Ecuadoreans Plan to Pursue Chevron in Other Countries
By SIMON ROMERO and CLIFFORD KRAUSS
CARACAS, Venezuela — Armed with a $9 billion ruling against Chevron in Ecuador but little chance of collecting it there, representatives for Ecuadorean villagers said Tuesday that they were looking at waging legal battles against the company in more than a dozen countries where it operates, hoping to force Chevron to pay.
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Dolores Ochoa/Associated Press
Pablo Fajardo, the lead lawyer representing the Ecuadorean villagers at a news conference in the capital, Quito, on Tuesday.
Ecuador Judge Orders Chevron to Pay $9 Billion (February 15, 2011)
The latest salvo, coming only a day after an Ecuadorean judge ordered Chevron to pay one of the largest environmental awards ever, suggests that the legal battle between villagers and oil executives, which began in 1993, is far from over.
The case stems from oil pollution in the Ecuadorean rain forest, but Chevron does not operate there and has no significant assets in the country. It was Texaco, which Chevron acquired in a merger in 2001, that was accused of widespread environmental damage before pulling out of Ecuador in the early 1990s.
Chevron has much larger operations elsewhere in Latin America, and the plaintiffs’ strategy of pursuing the company across the region could open a contentious new phase in the case — one that would test Ecuador’s political ties with its neighbors and involve some of Washington’s most prominent lobbyists and lawyers.
Advisers to the plaintiffs said Brazil, Argentina and Venezuela would be obvious candidates to pursue Chevron assets, but they acknowledged it would not be easy. Venezuela, for instance, is a close Ecuadorean ally and its president, Hugo Chávez, is a frequent critic of the United States. But Chevron has extensive operations in Venezuela and enjoys warmer ties with Mr. Chávez’s government than just about any other American company.
The plaintiffs also face an uphill struggle collecting damages in the United States, at least immediately, given that a judge in New York this month temporarily prevented enforcement of the Ecuador awards. Still, legal advisers said they were prepared to try to collect damages in the United States as well.
A confidential memo prepared by the Washington law firm Patton Boggs recently released under court order laid out the plaintiffs’ strategy, which foresees using a European industrial espionage firm to investigate Chevron’s assets around the world.
“The fact that Chevron has agreed to ‘play ball’ in Venezuela, while the company’s peers have universally rejected the unfavorable contract terms imposed by the Chávez government, may portend difficulty there,” said the memo, code-named “Invictus.” “Nonetheless, the populist Chávez government remains a natural ally” of the plaintiffs.
In the memo, lawyers also identified the Philippines, Singapore, Australia, Angola, Canada and several other countries where Chevron has significant assets as potential targets. In the Philippines, it even suggested using the services of Frank G. Wisner, the retired diplomat and a foreign affairs adviser for Patton Boggs, who recently waded into the crisis in Egypt as an envoy for the Obama administration.
Citing the Invictus memo, Judge Lewis Kaplan of the Southern District of New York argued that the plaintiffs were seeking to use a “worldwide, full-court press” to extract a settlement against a company of considerable importance in providing energy supplies to the United States economy.
Chevron said it did not intend to pay a dime. “We intend to resist enforcement anywhere where the plaintiffs seek to take what we perceive to be a fraudulent judgment,” said Kent Robertson, a Chevron spokesman.
Beyond the temporary protection issued by Judge Kaplan, Mr. Robertson noted a decision by a panel of international arbitrators in The Hague that granted the company a preliminary injunction that might also block enforcement of the judgment.
But Ecuadorean lawyers said they did not consider themselves under the jurisdiction of either the American court or the arbitrators.
Referring to the arbitration process, one of the lawyers, Pablo Fajardo, said, “This is part of the Chevron legal strategy to delay and obstruct.”
Duncan Hollis, associate dean of the Temple University law school, said it was logical for the plaintiffs to take their battle to other countries in the region because “there is some commonality in Latin American legal systems.” But, Mr. Hollis added, “there is no international law about how one court is supposed to enforce the judgments from another nation’s court.”
For now, the case moves forward in the Ecuadorean courts. Three judges will hear appeals from both sides. The Amazon coalition intends to appeal the amount of the damages, while Chevron will appeal the entire ruling.
“I don’t know if we will be broadcasting” our legal argument, Mr. Robertson said. But he added: “It is the illegitimate nature of the ruling. The scientific evidence demonstrates that this is a meritless outcome.”
The final appeal will go to a national appeals court, a process that could take months. Then the fight may move to several countries simultaneously. Advisers to the villagers and forest tribes said they hoped to extract Chevron money from many countries until they reach the final judgment total.
The ruling’s impact is already being felt in Ecuador and beyond as a cautionary tale of the environmental and legal aftermath of oil exploration. Alberto Acosta, a former oil minister in Ecuador, called the ruling “a historical precedent.”
It is “a reminder that we have to defend ourselves from the irresponsible activity of extraction companies, both oil and mining,” Mr. Acosta said.