Thursday, March 9, 2017

Why Canadian Courts Care about Justice in Ecuador

Reposted from Huffington Post.

Marta Isabel Arrobo, 49, recalls the numerous health problems she and her family have encountered living in close proximity to several pits of the Sur-Oeste Station. Photo credit: Amazon Watch
Marta Isabel Arrobo, 49, recalls the numerous health problems she and her family have encountered living in close proximity to several pits of the Sur-Oeste Station. Photo credit: Amazon Watch

Jay Cameron asks some important questions in his deeply flawed pro-Chevron opinion piece about one of the biggest environmental crimes in history. We think he deserves some answers, but despite repeated requests the Financial Post declined to even respond to our requests to publish this response. Fortunately, here we can provide the answers to Cameron's questions, but some basic facts about the case that Cameron gets wrong must be corrected first.

First, the title of the piece itself is false, since U.S. courts didn't "originally rule" in the Chevron case. In 2011, after almost two decades of legal wrangling and based on thousands of scientific samples – most of which were provided by Chevron itself – an Ecuadorian court ruled Chevron liable for the amount of US $18 billion to pay for environmental cleanup, health care costs and punitive damages for the crimeadmitted to by Chevron – of deliberately dumping over 18 billion gallons of toxic oil drilling water into the once pristine Amazon rainforest, home to 30,000 inhabitants. This trial took place in the venue of Chevron's choice: Ecuador. The "original ruling" on that decision was the Ecuadorian appeals court and later its Supreme Court, which eliminated the punitive damages on constitutional grounds and halved the judgement to US $9.5 billion. Those courts dismissed Chevron's fraud claims after considering the "evidence." Furthermore, the civil suit brought against Chevron was perfectly legal in Ecuador since the "release" given by a prior Ecuadorian administration specifically did not protect Chevron from civil claims, a fact that Chevron itself did not dispute when it argued that Ecuador was the proper venue for this case.

Mr. Cameron refers to "court-tested proof" of fraud in Chevron's retaliatory U.S. suit filed after the Ecuadorian verdict. That is false. In fact, it might interest Mr. Cameron to know that not a single piece of evidence about the actual contamination was even permitted in that trial. Cameron also omits the fact that Chevron's fraud claims were based almost wholly on the testimony of a corrupt ex-judge who later admitted, during another Chevron forum-shopping legal case, that he lied about the alleged bribe. Worse yet, the actual "proof" – the forensic evidence about the authorship of the original Ecuadorian judgment – was not considered by the US court, despite the fact that it validates the Ecuadorian plaintiffs' claims that the judgement was not ghost-written. The Canadian courts, however, were made aware of these facts. They also know about the leaked Chevron videos showing their own technicians finding toxic contamination at former well site Chevron swore to have completely remediated (more evidence that Kaplan refused to allow in his court despite Chevron's lawyers having authenticated them).

Ultimately, the courts in Canada have seen through Chevron's attempt to abuse the legal system with its might and fabricate false stories to escape justice for a crime that still festers in 1,000 unlined open-air pits like scars across the Amazon. Those same courts also realize that Ecuadorians are still dying today from contamination from those pits. They will offer Chevron a chance to explain itself in a trial and Chevron is perfectly welcome to put its key witness on the stand. But will they risk it, since he has already admitted to having lied for them in exchange for a multi-million dollar payoff?

To answer Mr. Cameron's question, the reason the Canadian courts considered the valid claims of the 30,000 Ecuadorian victims of one of the worst corporate crimes in history is because they realize that facts and justice do, in fact, matter.

Tuesday, January 31, 2017

Part of Canadian Judge's Decision a Slap in the Face To Human Rights Victims Worldwide

After being forced by Chevron to litigate for an astonishing 24 years, Ecuadorian indigenous villagers fighting for their own survival are now set to seize the company's assets in Canada to pay for a court-mandated clean-up of what is probably the world's worst oil-related environmental disaster.

But Canadian trial judge Glenn Hainey, either through ignorance or by making an old-fashioned mistake of corporate law, has just put up a potential roadblock in this historic campaign. In so doing, he inadvertently has damaged the cause of human rights and helped smooth the way for corporate polluters like Chevron to obtain impunity for their environmental crimes.

In a decision last week, Hainey allowed the Ecuadorian villagers to try to seize Chevron's assets in Canada to force the company to pay for its $12 billion environmental judgment in Ecuador. That's a huge victory for human rights. But oddly, Hainey also ruled that the assets in the oil giant's wholly-owned subsidiary in Canada were off-limits to collection.

Given that most of Chevron's estimated $25 billion worth of assets in Canada are held in the company's subsidiary (called Chevron Canada), that could be a big problem for collection if allowed to stand. We believe this part of Hainey's decision will be swiftly reversed, as was a previous trial judge's decision in favor of Chevron on similar grounds.

As background, Chevron has admitted to abandoning 1,000 toxic waste pits on indigenous ancestral lands in the Ecuadorian rainforest. Five indigenous groups have been decimated and are fighting for survival. The company also confessed that it deliberately dumped billions of gallons of toxic oil waste (known as "production waters") into streams and rivers of Ecuador, causing an outbreak of cancer in the affected area as confirmed by several independent health evaluations.

Hainey's decision has dramatic and even terrifying implications for the Ecuadorian villagers and all human rights victims. The thinking behind it explains why all too often the fossil fuel industry feels it can run roughshod over the planet while externalizing the costs of pollution to taxpayers without ever being held accountable in a court of law.

For context, Chevron has 1,500 wholly-owned subsidiaries around the world. Most of these subsidiaries, like many of those the company has set up in Canada, have no operations but are used for tax avoidance purposes and to avoid liability. Hainey ruled that all Chevron and other corporate polluters have to to do to avoid liability is to stuff their high-value assets (like oil fields, refineries, and pipelines) into a paper subsidiary and leave it at that.

Under Hainey's stunning theory, communities like those in Ecuador that win court judgments over environmental pollution are left out in the cold even though they adhere to the rule of law and fight for decades to win court judgments that get upheld on appeal.

What's really crazy about the logic behind the ruling -- and extremely unfair -- is that Chevron gets to keep all the profits from its subsidiaries, but the subs themselves are not allowed to be used to pay the company's debts. Chevron Canada pays about $3 billion annually in dividends to its sole shareholder Chevron yet is immune from any effort to collect a debt against its patron.

American law professor Aaron Marr Page recently published a brilliant deconstruction of the Hainey decision in the Huffington Post that should be a must-read for those who want to understand how such an unjust result can emerge from an apparently well-meaning judge.

After pointing out that Chevron has engaged in many years of forum shopping, judicial sabotage, and falsification of evidence to evade paying for its pollution in Ecuador, Professor Page writes:
Judge Hainey essentially ruled that a multinational fleeing a valid court judgment that hides its assets in a maze of paper subsidiaries can completely insulate itself from paying its obligations, while losing nothing in terms of profit or control... The decision stands as a dangerous precedent for the many other corporate accountability claims that are currently underway in Canadian and other courts.
Professor Page continues:
[Hainey] says to those claims that even if you prevail at the jurisdiction and the merits/liability stages, even if you sustain your victory on appeal, here is yet another barrier that could prevent you from merely collecting on a successful judgment. The chill this could cast more broadly on efforts to enforce human rights norms is obvious.
Professor Page also underscored that Hainey's fundamental error was that he used the wrong legal analysis of the corporate separateness defense raised by Chevron.

The real issue that Hainey missed is that there is a $12 billion judgment against Chevron based on voluminous record evidence documenting in great detail the company's pollution in Ecuador. The decision was affirmed unanimously by Ecuador's Supreme Court in the country where Chevron accepted jurisdiction. Chevron is a scofflaw debtor and no different than a parent who owes child support and flees to another state to evade paying.

The issue before Hainey was simple: Chevron Canada is a Chevron asset that obviously can be used to seize a debt owed by Chevron under basic legal principles adhered to by all civilized nations and codified in Canada's Execution Act. It's no different than a court ordering the seizure of the car or bank account of a parent to force payment of court-ordered child support.

Instead of adhering to this bedrock principle of law -- creditors have the right to seize a debtor's assets to satisfy a debt --  Hainey took Chevron's bait and went on a radical tangent by engaging in a "pierce the corporate veil" analysis which has no applicability to this enforcement action. He then bailed out Chevron by claiming Chevron Canada is a "separate" company even though it is totally owned and controlled by Chevron and 100% of its revenues flow up to Chevron as dividends.

But even under the incorrect "pierce the corporate veil" analysis, Hainey still got it wrong. In the modern globalized world, it is preposterous to think a company can avoid liability in one country by moving its assets to a paper subsidiary in another that it totally controls and then claim it is a "separate" company.

