Shows Limits of Legal System

By Karen Hinton, Huffington Post
14 October 2013

Nothing better demonstrates how ineffective the judiciary can be at righting wrongs than the $19 billion legal battle over Texaco's massive oil contamination of the Ecuadorian rainforest from 1964 to 1990.

Since 1993, at least two dozen courts in five countries have heard evidence about the case. Chevron, which bought Texaco in 2001, has hired more than 2,000 lawyers to defend itself and doesn't dispute an estimated $1 billion legal tab between the two companies.

With yet another trial starting this week in a New York federal court, it appears that no court is capable of delivering justice to the people who deserve it -- the 30,000 indigenous people and poor farmers who live in the communities devastated by Texaco's deliberate contamination of their water and soil.

As the former U.S. spokesperson for the Ecuadorians who sued Texaco, I held out hope for the five years that I worked for them that a judicial ruling would result in an environmental remediation, clean water and medical facilities for the Ecuadorians who have suffered from illnesses, lost family and friends to cancer and continue to live with the environmental impacts of ongoing pollution.

The blame, though, doesn't just rest at Chevron's feet. There's plenty to go around.

• The militaristic, pro-oil governments in Ecuador, at the time, that oversaw Texaco's exploitation of the rainforest willfully allowed it to happen because they wanted to share in the spoils, and they turned a blind eye to the impact on the indigenous population.
• The current government does more for impoverished peoples than any before but struggles to curtail the pollution by other oil companies and crank an economic engine independent of petroleum, as is the case in several Latin America and African countries today.
• U.S. law firms and lawyers, representing both sides of the fight, have allowed greed, arrogance and paranoia, in some cases, to stand in the way of negotiating a settlement. Colliding egos, cavernous litigation budgets funded by even larger oil profits and promises of gold at the end of legal rainbows for lawsuit funders working on contingency all hampered an out-of-court resolution.

The lawsuit has become a conglomerate of lawyers looking for courtroom advantage instead of justice and a magnification of everything that is wrong with the law and that which often revolves around it, including a deployment of lobbyists and media consultants for the spillover fight outside the courtroom. I was one of those media consultants.

Now comes Chevron in a U.S. court charging that it should not have to pay a $19 billion judgment that the Ecuador courts have awarded because it is the real victim; a victim of fraud.

It's taken 20 years, but we have come full circle, landing back in the same U.S. court that sent the case to Ecuador in the first place.

Chevron maintains its allegations of fraud are serious but the Ecuadorians also have compelling evidence of fraud on two continents by the oil giant. Both sides have detailed answers to each and every allegation. It just so happens that the U.S. judge, hearing the fraud case, isn't interested in the Ecuadorians' charges against Chevron, and there is no doubt he will rule in the oil giant's favor.

While thousands of facts are in dispute, some are not. The most conservative review of the record would find that:

• Texaco admitted it dumped at least 16 billion gallons of toxic water into the Amazon waterways and built hundreds of huge, unlined oil pits to store permanently pure crude. See here and here.
• Exposure to toxins resulting from oil production over time should be avoided.
• The Ecuadorians fought for nine years to have their case tried in the U.S., where they thought they could get a fair trial. Texaco and Chevron fought for a trial in Ecuador, and a U.S. court gave it one.

Once in Ecuador, the game got played the way it sometimes gets played in courtrooms across the globe, even in the U.S., with parties on both sides pushing the legal envelope. Take a close look at the record and you'll find plenty of questionable tactics undertaken by the lawyers for the Ecuadorians and for Texaco/Chevron.

Would the theatrics been any different if the lawsuit had been litigated in the U.S.? Who knows? The fact is it wasn't. And, as much as Chevron hates this fact, Ecuador law applies in all of its strengths and weaknesses, something that the U.S. Second Circuit Court of Appeals, which will hear the inevitable appeal of the federal court's fraud ruling, has noted.

Meanwhile, similar abuses of the environment and native cultures by multinational corporations plague many other developing countries today. (Some would argue, right here in the United States.) It goes without saying that the indigenous and the poor who bear the brunt of such abuses, however, should not look to the Ecuador litigation for inspiration and guidance.

They will be well served to remember that the scales of justice are weighted toward those with the most wealth to fund the most sophisticated legal team.

A fraud conviction against the Ecuadorian attorneys will not exonerate the oil giant for its deliberate actions that have resulted in the devastation of indigenous cultures, untold deaths and illnesses. But it will mean that justice for the Ecuadorians still remains years away from any finality. Their lawyers will appeal a fraud conviction in the U.S. and will continue to fight for enforcement of the $19 billion Ecuador judgment in countries where Chevron has assets: Argentina, Brazil, and Canada.

After 20 years of litigation in courts around the globe, the Ecuadorians remain twice victimized -- first by the exploitation of their environment, and now by the exploitation by both sides of a legal system ill equipped to deliver them justice.