With its options dwindling and the mistakes of its legal team mounting, Chevron has suffered another courtroom setback in its eleventh-hour attempt to block indigenous rainforest communities from enforcing their $18 billion judgment against the oil giant’s assets around the world.

A three-judge appellate panel in Ecuador on Friday ruled  that a Chevron request for a special bond waiver had no basis in Ecuadorian law, thereby paving the way for the commencement of enforcement actions. Chevron has stripped its assets from Ecuador, forcing the rainforest communities to consider standard judgment collection lawsuits against the oil giant in other countries.

“We intend to do everything in our power to ensure Chevron’s management team meets the company’s legal obligations and pays the full amount of the judgment,” said Pablo Fajardo, the lead lawyer for the 30,000 Ecuadorians who initiated the lawsuit against the oil giant in U.S. federal court in 1993.

“Chevron broke the rainforest of Ecuador,” said Fajardo. “Now it must fix it.”

Once the judgment against Chevron was affirmed by the same Ecuador appellate panel in early January, the oil giant was obligated to request the bond pending an extraordinary final appeal to the nation’s highest court. Payment of such a bond was the only way under Ecuadorian law to temporarily suspend enforcement of the judgment, but Chevron’s legal team blundered by never asking for it, said Fajardo.

Instead of requesting the bond — which easily could have been paid given Chevron’s annual revenues of$240 billion – Chevron requested an unprecedented waiver of the bond requirement.  After Chevron sought the waiver, the rainforest communities charged the oil giant was seeking “special treatment” not available to any other litigant in Ecuador.

The court, in a four-page decision, said seeking a bond “is the only established legal mechanism to give litigants in Ecuador the opportunity to suspend execution of a judgment.”  In reference to Chevron, it added:  “The losing party decided not to exercise this right.”

Separately, the court rejected an “order” issued Thursday from a private investment arbitration thatEcuador’s government freeze the 18-year litigation until it can rule on a separate set of Chevron claims that it the court system in Ecuador treated it unfairly. See here. The private investment panel has been harshly criticized by jurists for violating international law, and the rainforest communities have said its actions have no bearing on their claims given they are not a party to the proceedings. See here and here.

In a detailed analysis of the international law obligations of Ecuador’s government, the appellate panel said the Inter-American Convention of Human Rights and Ecuador’s Constitution trumped any authority from the investment panel, which was convened by Chevron under the U.S.-Ecuador Bilateral Investment Treaty.

The rainforest communities recently filed a petition with a noted human rights court to block any order from the secret arbitral panel, whose members — all private lawyers — stand to reap millions of dollars of fees for simply granting jurisdiction over the case.

“No part of this Convention can be interpreted to permit any person (such as Chevron or the Arbitral Panel) to interfere with the enjoyment and exercise of rights and liberties recognized in the Convention, nor can it override other rights and guarantees that are inherent in the rights of all men,” the panel wrote in its decision.

The panel also ruled that international law to protect investors can never override international treaties that protect fundamental human rights of individuals, including the right to life and the right to seek legal redress, both of which are being exercised by the rainforest communities.

“A simple arbitral award … cannot obligate judges to do violence to the human rights of the citizens of the country where it sits,” said the panel.

A representative of the rainforest communities was pleased with the decision, which she said protects the independence of Ecuador’s courts and ensures that a private investor treaty cannot trump the fundamental human rights of ordinary citizens.  The trial was held in Ecuador only after Chevron moved it there from U.S. federal court, promising to abide by any adverse judgment.

“The Ecuador appellate panel spoke in a way that is consistent with both Ecuador’s laws and the country’s international treaty obligations,” said Karen Hinton, the U.S. spokesperson for the rainforest communities.  “It shows that Ecuador’s independent courts will not succumb to Chevron’s political pressure nor its request for special treatment.”

“After 18 years of dealing with Chevron’s bad faith and abusive litigation tactics, the rainforest communities have a final and enforceable judgment,” she added.

The Ecuador appellate court did grant Chevron’s request for an extraordinary appeal to the National Court of Justice, a process that likely will take one to two years to conclude.