Hainey never should have succumbed to Chevron's pressure and used the "pierce the corporate veil" analysis. That analysis should apply only when there is a judgment against a subsidiary that has insufficient assets, forcing the creditor to go after the parent. In the Ecuador case, we have the opposite situation. There is a judgment by the villagers against a parent (Chevron) that refuses to pay and is a scofflaw. The subsidiary is simply one asset of the parent that could be seized to satisfy the judgment and force the parent to respect the rule of law.

When one understands Chevron's quarter-century of abuse of the civil justice systems in Ecuador and the United States, Hainey's decision becomes even more bewildering.

One wonders if he was cowed by the 30 or so Chevron lawyers from powerful law firms who showed up in his court during a four-day motions hearing last September. Most of them stared him down while only four or so of the lawyers actually did the argument.

The tab in legal fees to Chevron for what appeared to be a four-day exercise in judicial intimidation was an estimated $500,000. But that's nothing compared to the $2 billion Chevron has paid to hire 60 law firms and 2,000 lawyers to fight the villagers since the inception of the case in 1993.

While the affected villagers make around $500 per year on average tilling contaminated land courtesy of Chevron, Chevron grosses about $250 billion per year and is the third largest corporation in the U.S. Chevron CEO John Watson takes home around $30 million per year -- or 60,000 times as much as each of his victims in the rainforest.

Hainey might remember that Chevron originally fought for ten years to avoid jurisdiction in the United States. The company filed 14 sworn affidavits before U.S. courts praising Ecuador's courts as fair and accepted jurisdiction in Ecuador as a condition of the change of venue. But once the scientific evidence mounted against it in the Ecuador trial, Chevron sold its assets in the country and started to attack the court system it had previously praised.

Hainey's reasoning no doubt will be recognized as extremely disturbing by Canadian appellate courts, which have a long history of being open to the claims of human rights victims. A previous trial judge tried to block the enforcement trial in 2013 only to be unanimously overturned by two Canadian appellate courts, including the country's Supreme Court.

While Hainey closets himself behind mechanical arguments, human rights victims the world over rightly shudder at his reasoning. Courts like those in Ecuador make valiant efforts to advance the rule of law to hold polluters accountable. To be undermined by a trial judge in a faraway land is both demoralizing and a blow to civil society institutions everywhere.

People actually die from pollution as a result of delays produced by incorrect legal decisions.

As said, Canada's Supreme Court already blocked Chevron's earlier attempt to stop the Ecuadorian villagers from launching what in the commercial context would be considered a routine asset seizure action. Canada's appellate courts should order Chevron to defend itself in a speedy enforcement trial that will have zero tolerance for further litigation abuse.

Monday, January 23, 2017

In Canada, Chevron Faces New Nightmare Scenario Over Ecuador Pollution Liability

A Canadian trial judge on Friday issued a ruling allowing indigenous villagers in Ecuador to try to seize critical Chevron assets in the country to pay for the clean-up of the billions of gallons of toxic waste the company dumped into Ecuador's rainforest. The ruling has enormous implications for the rule of law, the corporate accountability movement, and for Chevron shareholders.

After five years of obstructionism by Chevron in Canada, Judge Glenn Hainey of the Ontario Superior Court of Justice finally gave the green light for the rainforest communities to have a trial to target Chevron assets to pay the $12 billion tab needed to remediate their ancestral lands. The affected communities filed their enforcement action in Toronto in 2012 after winning a court battle the previous year in Ecuador that awarded them the damages.

Chevron refused to pay the judgment, selling off its assets in Ecuador and hiding behind narrow technical arguments. Chevron had accepted jurisdiction in Ecuador and later was found to have committed fraud in the trial by falsifying evidence, trying to hide contamination from the court, and engaging in a sham remediation.

Here are some of the important implications from the latest Canada decision:

Chevron has definitively lost its bid to avoid an enforcement trial in Canada. Chevron used every technical defense in the book to avoid the Canada enforcement trial. Even Canada's Supreme Court ruled against Chevron. Now it must face a terrifying day of reckoning over how its key witness, Alberto Guerra, has lied under oath and that his fundamental story about judicial bribery is false.

Chevron's U.S. lawyer Randy Mastro will face enormous risk. American lawyers Randy Mastro and Avi Weitzman of the U.S. law firm Gibson Dunn violated the law by arranging for Guerra to be paid $2 million for his false testimony in a farcical retaliation trial in the U.S.  Mastro and his team coached Guerra for 53 consecutive days before he testified; Guerra later admitted lying on the stand. Gibson Dunn's obstruction of justice will be front and center in the Canada proceeding.

Look for Chevron's executives to try to settle before the trial: Chevron shareholders already are up in arms over management's mishandling of the Ecuador liability. Look for embattled CEO John Watson to order his lawyers to try to settle the case before Guerra is forced to take the stand and the company's entire narrative falls apart.

Chevron's strategy of perpetual delay just got shellacked. Trial judge Hainey tossed out two of the company's main defenses which already had been litigated and rejected by three layers of courts in Ecuador. The company will be kept on a short leash in Canada, undermining its strategy of delaying any judicial procedure that could hold it accountable on the merits.

Chevron is kidding itself if it thinks its Canadian subsidiary is immune from liability. The part of the Hainey decision that immunized Chevron's wholly-owned subsidiary from enforcement runs counter to logic, violates the spirit of a prior decision of the Canada Supreme Court, and is likely to be reversed on appeal.  Ten separate Canadian appellate judges already have reversed a similar ruling when issued by a prior trial judge in 2013.

Karen Hinton, the spokesperson for the villagers, was forceful in her response to the latest development. She called it a "resounding victory for Ecuadorian indigenous groups and farmer communities who have struggled for more than two decades to clean up its toxic waste."

Hinton added:
The court sent Chevron a powerful message that it can no longer ride the legal merry-go-round and re-litigate the same discredited defenses in different courts as part of its strategy of delay...The villagers expect to proceed later this year with their seizure of Chevron's assets to force the company to respect multiple court judgments that found it guilty of dumping billions of gallons of toxic waste into the waterways of Ecuador, causing an outbreak of cancer and other harms afflicting thousands of people. Ultimately, we are confident that Canada's courts will hold Chevron fully accountable for its outrageous and criminal conduct in Ecuador.
Carlos Guaman, an Ecuador community leader and the executive director of the coalition that brought the enforcement action, said he wanted to "thank" Canada's courts "for sending a strong message to Chevron that its outrageous strategy of blocking justice will soon end."

Thursday, January 5, 2017

Chevron's Massive Pollution In Ecuador Frames Death of Legendary Nurse Rosa Moreno

Rosa Moreno, the legendary nurse in Ecuador who spent three decades treating children and others afflicted with cancer in the area of Chevron's oil pollution in the Amazon rainforest, has now herself succumbed to cancer, the Amazon Defense Coalition reported on Wednesday. One might reasonably question whether Chevron's refusal to clean up its pollution in Ecuador played a role in this tragic event.

Moreno, a splendid human being well-known to those of us who write The Chevron Pit, died this week in the Amazon village of San Carlos after a two-year battle with the illness. Moreno, 55, had hosted a long line of celebrities -- including Brad Pitt and the actor Trudie Styler -- in her tiny health clinic in the town of San Carlos as she tried to sensitize the world to the plight of people who won a historic $9.5 billion judgment against Chevron in 2013.
Rosa Moreno in front of the San Carlos clinic
San Carlos is akin to Love Canal in the United States, only worse. For decades the village has been home to dozens of toxic waste Superfund sites that include open-air waste pits filled with oil sludge that that were built by Texaco in the 1970s and abandoned. Texaco installed pipes to run the toxic waste into nearby streams and rivers relied on by locals for drinking water. The pits were documented in a report on 60 Minutes and in the documentary Crude by acclaimed filmmaker Joe Berlinger.

Chevron bought Texaco in 2001 and inherited the liability from the disaster. Over the years, the company has used 60 law firms and roughly 2,000 lawyers to evade paying for the court-mandated clean-up.

Aside from the pits, one of which is pictured below, Texaco located a large oil separation station in the middle of town. The station systematically discharged billions of gallons of benzene-laced production waters into rivers and streams, creating a ticking time bomb that has killed or threatens to kill thousands of people. Chevron never even extended the courtesy of putting up fences around the hazardous waste sites to keep animals out and to warn people away.

Oil pit built by Texaco in the 1970s and abandoned by Chevron near San Carlos, where Rosa Moreno lived.

