Chevron Putting Out Inaccurate Information About Ontario Enforcement Action To Hide Risk of $12b Ecuador Pollution Judgment

Criticized By Shareholders, Chevron CEO Misleads Markets About Risk of “Amazon Chernobyl” Disaster; Lawyer for FDA Answers Questions About New Enforcement Plans

New York – Chevron CEO Michael Wirth has been misleading the financial markets by not disclosing that the company this week failed in its long-running effort to obtain a dismissal of the $12 billion Ontario enforcement action with prejudice, allowing the case to be re-filed in any of a number of jurisdictions where the company has assets, say Amazon rainforest leaders who continue to suffer a wave of cancers from the company’s dumping of billions of gallons of toxic oil waste.

Patricio Salazar, the lawyer for the indigenous groups and farmer communities that won the landmark $12 billion judgment affirmed by Ecuador’s Constitutional Court in 2018, explained that his clients were the party that sought to discontinue the enforcement action in Ontario (Canada) for procedural reasons. Because Chevron failed to get a “fraud” finding in Ontario – which would have led to a dismissal with prejudice – the case can be brought again in any jurisdiction outside Ontario.

There still has been no enforcement trial anywhere in the world on the validity of the Ecuador judgment, which is something Chevron has avoided largely by using 60 law firms to tie up the justice process, said Salazar. In a press release issued this week, Chevron tried to leave the impression that the entire case was subject to a “final dismissal” just because of the end of the one enforcement action – something completely untrue and misleading, he added.

The enforcement action in Canada became necessary because Chevron stripped its assets from Ecuador and refused to pay the judgment after having accepted jurisdiction in the South American country. “Chevron, which is nervous about a $12 billion liability that has shamed the company, once again has demonstrated it has a very estranged relationship to the truth,” said Salazar.

“What actually happened is that after much discussion, the affected indigenous peoples and farmer communities decided to seek a dismissal of the Ontario action to refocus our efforts to collect the judgment in a more appropriate venue where the company’s substantial assets will be available for seizure,” he said. “While we had hoped for a better outcome in Ontario, there are a number of other viable options being considered that we believe will be produce a better result faster for the affected communities in terms of the asset recovery portion of the case.”

The community leader of the organization that brought the lawsuit, the Frente de Defensa de la Amazonia (FDA), warned Chevron that the enforcement case will continue until a recovery occurs at a level necessary to do a comprehensive clean-up of the extensive environmental damage. Chevron was found liable in 2011 for dumping 16 billion gallons of cancer-causing oil waste onto ancestral lands, causing an outbreak of cancer and decimating five indigenous groups. That decision was affirmed by three separate appellate courts in Ecuador, where Chevron insisted the trial be held.

“Chevron needs to understand that the affected communities in Ecuador will push until their historic judgment is enforced such that the world’s worst oil disaster is cleaned up by the responsible party as found by multiple courts,” said Ermel Chavez, the President of the FDA.

Salazar also said Chevron’s witness bribery and fraud in the United States – currently the subject of three criminal referral letters to the U.S. Department of Justice – will continue to be exposed, leading to potential jeopardy for the company’s executives and lawyers at the outside law firm Gibson Dunn & Crutcher. Those issues are expected to be raise in any enforcement trial, Salazar said. (See here and here for the criminal referral letters signed by Amnesty International, Global Witness, Greenpeace USA, Rainforest Action Network, Amazon Watch, and others.)

Here is a Q&A with Salazar conducted by Karen Hinton, U.S. spokesperson for the Ecuadorians and a former aide to New York City Mayor and U.S. presidential candidate Bill DeBlasio:

Tell us the latest about the dismissal of the enforcement action in Ontario – why?

We decided that this incredible case – really a landmark case for the global environmental and indigenous rights movements – needed a revamp after seven years of enforcement litigation in Canada that was heavily burdened by Chevron’s strategy of obstruction and delay. It was unclear if we could collect assets in Ontario, so it seemed to be the right time to move forward in a different place. The good news is that we did obtain an amazing decision from the Canada Supreme Court backing our right to enforce against Chevron assets, so we are still in good shape from a legal standpoint. That decision will benefit indigenous peoples all over the world for decades to come.

Why did Chevron agree to a joint dismissal of this one action on consent in Ontario without trying to settle the entire case, given the amount of risk it faces?

Chevron obviously wants to get rid of any legal action that might lead to accountability for its disaster in Ecuador. The case has become an inspirational rallying point for people all over the world in terms of environmental justice, indigenous rights and climate change. Chevron does get a sugar high for a few days in terms of a public relations boost as they are claiming the case ended in Ontario. That is being amplified in the business media to suggest we have given up. The case is not over and we are fighting with as much determination as ever. It is clear the long-term trajectory is not good for Chevron.

Why did Chevron agree to a dismissal without prejudice, meaning the case can be brought again?

