Chevron Evades Paying Ecuadorean Villagers for Amazon Damages Again

Wednesday, March 26, 2014 - 12:45

Three years ago, oil giant Chevron was ordered to pay $19 billion in an Ecuadorean court to indigenous villagers in the Amazon for damages following oil extraction by Texaco, which ended in 1992. As one of the largest judgments in history regarding environmental pollution, the decision marked a significant victory in the long battle against Chevron. Despite the fine being lowered to $9.5 billion by the Ecuadorean Supreme court, Chevron has not only refused to pay the fines but also refuses to acknowledge any culpability for the polluting the Amazon rainforest of Ecuador.1

More than 20 years ago in 1993, 30,000 Ecuadorean villagers sued Chevron. The indigenous villagers accused Chevron of dumping 18 billion gallons of toxic wastewater. Chevron is also accused of spilling more than 17 million gallons of oil and leaving more than 1,000 waste pits unsealed which contain toxic waste. The resulting pollution has allegedly led to cancer and birth defects for those living in the region.2 Environmental groups and human rights groups have since condemned Chevron, calling their actions in Ecuador a “Rainforest Chernobyl.” 2

Despite the huge fines against Chevron, the enormous legal team they employ and their endless budget has allowed Chevron a recent victory against the indigenous groups and their environmental lawyer, Steven Donziger. A federal judge from Manhattan, Judge Lewis A. Kaplan, ruled that the case against Chevron was developed using fraud and corruption. Kaplan released a 500-page ruling which acknowledged the pollution in Ecuador’s Amazon, however the ruling supported Chevron’s claims that Donziger and his team participated in “conspiracy and criminal conduct.”1 This ruling increases the likelihood that Chevron may evade any responsibility for the oil pollution in Ecuador. As a result, Donziger and others from his team have been banned “from profiting from the egregious fraud that occurred” as a result of the ruling. The ruling agrees with Chevron’s claims that Donziger and his team were responsible for ghostwriting an environmental report submitted by an environmental group to the Ecuadorean court. Donziger has admitted to working with the scientific firm, but maintains the results of the report are solid.2 Chevron also accused Donziger of bribing the judge who made the ruling in the Ecuadorean court.

While this court decision does not affect the enforcement of the ruling in other countries such as Canada, Brazil and Argentina, where lawyers working for Ecuador have sued for assets, Steven Donziger is now facing charges. Donziger was charged with fraud and as a result, he is liable under the civil provisions of the Racketeer Influenced Corrupt Organizations Act, or RICO. RICO was originally established in an effort to suppress the mafia.2 Before the case was dropped, Chevron was seeking $60 billion in damages from Donziger in a RICO suit, claiming that Donziger was simply plotting to rob Chevron of billions using pollution claims. While this claim was eventually dropped, Chevron also won their RICO case to avoid making a payment. It is becoming evident that it will be nearly impossible to enforce fines laid out by Ecuadorean courts. Environmental groups fear that this recent victory shows the power of big corporations and their ability to defy any opposition. More than 44 environmental groups signed a letter opposing the lawsuit, stating the case has led to a “growing and serious threat to the ability of civil society to hold corporations accountable for their misdeeds around the world.”3 Chevron’s actions resemble tactics used by other large corporations in the past to evade accountability. Environmental and consumer groups do not have the resources to fight the army of attorneys that big corporations can hire. Paul Paz y Miño of Amazon Watch argues that this new model of fighting back by big companies will only lead to more problems and less justice for those without the funds to fight: "If they don't have the resources to make that fight legally, they may have to just pick another campaign, and it would end there."2 The fears of environmental groups are now being realized as the money and power of Chevron continues to allow them to evade paying for the extensive damages to the Ecuadorean Amazon. This new model by big businesses has also put journalists in jeopardy.

