Tag Archives: Chevron liability

Foreign Corporate Immunity: Chevron/Canada against Ecuador

A Toronto judge halted on May 1, 2013 an effort to enforce a $19 billion Ecuadorean judgment against U.S. oil company Chevron Corp in Canada, finding that his Ontario provincial court was the wrong place for the case.  The action is the latest skirmish in a two-decade conflict between Chevron and residents of Ecuador’s Lago Agrio region over claims that Texaco, which Chevron acquired in 2001, contaminated the area from 1964 to 1992.

Citing Chevron’s promise to fight the plaintiffs until “hell freezes over, and then fight it out on the ice,” Justice David Brown of the Ontario court foresaw a “bitter, protracted” battle that would be costly and time consuming.  “While Ontario enjoys a bountiful supply of ice for part of each year, Ontario is not the place for that fight,” Brown wrote in his ruling on Wednesday. “Ontario courts should be reluctant to dedicate their resources to disputes where, in dollars and cents terms, there is nothing to fight over.”

Alan Lenczner, principal lawyer in Toronto for the Ecuadorean plaintiffs, said they would definitely appeal, arguing that a multinational company could not be immune from enforcement in a country where it earns so much. “Chevron Corp itself earns no money,” he said in a statement. “All its earnings and profits come from subsidiaries including, importantly, Chevron Canada.”  Chevron Canada’s assets are worth more than $12 billion, the plaintiffs had said, and alongside separate actions in Argentina and Brazil, they had sought to persuade the Ontario court to collect the damages awarded to them by the South American court.

Chevron, the second-largest U.S. oil company, has steadfastly refused to pay, saying the February 2011 ruling by the court in Lago Agrio was influenced by fraud and bribery. A related fraud case goes to trial in New York in October.  The Supreme Court of Canada has ruled that the country’s courts can recognize and enforce foreign judgments in cases where there is a “reasonable and substantial connection” between the cause of the action and the foreign court. Chevron called Brown’s ruling a “significant setback” to the Ecuadoreans’ strategy of seeking enforcement against subsidiaries that were not parties to the Ecuador case.  “The plaintiffs should be seeking enforcement in the United States – where Chevron Corporation resides. In the U.S., however, they would be confronted by the fact that eight federal courts have already found the Ecuador trial tainted by fraud,” Chevron said in a statement. Last month, a consulting firm whose work helped lead to the $19 billion award against Chevron disavowed some environmental claims used to obtain the judgment.

Excerpt, Judge halts Chevron-Ecuador enforcement action in Canada, Reuters, May 1, 2013

See also how Chevron Destroyed the Paper Trail

Argentina against Chevron: the Amazon Rainforest Judgment

An Argentine judge embargoed Chevron Corp.’s assets in Argentina to carry out an Ecuadorean court order that awarded $19 billion to plaintiffs in an environmental damage lawsuit in the Amazon, a lawyer said Wednesday (Nov. 7, 2012).  Judge Adrian Elcuj Miranda ordered the freezing of Chevron’s assets in Argentina as plaintiffs try to collect the judgment won in Ecuador last year, Argentine lawyer Enrique Bruchou told reporters in a conference call.  The order states that all the cash flows from sales and bank deposits be frozen until the $19 billion is collected, Bruchou said. The order applies to 100 percent of Chevron’s capital stock in Argentina, 100 percent of its dividends and its entire minority stake in Oleoductos del Valle. It also includes 40 percent of any current or future money that Chevron Argentina holds as well as 40 percent of all its crude sales.

Bruchou said the decision in the largest environmental suit in the world should send a strong message to foreign investors that they must apply the same environmental standards wherever they do business. Similar lawsuits have been filed this year in Canada and Brazil.  “We’re making history in the preservation of the environment,” Bruchou said.  “This is a ruling that sets an example. What we’re telling the world is that in Latin America we want to demand that whoever comes to exploit does it following the same health an environmental standards as they do in their countries of origin,” he said.

Chevron officials said the company knew of neither a filing by the plaintiffs nor an order from a court in Argentina. They also said Chevron’s operations in Argentina had nothing to do with the case in Ecuador.  “The plaintiffs’ lawyers have no legal right to embargo subsidiary assets in Argentina and should not be allowed to disrupt Argentina’s pursuit of its important energy resources,” said James Craig, a Chevron spokesman for Latin America and Africa. “The Ecuador judgment is a product of bribery, fraud, and it is illegitimate.”  Chevron has refused to pay the sum stemming from waste water pollution and oil industry waste, saying that fraud marked the trial and that Texaco Petroleum Co. mitigated the environmental damage long before 2001, when it became a Chevron subsidiary.