Chevron originally wanted a dismissal with prejudice. Their lawyers wanted some sort of ruling, based on the Kaplan “racketeering” case in New York which has been rejected by 17 judges in Ecuador, that the Ontario case was dismissed because it was the product of “fraud” or was “vexatious”. The company backed off and agreed with our request for a dismissal without any of those findings. While we didn’t get enforcement in Ontario and that’s disappointing, the fact the case was dismissed without prejudice is a victory for the Ecuadorians. Chevron knew it couldn’t prove “fraud” if it were to be litigated before a neutral judge in Ontario.

Explain the long-term prospects for Chevron in terms of enforcement.

Chevron could have pressed for a hearing in Ontario on the merits of the evidence. The enforcement issue could have been decided once and for all. But of course Chevron’s CEO Michael Wirth and General Counsel Hew Pate want to avoid that at all costs given the overwhelming scientific documentation of the company’s toxic dumping and the wave of cancers it has caused. So, when that enforcement trial happens and the facts come out, we have a high degree of confidence Chevron will lose. In fact, I don’t think the company will even take the risk of having its fraudulent evidence tested at an enforcement trial. I wouldn’t if I were them.

Has there ever been an enforcement trial to assess the Ecuador judgment?

No, and that’s largely because Chevron has spent massive sums of money on hundreds of lawyers to block an enforcement trial. Wirth knows that once in trial, they are likely to lose. The world spotlight will be on their massive pollution and criminality in Ecuador including witness bribery and fraud. It is important to remember there has never been a single enforcement hearing on the merits of the Ecuador judgment anywhere in the world. We are determined to make that happen as soon as possible.

How does the dismissal of the Ontario action help the affected peoples of Ecuador who live in this very contaminated area of rainforest?

It allows us to refocus our resources on those places where seizing Chevron assets is viable. In Ontario, Chevron hid its assets in a 7th-tier subsidiary. That created a complication. Plus, for various reasons that made sense years ago but no longer make sense today, we were tied up in a commercial court with what is fundamentally an indigenous rights and environmental rights case.

So Chevron’s celebratory mood this week is premature?

Premature, entirely inappropriate, and based either on a deliberate lie or a scary level of self-delusion. The affected communities in Ecuador won the judgment based on 220,000 pages of evidence and 105 expert reports. Chevron submitted thousands of water and soil samples in the Ecuador trial that proved the case against it. That’s why the company hires armies of lawyers – 60 law firms at last count – to obstruct and delay, rather than litigate on the merits.

Tell us about your allegations that Chevron committed fraud in the New York RICO case.

Chevron is now the subject of three criminal referral letters signed by Amnesty International, Global Witness and other leading NGOs for engaging in witness bribery and fraud in a U.S. “racketeering” case used to try to undermine the Ecuador judgment. The company’s criminality is pretty obvious; the question is whether the Trump-run DOJ will move on the request. Regardless, Chevron’s fraud in its RICO case – including coaching a paid witness to lie in court which is indisputable and just shocking – will be exposed in an enforcement trial.

What is the overall risk faced by Chevron by the Ecuador judgment at this point?

Significant. The company faces the largest environmental judgment in the world backed by four courts in Ecuador. The right to enforce against company assets has been backed unanimously by Canada’s Supreme Court. Dozens of institutional shareholders are pressuring CEO Wirth to settle. Wirth and his management team are squandering vast sums on legal fees while indigenous peoples are dying due to the company’s inaction. Indigenous groups in South American are ready to announce a continent-wide boycott of Chevron, which would put the company at a major competitive disadvantage. Wirth and his team continue to lie in press releases to hide their risk from the financial markets, creating additional exposure to regulatory authorities. Plus, Chevron faces a revolt from the world’s leading NGOs, including Amnesty International, who are demanding a criminal investigation. Overall, it’s not a pretty picture.

What’s the time frame to move on this?

We are working diligently to weigh options and move as quickly as possible given that our clients continue to suffer from illness and death due to Chevron’s refusal to abide by court orders that it remediate.

Can you tell us where you plan to file?

We have been weighing options. The specifics are confidential.

How is the morale of the affected communities in Ecuador?

Strong.  We have great leadership at the local level through the FDA, the non-profit group that brought the case. The people are sophisticated and they get Chevron’s game of obstruction and delay. They know they have won the case based on the truth and that their leadership has inspired many around the world. They also are inspired by the courage and commitment of Steven Donziger, their longtime U.S. lawyer who has stood up to the company’s attacks for two decades now and who has played an instrumental role in getting the case to this point. This is by far the furthest advanced any such environmental and indigenous rights case against a US oil major.

Do you think Chevron is capable of respecting adverse court decisions?

That’s a funny question. Chevron only respects such decisions if it is forced to respect such decisions. Our experience is that Chevron attacks any judge or court that disagrees with the company’s position. Chevron has decimated five indigenous cultures, almost to the point of genocide given the deliberate dumping of poison into fresh water sources. The company regularly attacks Ecuador’s judicial system, violating its sovereignty.  All of this was done out of pure greed.

(For more information on Chevron’s Ecuador disaster, see this website. For background on the cancer epidemic caused by Chevron’s toxic dumping, see this summary memo; for the overwhelming evidence against Chevron, see here; for a photo essay on some of Chevron’s victims, see here.)