Democracy Now | 20 Dec 2013
Indigenous groups win right to seize Chevron’s Canadian sssets over $18 billion in Amazon pollution
A court in Canada has ruled Ecuadorean farmers and fishermen can try to seize the assets of oil giant Chevron based on a 2011 decision in an Ecuadorean court found it liable for nearly three decades of soil and water pollution near oil wells, and said it had ruined the health and livelihoods of people living in nearby areas of the Amazon rainforest. Since then, the victims have been trying to collect some $18 billion in environmental damages. But Chevron has filed its own lawsuit that argues the verdict was won through fabrication of evidence and bribery. We speak with Paul Barrett of Bloomberg Businessweek about how oil corporations from Chevron to BP are fighting lawsuits brought against them by attacking the lawyers handling the cases.
JUAN GONZÁLEZ: We turn now to major developments in the landmark lawsuit filed by a group of Ecuadorean farmers and fishermen against Chevron, the world’s third-largest oil company. In 2011, an Ecuadorean court found Chevron liable for nearly three decades of soil and water pollution near oil wells, and said it had ruined the health and livelihoods of people living in nearby areas of the Amazon rainforest. Since then, the victims have been trying to collect some $18 billion in environmental damages.
AMY GOODMAN: But Chevron has vowed never to comply with the judgment. In a case now before a federal court in New York, Chevron argues the main American lawyer in the case, Steve Donziger, won the verdict after he engaged in judicial coercion, fabrication of evidence, and bribery. The court is expected to rule in the coming months. Han Shan, working with the victims, spoke as Ecuadorean villagers and their supporters rallied across from the courthouse in New York in October.
HAN SHAN: Nearly every single person who’s been named as a defendant in Chevron’s retaliatory RICO suit has loved ones, has family members who have died, who have contracted cancer, who have suffered from birth defects and other oil-related illness due to Chevron’s contamination. This lawsuit essentially rubs salt in their wounds.
JUAN GONZÁLEZ: Well, as victims of Chevron fight this case in the United States, they’ve also tried to move forward on collecting damages from the company in Canada. Now the courts there have given the green light for the rainforest residents to attempt to seize Chevron’s Canadian assets.
AMY GOODMAN: This week, a panel of judges noted a Chevron spokesman had previously said, quote, "We’re going to fight this until hell freezes over. And then we’ll fight it out on the ice." In response, the judges wrote, quote, "After all these years, the Ecuadorean plaintiffs deserve to have recognition and enforcement of the Ecuadorean judgment heard on the merits in an appropriate jurisdiction. At this juncture, Ontario is that jurisdiction."
Well, for more, we go to Paul Barrett, assistant managing editor and senior writer at Bloomberg Businessweek. He’s been following all this closely, and his book about the Chevron oil pollution case in Ecuador is due out next year.
Welcome back to Democracy Now!, Paul. Talk about the significance of this decision.
PAUL BARRETT: Thanks. The importance of the decision in Canada is that for the first time the Ecuadorean plaintiffs will be able to go before the judiciary of a third country—not Ecuador, not the United States—and say, "We have a legitimate judgment in Ecuador, multiple billions of dollars, and we believe it should be enforced. And we want you, the judiciary of Canada, to respect the judiciary of Ecuador and allow us to literally seize the operations of Chevron in this country."
AMY GOODMAN: What assets could be seized?
PAUL BARRETT: Well, you’re talking about refineries, Chevron’s ownership in operations, for example, in western Canada in the tar sands area, and bank accounts and any assets that could then be sold off and offset against this multibillion-dollar verdict in Ecuador.
JUAN GONZÁLEZ: Now, the verdict in Ecuador has gone up the entire chain of the court system in that country, right?
PAUL BARRETT: True.
JUAN GONZÁLEZ: What is, in essence, the main claims of Chevron about that verdict, in particular?
PAUL BARRETT: Right. Well, that’s, of course, Juan, the other side of the story here, because Chevron says that while there may be victims of oil pollution in Ecuador—and, in fact, if you go down there and have your eyes open, you can see there is a tremendous problem of contamination—Chevron says, "Those are not our problem. This is not something that can be laid at our doorstep." And, in fact, the 2011 judgment against Chevron, the company says, was the product of corruption, that you had outside American lawyers cooperating with Ecuadorean lawyers and corrupt Ecuadorean judges to put together what amounts to a sham. And that’s where we have the conflict. And that’s the argument you’re going to hear in the Canadian courts, because while the Canadians have said, "We will hear this argument," they have not said, "We’re going to rule for the Ecuadoreans." They have said, "We’re going to give you an opportunity to make your argument." And Chevron’s argument on the other side is this is all a sham.