Moreno was a bright light in the middle of what might be the most contaminated town on earth. From a press release from the Amazon Defense Coalition, the grass roots organization that brought the historic lawsuit against Chevron:
Moreno was mostly known as a person who tried against all odds to stave off the impending health disaster with her compassionate care of young children. Her clinic was a short walk from her house, and she was often found there seven days per week. Moreno meticulously kept a handwritten log of people in the clinic who had died, often without receiving proper treatment given the paucity of doctors in the area. The list in recent years had grown to dozens of names -- many young children -- even though only 2,000 people lived in the town. Each name on the list had a date of birth and date of death scrawled in Moreno's distinctive script.
Steven Donziger, the longtime U.S. legal advisor to the affected Ecuadorian communities who has been targeted by Chevron for his work to hold the company accountable, laid some of the blame for Moreno's death at the feet of the company:
I firmly believe Rosa and many others like her in San Carlos would not have died had Chevron mets its legal and moral responsibilities to the people of Ecuador. Rosa's death, like those of many others in Ecuador, was entirely preventable. Chevron should provide compensation to her family and medicine and diagnostic equipment for the San Carlos clinic, in addition to remediating the abysmal environmental conditions that continue to put innocent lives at risk.
Moreno's legacy will live on in many ways.

Many of the celebrities who visited Moreno in her clinic took action to alleviate the human suffering and to protest Chevron's outrageous behavior. They include Styler, who has written articles to call attention to Chevron's human rights abuses and who started a project with UNICEF that has delivered clean water to numerous villages in the affected area.

Rosa Moreno and colleague Mariana Jimenez in San Francisco
Rep. James P. McGovern (D-MA), the only U.S. Congressman to visit the devastated area, toured the health clinic in 2008 and then vividly described the horrific conditions created by Chevron in a moving letter to President-elect Obama. Bianca Jagger went to Chevron's shareholder meeting and gave the company's CEO hell in a blistering speech. Berlinger's film included Moreno and scenes from her clinic.

Karen Hinton, the former press secretary for New York City Mayor Bill DeBlasio, has hounded Chevron for its irresponsible behavior in Ecuador in a series of blogs published on The Huffington Post. And Donziger -- a classmate of Barack Obama from Harvard Law School -- has been a thorn in Chevron's side for more than two decades, as his own writings illustrate.

If you have any doubt about the cause of Moreno's death, look no further than the numerous independent studies that demonstrate Chevron's toxic legacy has produced skyrocketing cancer rates in the area where she lived. One study from a former Rand Corporation analyst predicts 9,000 deaths in the affected area in the coming years if Chevron refuses to remediate the disaster.

For more on Texaco and Chevron's dastardly behavior in Ecuador, see this video.

Although Chevron's management team surely never thought it possible, Rosa was among the many impoverished Ecuadorians who banded together and fought for years before finally holding the company legally accountable in 2011 after an eight-year trial. In a paradigmatic breakthrough in the human rights area, several prominent corporate law and litigation firms around the world signed up to represent the villagers. And in 2013, Ecuador's Supreme Court unanimously affirmed the trial court ruling in a 222-page decision that meticulously documented the overwhelming evidence against Chevron.

Although the lawsuit originally was filed in the U.S., the trial was held in Ecuador at Chevron's request and the company willingly accepted jurisdiction there. Of course, Chevron thought it could engineer a political dismissal by pressuring Ecuador's government. That unethical strategy backfired.

Chevron's continued obstinance -- it sold off its assets in Ecuador during the trial and has vowed to fight "until hell freezes over" -- forced Rosa and her friends to try to seize company assets in Canada to pay for their clean-up. That country's Supreme Court recently backed the villagers in a unanimous opinion. Chevron is now facing its own ticking time bomb in court.

Rosa, your legacy will inspire the affected communities and their allies around the world to fight on until Chevron pays the court judgment in full and the responsible individuals are held accountable for their misconduct.

Monday, October 31, 2016

Exxon Campaign Against Environmental Groups and AG Offices Eerily Similar To Chevron's Against Ecuadorian Indigenous

Reposted from Medium.

Exxon and Chevron have something in common other than oil these days. They both are playing big victims in big ways to distract from their environmental wrongdoing.

These gigantic companies are arguing in court that separate but similar “illegal conspiracies” against them are underway by groups of environmentalists, states attorneys general, trial lawyers and liberal-leaning advocates.

Chevron says it’s being “victimized” by a group of impoverished Ecuadorian indigenous peoples and their lawyers who won a historic $9.5 billion judgment for water and soil contamination in the Ecuador rainforest and want Chevron to pay up now, after 23 years of litigation.

Ecuadorian women and their children living in the rainforest who Chevron says are “conspiring” against the oil giant in collusion with their lawyers and environmental groups, like Amazon Watch — Photo by Lou Dematteis

Note: Chevron demanded the historic court case be tried in Ecuador, in the first place, and accepted jurisdiction there. Three levels of Ecuador’s courts have upheld the damage award, based on no fewer than 106 technical evidentiary reports submitted to the court.
But, like Donald Trump who refuses to accept the outcome of the presidential election unless he wins, Chevron refuses to pay the environmental judgment.
That’s after the company stripped its assets from Ecuador during the trial, forcing the Ecuadorians — who have suffered from decades of pollution — to file a lawsuit in Canada to seize company assets there as payment for the Ecuador judgment.
Meanwhile, Exxon would have us believe environmental groups and states attorneys general are colluding — in violation of their 1st, 4th and 15th Amendment rights — by demanding to know what Exxon knew about climate change in the 1970s but intentionally kept from shareholders and the public. They are asking questions about possible securities law violations based on Exxon’s obvious deceptions about global warming. Check out one of numerous internal admissions kept from shareholders.

While Chevron wrote the “victim” playbook, Exxon is taking pages from it. Examples of the eerily similar campaigns:

Similar Message

Exxon spokesman Alan Jeffers used this line in recent news coverage to describe its victimization: “This is a conspiracy to deliberately misrepresent the company’s position and to tear down the company.”

Chevron’s main lawyer Randy Mastro — known for “exonerating” NJ Governor Chris Christie in the Bridgegate scandal — has accused the Ecuadorians and their lawyers of a “criminal conspiracy” and said, if successful, “it will be open season on U.S. corporations.”

Similar Tactics

Chevron has by its own admission sought to demonize one of the Ecuadorians’ lawyers, Steven Donziger. In much the same way, Exxon is demonizing the motivations of state attorneys general.

Exxon has recruited U.S. Congressman Lamar Smith to conduct hearings on the investigation launched by state attorney generals. As Chairman of the House Science Committee, the Texas lawmaker has subpoenaed the environmental groups and Attorneys General in New York and Massachusetts for all sorts of documents as an obvious form of harrassment.

Chevron played a similar card over ten years ago, lobbying Congress to end Ecuador’s trade preferences in retaliation for “allowing” the Ecuadorians to file a lawsuit against the oil giant. Had Congress agreed, Ecuador would have lost thousands of jobs for its low-income residents. A Chevron lobbyist told Newsweek the U.S. “…can’t let little countries screw around with big companies like this — companies that have made big investments around the world.”

Similar Legal Strategy

Chevron countersued the Ecuadorians and their lawyers claiming their entire case was a “sham” and that they were trying to extort money from the company.

In turn, Exxon took the AGs and the environmentalists to court.

Here’s the reality on these two so-called “conspiracies”.

When it became clear the Ecuadorians would win their long court battle in Ecuador, Chevron unveiled an intimidation campaign in the U.S. designed to discredit the Ecuadorians and their lawyers, delay the enforcement of the Ecuador judgment and deceive the public and financial markets about what happened in the South American country.

With over 2,000 lawyers and legal assistants, at least six major public relations firms and as many, if not more, lobbying firms in tow, Chevron filed a retaliatory, RICO lawsuit for extortion and bribery against the Ecuadorians and launched a coast-to-coast PR slander campaign against them and their lawyers.

Now comes Exxon with a similar campaign against, Sierra Club, the Environmental Defense Fund and the Natural Resources Defense Council and 40 other well-known environmental and social justice groups, as well as the Attorney General.

Exxon’s PR guru Suzanne McCarron told a Business Week reporter that the effort against Exxon “feels very orchestrated” and “we wanted to know who’s behind this thing.”

Of course, it’s no secret — and never has been — who is behind it. All McCarron had to do was Google search “Exxon” and “climate change” and the people criticizing her company will appear. It’s absurd to believe the groups “behind this thing” don’t have constitutional rights to criticize and probe the actions and policies of a publicly-traded company.

But, like Chevron, if Exxon could build a different narrative — one of intrigue, conspiracies, and collusion — then the leaders of the “conspiracy” could be discredited and demonized, just as Chevron tried to do to the lawyers for the Ecuadorian villagers.

“Exxon has hired an army of lawyers to try and distract from the real story here: that they lied about their knowledge of climate change for decades,” said communications director Jamie Henn. “Delay and deceit.”

“Exxon’s filing leaves out the fact that they have spent millions of dollars funding misinformation campaigns, faux think tanks, and the elections of climate deniers. They’re reacting this way because they know the stakes of this investigation are enormous.”

The Ecuadorians could tell the U.S. environmental groups a thing or two about delay, deceit, and distractions.

Delay: 23 years of litigation in U.S., Ecuadorian and now Canadian courts, thanks to the litigious Chevron and its bottomless pit of money for lawyers.