Ecuador’s highest court has upheld the ruling, while the plaintiffs have accused Chevron of dirty tricks designed to subvert the lower-court ruling.  The plaintiffs say Texaco, and now Chevron, remain responsible for environmental contamination and illnesses resulting from the operations of an oil consortium from 1972 to 1990 in Ecuador’s rainforest…

The plaintiffs will begin a suit in Colombia in the coming days and are also preparing legal actions in Asia, Europe and elsewhere, Fajardo said.  “Environmental crime will not go without punishment and we’re going to chase them anywhere in the world,” he said.  Chevron argues that a 1998 agreement Texaco signed with Ecuador after a $40 million cleanup absolves it of liability and that Ecuador’s state-run oil company is responsible for much of the pollution in the oil patch Texaco quit more than two decades ago.

Chevron is a major player in Argentina producing about 26,000 barrels of crude and 4 million cubic feet of natural gas daily, the plaintiffs have said.  The company is also key for the South American country’s future energy needs, especially after it agreed to work with the state-run YPF energy company to develop shale reserves that could be the third-largest in the world.

Argentine judge embargoes Chevron assets on spill, Associated Press, Nov. 7,2012

See also Chevron US Courts

Chevron and Amazon: the $18 billion Ecuador Liability

The D.C. Circuit Court of Appeals  on June 12, 2012  (pdf) dealt another setback to Chevron over its $18 billion Ecuador liability, reversing a lower court decision that allowed the oil giant access to documents from a prominent consulting group for the Amazon rainforest communities that sued the company.-

Chevron’s Oil Spills in Amazon, destroying the paper trail

A new document reveals that Chevron officials ordered the destruction of key documents as part of a broad scheme to hide the extent of the company’s pollution in Ecuador’s Amazon, says Amazon Defense Coalition.  A company memorandum from Ecuador dated July 1972 ordered that all reports related to oil spills “are to be removed from the Field and Division offices and destroyed.” From 1964 to 1990, Chevron operated a large concession in Ecuador’s Amazon region that included an extensive network of pipelines, wells and separation stations.

Chevron operated in Ecuador under the Texaco brand. In February, an Ecuador court found Chevron liable for dumping billions of gallons of toxic waste into the Amazon, decimating indigenous groups and causing a spike in cancer rates. Damages in the case, which is under appeal in Ecuador, were set at $18 billion. The extent and environmental impact of the disaster dwarfs the size of the BP spill in the Gulf of Mexico, according to experts.

The memo ordering the destruction of documents was written by R.C. Shields, at the time the director of production in Latin America for Texaco and Chairman of the company’s Ecuador subsidiary. The memo directs Chevron personnel to report only oil spills that are “major events” which are defined as those that “attract the attention of press and/or regulatory authorities.”  The directive also orders that no reports are to be kept on a “routine basis.”  The Shields memo emerged via discovery in U.S. federal court.

Texaco reportedly caused hundreds of oil spills in Ecuador, many of which were “remediated” by setting them on fire, according to the book Amazon Crude, which was published in 1989 and which documented Texaco’s substandard operational practices. The company also has admitted to pouring sludge from the waste pits along dirt roads.

The Shields memo ordering the destruction of documents infuriated members of the legal team representing 30,000 Amazon residents who are suing the oil giant.  This memo is a vivid illustration of the culture of deceit that characterizes Chevron’s destruction of Ecuador’s Amazon over a period of decades,” said Pablo Fajardo, the lead Ecuadorian lawyer. “Deception remains the operating principle for Chevron in Ecuador even today as the company continues to flout its legal obligations to remediate toxic pollution that threatens thousands of innocent lives.”

Karen Hinton, the U.S. spokesperson for the Ecuadorians, said the memo was part of a “pattern of corrupt activities” by the company that include a fraudulent remediation in the 1990s, the fabrication of scientific evidence, attempted entrapment of a trial judge and threats to put judges in jail if they didn’t rule in the company’s favor.  “Chevron acted like the Mafia in Ecuador,” she added. “This repugnant memo is just a small piece of the company’s scheme to defraud Ecuador’s government and its people.”

Chevron’s Ecuador Fraud Highlighted In Memo Ordering Destruction of Documents Related to Contamination, Says Amazon Defense Coalition, PR NewsWire, Dec. 14, 2011