AMY GOODMAN: Paul Barrett, quickly give us the history of Chevron—
PAUL BARRETT: Sure.
AMY GOODMAN: —in Ecuador, because it didn’t start as Chevron.
PAUL BARRETT: Absolutely not. The history really begins with Texaco in the 1960s in Ecuador, invited into the country by the then-military government of Ecuador to exploit the oil reserves in the rainforest east of the Andes. And Texaco was there for 25-odd years. Texaco did what it was asked to do. This was not some type of by dark of night American oil company comes in and takes all the profits out; this was done in close cooperation with the Ecuadorean government.
The big problem was that Texaco left a big mess on the ground—waste oil pools, pollution. They sprayed waste oil on the roads to keep dust down. And, you know, it looks like, if you’ve been down there, what you might imagine the Gulf Coast of the United States looked like in the 1920s, except with rural Ecuadorean poverty hard up against the oil operations.
2001, Chevron takes over Texaco and inherits its legal problems, its liabilities. A lawsuit has been filed in 1993 on behalf of the residents, here in New York. That lawsuit was actually dismissed by the American courts on the assumption that the proper place for it to be played out was in Ecuador. The lawsuit was restarted in Ecuador in 2003, and the result of that lawsuit, some eight years later, was this huge victory for the Ecuadorean plaintiffs.
AMY GOODMAN: And it was to the tune of?
PAUL BARRETT: Well, initially, it was $18 billion-plus. In upholding the verdict, as Juan correctly said, the top court in Ecuador actually said, "The liability is legitimate, Chevron must pay," but they cut the verdict in half. So at this point, the liability at this moment is $9.5 billion.
JUAN GONZÁLEZ: And in terms of the likelihood of—the court case that Chevron is pursuing here in the United States—
PAUL BARRETT: Yes.
JUAN GONZÁLEZ: —could you talk about that and the likelihood of success in that?
PAUL BARRETT: Absolutely. This is—this is Chevron’s counterpunch. Chevron—the plaintiffs landed a big blow into Ecuador, and Chevron said, "We lost in Ecuador. We’re not going to pay, but we lost. We’re going to take you back to the United States, where all of this started, and we’re going to prove that the people on the other side are akin to gangsters." They used the U.S. anti-racketeering law enacted in 1970 to deal with the Mafia.
JUAN GONZÁLEZ: So it’s a RICO suit.
PAUL BARRETT: It’s a RICO suit, exactly. "And we are going to show that what you called a lawsuit was actually a conspiracy, a protection racket, a shakedown of the company." And they put on evidence for six weeks. I was actually there almost every day of this trial, as were all kinds of much more famous people, like Sting and his wife Trudie Styler and others. And this is now with a federal judge here in New York, and we are eagerly awaiting his ruling, which could come as early as January. And he’s going to say either Chevron is correct or Chevron is incorrect. And I think all the smart money is on his finding for Chevron. And I think Chevron is going to walk away from this trial with a judgment from a U.S. court that says that Steve Donziger and his clients were actually, basically, akin to criminals, who shook down this big American company.
AMY GOODMAN: You’ve also been following BP.
PAUL BARRETT: Yes.
AMY GOODMAN: And I was wondering if you can talk about what’s happening in the legal cases with BP and what BP is doing—
PAUL BARRETT: Right.
AMY GOODMAN: —because it seems to be following a certain pattern.
PAUL BARRETT: There is a pattern here throughout the oil industry, but it even goes broader than that. It’s throughout corporate America. A strategy is emerging on the part of major corporations whereby when they are hit with a big liability in court, they turn not so much to the merits of the case, but to the lawyers who have brought the case, and they try to ruin the lawyer. Now, the companies would say, "We’re doing this because the lawyers are all thieves and crooks." The plaintiffs’ lawyers would say otherwise.
But in the BP case, just this last week, BP has filed a massive fraud case against a plaintiffs’ lawyer in Texas named Mikal Watts, who is one of the most powerful and influential mass tort lawyers in this country, a big supporter, as it happens, of President Obama, one of his main financiers. And Watts had filed tens of thousands of claims against BP in connection with the 2010 Gulf of Mexico oil spill. That’s all being fought out in the courts. But meanwhile, BP has said, "Watts is a fraud, and more than half of his 40,000 claims, those people don’t even exist."
