Chevron in Ecuador

The archive of the Clean Up Ecuador campaign website

Chevron Violates Canada Supreme Court Order By Trying to "Derail" Ecuador Pollution Judgment, Lawyer Says

Contact: Karen Hinton at +1.703.798.3109

Toronto, Canada – Chevron is under fire in Canada for violating a unanimous order of the country's Supreme Court that Ecuadorian rainforest villagers be allowed to try to seize the oil giant's assets to force it to comply with a $10 billion pollution judgment in their home country, according to the latest legal motion filed in the action.

Chevron's latest attempt to block the Ecuadorian villagers from Canada's courts – based on an argument already rejected by 11 Canadian judges including the country's entire Supreme Court – is yet another "attempt to delay and derail" a collection action that is the best chance for the villagers to remediate the billions of gallons of toxic waste dumped onto their ancestral lands, according to a filing by Alan Lenczner, a prominent litigator who is leading the action.

All eighteen appellate judges in Ecuador and Canada to hear the case have now ruled against Chevron yet the company is still using four law firms in Canada to try to thwart the villagers from commencing their enforcement action. Chevron already stripped its assets from Ecuador to evade paying the pollution judgment, forcing the villagers to chase the company into other countries to seize assets for the court-mandated clean-up.

"It is clear that Chevron is now willing to go to war with Canada's Supreme Court to evade cleaning up the billions of gallons of toxic waste it dumped on indigenous ancestral lands in the rainforest," said Luis Yanza, a leader of the Ecuadorian communities that won the judgment against Chevron.

"The constant delays are part of Chevron's designed strategy of perpetual litigation that has lasted for more than two decades," said Yanza. "During this time, many indigenous groups have literally begun to die off from the company's poisoning of the forest. This is beyond upsetting and we trust Canada's courts will see through Chevron's abusive and unethical strategy."

After Canada's Supreme Court tossed Chevron's jurisdictional objection last September in a resounding 7-0 decision, the company infuriated the villagers by quickly filing yet another motion before an Ontario trial court to defeat jurisdiction as part of a "decades-long campaign of delay and evasion," said Lenczner. In its decision, the Canada Supreme Court had ordered the enforcement action against Chevron to proceed immediately.

"Deep pockets against the resources of indigenous people in the Ecuadorian Amazon and repeated, interminable delay until ‘hell freezes over' are Chevron's weapons," Lenczner argued in the brief. He asserted Chevron's repeated jurisdictional arguments are "futile" and violate four separate decisions by the Canada Supreme Court which require courts to facilitate the enforcement process and not permit a defendant to re-litigate issues already decided in the forum where it accepted jurisdiction. (The law is the same in the United States and most countries.)

"In this case, Chevron Corporation defended itself in Ecuador in an eight year trial," Lenczner asserted in the motion. "It then appealed the judgment against it to the Intermediate Court of Appeal... It further appealed the decision to the National Court of Cassation (Ecuador's highest court). Chevron Corporation has had its day in court, yet refuses to abide by the judgment."

"No Canadian litigant would receive as extensive access to justice as did Chevron Corporation," Lenczner added. Quoting language from a Canadian appellate ruling against Chevron, Lenczner said the case "cries out for assistance, not unsolicited and premature barriers" of the type Chevron is trying to erect to block the proceeding.

Lenczner also added that a motion by Chevron Canada (the company's wholly-owned subsidiary) that an Ontario trial court had no jurisdiction over it, "even thought it had an office and employees in Ontario and carried on business (sales) in Ontario was, patently, without merit."

Chevron's various motions to block jurisdiction in Canada "were dismissed by three levels of court, 11 judges being unanimous," said Lenczner in the motion. "Nevertheless, they took over three years to resolve."

(For more background, here is a blog on Chevron's abusive litigation strategy in Canada and here is a summary of the major difficulties facing Chevron because of the Canada enforcement action.)

The showdown in Canada between the villagers and the world's third-largest oil company is hugely significant. Chevron's assets in Canada are said to be worth $15 billion and are more than enough to cover the entirety of the $9.5 billion Ecuador judgment, for which interest is running at approximately $300 million annually under Canadian law. In Canada, Chevron owns oil fields, a network of gasoline stations, bank accounts, and a series of leases and office buildings that collectively produce roughly $3 billion annually in dividends.

Chevron CEO John Watson also has rejected multiple offers by the communities to settle the case, putting added pressure on his expensive legal strategy which includes the use of at least 60 law firms and 2,000 lawyers worldwide. In recent years, several prominent company shareholders have questioned Watson's scorched earth approach and urged the company to settle the matter.

The Supreme Court of Canada's decision for the villagers followed a unanimous 3-0 decision by the Ontario Court of Appeals (an intermediate appellate court in Canada) against Chevron which also granted them jurisdiction to seize company assets. In the United States, a U.S. federal appellate court in New York also ruled 3-0 in 2012 (after Chevron brought a similar action) that the villagers had the legal right to enforce their judgment anywhere in the world.

Instead of respecting the Canada Supreme Court decision, Chevron filed a motion in November demanding the right to engage in a new round of discovery so it can re-litigate issues that had been resolved by three layers of courts in Ecuador, including the country's highest court, said Lenczner. Evidence in the Ecuador case was extensive and included 106 expert technical reports, 64,000 chemical sampling results, and a record of 220,000 pages supplemented by 20,000 additional pages of material submitted by Chevron during the appellate process.

Those who won the Ecuador judgment, including members of five indigenous groups and dozens of farmer communities, originally filed their claims against Chevron in New York in 1993. In 2001, the case shifted to Ecuador at Chevron's request after the company agreed to accept jurisdiction there and abide by any judgment.

Chevron later started to obstruct the court process in Ecuador as the overwhelming evidence against the company mounted. Ultimately, because of Chevron's strategy to undermine the proceedings, the case took 11 years to conclude in Ecuador and the same is now happening in Canada, said Yanza.

The villagers have complained for years that Chevron is engaged in a game of forum shopping and delay to evade its responsibilities for polluting the rainforest. For background on Chevron's forum shopping, see this letter to the Wall Street Journal. For a summary of independent media reports documenting Chevron's pollution in Ecuador, see here.

Chevron's latest attempt to obstruct the Canada enforcement action also comes after the villagers have gained significant momentum in the case. For a summary of the company's growing problems in 2016 related to the Ecuador liability, see here.

Separately, a private investor arbitration panel overseeing a related dispute between Chevron and Ecuador's government recently dealt the company a stunning setback. To make matters worse, videos recently surfaced from a Chevron whistleblower showing company scientists trying to hide pollution from the Ecuador court.

Outside the courtroom, Chevron was humiliated when it won a Public Eye lifetime achievement award in Davos for being named the worst corporation on the planet due to a poor environmental record in Ecuador and elsewhere.