Another example of Chevron’s deceit and deception in Ecuador rainforest.

Deceit: Chevron’s paying a witness over $2 million in cash and benefits to testify falsely against the Ecuadorians that they bribed a sitting judge and wrote the judgment for him. The $2 million is four times the amount of the false bribery claim. Chevron’s lawyer Mastro and his team spent 53 days “coaching” the witness to lie.

Distractions: Filing lawsuits in dozens of jurisdictions to draw attention away from the pollution in Ecuador and drain the Ecuadorians of any money for lawyers so they are not able to enforce the judgment that three layers of appellate courts in Ecuador have upheld.

Despite the delays, deceit and distractions, the Ecuadorians are still fighting Chevron and could end up collecting the full amount of their judgment in Canada, where the country’s Supreme Court backed them in a unanimous procedural decision in 2015.

Time will tell. Chevron as well as Exxon should look around and see how the world is changing. Time is running out for both climate change deniers and corporate polluters.

Monday, September 19, 2016

Calling Chevron's Bluff

The courthouse in Canada

Reposted from Eye on the Amazon.

One of the worst oil-related disasters in history occurred when Texaco, later purchased by oil giant Chevron, deliberately dumped 18 billion gallons of toxic waste into the Ecuadorian Amazon over the course of decades. The resulting health crisis in the rainforest home of 30,000 Amazonian inhabitants continues to this day. A $40 million deal with the government of Ecuador in 1995 resulted in a sham remediation, after which Texaco publicly washed its hands of the affair.

Not satisfied with such an egregious lack of justice, the affected communities have continued to demand accountability, taking their case all the way to the Ecuadorian Supreme Court, and winning: in 2011 an Ecuadorian judge found Chevron liable for $9.5 billion in damages, a ruling upheld by the Supreme Court. Instead of doing the right thing, however, Chevron took its assets and fled from Ecuador, and continues to use its corporate might to avoid accountability. Nonetheless, the communities and their allies around the world haven't given up the quest for justice.

The quest continues

Amazon Watch spent four days last week in a courthouse in Toronto to witness the latest, and hopefully last, chapter in this epic quest for justice.

When Chevron fled Ecuador after the $9.5 billion judgement against it, the affected communities turned to the courts in Brazil, Argentina and Canada to hold the company accountable, seeking summary judgments allowing the seizure of the assets of Chevron subsidiaries in order to pay for the Ecuador judgement.

Backed by a unanimous 2015 decision from Canada's Supreme Court giving a green light for the Ecuadorians to sue Chevron in Canada, last week's trial is an important step in the quest for justice. The principal issue before the court was whether to grant the Ecuadorian's request for access to Chevron Canada's assets to cover the $9.5 billion judgement, versus Chevron's defense motion to summarily dismiss the entire claim. The Ecuadorians base their plea on the massive evidence of contamination in Ecuador and a $9.5 billion verdict issued in Ecuador and upheld by its highest court. Chevron claims the verdict itself is fraudulent, basing this claim on the fact that it managed to win a retaliatory RICO (racketeering) lawsuit in the US by alleging bribery, corruption, and a "ghostwritten" judgment by the Ecuadorian court.

Also at issue is what lawyers call "piercing the corporate veil" of hidden parent-subsidiary relationships in order to hold Chevron Canada – a wholly owned subsidiary of Chevron Corp. – liable for the actions and its parent company. The Ecuadorians assert that their action doesn't really hold Chevron Canada responsible, it simply seeks to hold Chevron accountable by seizing assets it controls in Canada through what is actually nothing more than a holding company. This is an important issue for corporate accountability advocates everywhere, because corporations around the world attempt to hide behind the corporate veil.

Therefore, Ontario Superior Court Judge Glenn Hainey will have to decide whether to grant a summary judgement in favor of either the Ecuadorians or Chevron, or to send the case to trial to examine in depth the claims made by both sides.

This last option was welcomed by the lawyer for the Ecuadorians, Alan Lenczner, who encouraged Judge Hainey to give him the opportunity to demonstrate the falsehood of Chevron's claims of bribery and a ghostwritten judgement in Ecuador, and the resulting invalidity of the US RICO decision.

Lenczner's offer provoked quite a reaction from Chevron's legal team in the courtroom (over a dozen US and Canadian lawyers), but he persisted. "That's the issue and what should be tried here. If they're right and have confidence in that, then they can show you and... well then, we lose," Lenczner continued emphatically. "We should have a trial on the ghostwriting! Here's how a trial would go. I will stand up and file a judgment which will be valid until you [the judge] set it aside. Chevron will then bring on their defense and call Guerra [Chevron's “witness” to the alleged bribery]... They won't call Guerra, they're afraid to," concluded Lenczner. By doing so he called their bluff; Chevron's RICO verdict is predicated on the testimony of a corrupt witness, who has since admitted he lied in exchange for over $2 million from Chevron.

To explain the details of this sordid tale and just how Chevron has apparently backed itself into a seemingly impossible corner, we must return to the beginning of the story and detail more about Chevron's efforts to escape justice at all costs.

The history

While Texaco long since admitted to dumping the toxic waste as a cost-saving measure, and is therefore responsible (as the sole operator) for the contamination, Chevron, since its purchase of Texaco, has itself dumped billions of dollars into fighting to avoid a full cleanup, even while knowing full well it could never win the case based on the merits.

The number of legal hoops that Chevron has jumped through to avoid accountability are impressive. When the communities brought their first claim against Texaco, in New York, Texaco spent a decade arguing that Ecuador was the proper venue for the case. It eventually won that argument, but then on the first day of the trial in Ecuador objected to the entire case and claimed it shouldn't be there either. It proceeded to drag out this second trial another eight years and used every dirty trick in the book to throw wrenches in the wheel of justice.

As the case was finally coming to an end in Ecuador, leaked internal memos revealed Chevron's plan to vilify the Ecuadorians, their lawyers and the entire Ecuadorian judicial system, as an attempt to invalidate in the court of public opinion any judgement that would be issued against it. Sparing no expense, the company waged a scorched earth legal strategy and hit pay-dirt when US Federal Judge Lewis Kaplan suggested Chevron file a RICO (racketeering) suit in the US; Kaplan made his suggestion based primarily off doctored outtake clips from the documentary Crude.

Kaplan's court was exactly what Chevron desperately needed – a friendly judge thousands of miles away from the actual events in the Amazon who didn't read Spanish and expressed public disdain for the Ecuadorians before his trial even began. Most importantly for Chevron, Kaplan would not even allow the word "contamination" in his courtroom, let alone evidence of the actual crime of Chevron's toxic waste. Further, Kaplan's willingness to grant any request of Chevron's lawyers at Gibson Dunn & Crutcher meant the widespread issuing of subpoenas of a long list of "non party co-conspirators" – a tactic to intimidate and harass anyone critical of Chevron in support of the Ecuadorians (including Amazon Watch).

The underlying claims made by Chevron are that the Ecuadorian verdict was obtained by fraud committed by the Ecuadorian and US legal team led by Steven Donziger. Chevron claims that Ecuadorian Judge Alberto Guerra was offered a $500,000 bribe by the Ecuadorian's lawyers to ghostwrite the $9.5 billion judgment and give it to the presiding judge Nicolas Zambrano. The truth is none of that actually happened.

In a mockery of justice, Judge Lewis Kaplan accepted the testimony of Guerra, even though it came to light during the trial that Guerra received millions of dollars from Chevron to testify and had been coached for 57 days before the trial. Guerra himself had already lost his position as a judge because he had admitted to taking at least 20 bribes in other cases, some for as low as $200. Kaplan even acknowledged that Guerra was not a very credible witness, but decided to believe him in this instance. This despite the fact that Guerra was unable to produce the evidence he claimed he had of the verdict he supposedly wrote for Zambrano, and that the details his story changed several times during his testimony.

Few people know that the way Chevron found out that Guerra was corrupt in the first place was because, as he admitted during the RICO trial, he approached Chevron looking for a bribe. Chevron claims it turned him down, but curiously it didn't report the incident to anyone. Ultimately, Guerra should never have been permitted to take the stand, but Kaplan allowed it. After a trial called a "Dickensian farce" by noted California Attorney John Keker, Kaplan issued a 500-page verdict and blasted the Ecuadorians and their lawyers. He never claimed that Chevron was innocent of the environmental crimes in the Amazon, but he declared that the Ecuadorian judgment was unenforceable in the U.S. The Second Circuit Appeals Court inexplicably held up Kaplan's verdict a few months ago. And while the Ecuadorians' appeal to the Second Circuit was based on Chevron's misuse of the RICO statute and their lawyer Donziger vehemently contested the "facts" of Kaplan's ruling, Chevron's PR spin machine often succeeds in getting the mainstream media to not report on the facts of the case but only on the allegations of fraud. Nor has the media reported widely that Kaplan's RICO verdict offers no legal remedy for Chevron since no one has sought to enforce the case in the U.S.

