Chevron in Ecuador

The archive of the Clean Up Ecuador campaign website

Ecuador Villagers Ask Canada Court to Speed Up Action Seizing Chevron Assets as Pollution Battle Heats Up

Contact: Karen Hinton at +1.703.798.3109

Toronto, ON – Empowered by a new favorable Supreme Court decision, indigenous villagers from Ecuador’s Amazon rainforest have filed legal papers asking a Canadian trial court to accelerate an action to seize assets from Chevron to satisfy their $9.5 billion environmental judgment.

The latest document, filed in Ontario by lawyers for the villagers and available here, blasts Chevron for trying to use the Canadian proceeding to re-litigate legal and factual issues already repeatedly decided against the company by courts in Ecuador and the United States. Chevron has vowed to fight the villagers -- who filed their initial claims over Chevron’s pollution 22 years ago -- “until hell freezes over” and beyond.

“All of Chevron Corp.’s defenses fail” in the enforcement action because “the issues that Chevron Corp. seeks to re-litigate have been determined against it by the courts of Ecuador,” asserted the filing, made by Canadian litigator Alan Lenczner of the law firm Lenczner Slaght in Toronto.

“No aspect of the merits of the case, whether factual or legal, can be tried or raised in Canada,” the filing added.

The latest filing sets up a major showdown in Canada over the scope of the enforcement proceeding, which began in 2012 and was delayed for three years while Chevron appealed an early decision granting jurisdiction to the villagers. In early September, Canada’s Supreme Court ruled unanimously that the villagers could proceed to try to collect assets in Canada against both Chevron and its Canadian subsidiary, Chevron Canada. (For background on the winning appellate court decision, see here.)

In 2013, Ecuador’s Supreme Court unanimously affirmed a judgment finding Chevron had deliberately dumped billions of gallons of toxic waste into the rainforest, decimating indigenous groups and causing an outbreak of cancer. For background on the humanitarian crisis caused by the dumping, see this summary of cancer rates and this photo essay of the company’s victims.

Argument in Canada on the preliminary motion of the villagers to knock out Chevron’s defenses and accelerate the enforcement proceeding will be held in early March. If the villagers win that motion, Chevron’s strategy of “perpetual litigation” will be dealt a severe blow and the proceeding could move quickly to a debt collection phase where the company’s assets will be directly in play.

Even if the villagers do not win the preliminary motion, the enforcement action by its very nature will avoid re-litigating the merits of the environmental case and questions of Ecuadorian law, although the process will take longer, said Aaron Page, a U.S. legal advisor to the Ecuadorians.

The goal of the villagers in Canada is to get their judgment recognized so it will be treated as “domesticated” under Canadian law, he added. Such a ruling would enable the villagers to seize Chevron’s assets in any province in Canada. It also would facilitate potential debt collection by the villagers in other countries that have reciprocal judgment enforcement agreements with Canada.

Chevron owns a large crude oil refinery in British Columbia, a large interest in a tar sands project in Alberta, another interest in an offshore oil field off the coast of Newfoundland, various leases in the Northwest Territories, and a network of gasoline stations under the Chevron brand. All told, Chevron has an estimated $15 billion in assets in Canada that kick off roughly $3 billion annually in profits for company shareholders.

The oil giant refuses to pay the Ecuador judgment despite having accepted jurisdiction there in 2001 as a condition of shifting the litigation from New York to the South American nation. Because interest runs on the judgment, the amount that could be seized is just north of $10 billion and is rising steadily, said Luis Yanza, a rainforest leader and Goldman Prize winner who works with the dozens of Amazon communities that have sued Chevron for damages.

“We again urge Chevron to stop the gamesmanship and comply with its legal obligations to the very people of Ecuador that it exploited mercilessly for decades by dumping toxic waste onto their ancestral lands,” said Yanza.

“Chevron is a deadbeat debtor to the people of Ecuador and should be treated as such by the court system of Canada,” he added.

In its most recent filing in Canada, Chevron’s lawyers raised factual defenses already decided against it by three layers of courts in Ecuador, including in unanimous decisions by an intermediate appellate court and the country’s Supreme Court. The latter decision, which meticulously documented the extensive evidence of contamination at hundreds of former Chevron well sites, can be read here.

The Ecuadorian villagers have been gaining momentum recently in the long-running litigation, which began in 1993 when the original pollution claims were filed in New York. Chevron moved the case to Ecuador in 2001 after filing numerous expert affidavits praising the country’s court system. At the time, Chevron had never been held liable in a court in Ecuador for even one dollar of environmental damages even though the contamination caused (under the Texaco brand) had been visible and widespread for decades.

In all, eight separate appellate judges in Ecuador affirmed the underlying judgment against Chevron. Separately, all 10 appellate judges in Canada to hear Chevron’s arguments to block the enforcement proceeding have ruled for the villagers. In addition, the villagers in 2012 won an important 3-0 appeals court decision in New York nullifying an illegal injunction sought by Chevron purporting to block enforcement of the Ecuador judgment anywhere in the world.

In its defense in Canada, Chevron claims that the Ecuadorian courts had no jurisdiction over it, but that issue was decided against the company in unanimous decisions by Ecuador’s Supreme Court and by a U.S. federal appellate court. The company also claims it is not liable for pollution caused in Ecuador by Texaco, but that issue also was decided against the company in both the U.S. and Ecuador given that Chevron and Texaco merged in 2001.

Chevron also claims the findings of U.S. Judge Louis A. Kaplan in its retaliatory “racketeering” case in 2013 (where the company alleged the Ecuador litigation was a “sham”) should be adopted by Canada’s courts, even though the judge had no jurisdiction and refused to admit any evidence of the company’s pollution. Judge Kaplan’s flawed findings have no relevance to the Canadian action, according to the filing of the villagers. (For background on the Kaplan decision, see here.)

Chevron is also trying to use the legal defense of “corporate separateness” to claim the assets of its wholly-owned Canadian subsidiary should be immune from seizure. The villagers point out in their latest filing that Chevron Corp. completely controls its subsidiary in Canada, and that shell entities cannot be used to avoid the collection of a valid debt.

In any event, Canada’s Supreme Court in its recent decision rejected Chevron’s claim that “corporate separateness” should block the enforcement action from commencing.

The villagers have charged that Chevron for years has engaged in abusive litigation tactics and played a jurisdictional shell game to evade the Ecuador court judgment. Several years ago, with the evidence against it mounting, Chevron General Counsel Charles James said openly the company would fight the villagers “until hell freezes over” and then “fight it out on the ice” if necessary. Internal Chevron emails describe efforts to “demonize” adversary counsel.

Background on Chevron’s forum shopping and shifting arguments can be found here and here.

The Canadian action also comes after a private investor arbitration panel overseeing a related dispute between Chevron and Ecuador’s government nullified Chevron’s main defense that a government release barred the claims of the villagers. That defense has been rejected now by the courts of three countries, although Chevron is trying to use it again to block the enforcement proceeding in Canada.

Outside the courtroom, Chevron has fared no better. It recently won a Public Eye lifetime achievement award for being the worst corporation on the planet as a result of its horrendous environment record in Ecuador and elsewhere.