PRI’s The World | December 18, 2013
A Canadian court is allowing Ecuadorians to pursue their long-running pollution suit against Chevron
Producer Andrea Crossan
It’s a legal battle spanning decades and countries.
The residents of Ecuador’s Lago Agrio region have been pursuing a case against Chevron oil company.
This week, a judge ruled that the Ecuadorians can pursue their case against Chevron in Canada. The residents are trying to collect damages that were awarded to them by a court in Ecuador.
They had originally sued Chevron after the company was found guilty — in Ecuador — of contaminating a large area of the Amazon jungle. Chevron was ordered to pay $18 billion in damages.
The company refused, saying the ruling in Ecuador was influenced by fraud and bribery. But now a Canadian judge has ruled in favor of the plaintiffs, giving them a green light to seek a reduced payment of $9.5 billion.
"Before the judgment was earned against Chevron in Ecuador, Chevron and Texaco removed all their assets out of Ecuador, so there are no assets of Chevron’s in Ecuador," said Christopher Gowen, a member of the legal team working with the Ecuadorians. "So to collect on this judgment for the people of Ecuador, to have their water cleaned, they have to go to other countries where Chevron has billions and billions of dollars in assets. And Canada is one of those countries that have assets."
The Court of Appeal for Ontario said the 47 villagers have the right to pursue Chevron’s Canada assets. The decision reverses a previous ruling that stated the company did not have any assets in Canada.
A court in Ecuador in 2011 found the company liable for about three decades of soil and water pollution near oil wells that ruined the health and livelihoods of the Amazon rainforest dwellers.
"They built these giant pits in Ecuador and dumped them and those pits leaked into the Amazon and the water is completely contaminated," said Gowen. "The judge wrote that Chevron’s spokesperson has said that they would fight this case until hell freezes over, and then they would fight it on the ice. The judge said that Ontario is where the ice is and you’re going to have to fight it in Ontario."
Chevron contends that Texaco, which it acquired, had signed an agreement with Ecuador in 1998 and paid $40 million to clean the pollution, and the company was then absolved of any future liability.
Villagers argue that the agreement does not exempt the company from third-party claims.
"It’s certainly discouraging when you see how much money Chevron has and the amount of delay they can achieve with all the money they have," said Gowen. "But maybe by the time my 3-year-old has graduated from law school, she can enforce this judgment. It’s going to take time."
In a statement, Chevron Corp. said it is considering its next steps, including an appeal to the Supreme Court of Canada.
Marco Werman: It’s like a game of Whack-A-Mole. One lawsuit pops up after another goes down. That’s a shorthand description of a two-decade legal battle between the residence of Ecuador’s Lago Agrio region and the Chevron oil company. Here’s a more detailed look at the story. This week a judge ruled that the Ecuadorians can pursue their case against Chevron in Canada. The residents are trying to collect damages that were awarded to them by a court in Ecuador. They had originally sued Chevron after the company was found guilty, again in Ecuador, of contaminating a large area of the Amazon jungle. Chevron was ordered to pay 18 billion dollars in damages. The company refused saying the ruling in Ecuador was influenced by fraud and bribery, but now a Canadian judge has ruled in favor of the plaintiffs, giving them a green light to seek a reduced payment of 9.5 billion dollars. Christopher Gowen is adjunct law professor at the American University in Washington. He’s also part of the legal team representing the Ecuadorians.
Christopher Gowen: Before the judgement was earned against Chevron in Ecuador, Chevron and Texaco removed all their assets out of Ecuador, so there’s no assets of Chevron’s in Ecuador, so to collect on this judgement for the people of Ecuador to have their water cleaned, they have to go to other countries where Chevron has billions and billions of dollars of assets, and Canada’s one of those countries where they have assets.
Werman: And why isn’t the case in a US court?
Gowen: Chevron brought a RICO lawsuit in the US courts to prevent any collection in the United States and that case is still pending -
Werman: RICO is racketeering and corruption charges.
Gowen: That’s correct. With that case pending, there’s not going to be any collection in the United States.
Werman: It’s a really complicated case, Christopher. Take us back to the original lawsuit. What happened in Ecuador?
Gowen: Unlike the situations with BP, the Deepwater Horizon and the Exxon Valdez - both of those situations were accidents. They were negligent accidents and those companies had accidents and they’ve paid. They’ve paid in the cleanup in the Alaska waters and in the Gulf of Mexico, which is ongoing, and a lot of cleanup has happened. Unfortunately, in Ecuador, this happened before both of those incidents and it was deliberate. There’s international standards of how to deal with oil and crude, and Chevron violated them - it was Texaco at that point. They built these giant pits in Ecuador and dump them in there and those pits leaked into the Amazon and the water has become completely contaminated -
Werman: Still to this day?
Gowen: It’s still very much contaminated and still very much in need of cleanup, yes.
Werman: As you said, Chevron has been unwilling to make good on the settlement. What weight can this California-based company bring to a courtroom in Canada?
Gowen: First of all, it’s not a settlement, it’s a judgement. They certainly did not settle this case. They went to trial and lost, and lost on the subsequent appeals. In Canada, what they were able to do was get a judge to say whether or not the Ecuadorians should be able to collect money in Canada through the full faith and credit of a judgement in Ecuador. They were able to postpone and stay those proceedings, which is somewhat absurd, but fortunately this week, a Canadian judge in a Canadian appellate court said it’s not going to be stayed and in fact, in a nice part of the opinion, the judge wrote that Chevron’s spokesperson had said that "they would fight this case until Hell freezes over and then they would fight it on the ice," and the judge said, "Ontario is where the ice is and you’re going to have to fight it in Ontario." Now, eventually, there’s going to be a hearing in Canada over whether or not the Ecuadorians can collect this judgement in Canada.
Werman: It would be a reduced payment of 9.5 billion dollars. Do you think the Ecuadorians are ever going to see any of that?
Gowen: I sure hope so. I wouldn’t be working on this case - I believe that justice should eventually prevail, but it’s certainly discouraging when you see how much money Chevron has and how much the amount of delay they’re able to achieve with all of the money they have. But maybe by the time my 3 year old has graduated law school, she can enforce this judgement. It’s going to take time, unfortunately. It’s taken way too much time. You or I would never be able to avoid a judgement against us for the amount of time Chevron has, but unfortunately Chevron has been able to do that.
Werman: Chevron has said it’s evaluating its next steps. What’s the incentive for Chevron to pay up?
Gowen: They’re spending millions and millions of dollars a day on lawyers. They have a judgement, they’ve lost the case. Eventually, it’s going to catch up to them. People are going to say, "Well, if I’m at a corner and I have a choice between Exxon and Chevron, I’m going to go with Exxon and not Chevron." This is sort of a bad business model on their part to act like they’re above the law, and so that’s our hope.
Werman: Christopher Gowen, an adjunct law professor at the American University in Washington. He’s also a part of the legal team representing the Ecuadorians in their case against Chevron. Thank you.
Gowen: Thank you.