Nonetheless, things were looking bright for Chevron, even knowing that the Ecuadorian's lawyers will likely appeal Second Circuit decision. But soon, Chevron's strategy of legal shell games and forum shopping began to backfire. At the same time as the RICO case, Chevron filed a case against the government of Ecuador at the Hague under a bilateral trade agreement. A panel of three judges were tasked with determining if Ecuador had offered Chevron adequate legal protection. A ruling in Chevron's favor could essentially end up forcing the government of Ecuador, and thus its taxpayers, to foot the bill for the cleanup. While this tribunal process offered no role for the actual affected people of Ecuador, but it did offer another opportunity for more evidence from Ecuador to see the light of day.

After Kaplan had already issued his verdict, Chevron's "star witness" Guerra took the stand before the tribunal... and proceeded to recant his RICO testimony about the bribe he allegedly received from the Ecuadorians! Furthermore, he admitted he came to no arrangement with Zambrano and he had no evidence of a ghostwritten judgement. Guerra also admitted that he told Chevron what they wanted to hear to get a bigger payout as reported by Vice News:

In testimony before the tribunal, Guerra admitted that at this point he tried to get more money from Chevron. "At some point, I said, well, why don't you add some zeroes to that amount, and then later on I said, 'I think it could be 50,000.'"

In an even bigger blow to Chevron, the government of Ecuador produced an expert forensic report of the computer of Judge Zambrano proving the judgment was written over the course of four months and no external devices, nor pasted-in excerpts from Guerra were inserted into the judgment.

The US Second Circuit Court of Appeals did not consider Guerra's new testimony nor the forensic report, but the court in Toronto might. And THAT brings us to this past week in Canada. Chevron cannot afford to have Alberto Guerra get back on the stand. Their lawyers are desperate to avoid that – so much so that they made an outrageous and false claim in the last few moments of the hearing stating that they "held transcripts of both Guerra's RICO and Tribunal testimonies side-by-side and there was no daylight between them." That appears to be a pretty desperate lie when Guerra stated in the Tribunal when referring to the RICO testimony, "yes sir, I lied there." You could see a solar flare through that gaping hole.

So now we wait, hopefully not too long, for Judge Hainey to decide. In the meantime, some Canadian journalists have already started to ask: "where is Alberto Guerra? Does anyone know?" Presumably he's still living somewhere in the US in the house Chevron bought for him and driving the car they gave him to the mall each week to spend some of the monthly stipend he still receives from his friends in San Ramon. We can't wait to see if he surfaces.

We certainly hope someone does track Guerra down, because the Ecuadorian communities living in the midst of Chevron's deadly oil waste shouldn't have to wait a day longer. As their lawyer Lenczner said in closing, "this case calls for assistance not barriers. These people have been waiting more than 20 years."

Thursday, September 15, 2016

No Money, Power or Influence, But the Ecuadorians Are Still Here, Fighting Chevron

A portrait of this Ecuadorian couple’s family members who died from cancer in a community contaminated by Chevron

Reposted from Medium.

I am sitting now in Ontario Superior Court wondering how the hell I got here but also marveling at the fact.

Over 23 years ago, 48 Ecuadorians sued Chevron for massive oil contamination in the Amazon rainforest.

Nobody thought they would win. They may never see a dime from Chevron.

But, like Celie (Whoopi Goldberg) said in The Color Purple, "I'm poor, black; I may even be ugly, but dear God! I'm here!"

The Ecuadorians have no money; no power; no influence. But, they are still here, demanding justice.

This Ecuadorian woman died from cancer not long after this photo was taken

The Ecuadorians are asking a Canadian court to enforce a $9.5 billion Ecuador judgment against Chevron for massive contamination since the oil giant sold all its assets there. I'm here to answer reporters' questions about the enforcement hearing.

For three decades, Chevron's predecessor Texaco treated the Ecuadorians' homeland, the Amazon rainforest, like a trash dump, intentionally pumping 16 billion gallons of toxic water into streams used for drinking and storing left over crude in over 900 huge unlined oil pits that leached into soil and water.

In 1993, the Ecuadorians sued Texaco in U.S. court. At Texaco's request, the court moved the case to Ecuador, and both Texaco and Chevron promised to abide by the Ecuador court's rulings. By 2013, three levels of Ecuador's judiciary had ruled against Chevron, affirming the $9.5 billion in damages.

Meanwhile, Chevron refuses to pay, saying it will fight "until hell freezes over, and then we will fight it out on the ice."

Given that indigenous peoples and the poor everywhere rarely have any pull with their governments and not enough money to pay for lawyers and lobbyists, they generally have been left to fend for themselves when the news media grows tired of their causes.

The Ecuadorians, however, have refused to go away.

They are still here, fighting for the justice that they deserve, beyond a shadow of a doubt.

Tuesday, September 13, 2016

Chevron's Elephant in the Room

Oil Giant's 53-Day Fraud, Denying Ecuadorians Justice in Ecuador Contamination Case

Reposted from Medium.

Today an elephant is lurking in a Canadian court where a group of Ecuadorian indigenous are seeking to enforce a $9.5 billion Ecuador judgment against Chevron for one of the largest environmental disasters in history. (See recent Medium piece.)

The elephant is Alberto Guerra, the witness Chevron "prepped" for 53 days to testify against the Ecuadorians and their lawyers on fraud and bribery charges brought by the oil company in a U.S. court to taint the Ecuador judgment. (See page 61 and page 815.)

Problem is Guerra, an Ecuadorian, recently admitted he lied about the fraud, after being paid at least $2 million for his testimony. (See page 853.)

(By the way, 53 days is a lot of days. Not normal. $2 million isn't normal either, and Chevron refuses to say if Guerra continues to be paid under a contract he negotiated {pages 853–857}, after being relocated by the oil giant with his family to the U.S.)

Meanwhile, Guerra has backed Chevron up against the proverbial wall in a Toronto courtroom.

Yesterday Chevron argued dryly for several hours that "corporate separateness" between Chevron Corporation and Chevron Canada blocks the Ecuadorians from seizing Chevron's assets and, as such, their enforcement case should be dismissed.

The Ecuadorians' lawyer, Alan Lenczner, disagreed. "The two are bound hand and foot" as Chevron Canada must seek approval from Chevron Corporation to drill on land and make expensive purchases, for example. Lenczner plans to detail today how Chevron Canada received $10.5 billion from its parent, Chevron Corporation.

(Chevron sold all its assets in Ecuador, forcing the Ecuadorians to obtain their damage award through enforcement proceedings in countries that do have Chevron assets, like Canada.)

But, if Chevron's legal farce of bifurcation fails to win the day and the Canadian judge grants the Ecuadorians a trial to enforce, Chevron will have to explain why Guerra recanted his incriminating testimony only 13 months after U.S. Judge Lewis Kaplan bought Guerra's story hook, line and sinker.

After obtaining a transcript of a related but secret arbitration proceeding between Chevron and the Government of Ecuador, the online news site VICE reported:

"Guerra has now admitted that there is no evidence to corroborate allegations of a bribe or a ghostwritten judgment, and that large parts of his sworn testimony, used by Kaplan in the RICO case to block enforcement of the ruling against Chevron, were exaggerated and, in other cases, simply not true."

Also see coverage by Courthouse News.

Here's a quick run-down on Guerra, a former Ecuador judge who admitted to taking bribes in 40 other, unrelated cases and got kicked off the court in 2009: (See page 2 of this legal brief.)

First, by the end of the 53-day, Chevron inquisition, Guerra had changed his testimony three times, and the changes were not minor. (See pages 55–57.)

Story #1: Guerra alleged the Ecuadorians' attorneys "ghostwrote" the judgment and hired Guerra to edit it, which he said he did on his home computer. But when Chevron couldn't find the judgment on his computer, Guerra recanted.

Story #2: Actually, Guerra said, the verdict was on a flash drive that the judge gave him at the Quito airport. But when Chevron couldn't find the judgment on any flash drives, Guerra changed his story yet again.

Story #3: Actually, Guerra said, he traveled to the jungle on a bus and edited the judgment there on a laptop owned by one of the Ecuadorian attorneys.

Second, after clinching Chevron's win over the Ecuadorians in U.S. court, Guerra told yet a different story only a year or so later to arbitration lawyers for the Government of Ecuador. From the transcript that VICE obtained:

"Can you recall how you tried to increase your negotiating position with the Chevron representatives?" a government lawyer asked Guerra.
"I must recognize that I did exaggerate about [some things], yes," said Guerra.
"When we are looking for a job, you say, how much experience do you have, and in fact you really don't have any experience, and you say, well, I have ten years of experience really. It's a situation just like that."
The lawyer asked: "And among the ways you tried to leverage your position was to falsely tell the Chevron representatives that the Plaintiffs had offered you $300,000; isn't that right?"
"Yes, sir. I lied there," Guerra responded. "I recognize it."

