Saturday, September 8, 2018

Here Are The Three Secret Trade Arbitrators Undermining Indigenous Groups In Ecuador's Rainforest

The three men above are being used by Chevron as a secret kangaroo court to try to undermine enforcement of the landmark $12 billion Ecuador pollution judgment resulting from the company's deliberate dumping of billions of gallons of cancer-causing oil waste into the rainforest. This so-called "court" is widely seen as a joke: it uses arbitrators who actually are private lawyers who charge commercial rates and reap enormous fees. They meet in secret and in this case repeatedly refused to let the Indigenous peoples of Ecuador participate or even attend as observers.

The discomfiting scenario of a private court for corporations might be the future look of "justice" in a world where the Koch Brothers and their allies wish to hide the gruesome details of corporate wrongdoing and corruption. It is also where outcomes easily can be rigged against human rights victims, as Chevron's lawyers tried to do here. The proceedings were held mostly in secure conference rooms of luxury hotels. (See here for how Chevron's law firm Gibson Dunn uses fraud to attack the Ecuador judgment; here for a blistering critique of the secret trade court by Ecuadorian community leader Carmen Cartuche and two lawyers for the affected communities.)

In the Chevron case against Ecuador's government, the names of the conflict-ridden trade arbitrators who work faithfully in service of the corporate class are Grigera Noan, Vaughn Lowe, and V.V. Veeder. Each made an estimated $25 million by charging standard commercial rates of $1,000 per hour to oversee Chevron's secret arbitration, which began in 2009 and is ongoing. These men for years have refused to disclose the exact amount of riches they have reaped by undermining the claims of the rainforest communities of Ecuador.

In short, these white males enriched themselves at the expense of the Indigenous peoples Chevron decimated with cancer as a result of its systematic and deliberate toxic dumping of 4 million gallons of produced waste water daily into rivers and streams. Notably, the trio have ignored demands by several civil society groups to disclose details of their inner workings. U.S. lawyers Max Gitter (see here), R. Hewitt Pate (see here) of Chevron, and Randy Mastro (here) and Ted Boutrous of the ethically-challenged Gibson Dunn firm are also on the growing list of those who have profited personally courtesy of Chevron's big money assault on the rainforest communities.

This week the arbitrators predictably carried out one of the final acts of their solemn duty to try to deliver impunity to a major corporate human rights violator. They purported to "rule" -- in contradiction to the robust findings of four layers of public courts in Ecuador -- that the judgment against Chevron achieved after two decades of litigation should be nullified. They relied on a fake "fraud" narrative Chevron concocted that was based largely on the testimony of an admittedly corrupt witness (Alberto Guerra) paid $2 million by the company to lie in open court. Chevron's lawyers coached Guerra for 53 consecutive days before he told his made-up story; Guerra later admitted under oath that he had lied while a forensic report proved he lied.

Most importantly, they refused to hear from the Indigenous peoples against whom this judgment is ultimately directed. No wonder they wanted to keep it secret. Could any "court" process be any more illegitimate than this one?

Guerra's testimony -- which resulted in a criminal referral letter of Chevron and its lawyers to the U.S. Department of Justice -- utterly destroyed Chevron's claim about the supposed "ghostwriting" of the judgment. "Money talks, but gold screams," Guerra had told Chevron's lawyers in 2011 as he demanded exorbitant and illegal fees for his witness testimony. Guerra is still on Chevron's payroll years later, living in a luxurious house near Chicago. We estimate he's made at least $5 million from the company after his last salary in Ecuador was $6,000 annually. Chevron even pays his income taxes. But the arbitrators in their decision almost completely ignored these credibility problems.

The three lawyer-arbitrators tried to overturn 17 separate appellate judges in Ecuador who affirmed the pollution judgment based largely on 105 technical evidentiary reports and reams of witness testimony. Ecuador's Constitutional Court validated Chevron's responsibility for its toxic dumping in a unanimous decision issued in July of this year. But the secret arbitrators have also done the world a favor of sorts. Their ruling vividly illustrates why the public needs to get rid of these anti-democratic, pro-corporate trade courts once and for all. No trade treaty should ever again have a provision for allowing private arbitration for the corporate class.