The appellate ruling comes at a time when Chevron officials are furiously trying to cut a side deal withEcuador’s government to illegally quash the environmental case, said Fajardo.  The company apparently offered $1 billion to the government to end-run the legal process, an act that could expose Chevron to criminal liability under various anti-bribery statutes in the United States and other countries, he added.

The Ecuador trial court in February 2011 found overwhelming scientific evidence that Chevron deliberately dumped billions of gallons of toxic waste into Amazon waterways when it operated in Ecuador under the Texaco brand from 1964 to 1992.  The dumping decimated indigenous groups and caused an outbreak of cancer that could lead to thousands of deaths in the coming years, according to evidence before the court. See here and here.

A video that tells the story of the environmental disaster and of Chevron’s fraudulent cover-up can be seen here.

The amount of damages set by the Ecuador court is modest compared to the potential liability of BP in the much smaller Deepwater Horizon disaster in the Gulf of Mexico, said Hinton.  BP already has committed $20 billion in compensation for the Gulf spill, an amount that does not include an estimated$60 to $80 billion in additional liability from civil lawsuits now pending in U.S. federal courts.

Image Courtesy of   http://www.flickr.com/photos/rainforestactionnetwork/

The article Chevron’s Attempt to Evade $18 Billion Judgment Rejected by Ecuador Court appeared first on The Toonari Post - News, Powered by the People!.

Indigenous rainforest communities from Ecuador who recently won an $18 billion judgment against Chevron for environmental damage have filed suit  before a renowned international human rights court seeking an order that would prevent the oil giant from using a secret arbitration to violate their legal rights.

The Ecuadorians filed a petition (attached) before the Inter-American Commission on Human Rights strongly criticizing Chevron’s “egregious misuse” of the U.S.-Ecuador Bilateral Investment Treaty (“BIT”) to violate human rights protections. They are seeking an order requiring Ecuador’s government to protect their right to life, physical integrity, health, a fair trial, and equal treatment under the law as guaranteed by the American Declaration of the Rights of Man and other international human rights treaties.

The petition was filed against Ecuador’s government because Chevron is seeking an order from the private investor arbitration panel mandating that the country’s President freeze the court proceedings until the BIT panel can rule, a process which normally takes three years.  Such an order would violate Ecuadorian and international law as well as the human rights protections that the Commission is sworn to uphold, said Pablo Fajardo, the lead lawyer for the Ecuadorian plaintiffs in the underlying environmental case.

The Commission, located in Washington, D.C., hears claims for emergency relief from individual human rights victims and derives its authority from the multilateral international treaty that created the Organization of American States, of which Ecuador and the United States are members. Any order from the Commission is binding on the government against which it is issued.

“The threats are serious and urgent,” the plaintiffs wrote in their petition, referring to their own plight living near extensive levels of toxic oil contamination in the Amazon rainforest for almost 50 years.  An Ecuadorian court in 2011 found Chevron liable for dumping billions of gallons of toxic waste into the Amazon when it operated under the Texaco brand from 1964 to 1992, causing dramatically increased rates of cancer and decimating indigenous groups.

“The idea that an arbitral panel would even contemplate ordering a sovereign state to violate its human rights obligations is repugnant not only to the substance of international human rights law but to the very core of the international legal order,” the petition added.

The petition also argues that the relief sought by Chevron extends well beyond the scope of the BIT in that it does not authorize private investor arbitration panels to act as a “transnational” appellate court that can override decisions in a public court system of a sovereign nation.  The BIT is normally limited to allowing investors to seek monetary damages directly from a government if it feels it has been treated unfairly, a claim that Chevron makes but that the indigenous communities reject.

The Ecuadorians believe the investor arbitral panel convened by Chevron violates international law in that it bars the rainforest communities from appearing before it, does not publish its decisions, and does not inform the public about when and where it meets.  Further, its three members — all practicing lawyers — suffer from a conflict of interest in that they each stand to reap millions of dollars in fees paid in part by Chevron simply by granting jurisdiction over the case when there is little if any basis to do so.