With seemingly no shame whatsoever, Guerra described one of his first meetings with Chevron lawyers.

"One of them took me by the arm and said, 'Look, look, look what's down there. We have $20,000 there.' Specifically, one of them was the one that led me to take a look at it. It was inside a safe."
"At some point, I said, well, why don't you add some zeroes to that amount, and then later on I said, 'I think it could be 50,000.'"

Right then, Chevron should have adhered to Abraham Lincoln's sound advice about elephants.

"When you have got an elephant by the hind legs and he is trying to run away, it's best to let him run."

Instead, Chevron's lawyers may soon have to corral their elephant back into court and explain why Guerra can't seem to get his stories straight – even after 53 days of prepping.

For more details on Guerra and his sordid tales, see here.

Monday, September 12, 2016

The Beginning of the End: Day One of Chevron's Legal Farce Comes to Canada

The best part of Day One of Chevron's enforcement trial is that it has started. For the oil giant and its odyssey in Ecuador, this could be the beginning of the end.

The first day of the long-awaited trial to enforce the $9.5 billion environmental judgment against Chevron began with the company flooding the courtroom with 20 lawyers to argue a simple motion over a legal technicality. Twenty more lawyers from the company were in the gallery. With Chevron, that's just how it rolls. The company can't file a simple motion without a football team of clerks taking it to the courthouse, all billing their hourly rate.

For more than two decades, Chevron has spent at least $2 billion and used 60 law firms to try to obstruct efforts by the villagers to hold the company accountable for billions of gallons of toxic dumping in Ecuador's rainforest when it operated there from 1964 to 1992. (For background on the overwhelming evidence against Chevron, see here.)

This includes sending the case from U.S. federal court to Ecuador for trial back in 2001; selling off its assets in Ecuador as evidence mounted against it; bringing the case back to the U.S. when it lost the trial it wanted in Ecuador; getting a U.S. trial judge to buy its fabricated evidence of "fraud" from a lying witness to whom the company paid $2 million; filing two international arbitration actions against Ecuador's government to obtain a taxpayer-funded bailout of its liability; and going to more than 25 U.S. courts to sue more than 100 lawyers, activists, bloggers and supporters of the villagers as part of an intimidation campaign.

Thus far, little of this unprecedented and unethical defense strategy has worked. In Canada, Chevron is clearly coming to the end of the trail.

The small army of Chevron lawyers who entered the Superior Court of Ontario on Monday is trying to use its muscle to again deny due process of law to Ecuadorian villagers who have suffered from high cancer rates and other health impacts related to Chevron's deliberate dumping of billions of gallons of toxic waste into the rainforest. They have come to Canada to collect on their judgment because Chevron refuses to pay up, despite having made promises to do so as a condition of sending the case to Ecuador from U.S. federal court in 2001.

Chevron's goal is to prevent the villagers from collecting the first dollar of their judgment on the theory that all Chevron's assets in Canada are held by a wholly-owned subsidiary, and not by Chevron. There is virtually no chance the argument will work for the simple reason that Canadian law (and the law in almost every other country) makes it clear that any party can collect any assets of a scofflaw debtor to force payment, be it a subsidiary or money in a bank account.

In its corporate shell game game that started more than two decades ago, Chevron was as slippery as ever on Monday. Any objective observer could see it wasn't working; Justice Glen Hainey – a highly respected jurist – looked bored while Chevron's lawyers droned on for almost three hours as they explained the 1,000 or so reasons why they believed Chevron Canada was not really the same as Chevron Corporation.

People are dying in Ecuador because of Chevron's dumping and technicalities is all its lawyers could talk about.

Chevron lawyer Benjamin Zarnett tried to claim that even though Chevron owns its subsidiary in Canada, the Ecuadorians could not seize it because it is not an actual "asset" as required by law but is instead only an "operating body" – whatever that means, as there is no such distinction in the law that we can ascertain. Put simply, while Chevron reaps 100% of the profits of Chevron Canada, it feels it should not pay for any of its liabilities.

Alan Lenczner, the litigator extraordinaire who represents the Ecuadorian villagers in Canada, summarized Canadian law in a way that explains why Chevron is in trouble: "According to Canada's Supreme Court, a debt is enforceable against any and all assets of a given debtor." Pretty simple, and true the world over.

The larger issue for Chevron is that it is being engulfed by risk in Canada; its team of ethically-challenged lawyers at Gibson Dunn & Crutcher in the New York – the same crowd that fabricated the "fraud" evidence by coaching witness Alberto Guerra for 53 consecutive days to lie on the stand – are at risk of being ordered to disgorge their documents to the Canadian court as part of the enforcement trial. That would be poetic justice to say the least.

Chevron's use of 2,000 legal personnel to implement a scorched earth strategy to kill off the case clearly has failed. Otherwise, the trial to seize the company's substantial assets in Canada would not be taking place. And unlike in the U.S., Canadian judges cannot be so easily influenced by corporate power and political connections; they will actually rule on the merits, which is something that Chevron deeply fears.

In fact, the villagers are within a short distance of a total victory where they can collect 100% of the judgment, plus statutory interest – a result few saw coming, and one that has never happened before on anything close to this scale when indigenous groups are the plaintiffs and a major oil company the defendant.  Last year, Canada's Supreme Court delivered a unanimous opinion granting the villagers the right to proceed with their action; numerous Canadian civil society organizations have weighed in on their behalf.

Later this week, Justice Hainey will hear argument on whether Chevron's defenses to enforcement – largely centered on its discredited and wholly fabricated "fraud" narrative that has unraveled – will be allowed in as evidence. The villagers believe Chevron should not be given yet another bite at the apple after its arguments already were fully litigated and rejected by three layers of courts in Ecuador.

If Chevron loses the motion, or even part of it, look for the company to approach the villagers for a way out of its growing risk and ongoing reputational harm for being convicted as a human rights violator. Trust us: the pain Chevron will feel to settle the case will hurt a lot less than the pain of its assets being publicly seized in humiliating fashion.

This is what happens when an oil company has to face justice before the transparent, neutral courts of Canada. We look forward to the rest of the motions hearing – expected to last until the end of the week – and the enforcement trial, which is expected to begin in 2017.

Stay tuned as the resolution to the world's most important corporate accountability case gets closer.

Chevron Once Again Spouts Tired Excuses (aka Lies) for Ignoring Toxic Mess in Ecuador

Chevron Says This Unlined Oil Pit Isn’t Harming Ecuadorians & Their Food & Water Supply In Rainforest

Reposted from Medium.

Today a group of indigenous Ecuadorians take their long-running fight against Chevron to a Canadian court to try and seize company assets there as payment for a $9.5 billion Ecuador judgment against the oil giant for massive oil contamination in the Amazon rainforest.

It’s been 23 years since they first filed their lawsuit in U.S. court, only to have Texaco, which Chevron later bought, successfully plead to move one of the world’s largest and most complicated environmental trials to Ecuador. The U.S. courts agreed, though, it took ten years for them to sort it out, thanks largely to Texaco’s and later Chevron’s ability to drag out every legal proceeding as long as possible.

Delay has been their strategy from the beginning. Deplete the Ecuadorians of resources. Wait them out. And, when that didn’t work, Chevron’s top executives accused them and their lawyers of a criminal conspiracy to “shake down” the company.

In 2003, the Ecuadorians re-filed their lawsuit in the South American country, and in 2012, an Ecuador court ruled against Chevron. Having sold all of its assets in Ecuador, Chevron refused to pay the judgment even after the nation’s two appellate courts upheld it.

During that nine years in Ecuador, Chevron devised all manner of false excuses (aka lies) to side step its responsibility for cleaning up a toxic mess deadlier and dirtier than the BP and Exxon Valdez disasters.

Today a Canadian judge will hear the company’s excuses for the first time. For the Ecuadorians? A million times plus in the two decades they have been waiting for justice.

Chevron Excuse #1: We aren’t Texaco. We never drilled in Ecuador.

The argument boils down to we bought their assets, but not their liabilities. No court anywhere has ever bought that one.

Chevron Excuse #2: What contamination? There is no contamination. It is a figment of your imagination.

But, then, someone found a document where Texaco admitted to intentionally dumping around 16 billion gallons of toxic waste water into the rainforest’s rivers and streams that people still use as drinking and cooking water today. And, let’s not forget those 50,000 or so soil and water samples that Chevron itself took and found contamination. Of course, we’ve got hundreds of photos of the huge unlined pits where Texaco permanently stored left-over crude. I guess Chevron thought no one would go check it out, either. The Ecuadorians regularly operate a “Toxico Tour” to show people how Texaco treated their rainforest like a trash dump.

Chevron Excuse #3: If there is contamination, it’s not harming anyone.

