Chevron in Ecuador

The archive of the Clean Up Ecuador campaign website

Chevron Maneuvering to Block Ecuadorian Villagers from Enforcing $9.5 Billion Judgment in Canadian Courts

Hinton Communications
10 December 2014 - FOR IMMEDIATE RELEASE
Contact: Karen Hinton at +1.703.798.3109

Ottawa, Canada – Trying to make good on its promise of a "lifetime of litigation" to avoid paying for a clean-up of Ecuador's rainforest, Chevron will ask the Supreme Court of Canada this week to create a new jurisdictional hurdle that likely would close off the country's courts to indigenous communities seeking to enforce their $9.5 billion environmental judgment against the company.

(A background document explaining the Canadian enforcement action, which will be argued before the Supreme Court of Canada on December 11, can be read here.)

After more than two decades of litigation by the indigenous communities, Chevron is now arguing that a new jurisdictional barrier should apply to the villagers. Chevron is asking that the Ecuadorians establish jurisdiction over the company all over again in Canada, even though such jurisdiction already was established in Ecuador during the underlying trial.

No country in the world imposes such a burdensome rule for the enforcement of foreign judgments, according to research done by the plaintiffs.

"We believe Chevron is asking the Canadian courts to create an unconscionable barrier to justice as part of its long-term plan to keep the merits of these life and death issues from being decided," said Kevin Koenig, the coordinator of Ecuador programs for the U.S. environmental group Amazon Watch. "By blocking the Ecuadorians villagers from getting in the courthouse door, Chevron hopes to obtain impunity for its human rights violations in Ecuador."

Koenig added: "This case has gone on way too long. It is past time for these claims to be resolved once and for all."

The dispute is the result of Chevron's refusal to abide by the Ecuador court's order – issued in 2011 -- that it clean up almost 1,000 oil waste pits and billions of gallons of oil sludge dumped into streams and rivers of the Amazon between 1964 and 1990, when the company operated in the region under the Texaco brand. Locals call the ecological disaster the "Amazon Chernobyl" and experts say it might be the worst oil-related pollution problem on the planet.

Chevron accepted jurisdiction in Ecuador in 2001 as a condition of the trial being transferred out of U.S. court at the company's request. Two separate appellate courts in Ecuador, including the country's Supreme Court, unanimously affirmed the trial court judgment.

Because Chevron still refuses to pay, the affected communities are seeking to seize the company's assets in Canada so they can begin a long-awaited clean-up of their homeland. Chevron's lawyers, who in 2007 stripped almost all of the company's assets from Ecuador, repeatedly have vowed a "lifetime of litigation" if the litigants persist in pursing their claims.

Since the villagers filed the Canadian enforcement action in May of 2012, Chevron has succeeded in tying up the case with technical arguments concerning jurisdiction and subsidiary liability. The Canadian Supreme Court argument concerns a Chevron appeal of a unanimous decision by an Ontario appellate court – issued one year ago -- that ordered the company to stand trial on the issue of asset seizure.

"For 20 years, Chevron has contested the legal proceedings of every court involved in the litigation – in the United States, Ecuador, and Canada," the three-judge panel of the Ontario court wrote in its decision.

"In these circumstances, the Ecuadorian plaintiffs should have an opportunity to attempt to enforce the Ecuadorian judgment in a court where Chevron will have to respond on the merits," it added.

If the Supreme Court of Canada rules in favor of the villagers, Chevron will be forced to defend itself at a public trial in Toronto. The trial will concern whether Chevron was given a fair chance to be heard during the eight-year Ecuador trial, which produced 220,000 pages of evidence, dozens of judicial inspections, and more than 100 technical evidentiary reports.

If the villagers win the enforcement action, it is conceivable they could collect the entirety of their judgment plus statutory interest in Canada. Chevron holds an estimated $15 billion worth of assets in the country, including oil fields in the Beaufort Sea and offshore of Newfoundland, a tar sands project in Alberta, and a refinery in British Columbia.

If the court adopts Chevron's requested rule, it will be very difficult for the villagers to proceed given that all of the company's Canadian assets are held by wholly-owned subsidiaries. Lawyers for the Ecuadorians have asked the Supreme Court of Canada to rule on whether those assets can be seized as part of the enforcement action to prevent Chevron from further delaying collection.

The Ecuadorian communities originally filed their lawsuit against Texaco in 1993 in U.S. federal court in New York. Chevron inherited the case in 2001 when it bought Texaco.

Texaco and then Chevron (known after the merger as ChevronTexaco) fought for almost ten years in the U.S. to move the litigation to Ecuador and filed 14 sworn affidavits praising the country's courts. The company's request was granted after it promised to submit to jurisdiction and abide by any adverse ruling, subject only to narrow enforcement defenses.

Chevron's top executive in Ecuador, Rodrigo Perez Pallares, admitted during the trial that the company had indeed dumped billions of gallons of toxic oil waste into waterways relied on by local inhabitants for their drinking water, bathing, and fishing.

Since the Ecuador judgment was issued, Chevron has filed more than 30 retaliatory legal actions in the U.S. and other jurisdictions against the named plaintiffs, their lawyers, their financial supporters, and allies in the environmental community. The company has admitted to using at least 60 law firms and 2,000 legal personnel in the effort.