“What Chevron is trying to with this secret arbitration is utterly offensive to anybody who believes in the rule of law,” said Fajardo, whose clients initially filed the environmental lawsuit against Chevron in 1993 in U.S. federal court in New York before it was shifted to Ecuador at Chevron’s request.

“Chevron is trying to convince the private arbitral panel to override the decisions of a public court in a sovereign country where Chevron chose to litigate, even as Chevron continues to pursue appeals in that country making the same arguments it makes before the secret panel,” he added.  “It’s just an outrageous abuse of judicial process.”

“Any decision by the panel granting Chevron’s requests would violate international law and certainly would not bind the indigenous communities who are not a party to the proceedings,” he added.  “We also believe it will backfire against Chevron if the company carries through on its threats to try to block enforcement of the legitimate Ecuador judgment in courts around the world.”

Ecuador’s government has argued that the oil giant has no right to even file the claim under the BIT given that the treaty did not take effect until 1997, or five years after Chevron left the country.

Chevron’s latest maneuver prompted renowned Latin American jurist Jose Daniel Amado to send a letter to U.N. Secretary General Ban Ki-moon asking for a review of what he called an “improper and illegal expansion of arbitral powers” by the panel. The Amado letter gained immediate support from jurists around the world, who sent a separate letter (attached) backing Amado’s arguments to the U.N. official in charge of international arbitration, Renaud Souriel.

Souriel is hosting a meeting this week in New York to evaluate the issue of “transparency in investment-State arbitration.”

Chevron is seeking any forum it can to delay the Ecuador proceedings given that the company could soon face judgment enforcement actions around the world, said Fajardo. Chevron stripped its assets from Ecuador and a company spokesman said the oil giant would fight the rainforest communities “until hell freezes over, and then skate it out on the ice.”

“Chevron lost the trial,” Fajardo said.  “It lost the first-level appeal in Ecuador.  It lost in the United States.  It has very few options left other than a secret arbitration that will carry no weight in any country that observes the rule of law.

“Nevertheless, by filing this petition, we are showing that we will use every legal means available to expose Chevron’s disrespect for the rule of law and to protect the rights of our clients.”

Chevron tried a similar maneuver before, and it backfired.

Image Courtesy of   http://www.flickr.com/photos/rainforestactionnetwork/

The article Ecuador Communities Target Chevron’s Secret Investor Arbitration appeared first on The Toonari Post - News, Powered by the People!.

After being found liable in Ecuador for creating one of the world’s worst oil disasters, Chevron filed a notice of appeal to Ecuador’s highest court where it seeks special treatment not afforded any other litigant under the nation’s laws — the waiver of a bond required to suspend enforcement of a judgment during the pendency of any appeal.

It would be illegal under Ecuadorian law for the appellate court to grant Chevron’s unusual and unprecedented request to waive the bond requirement, said Pablo Fajardo, the lead attorney for the indigenous and farmer communities who brought suit against the oil giant for the dumping of billions of gallons of toxic waste into the waterways used by several indigenous groups and farmer communities.

“Chevron has every right under the law to seek an extraordinary appeal to the highest court as long as it can cite a proper legal basis,” said Fajardo.  “But Chevron is yet again seeking a special exemption under Ecuadorian law when it claims the bond requirement should not apply to it, while it applies to every other litigant in the country.”

“Chevron behaves in Ecuador as if it is above the law while thousands of people continue to suffer the devastating effects of the company’s toxic contamination,” said Fajardo.  ”This abuse of the judicial process must end.”

For execution of a court judgment in Ecuador to be suspended pending appeal to the highest court — called the National Court of Justice — the losing party must post a bond that is usually calculated at roughly 8% of the amount of damages awarded (roughly $1.5 billion in this case). Chevron is seeking to have enforcement suspended even without posting a bond even though the indigenous and farmer communities continue to suffer grave health effects engendered by the company’s delaying tactics, said Fajardo.

Karen Hinton, the U.S. spokesperson for the Ecuadorians, said in a statement that “for almost two decades, Chevron has stood in the way of a comprehensive cleanup of billions of gallons of crude oil and toxic waste water it deliberately dumped into the pristine rainforest of Ecuador.”