Right. And, in the 70s, when Texaco first started drilling, the gringo workers told the indigenous that rubbing oil on their bodies was as healthy as drinking milk.

Chevron Excuse #4: OK, so maybe digesting oil and carcinogenic waste water is not such a good idea, but Texaco made a deal with the Ecuador government that if they cleaned up a few pits, the government wouldn’t sue Texaco, so legally we aren’t responsible.

Hold up. Lots of problems here.

1) Texaco made the deal after the Ecuadorians filed their lawsuit, and a U.S. court said the deal was not binding.

2) The deal itself said it wasn’t binding on the Ecuadorians.

3) Ecuador’s courts later ruled the same, as did an international arbitration panel.

4) Even if it were binding, Texaco faked the clean-up. They just poured dirt over the pits.

Chevron Excuse #5: We need to take tests at all of the well sites that Texaco drilled and the pits it built — over 300 well sites and over 900 pits. And, if the Ecuador courts don’t allow it, then that proves they are corrupt.

During the Ecuador trial, it took six months to finish testing at one well site because of Chevron’s legal maneuvers. (Do the math. 300 well [email protected] a year = 150 years.) The courts reviewed over 60,000 soil and water samples and found extensive contamination. No one needed to test all the sites.

Chevron Excuse #6: An Ecuador judge wouldn’t let us take tests at all the well sites, and then he ruled against us, so the whole entire judiciary is corrupt, (even though Chevron argued in U.S. court that it could get a fair trial in Ecuador). We are going to hire 2,000 lawyers and file a RICO/fraud lawsuit, back in the same U.S. court where it all started 23 years ago.

Why? Because we have so much money lying around we would rather spend it on lawyers than help people in Ecuador.

Chevron Excuse #7: We are going to do this our way because we are big oil. And, the U.S. better not let little countries screw around with big oil companies.

Literally. See this Newsweek article.

Chevron Excuse #8: Thank you, U.S. courts, for not letting these little Ecuadorians screw around with us.

U.S. courts ruled against the Ecuadorians after hearing “fraud” and “bribery” evidence from a witness that Chevron paid at least $2 million to testify.

Like we said, till hell freezes over, we are never paying the judgment.

The Ecuadorians go to Canada to seize Chevron’s assets there.

Chevron Excuse #9: Yes, but Chevron USA — who made the decision to buy Texaco’s mess — is NOT Chevron Canada. It is a separate business.

Never mind that all of Chevron Canada’s profits go directly to Chevron USA and its shareholders.

Chevron Excuse #10: We are not paying these little Ecuadorians because, if we do, even more little people will come after us.

And, we can’t have that.

Stay tuned for more reports from a Canadian courtroom this week.

Chevron’s "Hell Freezes Over" Tour

Chevron should clean up its toxic messes.

Reposted from Eye on the Amazon.

One might wonder why one of the most clear-cut cases of environmental destruction and criminal corporate acts will be heard in yet another courtroom twenty-three years after the first legal claims were ever made. The only reason is because when corporations like Chevron are committed to throwing billions of dollars at fighting justice instead of accepting responsibility, they often are able to delay (and thus deny) justice in perpetuity. For the sake of justice everywhere, this must end here and now.

This chapter in the ongoing saga of Chevron's toxic contamination in Ecuador highlights one of the most grievous threats to the notion of justice in the face of crimes committed by corporations anywhere in the world.

There's no good reason why anyone should have to be continuing this fight in Toronto, but Amazon Watch is here today because it's "Day One" of a critical enforcement trial in Canada to make Chevron finally pay the US $9.5 billion (now closer to US $11 billion with interest) it owes to clean up the biggest oil-related disaster in history which is still polluting the Ecuadorian Amazon today – close to fifty years since drilling first began. We are here alongside our Ecuadorian allies because Chevron has vowed to "fight until hell freezes over and then fight it out on the ice" rather than do the right thing and clean up its mess – a mess it has confessed to creating deliberately in order to squeeze a little more profit out of its operations in the Amazon.

As everyone should know by now, Texaco (now owned by Chevron) admitted to systematically dumping billions of gallons of toxic oil drilling waters into nearly 1,000 open-air pits in the rainforest. Those pits remain today, despite a 1992 agreement Texaco signed with the government of Ecuador to "clean up its share." Turns out that small portion that Texaco incorrectly claimed was "its share" wasn't actually cleaned up (which has been independently verified by many, including the company's own videos leaked to Amazon Watch by a Chevron whistleblower).

Despite those incontrovertible facts, in recent years Chevron has succeeded (by spending hundreds of millions of its shareholder's money on lawyers and PR firms) in changing the story to one about alleged fraud and malfeasance by what they call "corrupt lawyers" and "unethical environmental groups." There's a perverse logic to this, since when considering that the evidence is so soundly against it in Ecuador, Chevron's management decided it's could only fight on by vilifying its critics in a profoundly bizarre way, claiming it was the "real victim" in the case.

But in Canada that convoluted story becomes a lot more problematic for the oil giant. Here Chevron will attempt to defend itself with the results of its outrageously flawed US SLAPP suit against the massive and damning evidence in the Amazon. They will ask Canada's courts to ignore the company's admission of intentional dumping, the wave of cancers and other health impacts, the indigenous peoples decimated by the contamination, the growing number of environmental and human rights NGOs publicly condemning Chevron for its failure to clean up and transparent tactics to attack its critics, and the reality that three levels of Ecuadorian courts – including its Supreme Court – reviewed the evidence (including Chevron's fraud claims) and unanimously ruled against the company.

Furthermore, Chevron will walk into court today and ask the judge to ignore the laws of his own country and throw out the entire enforcement case based on the findings of a US judge who never went to Ecuador, doesn't understand Spanish, and refused to allow a single piece of evidence in court of the actual contamination in the Amazon. Even according to the appellate decision itself, the US case has no legal relevance in Canada. Regardless, Chevron will demand that the Canadian court accept the word of disgraced former Ecuadorian judge Alberto Guerra, Chevron's star witness, who admitted to lying in his testimony about a bribe to get a bigger payout from Chevron. Guerra received US $2 million to testify and has been unable to offer any hard evidence of his claims of a ghostwritten verdict, but Chevron still expects the Canadian judge to believe he's credible.

The reality of this week's hearing is as simple as the first case brought against Texaco in 1993. In fact, this week's proceedings are a simple debt collection trial. Common in Canadian law is the basic notion that a party can request to enforce a valid foreign judgment and seek assistance in forcing a debtor to pay up. Meanwhile, Chevron is understandably worried and is already seeking to sell billions of dollars of Canadian assets, as we have reported before. Chevron also claims that its Canadian assets – the same ones it reports to its shareholders each year – can't be touched because they're not really theirs, something that we expect to hear more about later in the week.

Fortunately, so far the Canadian courts have shown no signs that they are willing to arrogantly dismiss every Ecuadorian court as corrupt and refuse to review the evidence, unlike US Federal Judge Lewis Kaplan and his superiors on the Second Circuit Court of Appeals. Indeed Canada's Supreme Court has already sided unanimously against Chevron and allowed this trial to move forward. We will be here all week, with support from some of Canada's largest environmental organizations, to observe the hearings and continue to confront Chevron's ongoing lies in its attempt to crush the people brave enough to take on the third largest US corporation.


Chevron's weak argument: Canadian wing is separate from the mothership

When Chevron first stood to defend itself from the Ecuadorians legal action to enforce the $9.5 billion verdict to pay for a clean-up, its opening argument couldn't have been more befitting of the oil giant. This is, after all, the company whose lawyers were blasted in US Federal Court last April for suggesting that "it was Texaco" that was responsible in Ecuador and that Chevron is a different company. True to form, Chevron kicked off its opening argument by claiming that Chevron Canada is not the same as Chevron Corp and therefore can't be held liable for Chevron Corp's debts.

Most of the courtroom yawned through a lengthy presentation of all the ways Chevron Canada is different from Chevron Corp – Chevron's lawyers even went so far as to point out that one has headquarters in Canada and the other in the US. That's really their legal argument?

Here's the rub for Chevron: as the lawyer for the Ecuadorians, Alan Lenczner, explained, the court doesn't even need to rule on the issue of "corporate separateness" to decide whether the Ecuadorians can enforce the judgment in Ontario. They only need show only they have a judgment debt from a foreign court. Which they do, of course.

After hours of Chevron attempts to distance itself from Chevron Canada, Lenczner called Chevron out for its same tired tactics. As he forcefully argued, "this company polluted the area [the Ecuadorian Amazon] and then dragged these people through twenty years of litigation! In first instance they sought to bring their case in the US and Chevron said no. Now they are here. This is a commercial court and it should recognize the debt that is owed."

Lenczner also pulled apart Chevron's transparent attempt to show Chevron Canada isn't directly connected to Chevron Corp because there are six subsidiaries between the two; he explained how every one of those entities is simply an investment company and the funds pass directly from one to the other up to Chevron. "Chevron Canada is one of the cash cows that sends money to its parent. It sends $5 billion a year in dividends," he said.