The double standard of the private trade court concept is amazing, if not patently racist as applied to the current situation in Ecuador. Chevron loses a case in a regular public court where it had accepted jurisdiction and then gets another bite at the apple in a Kafkaesque proceeding where the opposing party -- in this case Indigenous peoples and impoverished farmer communities who have the most important interest in the dispute  -- can't participate.

The morally bankrupt trade process uses indecipherable standards rather than actual laws. Until Chevron came along, no trade arbitration panel in history had tried to "reverse" a ruling by the highest court of a sovereign nation involving a litigation between private parties. To do so is an open assault on Ecuador's sovereignty and its independent judiciary and is illegal as a matter of international law, according to dozens of scholars. For this reason and others, we believe the latest trade court ruling is unenforceable and Chevron will look foolish if it tries to use it to block the ongoing judgment enforcement actions to seize company assets in Canada. (Canada's Supreme Court already has backed that effort of the rainforest communities in a unanimous opinion.)

Speaking of double standards, exceptions to the normal rules of justice apparently must be made when Indigenous groups turn the tables on a powerful oil company. Commercial companies get a free pass to the secret arbitration when they can't win in public courts by the normal rules of evidence. But not real human rights victims. According to the arbitrators, these dangerous Amazonian peoples who apparently never merited even a seat in the hotel courtroom must be stopped cold in what seems like a modern-day version of the Indian Removal Act passed in 1830 by the U.S. Congress. While we believe this secret trade court cannot stop the enforcement of the Ecuador judgment, it is still a disgusting example of the state of our world in the age of Trump and the Koch Brothers.

We remember that day way back in 2009 when Chevron General Counsel Charles James initiated the secret arbitration as he was about to lose the pollution judgment in the company's preferred forum of Ecuador, where it had insisted the trial be held. It made the request under the supposed authority of the U.S.-Ecuador bilateral investment treaty. This treaty came into effect in 1997 even though Chevron already had fled the country in 1992.

But like the NAFTA treaty, this bilateral trade treaty allowed "investors" to sue host governments for any "complaint" they might conjure up. In this case, Chevron's "investment" was not drilling for oil and then dumping its toxic waste; it was the very fact of its lawsuit brought after the treaty came into effect. Could anything be more unfair? Would you believe us if we told that the Ecuador government official who sold out his country to corporate interests by signing the treaty (Benjamin Ortiz) has served as Chevron's spokesman in Ecuador on the environmental litigation for several years? That's how Ortiz has enriched himself since he left his government post.

Ecuador under a prior government opposed the entire arbitral process as illegitimate. But the three arbitrators claim they can determine their own jurisdiction with millions of fees waiting in the wings. Guess how they ruled? They granted themselves jurisdiction in yet another example of a conflict-ridden process. Nothing about this deserves any respect from any real court. And Ecuador's President, Lenin Moreno, should strongly defend his nation's citizens in light of this vicious and illegal Chevron assault clothed as an arbitral ruling.

Ecuadorian community leader Carmen Cartuche, who helped bring the lawsuit against Chevron, appropriately summed up the secret court decision as follows:
The decision by three male arbitrators who claim they have a right to "judge" Amazonian Indigenous peoples and impoverished farmers secretly from the comfort of luxurious hotel conference rooms in the United States and Europe is outrageous. This decision is an attempt by the global corporate establishment to use unfair trade agreements to block legitimate social movements. This decision is legally irrelevant and will be ignored as the travesty of justice that it is. It will not block our litigation to hold Chevron accountable in Canada so that just compensation can be paid to the thousands of people who died of cancer or otherwise been harmed by the slow genocide the company is imposing on our country.