“Thousands of people have died or suffered from illnesses as Chevron and its army of lawyers have waged a campaign to distract attention from the overwhelming scientific evidence against the company,” said Hinton. “Chevron has always believed that Ecuador’s many laws prohibiting environmental contamination should not apply to its misconduct.”

The bond requirement, typical in countries around the world including the U.S., is intended to protect the winning side from unnecessary delays during appellate review.  Ecuador’s first-level appellate court already affirmed the trial court judgment that the company is required to pay $18 billion for a clean-up, a relatively modest amount compared to BP’s estimated $60 billion liability for the smaller Deepwater Horizon spill in the Gulf of Mexico.

Fajardo also said that an arbitral order cited by Chevron as justification for its request for a bond waiver is not binding on the rainforest communities as they are not a party to that proceeding, which is held in secret pursuant to a U.S.-Ecuador investment treaty.

In any event, the arbitral panel never ordered — and under the law cannot order — that Ecuador’s courts take steps that would “clearly violate” Ecuador’s Constitution and international treaties binding the government to protect the fundamental human rights of its citizens, including the right to life and the right to seek legal redress in national courts, said Fajardo.  Further, the arbitral panel has never even held an evidentiary hearing on Chevron’s claims that a remediation contract with Ecuador’s government released it from liability.

“We believe Chevron clearly is misinterpreting the scope of authority of the arbitration,” he added. ”We want to reiterate that Chevron has every right to appeal to Ecuador’s National Court of Justice, but it has no right to special treatment during the pendency of the appeal,” Fajardo added.

The trial court decision, issued in February 2011, found that Chevron systematically dumped billions of gallons of toxic waste into the Amazon, poisoning waterways that local inhabitants use for drinking water and causing increased cancer rates. Damages were set at $18 billion.  In 2002, the case was shifted from U.S. federal court to Ecuador at Chevron’s request.

The trial court in Ecuador also repeatedly sanctioned Chevron’s legal team for filing frivolous motions intended to delay the proceedings, and for threatening a judge with jail if he did not rule in favor of the company.  These actions led to a punitive damages award that accounts for roughly half of the total judgment.

Chevron has roughly two more weeks under Ecuadorian law to determine if it will publicly apologize for its misconduct, which would allow it to eliminate the punitive damages component of the award.

As support for the contention that Chevron believes it does have to adhere to the law in Ecuador, Hinton cited a comment in a 60 Minutes interview where Chevron attorney Silvia Garrigo – pressed as to why the company said it would never pay any adverse judgment in Ecuador – said: “We don’t believe we should be in any court, much less the courts of Ecuador.”

The 188-page trial court judgment is undergirded by a wide body of scientific and testimonial evidence submitted during eight years of proceedings that prove Chevron designed a system of oil extraction that deliberately discharged toxic oil waste into the environment to keep production costs to a minimum. Chevron also has been heavily criticized for trying to defraud the Ecuador court and sabotage the proceedings.

In briefs submitted to U.S. and Ecuadorian courts, the rainforest communities submitted evidence that Chevron technicians staked out “clean” spots at contaminated well sites to test prior to court-supervised judicial inspections; sent dirty soil samples to a secret lab to prevent their disclosure to the court; and doctored a “judicial playbook” document so two academic experts in the U.S. would endorse the company’s misleading sampling protocol, among other charges.

A separate ruling by a New York federal appellate court marks Chevron’s third consecutive legal setback in its effort to block enforcement of the Ecuador judgment.

In September, a federal appellate panel blocked Chevron’s attempt to seek an unprecedented worldwide injunction blocking enforcement. In January, a federal district court judge denied Chevron’s illegal attempt to freeze the assets of the plaintiffs. And on January 3, Ecuador’s first-level appellate court confirmed the validity of the trial court judgment.

The article Chevron Claims Special Treatment Under Ecuadorian Law appeared first on The Toonari Post - News, Powered by the People!.