JUAN GONZÁLEZ: Well, they seem to have, at least on the face of it, some pretty good evidence that he submitted Social Security numbers for people that—whose names were not the same names as the Social Security numbers that they represented and that many of them were dead and—
PAUL BARRETT: Well, as with the Chevron case, wherever your loyalties are on the underlying merits—oil on the ground, oil in the water—as with the Chevron case, the companies have come up with very troubling evidence of plaintiffs’ lawyers cutting corners and basically using an ends-justify-the-means approach to trying to get—to hold the oil companies accountable. I mean, I think we would all agree that not—that not all ends justify any means. If you’re in a court of law, the evidence has to be real evidence. The plaintiffs have to be real people.
JUAN GONZÁLEZ: I wanted to go back to the lawyer in the case in Ecuador.
PAUL BARRETT: Yeah.
JUAN GONZÁLEZ: There had been some—also some problems between him and some of his clients, as well, since then?
PAUL BARRETT: Oh, absolutely. This is a man who, as he’s proceeded through this case, has had fallings out with most of his allies and some of his clients. So there are other groups of Ecuadoreans who have claimed that he doesn’t represent their interests, and they’ve actually filed their own lawsuit against him. That’s pending here in New York. And meanwhile, some of his scientific advisers have disavowed their own work on his behalf. So this is a very troubling and confused situation.
AMY GOODMAN: I wanted to stay with Ecuador, the Chevron case. I recently interviewed the Ecuadorean Foreign Minister Ricardo Patiño when he was here in New York, and asked him about the pollution that ChevronTexaco left behind.
RICARDO PATIÑO: [translated] President Rafael Correa, a few days ago, went to an area where ChevronTexaco was operating, and the president put his hands in the toxic waste pits that ChevronTexaco left, and raised his oil-stained hand up to show the world how ChevronTexaco has destroyed the Ecuadorean Amazon and did not use the cleanup methodologies that were available at the time to mitigate or even avoid environmental damages.
AMY GOODMAN: You argue that ChevronTexaco has not cleaned up the Amazon that it polluted. Why hasn’t the Ecuadorean government done more to clean it up over these decades that ChevronTexaco is gone? Wasn’t Texaco a subcontractor for the Ecuadorean—for Ecuador, Petroecuador?
RICARDO PATIÑO: [translated] Unfortunately, the governments prior to the current government did not take measures to clean up Texaco’s mess. At one point, officials of Ecopetrol issued a document saying that Texaco had in fact cleaned up, but we know that this isn’t the case. That is why Ecuador has now begun to clean up the damage. But now we have to put that on hold, because, otherwise, the evidence of their pollution will no longer exist. So, the proof could disappear if we continue with the cleanup.
AMY GOODMAN: That’s Ecuadorean Foreign Minister Ricardo Patiño. If you could respond to that? And also, you had an exclusive interview with the Ecuadorean ambassador to the United States.
PAUL BARRETT: Yes. Well, I mean, you asked the Ecuadorean official, you know, one of the most important questions, which is, what’s the priority here? Is the priority to actually clean up the oil, which, after all, was being drilled and produced on behalf of your country, not on behalf of another country? The vast majority of the revenue generated from all of that activity by Texaco stayed in Ecuador. And some of it was put to very good use—building roads, electrifying small towns and so forth.
And I don’t think the government of Ecuador really has a good answer, and I think you saw that demonstrated there, where it’s, "Yes, someone else should have done it earlier, and now we’ve started to do it, but now we’ve stopped doing it because of evidence." Well, look, if you’ve got poor people who are living up to their ankles in oil, you clean up the oil, and you figure out the legalities and the liabilities later. You don’t put it all on hold.
And I think, in an interesting way, the ambassador to the United States took another small step forward, and she said, in a more positive way—she actually said, "I think we should be cleaning up the oil, and the lawyers are telling us not to. And we’ve got to figure out a political compromise. We’ve got to figure out a way to just get this done." And I thought that was actually a heartening statement by her.
AMY GOODMAN: Paul Barrett, I want to thank you for being here with us, and we’re going to link to your articles, assistant managing editor and senior writer at Bloomberg Businessweek. His latest book is called Glock: The Rise of America’s Gun. His book about the Chevron oil pollution case in Ecuador is due out next year. This is Democracy Now! We’ll be back in a minute.