Chevron in Ecuador

The archive of the Clean Up Ecuador campaign website

In Ecuador Case, Focus Shifts to Canada Where Enforcement Hearing Targeting Chevron Assets Begins Monday

Amazon Defense Coalition (ADC)
8 September 2016 - FOR IMMEDIATE RELEASE
Contact: Karen Hinton at +1.703.798.3109

Toronto, Canada – A group of Ecuadorian indigenous groups and farmer communities from the rainforest will ask a Canadian judge Monday to stop Chevron from seeking to evade a $9.5 billion environmental damages award resulting from a lawsuit filed 23 years ago.

After a four-year delay in Canada caused by Chevron's pre-trial maneuvering – which came on top of a 12-year trial in Ecuador -- the Amazon communities are seeking to enforce a 2012 Ecuador court judgment against the oil giant. Chevron submitted to jurisdiction in Ecuador in 2001 but later sold all of its assets there and has refused to pay the multi-billion dollar penalty, imposed after the company admitted to systematically dumping billions of gallons of toxic waste into the rainforest in the 1970s and 1980s.

"We are urging Canada's courts to move quickly because many people, including children, are sick and dying from the contamination Chevron left behind on our ancestral lands and the company continues to disrespect legal rulings," said Carlos Guaman, President of the Amazon Defense Coalition, the grass roots organization that brought the original lawsuit on behalf of roughly 80 indigenous and farmer communities in Ecuador's Amazon.

"Chevron's strategy for over two decades has been to throw sand into the gears of the judicial process by forum shopping and manipulating evidence, which we are prepared to show Canadian courts," Guaman added. "The bottom line is that Chevron's strategy of lawsuit abuse must be stopped."

(Here is a detailed background memo for journalists and observers on the Canadian enforcement action and its policy implications.)

An eight-year Ecuador trial, which generated more than 220,000 pages of evidence, resulted in a finding that Chevron deliberately dumped 16 billion gallons of toxic oil waste into streams and rivers and abandoned about 1,000 waste pits filled with oil sludge which to this day continue to contaminate soils and groundwater. (Chevron operated in Ecuador under the Texaco brand from 1964 to 1992.) The Ecuador trial court judgment was upheld unanimously by two appellate courts, including the country's Supreme Court in a 2013 decision.

Chevron tried to block the enforcement action in Canada until the country's Supreme Court ordered it to proceed in a unanimous opinion issued last year. Chevron has an estimated $15 billion to $25 billion in assets in the country, including oil production facilities, a refinery in British Columbia, and the Athabasca oil sands project in Alberta.

A five-day motions hearing, beginning Monday, will help determine both the scope of the enforcement trial and the timetable for the possible seizure of Chevron assets. The judgment against Chevron is now worth roughly $12 billion because of statutory interest under Canadian law.

Two key legal issues will be determined at the motions hearing.

First, the Ecuadorians will seek to knock out all of Chevron's "fraud" defenses because three separate Ecuador courts have considered Chevron's evidence and rejected its validity – courts where Chevron chose to conduct the trial, according to legal papers filed by Alan Lenczner, the Canadian trial lawyer.

Should the Canadian judge allow Chevron's claimed evidence of fraud, counsel for the Ecuadorians stands ready to present ample evidence proving the oil major conspired to fabricate its fraud claims to taint the judgment and to deceive foreign enforcement courts, said Aaron Marr Page, a U.S. legal advisor to the villagers. "While we don't think Canada's court should let Chevron re-litigate yet again its bogus fraud allegations, we are prepared to present evidence that will conclusively blow up those allegations in open court if necessary," said Page.

Secondly, the Ecuadorians plan to block a Chevron motion that seeks a ruling that the company's Canadian assets cannot be seized because they are owned by a wholly-owned Chevron subsidiary called Chevron Canada, rather than by Chevron itself. The Ecuadorians have rejected Chevron's argument as "illogical" and "preposterous" and predict the court will deny the company's attempt to hide behind corporate technicalities to evade paying what it owes to the impoverished villagers, many of whom suffer from cancer and other health impacts due to the pollution, added Page.

Chevron is essentially asking the Canada court to re-litigate the entire Ecuador trial, which is something the villagers say is barred by a long tradition in Canadian law regarding the enforcement of foreign judgments by scofflaw companies that refuse to pay their debts. The only relevant issue, say the lawyers for the villagers, is whether the company was afforded due process in Ecuador where it accepted jurisdiction and whether it raised its complaints in the forum where it wanted the trial held – or could have raised them, with proper due diligence.

Chevron's fraud evidence comes largely from one witness – a former Ecuadorian judge named Alberto Guerra. Guerra, in a separate arbitration proceeding, admitted lying about key parts of his testimony in a retaliatory U.S. "racketeering" case filed by Chevron against the villagers and their lawyers. Also, Chevron has paid Guerra at least $2 million for his testimony and given him a slew of other benefits, including moving him and his entire extended family from Ecuador to the United States. Guerra had no corroborating evidence for the bribe allegation and the villagers say his testimony had so little credibility that there is a serious question whether a court will even let him testify.

On the so-called "ghostwriting" issue, also based largely on Guerra's false testimony, a recent forensic examination by one of the world's leading computer authorities definitively proves the Ecuador trial court judgment was written by the trial judge on his office computer – not given to him on a flash drive by someone else, as Guerra falsely testified. For background on how Chevron's key evidentiary planks in its "fraud" narrative have unraveled in recent months, see this article published by the Huffington Post.

Recently a U.S. appellate court upheld a lower court decision by Judge Lewis A. Kaplan that the Ecuador judgment could not be enforced in the U.S.; however, both U.S. courts said the Ecuador judgment could be enforced in other countries. The lower court also said it was not ruling on the validity of the judgment.

The Kaplan decision was rubber-stamped without any independent analysis of his factual findings by a three-person appellate panel because under U.S. law, appellate courts are always required to accept the lower court's findings without engaging in a de novo review. The particular appellate court that rubber-stamped Kaplan – based on New York – has grown increasingly hostile toward human rights victims from other countries, including the victims of the Union Carbide chemical disaster in India that resulted in widespread death, said Page.

Alan Lenczner, the Canadian lawyer for the villagers, strongly criticized the Kaplan decision in his submissions to the Canadian court.

"The illogicality of the proceeding before Judge Kaplan is stark," he wrote. "Judge Kaplan knew that the sole purpose of the action before him was to influence a foreign court that had the foreign judgment squarely before it for enforcement.

"The U.S. judgment does not respect comity or the ability of foreign courts to apply their own laws appropriately," he added. "The Supreme Court of Canada did not pay heed to Judge Kaplan's decision when it was raised before it."

(For the most important legal filing by the villagers for the motions hearing, see here. For a summary of the Canadian Supreme Court decision in favor of the Ecuadorians, see here. For a summary of the overwhelming evidence against Chevron in Ecuador, see here.)