Ecuadorian Indigenous Groups Plan Fast Trial in Canada to Hold Chevron Accountable for Fraud and Corruption in Pollution Case

Chevron Strategy of Delay and Gamesmanship “Ends Now” as Trial Team Being Assembled, Says President of Amazon Defense Coalition

Toronto, Canada – Seven years after launching an asset seizure action against Chevron in Canada, Ecuadorian Indigenous and farmer communities issued a strongly worded statement today vowing to proceed “immediately and with dispatch” to a trial already backed by Canada’s Supreme Court that they believe will force the oil giant to comply with a landmark $12 billion pollution judgment validated by four layers of courts in Ecuador.

Chevron has tried to hide its estimated $15 billion worth of Canadian assets in seven layers of wholly-owned subsidiaries as a way to shield them from being collected from pollution judgments, according to evidence adduced in the Canada proceeding. Today, Canada’s Supreme Court issued a one-sentence order letting stand a lower court decision that Chevron’s subsidiaries cannot be defendants in the enforcement action, leaving Chevron as the sole defendant for now.

The Ecuadorians vowed to enforce their judgment against Chevron first and then move to try to seize Chevron’s assets later given various debt collection statutes in Canada and in other countries favoring creditors. The fact that Chevron’s assets are hidden in subsidiaries ultimately will not be an obstacle to collection once the Ecuador judgment is validated at trial after evidence is put forth of the extent of the company’s criminality and misconduct, said Patricio Salazar, one of the lawyers for the affected communities.

“Having an immediate trial will save us substantial time given that Chevron’s defense strategy is based on obstruction and our clients continue to die due to exposures to the company’s toxic oil contamination,” said Salazar. “There are many options for us to collect Chevron assets in Canada and around the world as the company operates in more than 100 countries and there is no time limit on collection. Debt collections happen routinely in a commercial context and there is simply no valid justification for a corporation to hide behind layers of subsidiaries to obtain impunity for its human rights abuses, as Chevron is now trying to do.

“While we wanted the Canada Supreme Court to hear the issue, its denial of our motion does not mean the issue is resolved and it can still be decided at a later date after we enforce the judgment,” said Salazar. “The silver lining is that we do not have to spend another two years in an appellate court at this stage which only would play into Chevron’s abusive strategy. We want to get to the core issue of the case as soon as possible and deal with the critical issue of asset execution later, if needed.”

“We want to state clearly that Chevron’s strategy in Canada of using procedural traps and appellate disputes to distract attention from the company’s environmental crimes in Ecuador is over,” said Carmen Cartuche, the President of the Amazon Defense Coalition (FDA), the grass roots organization that won the judgment in 2013 on behalf of 30,000 affected peoples. “We plan to proceed immediately to a trial that we believe will force Chevron to comply with court judgments holding it responsible for massive environmental destruction deliberately caused to our ancestral lands. We will do everything in our power to force Chevron’s litigation games to end and we fully expect Canadian courts to deal justly and fairly with these issues.”

Canada’s Supreme Court already ruled unanimously in 2015 that the Ecuadorians could enforce their judgment against Chevron and that issue is not in dispute. Chevron in recent years also has lost multiple legal decisions in Ecuador and Canada, all of which affirmed the judgment or the right of the Ecuadorians to pursue the assets of Chevron Corporation.  In all, 16 appellate judges in Ecuador have affirmed the judgment and the Supreme Courts of both countries have issued rulings in favor of the Ecuadorians.

Most recently, Ecuador’s Constitutional Court affirmed the judgment against Chevron unanimously last July. (See here and here.) Chevron also has been under enormous pressure from Canadian civil society, with Greenpeace co-founder Rex Weyler condemning the company’s “ecological crimes” in Ecuador and the country’s Assembly of First Nations weighing in against Chevron.

Aaron Marr Page, a U.S. lawyer for the Ecuadorians, explained the legal basis to proceed to trial in Canada despite the denial of the appellate motion seeking the participation of the company’s Canadian subsidiary:

• Armed with a favorable Supreme Court decision, the affected communities will proceed against US-based Chevron even if they cannot -- for the time being  -- try to seize company assets which are hidden behind numerous layers of wholly-owned subsidiaries. Chevron has 1,500 such subsidiaries around the world, many located in tax havens. 

• The Ecuadorian communities will continue the process of seeking legal means to pierce the corporate veil or initiate whatever proceedings might be necessary in various jurisdictions to collect Chevron assets. They also plan to press for legal reform to address laws and policies that allow for this kind of abuse of the corporate structure.

• A trial and judgment against Chevron will put to rest the company’s debunked claims of “fraud” manufactured with false and paid-for testimony that was the basis for a “racketeering” judgment from a U.S. judge. This will thus speed the way for enforcement not just in Canada, but in other jurisdictions.

• A Canadian judgment against Chevron is separately enforceable in other jurisdictions in parallel with the Ecuador judgment and can be levied immediately against any assets that Chevron may bring into Canada in the future (as when Chevron used Canada to secretly launder funds to avoid a massive tax bill in other countries). The judgment can also be enforced under various debt collection statutes, Page said.

Cartuche issued the following statement on behalf of the FDA and the affected communities: 

“Although it denied our motion today, the Canada Supreme has been in clear in its support for our right under international law to enforce the valid Ecuador judgment against Chevron which has been confirmed by four layers of courts in the venue where the company insisted the trial be held and accepted jurisdiction.  Our plan now is to use our outstanding legal team in Canada to proceed as quickly as possible to trial against Chevron to hold the company accountable for its toxic dumping, fraudulent remediation, and other acts of obstructionism in Ecuador and the United States to evade its legal and moral responsibilities to the people it harmed. We are confident justice will soon be served for the thousands of people who still suffer from disease, economic harm, health problems and even death due to Chevron’s irresponsible drilling practices from which it reaped billions of dollars in illicit profits.”

Background Points

• The overwhelming scientific and testimonial evidence against Chevron is based on 64,000 chemical sampling results and various third-party health evaluations.  See here.

• Chevron has lost multiple legal decisions in the case in Ecuador and Canada, all of which affirmed the judgment or the right of the Ecuadorians to pursue the assets of Chevron Corporation. Most recently, Ecuador’s Constitutional Court affirmed the judgment unanimously last July. See here and here. 

• Chevron’s retaliatory civil RICO judgment in the United States the Ecuador litigation is a product of paid witness testimony and fraud for which the company is now the subject of two criminal referrals to the U.S. Department of Justice. See here and here.

• Greenpeace Co-founder Rex Weyler recently wrote a comprehensive article about Chevron’s crimes and fraud in Ecuador. See here.

• Chevron’s claims that other countries (such as Brazil and Argentina) have rejected the Ecuador judgment are inaccurate. Those countries refused to enforce on purely technical grounds unrelated to the merits of the case. The only judge in the world to rule in favor of Chevron is a U.S. Judge, Lewis A. Kaplan, but he refused to consider any of the environmental evidence and his proceeding was riddled with fraud, paid witness testimony, bias and error. See here.