Ecuador Court Rejects Chevron Arbitration Ruling, Reopening $18 Billion Fine For Amazon Pollution

Since 1993, Ecuadoran citizens have been trying to hold Chevron responsible for the 18 billion gallons of toxic waste that has devastated parts of the Ecuadoran Amazon and caused illness for countless people. The legal battle has been drawn out for nearly 20 years, but the latest news is potentially a good sign for the people of Ecuador who've been fighting this uphill battle.

A court in Ecuador has rejected an arbitration ruling that would have frozen the $18 billion award that Chevron has been ordered to pay the plaintiffs.

Court: It's A Human Rights Issue

Reuters explains:
A year after the landmark decision against Chevron, a panel working for The Hague's Permanent Court of Arbitration told Ecuador last week to take all necessary measures to suspend enforcement of the award at home and abroad…

"A simple arbitral award ... cannot force judges to infringe the human rights of our citizens," said the court, adding that abiding by the panel's order would be unconstitutional and would lead to the breach of international human rights conventions.

But the court did accept an appeal by Chevron, referring it to the Supreme Court—which could mean the case, which has already been dragged out for nearly two decades, could continue for years to come.

An extensive story in the New Yorker last month explains more about the Ecuadorans' ongoing struggle in court and at home:

When the company ceased operations in Ecuador, in 1992, it allegedly left behind hundreds of open pits full of malignant black sludge. The harm done by Texaco, the plaintiffs contended, could be measured in cancer deaths, miscarriages, birth defects, dead livestock, sick fish, and the near-extinction of several tribes; Texaco’s legacy in the region amounted to a “rain-forest Chernobyl.”

...In recent years, Chevron has invested millions of dollars in remolding its public image. Elegant television commercials, narrated by the actor Campbell Scott, emphasize that the company aims to “practice and espouse conservation.” ... Chevron’s manager for global issues, Silvia Garrigo, said that the company makes “social investments” wherever it operates, noting, “We’re in countries for the long haul.”

In the courtroom, however, Chevron has been far less conciliatory. Not long ago, after the company successfully defeated a lawsuit seeking to hold it responsible for the shooting deaths of protesters on an offshore oil platform in Nigeria, it tried to compel the impoverished Nigerian plaintiffs, some of whom were widows or children, to reimburse its attorneys’ fees.

For more background, read the New Yorker story in full; there's also an interesting piece on HuffPost about some of the legal specifics and the U.S. law firms involved. (But it's the lawyers in Ecuador who have impressed the world.)

An organization called You Break It You Fix It has been campaigning to educate the American public about Chevron's history in Ecuador. The group says it was formed to encourage conservative-minded Americans to speak out on Chevron's un-remediated oil spills in Ecuador, has compared the mess there to the BP spill in the Gulf:

"If BP is responsible for cleaning up its spill in the Gulf, then Chevron is responsible for cleaning up its spills in Ecuador, there is no way around it," said You Break It You Fix It spokesman Joshua Rizack…

BP, which You Break It You Fix It lauds for its extensive clean-up efforts in the Gulf Coast region, has created a $20 billion fund to remediate damage caused by its spill. Chevron, in contrast, has walked away from the 16-18 billion gallons of oil it left contaminating Ecuadorian lands and waters.

"Why is it right for the British company BP to be cleaning its spill in the Gulf Coast, while Chevronignores its far larger spill in Ecuador?," Mr. Rizack asked.

"Secret Investor Arbitration"

The arbitration itself has also been called into question, with accusations of "acute ethical problems:"

Horacio Grigera Noan, Chevron's arbitrator in a secret investor proceeding related to an $18 billion environmental judgment in Ecuador, has what amounts to a 'business relationship' with the oil giant's lead American lawyer and therefore should be disqualified and sanctioned under the ethical rules governing international arbitrators, said representatives of the rainforest communities in a letter to Ecuador's Attorney General...

Chevron stripped its assets from Ecuador and is now trying to use the secret investor arbitration to try to block enforcement of the Ecuador judgment. The three arbitrators, all private sector lawyers, have been harshly criticized by international law jurists for acting outside the scope of their authority, for violating international law protecting human rights and the sovereignty of independent judicial systems, and for not disclosing their conflicts of interest.

Reuters explains more background about the case:

California-based Chevron inherited the case with its 2001 takeover of Texaco, which had left Ecuador nine years earlier.

The plaintiffs accused Texaco of causing illnesses in the local population by dumping drilling waste in unlined pits. They launched their case in 1993 in New York, before it was moved to the court in the town of Lago Agrio nearly a decade later.

Chevron denies the accusations. It says Texaco did not pollute the jungle, and that it properly cleaned up all the pits for which it was responsible. The case is being watched closely by the oil industry for precedents that could influence other claims by states accusing multinational companies of pollution.

Tags: Amazonia | Ecuador | Oil | Oil Spill | Pollution