Chevron Facing New Obstacles Over $12b Ecuador Pollution Liability as Death Toll Rises in Amazon Rainforest
Signs That Cancer Rates, Shareholder Pressure, and Major Academic Conference Are Causing Worry Inside Company’s Executive Suite
NEW YORK, NY - Having failed to block its $12 billion Ecuador pollution liability despite two decades of massive spending, Chevron now faces a slew of growing problems after Canada’s courts green-lighted a lawsuit by Indigenous groups and farmer communities to seize company assets to remediate the world’s worst oil-related environmental disaster.
Chevron’s recent setbacks in Canadian courts and increasing pressure from company shareholders, activists, and Indigenous groups appear to be fraying nerves inside the executive suite of company CEO Mike Wirth, said Patricio Salazar, the lead Ecuadorian lawyer on the case. Chevron has an estimated $15 billion of assets in Canada that produce roughly $4 billion annually in profits. The affected Ecuadorian communities plan to seize some those assets to force compliance with their judgment, now worth $12 billion with interest, said Salazar.
Rex Weyler, the co-founder of Greenpeace, recently accused Chevron of committing “ecological crimes” in Ecuador. Former Canada National Chief Phil Fontaine also criticized Chevron for failing to clean up its pollution while four layers of courts in Ecuador and 17 judges in total found that the company deliberately dumped billions of gallons of life-threatening oil waste into the Amazon, causing an outbreak of cancer that has decimated five Indigenous peoples. (See this summary of the evidence against Chevron.)
“Signs of Chevron’s anxiety clearly are increasing,” said Salazar, who was interviewed on his way to a major global academic conference on Indigenous rights and the environment which opens Nov. 10 in Banff, Canada. The conference (which will focus in part on the Ecuador litigation) has attracted business leaders, Indigenous leaders, government officials, and shareholders from around the world.
Salazar cited various challenges now confronting Chevron over its Ecuador liability:
Thirty-six institutional Chevron shareholders representing $109 billion in assets recently wrote a letter to CEO Wirth demanding he explore a settlement of the case. Two shareholder resolutions criticizing Wirth’s mishandling of the litigation received overwhelming support at the company’s 2018 annual meeting, while the activist group Avaaz generated close to 1 million signatures on a petition blasting Wirth for his failure to deal with the company’s Ecuador pollution. (See here.)
While Chevron often tries to attack and demonize its opponents, the humanitarian crisis caused by the company’s toxic dumping in Ecuador is worsening. Cancer rates in the affected region have skyrocketed (see here); two key leaders of the accountability campaign, Rosa Moreno and Alejandro Soto, recently died from exposures to oil contamination; and one noted researcher predicts 10,000 people in the area will die of cancer in the coming years because of the company’s pollution.
Chevron’s lawyers also seem highly nervous about the Banff academic conference, which will explore several issues raised by the litigation including modeling settlements in cases involving Indigenous rights. The gathering has attracted luminaries such as former Canada National Chief Fontaine, noted Canadian academic experts Kathleen Mahoney and Sharon Mascher, Ecuador National Chief Luis Macas, environmentalist David Suzuki, Pink Floyd founder Roger Waters, and Canada Grand Chief Ed John. Chevron operatives have tried to pressure participants not to attend. “Chevron apparently fears that prominent people will learn details about the extent of the company’s environmental misconduct and violation of Indigenous rights in Ecuador,” said Salazar. (See here.)
After using at least 60 law firms and 2,000 lawyers in an unsuccessful effort to quash the claims of the Ecuadorians, Chevron recently launched yet more SLAPP-style harassment subpoenas in the United States targeting funders of the case. Chevron in 2012 unsuccessfully tried the same strategy, targeting subpoenas at more than 100 activists, bloggers, and environmentalists who had tried to help the affected communities. “Chevron’s court attacks in the U.S. have everything to do with intimidation, and nothing to do with the law,” said Salazar.
Chevron also faces increasing pressure from civil society in Canada. The Assembly of First Nations, Canada’s powerful Indigenous Federation which represents 653 bands, has thrown its support behind the Ecuadorians. The AFN, Ecuador’s national Indigenous federation, and the FDA (the coalition of affected communities that brought the lawsuit) recently signed a historic protocol to hold Chevron accountable for environmental contamination in both countries, infuriating company lawyers. (See here.)
Chevron now faces major tax liabilities in Canada related to billions of dollars of suspicious payments made by the company’s wholly-owned Canadian subsidiary to the governments of Nigeria and Indonesia. Chevron’s lawyers in Canada, led by Larry Lowenstein of the Osler firm, have tried to hide these payments from public view. Chevron’s reputation as a global tax cheat extends well beyond Canada while Lowenstein has been criticized for trying to mislead Canadian courts. (See here.)
Chevron’s main strategy to defend the case has been to point to a single decision for the company by a U.S. trial judge (Lewis A. Kaplan) who ran a highly-criticized civil “racketeering” case against the Ecuadorians and their lawyers that refused to consider evidence of the company’s contamination in Ecuador. But that case has fallen apart after Chevron admitted that it paid huge sums to a corrupt witness who later admitted lying under oath. Lawyers for the Ecuadorians accuse Chevron of committing a major fraud in that case by presenting false evidence, while the presiding judge had undisclosed investments in the company. (See this summary of Chevron’s fraud in U.S. courts.)
Chevron’s witness payments and presentation of false testimony have led to a criminal referral letter of the company and its law firm (Gibson Dunn & Crutcher) to the U.S. Department of Justice. A recent secret trade arbitration against Ecuador’s government started by Chevron also embarrassed Wirth after it turned out the Ecuadorians were barred from participating, essentially nullifying the effect of the proceeding. Chevron’s lawyers at Gibson Dunn also were caught ghostwriting an affidavit with false statements for a Boston business owner who had helped the Ecuadorians raise funds.
Despite its huge expenditures, Chevron has been unable to vanquish a small team of lawyers led by Salazar, prominent Canadian litigators Alan Lenczner, Kirk Baert, and Peter Grant, and longtime U.S. advisors Steven Donziger and Aaron Marr Page. The Canadian lawyers already won one unanimous decision before the country’s Supreme Court and two decisions before the Ontario Court of Appeal, all denying Chevron’s attempts to block the Ecuadorians from pursuing company assets.
Chevron had insisted the environmental trial be held in Ecuador, but later threatened the Indigenous groups with a “lifetime of litigation” if they persisted in pursuing their claims. In a clear act of fraud, Chevron also sold off its assets in Ecuador during the trial. That moved forced the Ecuadorians to pursue Chevron assets in Canada after their judgment was affirmed.
(For further background on the case and Chevron’s corporate intimidation campaign against the Ecuadorians, see this recent article by Weyler and this article in The Nation. Here is a segment on the case from 60 Minutes, the award-winning U.S. news program.)