While Chevron was attacking Donziger and his legal team, they also were trying to force documentary producer Joe Berlinger to hand over more than 600 hours of footage. This move caused the NY Times, ABC, CBS  and other media sources to immediately back Berlinger. The footage included everything from ecosystem damage to strategy sessions of the legal team. Chevron claimed the footage could help its case, yet the media community stood firmly behind Berlinger.2 Chevron also attempted to gain access to the personal information of the various journalists and environmentalists openly speaking out against the case. Chevron sought over 100 IP addresses and identities of opposition email accounts in an effort to gain material to build their case against the Donziger legal team.2

This is not the first time in Chevron’s long history that they have used dubious tactics. Chevron previously hired the Nigerian military to violently end protests by a group of unarmed fisherman and villagers who were occupying a Chevron oil platform in Nigeria. The move was exposed in an award-winning documentary by Amy Goodman and Jeremy Scahill, Drilling and Killing: Chevron and Nigeria’s Oil Dictatorship.4 Fearing actions such as these and Chevron’s overall power, environmental and human rights groups alike have vowed to continue to fight. On the other hand, Chevron has also vowed to continue to fight the rulings against them. One official commented on the battle: "We will fight [the lawsuit] until hell freezes over […] And then fight it out on the ice."2

One week after Kaplan’s ruling in favor of Chevron, Donziger filed an appeal against the decision. The same day Chevron filed a $32.3 million suit against Donziger and the others accused of fraud. Filed in New York City, Donziger is now being asked to reimburse Chevron for the cost of bringing the racketeering case against them. Deepak Gupta, a lawyer for Donziger believes that the case is simply a bluff to intimidate anyone who may file against Chevron for wrongdoing. The figures submitted to the court indicated that $32.3 million broke down to 36,837 hours of legal work from the firm hired by Chevron, Gibson, Dunn, and Crutcher.5 The work also included Randy Mastro, Chevron’s lead lawyer, who charges $1,140 an hour. Despite the large sums being sought by Chevron, Gupta remains confident that the suit is simply a statement. “Steven is a solo environmental lawyer who works from the kitchen table of his apartment. Chevron knows he can't actually pay those fees -- and that's the point.”5

While Chevron appears to have won the most recent round and Steven Donziger is about to enter into a battle for his livelihood, this court case between Chevron and Ecuadorean villagers has become monumental. While this case is significant because it is one of the longest running court battles in corporate history, it also holds major implications for current and future environmental damage cases. Donziger may have committed fraud and Chevron may have spilled 17 million gallons of oil, but one fact remains the same; Ecuadorean villagers are struggling and, instead of Chevron spending money to clean up the Amazon, they are spending millions to deny any responsibility for their actions. Chevron officials have made it clear that they will fight to the bitter end, but the unfortunate truth is that Chevron has the power to keep fighting and environmental groups do not. After 20 years in court debate, the damage to the Amazon remains the same and in this David versus Goliath story, it looks as though the Goliath that is Chevron might win. If Chevron does not win, they will most certainly go down kicking and screaming.

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Works Cited

1.     Krauss, Clifford. “Big Victory for Chevron Over Claims in Ecuador.” The New York Times. March 4, 2014. Pg 1-4. Web. March 17, 2014.

2.     Potter, Will. “Hell Will Freeze Over Before Chevron Pays for Pollution.” Vice. March 7, 2014. Pg 1-4. Web. March 17, 2014.

3.     “Institutions, Organizations and Individuals Advocating for Corporate Accountability Condemn Chevron’s Retaliatory Attacks on Human Rights and Corporate Accountability Advocates and See it as a Serious Threat to Open Society and Due Process of Law.” Amazon Watch. December 18, 2013. Pg 1-2. Web. March 24, 2014.

4.     “Drilling and Killing: Landmark Trial Against Chevron Begins Over its Role in the Niger Delta.” Democracy Now. October 28, 2008. n. pag. Web. March 24, 2014.

5.     Raymond, Nate. “Chevron Seeks $32 million in Legal Fees in Ecuador Case.” Reuters. March 19, 2014. Pg 1-4. Web. March 20, 2014.  

About Author(s)

Kelcey Hadden-Leggett
Kelcey Hadden-Leggett is an undergraduate student at the University of Pittsburgh pursuing a degree in Spanish, a Certificate in Latin American Studies, and a related area Certificate in Portuguese. She recently completed the Pitt in Ecuador program in the Amazon.