Friday, September 25, 2015

Chevron's Forum Shopping Over Ecuador Pollution Hits Dead End In Canada

It is widely known that Chevron has acted as a serial forum shopper when it comes to trying to evade its liability for creating an environmental disaster in Ecuador's Amazon. But Chevron's game of corporate subterfuge and litigation is clearly unraveling, spelling huge new risks for company shareholders.

In short, Chevron CEO John Watson's billion-dollar campaign to buy impunity for Chevron's human rights abuses in Ecuador is flaming out. Watson himself is at risk of being whipsawed by his own short-sightedness.

Canada's Supreme Court ruled in early September that thousands of Ecuadorian rainforest villagers have the legal right to try to seize company assets in that country to force it to pay for its court-mandated clean-up in Ecuador. This is serious: for the first time in two decades, the villagers have a direct path to a full recovery of their $9.5 billion judgment. (Chevron has an estimated $15 billion of assets in Canada, including a refinery, offshore oil field, and office buildings.)

Ecuador's Supreme Court already ruled in 2013 that Chevron must pay up. True to form, Watson had sold off company assets in Ecuador as the evidence proving the company's pollution poured in to court. Watson's posture of evasion not only has infuriated Chevron shareholders and alienated environmental and human rights groups, but has forced the impoverished villagers to chase down company assets around the world in a cynical game of corporate hide and seek.

In finding that the villagers had jurisdiction over Chevron, Canada's Supreme Court dealt a severe blow to Watson's strategy. In a unanimous decision, the court said this in reference to Chevron and other debtors who try to evade paying foreign court judgments:
Through their own behaviour and legal non-compliance, they have made themselves the subject of outstanding obligations, so they must be called upon to answer for their debts in various jurisdictions... The need to acknowledge and show respect for the legal action of other states has consistently remained one of comity's core components, and militates in favor of recognition and enforcement.
Murray Klippenstein, a Canadian lawyer who represented several human rights groups in the country who submitted a brief in support of the villagers, praised the decision in a legal publication. He said,
Chevron some time ago declared a total war, scorched earth legal strategy against this claim by the Ecuadorian villagers, and in this proceeding in Canada, Chevron was seeking to import into the law of international reciprocal enforcement of judgments an entirely novel test... in its decision the Supreme Court methodically and meticulously analyzed, and rejected, that attempt, based on existing legal principles -- and rightly so.
While Chevron forum shops, thousands of vulnerable people in Ecuador suffer from cancer and other grievous health impacts such as spontaneous miscarriages due to the company's failure to remediate its contamination. Thousands have either perished or face a real risk of death in the coming years. (For background on Chevron's cancer problem in Ecuador as documented by several independent scientific studies, see here.)

Chevron's forum shopping has been well-documented.

Chevron blocked the original case from being heard in U.S. courts (where it was filed in 1993) and insisted the litigation take place in Ecuador. It filed 14 sworn affidavits praising the fairness of Ecuador's courts.

Once in Ecuador, Chevron sold off its assets in the country and tried to get the matter dismissed on jurisdictional grounds even though it had promised U.S. courts it would accept jurisdiction there. When that didn't work, it started to attack the very courts it had previously praised.

At one point, notorious Chevron lawyer Ricardo Reis Veiga corruptly "persuaded" the country's Attorney General to call the trial judge to insist that the case be tossed. (The judge refused the entirely inappropriate request; Reis Veiga still works for Chevron.)

After years of trying to sabotage the proceedings in Ecuador -- Chevron's lawyers threatened judges with jail time and filed thousands of frivolous motions -- the courts ruled against the company based on more than 100 technical evidentiary reports and the company's own internal environmental audits. Despite its earlier promises, Chevron refused to pay and said it would fight the matter "until hell freezes over and then fight it out on the ice."

In Canada, Chevron tried to block the enforcement action by claiming its assets are held by a wholly-owned subsidiary. In Argentina, where another enforcement action was filed, Watson flew to Buenos Aries and met with the country's President. He then invested in a new gas field in exchange for a technical dismissal of the enforcement action.

Back in the United States, Chevron convinced a rogue federal trial judge in Manhattan to issue an unprecedented and illegal order purporting to block the villagers from attempting to enforce their judgment anywhere in the world. The judge, who had undisclosed investments in Chevron when he ruled, was reversed unanimously on appeal. He was also mocked by international law scholars around the world.

Chevron will face major hurdles in Canada if it tries to allege it was the victim of "fraud" by the very people it poisoned in Ecuador. Its evidence in this regard was rejected unanimously by Ecuador's Supreme Court and has been debunked even more since in other legal proceedings. The real fraud is how Chevron uses its fake allegation to retaliate against those who held it accountable.

It turns out that much of Chevron's "evidence" comes from a completely discredited witness paid $2 million by the company in violation of federal law.  Further, new whistleblower videos prove Chevron technicians tried to hide evidence of oil contamination at its former well sites in Ecuador as part of an elaborate scheme to defraud the courts during the trial there. (For more evidence of Chevron's vast corruption in Ecuador, see this affidavit.)

Chevron's two decades of litigation trickery, executed by no fewer than 60 different law firms paid enormous sums by the company, has forestalled justice in Ecuador for far too long. Something tells us the respected courts of Canada understand this point very well.