Further demonstrating the corporate oversight Chevron Corp exercises over its Canadian wing, Lenczner highlighted that fact that, per Chevron's own internal policies, every decision of $25 million or over needs to get direct approval from the Vice Chairman at Chevron Corp.

"They can't even drill a new well without concurrence – complete agreement," Lenczner said. “But I am not even 'allowed' to say this, your Honor." Lenczner referred to the fact that as the trial, began the company redacted the public copy of Lenczner's factum to hide all its policies that would show the level of controls over its subsidiaries. Chevron's lawyers were visibly agitated and squirmy as he continued to say things he was "not allowed to say" and declared that the public has a right to know and his brief must be unredacted. Today, both sides will continue to argue over those redactions, but for those of us with years of experience watching Chevron tactics in the courtroom, it's no surprise they want to keep the truth about their practices hidden from view.


Chevron's Cash Cow

The Chevron trial in Canadian commercial court continues as 30,000 people from Ecuadorian indigenous and farmer communities seek to enforce their $9.5 billion verdict against Chevron for an environmental clean-up.

The Ecuadorians are using Canada's Foreign Judgment Execution Act in an attempt to gain legal recognition of the Ecuadorian court's judgement against Chevron Corp. and use the assets of Chevron Canada to satisfy it.

Chevron's legal options here are narrow. According to Canadian legal precedent, there are very few defenses that can be raised with respect to recognition and enforcement when preceded by a final judgment like the one from Ecuador (where Chevron fought – and lost – all the way through Ecuador's Supreme Court). So Chevron will not be able to prevail by relying on the same laundry list of recycled arguments it has used to obfuscate what is at its essence a very simple issue of deliberate and widespread contamination by the oil giant.

But with a straight face, Chevron tried one more time.

The company started off the week by dusting off its old "It wasn't me" routine. It has argued before various courts that the Ecuadorians were suing the wrong company; that Texpet (as Texaco was known in Ecuador) is not the same as Texaco; that Texaco is not part of Chevron; that Chevron Corp. doesn't have any assets in Canada because Chevron Corp. and Chevron Canada are not the same company. That's right, shareholders: Chevron and Texaco didn't technically merge, it was a reverse triangular merger! And the money generated by Chevron Canada doesn't get paid out to your dividends! With arguments like that Chevron, with feigned incredulity, claimed it doesn't know why it's even in the Toronto courtroom. Apparently it ignored this scolding from the U.S. Court of Appeals in New York:

"Chevron Corporation claims, without citation to relevant case law, that it is not bound by the promises made by its predecessors in interest Texaco and ChevronTexaco, Inc. However, in seeking affirmance of the district court's forum non conveniens dismissal, lawyers from ChevronTexaco appeared in this Court and reaffirmed the concessions that Texaco had made in order to secure dismissal of Plaintiffs' complaint. In so doing, ChevronTexaco bound itself to those concessions. In 2005, ChevronTexaco dropped the name "Texaco" and reverted to its original name, Chevron Corporation. There is no indication in the record before us that shortening its name had any effect on ChevronTexaco's legal obligations. Chevron Corporation therefore remains accountable for the promises upon which we and the district court relied in dismissing Plaintiffs' action."

Often, in seeking to hold transnational corporations accountable for environmental crimes and human rights abuses, victims are forced to seek relief from the parent company because the local subsidiary is purposely set up as a limited liability company with no assets, no money, and questionable legal standing. But in this case the Ecuadorians have a judgment against the parent company – Chevron Corp. itself – and seek to fulfil the judgment debt using subsidiary assets.

As a result, all that the attorneys for the communities need to show is a direct relationship between the parent company and the subsidiary. In this case, it is complete dominance.

"Chevron is tied hand and foot to Chevron Canada," said Alan Lenczner, attorney for the plaintiffs to the court. "Chevron Canada is Chevron's cash cow."

Want to see what Chevron internal docs say about its financial relationship to Chevron Canada? So do we.Want to see what Chevron internal docs say about its financial relationship to Chevron Canada? So do we.

To back up this argument, the Ecuadorians used discovery to obtain copies of internal Chevron documents that expose just how much control Chevron Corp. has over its subsidiaries. But Chevron doesn't want the public to see them. Responsive documents turned over were heavily redacted. Several pages were blacked out entirely. But Mr. Lenczner had seen the unredacted version, and shared the details of them in oral argument with the court.

It turns out that Chevron Corp. is a holding company that doesn't own anything – not even its office buildings. It's essentially a shell company with all of its assets compartmentalized and stored in its subsidiaries, which is clearly an attempt to avoid responsibility in exactly this kind of case.

Chevron Canada is a "7th tier subsidiary" of Chevron Corp. The other six companies in between Chevron Corp. and Chevron Canada are investment companies, with every level being 100% owned by the level above it. Finance flows down the cash cascade from Chevron Corp. to Chevron Canada and returns in dividends.

Apparently Chevron Canada can't do anything on its own. There are no independent directors and the company must get agreement from the higher ups in Chevron Corp. for virtually every decision – from the major to the mundane. Money for off-road tires? Yep, have to go to corporate. Bid on a tar sands oil block in Athabasca? Talk to headquarters. Joining a pipeline consortium? Run it up the chain of command. Signing an office lease? Not without agreement from a Chevron Corp. Vice Chairman.

Maybe the best person to be deposed if this case does go to trial is John Watson, the current Chevron Corp. CEO and Chairman of the Board. He ran Chevron Canada for years, so he must have intimate knowledge about how his corporate veil really works in practice. He also has the unique distinction of orchestrating Chevron's acquisition, err, reverse triangular merger, with Texaco when he was head of mergers and acquisitions before becoming the CEO of Chevron Corp.

Chevron has tried to treat the entire Canadian proceeding as a first instance case – and then arguing that there's a lack of jurisdiction. This is absurd because the Ecuadorian judgment the communities are seeking to enforce is a final judgment from the country's Supreme Court. It is not a new case. Over ten years it passed through three layers of Ecuadorian courts – trial, appellate, and Supreme courts. The communities are merely seeking to enforce it.

So Chevron cannot re-litigate the entire case, and it cannot present defenses that have already been heard in the original proceedings. And Chevron has certainly been heard. According to the trial record, there are some 216,692 pages of evidence, 100 expert reports, 56 official visits to toxic sites. Chevron participated at every level. It brought 1,000 motions. There were 20,000 pages presented to the appeals court, and 10,000 more to the national Supreme Court.

Chevron's tactics have always been to deny and delay, hoping to drag out the proceedings as long as possible to avoid paying and hope that the communities will give up, run out of money, or worse. The company is literally trying to delay justice in this case until all of the original plaintiffs are dead. The company's counsel famously said, "We'll fight this until hell freezes over, and then we'll fight it out on the ice."

Well Chevron better lace up its skates, because they may get a hearing in Canada on exactly what they don't want to talk about: undeniable contamination in Ecuador and concocted claims of bribery and ghostwriting.

When counsel for the communities began to talk about the trial record in Ecuador and the 16.8 million gallons of oil spilled, 15 billion gallons of toxic waste water dumped, and over 1,000 oil pits that stain the rainforest floor, Chevron lawyers jumped from their seats.

Chevron tried to cut off any mention of their contamination. But unlike Judge Kaplan in New York, who forbade any talk of it and rarely let lawyers for the communities finish a sentence, Judge Hainey allowed it. The courtroom heard the criminal shortcuts Chevron took, like dumping waste instead of re-injecting it deep into the ground as was standard industry practice and building pits with no lining that allowed heavy metals and carcinogens to overflow into the forest and leach into groundwater.

"It's disastrous. A number of people die every year," Lenczner said.

Mr. Lenczner closed the day arguing for a truncated trial specifically on Chevron's claims of bribery and ghostwriting.

"Chevron concocted a sordid – and untrue – tale of bribery and ghostwriting," argued Lenczner. "But Chevron's star witness in that case – a corrupt ex-judge who Chevron paid over $2 million and coached for 52 days to testify, has recanted his testimony in a different proceeding."

"Let's have a trial on that. Bring it on!"

On Chevron claims that the communities and lawyer ghostwrote the judgment, Lenczner exclaimed, "Let's have a trial on that, too," citing forensic evidence that proves the judge was written by him alone on his computer.

While Chevron's back is up against the wall in Canada, you wouldn't necessarily know it by the media coverage in the U.S. Reporters who have covered the saga with incredible, pro-Chevron bias have been quick to write off the Ecuadorians. Those "journalists" are conveniently absent in the courtroom up here, nowhere to be found when the tide turns against the company.

The Ecuadorians are still standing, and may be closer to justice than ever. And if they can use Chevron Canada's assets to pay for a clean up, it will be a victory for communities around the world who seek to put an end to corporate impunity.