Tag Archives: Ecuador Amazon

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

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