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Chevron’s tricks
Luis Ángel Saavedra
2/15/2016
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US oil company uses its power and money to avoid payment of US$9.5 billion for polluting the Amazon.

US oil company Chevron, sentenced six years ago to pay a multimillion dollar fine for the damage it caused in the Amazon, is again trying to avoid paying the fine through a series of lawsuits against the plaintiffs and Ecuadorian government.

On Feb. 14, 2011, Judge Nicolás Zambrano from the Court of Nueva Loja (Lago Agrio), capital of the northeastern province of Sucumbíos, ruled in a case most awaited by the indigenous, peasants and environmentalists who had fought for more than 20 years to condemn Chevron for causing one of the biggest environmental disasters in the world between 1964 and 1990, at which time it operated in the Ecuadorian Amazon. The ruling’s sentence was the payment of US$ 9.5 billion, an amount that could double if the company did not apologize to the victims in the days after the ruling.

The Provincial Court of Sucumbios ratified on Jan. 3, 2012, the sentence issued by Judge Zambrano. The National Court of Justice did the same on Nov. 12, 2013, although the latter voids the additional payment despite the fact that the company did not apologize to those affected.

This case — initiated in 1993 when a group of residents filed a lawsuit in the United States against Texaco, bought by Chevron in 2001— for polluting the environment and risking health of people during its 25 years of operation — was understood to be officially over with the National Court’s decision, and that the oil company had no choice but to pay the amount stipulated. But this was not the case.


Immediately after learning of the decision of the National Court of Ecuador, Chevron filed an appeal to the same court to overturn the ruling. The appeal is pending but there is little chance that the court will rule in Chevron’s favor. Chevron also presented on Dec. 23, 2013 to the Constitutional Court a Special Protection Action to prevent the sentence from being carried out. Neither of these actions prevent the plaintiffs from demanding the payment while these cases are worked out in their respective jurisdictions.

Chevron did not only not comply with the decision of the Ecuadorian courts, it also initiated a series of trials and procedures at the international level to avoid payment. These trials, according to Pablo Fajardo, who is the lead attorney for the indigenous and peasants who sued the oil company, have cost the company about $2 billion as it has had to hire the best law firms in countries where it wanted to block the plaintiffs’ request for payment.

“Chevron has on its payroll about 2,000 lawyers intervening in this case,” said Fajardo to Latinamerica Press. “Chevron doesn’t mind the cost because this case for Chevron is not about paying or not paying the amount specified in the sentence of the Lago Agrio court, but about avoiding a legal precedent that can lead to a number of trials in other countries.”

International courts
The plaintiffs have sought to enforce the ruling in countries where the oil company has assets, such as Canada, Brazil and Argentina. In Argentina, a court of first instance ordered a freeze on Chevrons assets which the Chamber of Civil Appeals confirmed in late Jan. 2013. However, in June of that year, the Argentina’s Supreme Court decided to lift the freeze. The plaintiffs claimed that the lift was due to pressure from the administration of former president Cristina Fernandez (2007-2015) in relation to the negotiation of the exploitation of oil fields in Neuquén, in the Argentine Patagonia. This negotiation also pitted the indigenous Mapuche people against the government.

The plaintiffs have had the best luck in Canada, where they were able to get the Canadian Supreme Court to issue on Sep. 12, 2015 a resolution in which it states it has jurisdiction to examine the Chevron case upon proof that the Canadian subsidiary is owned by the same Chevron in Ecuador, which is easy to prove. For Fajardo, an interesting point in Canada’s resolution is the Court’s note that modern justice must be timely and act before the companies can make economic changes to avoid fulfilling their responsibilities.

“The Canadian court believes that if we can do transactions at the click of a button, justice must also run at that speed,” he said.

Arguing that the ruling violates a trade agreement, Chevron also sought relief on Sep. 2013 through the Treaty of Reciprocal Protection of Investments, signed between Ecuador and the United States and in force since 1997. Ecuador stated that this treaty does not apply in this case because the indigenous communities’ lawsuit dates back to 1993, and no treaty or law can be retroactive.

In 2006 Chevron turned to the Permanent Court of Arbitration at The Hague, involving Ecuador in a trial that entails only individuals. Since then, arbitrators at The Hague have issued five partial awards, but only one of them, issued in March of last year, favors Ecuador and its statement is strong enough that it states that in front of a violation of a human right, parties cannot invoke a trade agreement. When comparing two treaties, a human rights agreement and a trade agreement, the human rights agreement should have priority. Thus, we must first consider and repair violation of the human right before considering the violation of the trade agreement.

In short, what Chevron is looking for is that any of the courts in which it has legal proceedings, to rule in its favor so it does not have to pay the plaintiffs.

Chevron’s judges
Two judges have been critical in Chevron’s attempt to evade its responsibilities. One of them is Judge Lewis Kaplan from the Southern District Court of New York, who has agreed to all of Chevron’s requests and has even claimed universal jurisdiction to stop the execution of the payment sentence. The other is Ecuadorian former judge Alberto Guerra Bastidas, who has faced the plaintiffs by testifying in favor of Chevron in Judge Kaplan’s court in New York, where the plaintiffs are accused of being part of a plot against the company.

Since the beginning of this long process, Kaplan has been a barrier to justice. In May 2001 he did not uphold the case in the United States and sent it to Lago Agrio, in Ecuador. On Feb. 1, 2011, days before the sentence in the Ecuadorian court, he upheld an appeal in which the plaintiffs were accused of organizing along with the Ecuadorian justice to issue a fraudulent sentence to harm Chevron. In this trial, based on a US law to prosecute the big mafias, called RICO Act (Racketeer Influenced and Corrupt Organization), Judge Kaplan did not allow the plaintiffs to defend themselves by showing environmental damage in Ecuador’s Amazon.

“He forbad us from speaking about the environmental damage, and if someone mentioned it, the judge kicked them out of the court and nullified their testimony,” said Fajardo.

This trial had as the star witness former Judge Guerra, who said that the plaintiffs had themselves written Judge Zambrano’s sentence. The analysis done on Zambrano’s computer showed that the sentence had been written during more than 3,000 work hours.

However, Guerra had to accept that he lied during testimony he gave before the Court of Arbitration at The Hague when he accused the plaintiffs’ lawyers of written the sentence against Chevron. Yet, Kaplan considered his testimony valid and ruled that the sentence against the oil company was a fraud and therefore prohibited any court in the world to try to validate it, assuming universal jurisdiction in this case. In Apr. 2015 the appellate court in New York repealed this claim and Kaplan had to settle for issuing a ruling prohibiting the execution of the sentence in the United States only.

The plaintiffs, meanwhile, started in Oct. 2015 another trial in Lago Agrio against former Judge Guerra after showing his lies. They are now seeking his extradition from the United States, where Chevron pays him a monthly salary of $10,000 plus $2,000 for housing and several additional insurances, according to the contract signed between the company and Guerra.

Chevron’s tricks are starting to end. It has been useless committing blackmail or buying consciences to cover up damages caused in the Amazon. Soon will come the day when it will have to comply with the ruling. “Everything is a matter of time,” says Fajardo. —Latinamerica Press.


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