Members of the appellate panel in Ecuador that affirmed the $18 billion judgment against Chevron for contaminating the Amazon rainforest were clearly outraged at the oil giant’s abuse of the judicial process even as it denied a request by the rainforest communities to increase the amount of damages, a reading of an unofficial translation of the decision reveals.

The judges also found ample scientific basis to uphold the damages award — including devastating evidence provided the court by Chevron’s own team of technical experts that proved levels of pollution hundreds of times higher than permitted by law. But citing a lack of evidence, the panel also rejected efforts by the indigenous communities to seek additional damages for the loss of their ancestral lands and for the spreading of oil on the dirt roads of the region.

Chevron has a right to appeal to Ecuador’s National Court of Justice (NCJ) in Quito, but might first be required to post a bond, said Pablo Fajardo, the lead lawyer for the plaintiffs. The right to appeal to the NCJ — the nation’s highest judicial authority — will not kick in until the appellate panel has a chance to respond to requests by the parties for clarification, which must be submitted by the end of this week.

The case was heard in Ecuador at the request of Chevron, which fought for almost a decade to shift the venue away from the U.S. federal court where it was originally filed in 1993.

“This decision confirms what we have been saying for years,” said Pablo Fajardo, the lead Ecuadorian lawyer. ”Chevron is guilty of extraordinary greed and criminal misconduct that has created a humanitarian crisis in Ecuador that puts thousands of people at risk.

“Whether people live or die depends largely on whether Chevron meets its responsibility to remediate a problem it created,” Fajardo added. ”Chevron broke the rainforest. It now must fix it.”

In a 16-page single-spaced decision, the three Ecuador judges noted that Chevron had “staged incidents that encumbered the process of the trial” and that it dumped 20,000 pages of largely redundant evidence on the appellate court to delay consideration of the case. The plaintiffs have long accused Chevron of trying to undermine the trial by filing frivolous motions and trying to intimidate judges.

Among the key findings by the panel, which reviewed the voluminous trial record of 220,000 pages for 11 months:

In response to Chevron’s complaints that it was “denied justice” in Ecuador, the appellate court noted on the second page of its decision that the only filings from the oil giant that were denied were those that were “abusive” and “clearly designed to obstruct the administration of justice.” For example, Chevron once filed 18 similar motions in the trial court in a 30-minute period, and tried to have the judge removed when he did not rule on them fast enough.

The court found that Chevron’s requests for proof that it needed to defend itself — including the tedious task of conducting 36 judicial inspections of the company’s former well sites — were “processed without exception.” It found that “hundreds of thousands of documents submitted by Chevron bloated the trial record with everything it considered relevant.”

Referencing Article 283 of Ecuador’s civil code, and citing a long list of examples of Chevron’s malfeasance during the trial, the appellate panel upheld a decision that Chevron should pay the costs of the plaintiffs due to the “flagrant bad faith it exhibited in the case.”

The panel wrote:  “Chevron was condemned to pay trial costs for manifest bad faith… so much so that now suffice it to say that the procedural conduct of the defendant, few times seen in the annals of the administration of justice in Ecuador, were abusive to the point that… the Court will not even dedicate any more writings to this portion of the decision.”

The panel also criticized Chevron for continuing to challenge the jurisdiction of Ecuador’s courts, even though the oil giant voluntarily agreed to litigate the case in Ecuador to induce a U.S. federal judge to shift the venue to the South American country.

“From the [initial hearing] up to the present appeal, it can be said that … Chevron has failed to recognize the authority, jurisdiction, and competence of Ecuadorian courts,” the panel wrote on page 15 of its decision.

The court also noted on page 11 of its decision that laboratory results confirmed that pollution existed at former Chevron well sites hundreds of times higher than permissible norms in Ecuador, which themselves are considered relatively lax by international standards.

The panel also noted many of the scientific results that proved the case against Chevron were submitted to the court by Chevron’s own technical experts.

Pierre-Jean Durieu / Shutterstock.com

The article Ecuador Appellate Judges Fuming at Chevron’s Abuses appeared first on The Toonari Post - News, Powered by the People!.