In a legal battle involving one of the largest instances of environmental contamination in history, a U.S. district court judge in Manhattan ruled on March 4th in favor of Chevron Corporation after finding that a massive Ecuadorian judgment against the company was procured by corruption.
The case was filed on behalf of a group of 47 Amazon villagers who claimed that Texaco, an oil company later bought by Chevron, dumped billions of gallons of toxic waste into Amazonian streams from the 1960s through the early 1990s. These villagers asserted that the extensive pollution resulting from the dumps caused the destruction of a substantial part of the Amazonian ecosystem and made villagers sick.
Chevron denied the allegations and claimed that they had followed all Ecuadorian environmental laws and procedures for the cleanup of toxic waste.
But there is a wealth of evidence that oil companies operating in Ecuador, specifically Texaco/Chevron, used flawed practices while extracting and moving oil, resulting in the mass pollution of portions of northeastern Ecuador. Those faulty procedures included carelessly discarding drilling fluids associated with oil and pumping wastewater into local water systems.
Texaco had been heavily courted by Ecuadorian officials to begin oil development in their country. At first it went virtually unregulated, thereby explaining why they got away with polluting for so long in the first place. Also, the oil pits were spread over a remote area, roughly the size of Rhode Island, where no one would know what was really going on.
Not only did Texaco/Chevron’s failure to safely remove toxic wastewater devastate the environment, it also forced scores of indigenous people living in the region to relocate. Many reported developing illnesses due to exposure to the toxic waste left behind by the oil industry, and cancer incidence rates skyrocketed among those in the 60-70 age bracket.
After a legal battle in the Ecuadorean courts, the plaintiffs in the class action lawsuit filed against Chevron won their case in 2011 when a judge issued an $18 billion judgment against Chevron. Last year, Ecuador’s highest court upheld the judgment but slashed it down to around $9.5 billion dollars.
But on March 4th, a U.S. federal district judge, Lewis A. Kaplan of New York, stated that U.S. Courts would not enforce the $9+ billion dollar judgment against Chevron.
Judge Kaplan found that the lawyer representing the plaintiffs, Steven Donziger (along with other Ecuadorean lawyers on his legal team), used corrupt means to get the Ecuadorian courts to rule in their favor. In his ruling, he stated that these lawyers submitted fraudulent evidence and used other illicit tactics, such as coercing a judge, money laundering, and promising a $500,000 kickback to the Ecuadorean judge who ruled in their favor last November.
Chevron’s website discussing the lawsuit also states that the mass fraud included the bribing of an Ecuadorian court expert who allowed Donziger’s team to ghost-write a damages report.
However, Donziger and his legal team have a very different story of what happened. They claim that they did not participate in any wrongdoing and that Judge Kaplan’s ruling is “an appalling decision resulting from a deeply flawed proceeding…”
Donziger has said that he and his clients would appeal.
As a result of the U.S. District Court ruling, Ecuadorian judgment cannot be enforced in the U.S., but Texaco isn’t off the hook yet. Amazonian plaintiffs will still try to receive settlements in other countries where Chevron has substantial potentially seizable assets, such as Canada, Brazil, and Argentina.
In essence, their argument is that Ecuadorean courts have already ruled in their favor and that the ruling should stand. But Chevron is expected to use the U.S. decision as leverage in other countries, claiming judicial corruption in Ecuador. This argument, buttressed by the U.S. District Court’s ruling, may give them a huge advantage.
“In view of the findings here about what really went on in this case, we don’t think any serious court will entertain enforcement of the fraudulent judgment,” said Chevron’s General Council, R. Hewitt Pate.
Although Judge Kaplan did rule in Chevron’s favor, he did not rule directly upon whether or not Chevron was actually negligent. Whether negligent or not, there is no real dispute that the resulting oil pollution was devastating to the Ecuadorian environment. Tragically, despite decades of litigation, it still has not been cleaned up. The real injustice is that there is still oil on the ground, as there has been for the last four decades.
The reality is that oil is Ecuador’s largest source of income, accounting for 40 percent of its export earnings as of 2007, and it will continue to dominate the Ecuadorian economy despite its proven negative effects on the environment.
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