Chevron is reeling again in the Ecuador pollution case. The company's plan to evade paying for a court-ordered clean-up of the billions of gallons of toxic waste it dumped in the Amazon rainforest -- decimating indigenous groups -- seems to be faltering like never before.
After suffering defeats before 18 separate appellate judges, Chevron quietly abandoned its last major claim in Ecuador to challenge the $10 billion environmental liability imposed on the company by Ecuador's Supreme Court in 2013.
Chevron's decision to sit on its hands at such a critical juncture severely damages its prospects in Canada, where the affected communities are targeting company assets to pay for a clean up of their ancestral lands. (Here is background on Chevron's increasing legal difficulties in Canada; here is an explanation of the company's jurisdictional shell game.)
Chevron abandoned its "fraud" allegations in Ecuador by letting the statute of limitation lapse on a key claim under the country's Collusion Prosecution Act (CPA). The move is a flagrant illustration of how the company's evidence has collapsed in recent months. Ignoring the CPA claim all but nullifies Chevron's international arbitration action against Ecuador's government, where the company cynically has been trying to stick taxpayers in Ecuador with its enormous clean-up tab.
Chevron's decision follows a series of devastating courtroom setbacks.
The company's star witness, Alberto Guerra, recently admitted to accepting bribes and then lying under oath after being paid $2 million (see here and here) by the company. Some of the Chevron funds were handed over to Guerra as cash out of suitcase by company lawyers Andres Rivero and Yohi Ackerman.
The company's forensic evidence regarding the supposed "ghostwriting" of the trial court decision also has fallen apart; a new report proved the judge wrote the judgment by saving it 484 times on his office computer. Chevron is also facing negative fallout from a whistleblower video showing its scientists plotting to hide pollution evidence from the Ecuador court.
Caught committing fraud, Chevron paid an estimated $2 billion to dozens of law firms to try to turn the tables on the very people it poisoned by manufacturing false evidence using paid stooges like Guerra. Chevron's strategy is designed to shroud the company's crimes and wrongdoing in a fog so thick that the financial risk can be hidden from shareholders, artificially propping up the company's stock price. In the meantime, Chevron's notoriously passive Board of Directors (with CEO John Watson as Chairman) sits on its hands while villagers suffer and die.
This disastrous corporate strategy, designed and funded by Watson and Chevron General Counsel R. Hewitt Pate, is now in full backfire mode.
The mind-blowing story behind Chevron's latest retreat is in this press release issued by the Amazon Defense Coalition. The ADC represents the 80 impoverished indigenous and farmer communities in Ecuador who obtained the court judgment. Another press release explains how Chevron is facing a potential "litigation catastrophe" in the Ecuador case.
Three layers of courts in Chevron's preferred forum of Ecuador found that the oil giant deliberately dumped billions of gallons of toxic waste into the rainforest, causing an outbreak of cancer that has killed or threatens to kill thousands. (For a summary of the overwhelming evidence against Chevron, see here.)
In another sign of its bad faith, Chevron stripped its assets from Ecuador in 2007 after insisting that the trial take place in the South American nation. Once Ecuador's Supreme Court in 2013 affirmed the final judgment, there was no way to force Chevron to pay up without targeting company assets in other countries, which the villagers are doing in Canada and Brazil.
Chevron's latest decision to give up the CPA claim "is an example of the company bailing out of any court where it knows its incredibly weak evidence will not carry the day," said Luis Yanza, a leader of the affected communities and a Goldman Prize winner.