Chevron avoids paying Ecuador for Environmental Damage
The not surprising decision by a US appeals court that Ecuador had illegally charged Chevron makes it impossible for the country to obtain payment in US territory.
In March 2014, a New York judge ruled that the sentence of an Ecuadorian court condemning Chevron to pay more than $9 billion to Ecuador had been issued fraudulently, since it considered proven that the American lawyer who promoted the demand, Steven Donziger, falsified environmental reports and bribed the judge who issued the ruling.
Although Judge Lewis Kaplan’s decision did not cancel the heavy fine, it prevented that the money to be paid by Chevron could be collected in any court of the United States. In addition, it favored that it could not take effect either in the courts of Canada, Brazil or Argentina, where Chevron has assets.
Ecuador advocates appealed the sentence, which two and a half years later has been ratified by the appeals court.
“There is no authority to suggest that one of the parties, ignorant of the fraudulent actions of their lawyers, to implement a judgment obtained fraudulently”, argued the appeals judge on Monday.
“Even innocent customers can benefit from fraud by their lawyer,” it stressed.
Lawyer Deepak Gupta, said the court decision was “unprecedented” and warned of the danger that can result in future cases against big corporations.
“The decision puts in the hands of wealthy corporations a pattern to evade legal responsibility anywhere in the world,” Gupta said in a statement reproduced by Reuters. He also warned, that the decision has “thrown out the window the whole framework of international implementation of judgments”.
By contrast, Chevron’s vice president, R. Hewitt Pate, celebrated the ruling. He said that “the Ecuadorian judgment against Chevron is illegitimate and an unenforceable product malpractice”.
Despite the joy of the company after this victory, the legal battle is far from over. A spokeswoman for the plaintiffs, Karen Hinton, told US media that they will continue “exploring all options for a future appeal” of the judgment.
“No matter how disappointing it is, this failure will not prevent the Ecuadorians, to continue seeking justice in Canada and in other countries where trials are underway to seize Chevron’s assets,” promised Hinton, calling the appeals court decision a “sad day for the American judicial system.”
The origin of the legal dispute dates back to 1993, when Ecuador filed a lawsuit in the courts of New York on behalf of 30,000 indigenous people of Lago Agrio, in northeastern Ecuador, demanding financial compensation from Texaco for polluting waters in the region with its extractive practices between 1964 and 1992. The lawsuit against Texaco was admitted in an Ecuadorian court and, when Chevron acquired the company in 2001, it also inherited the legal battle.
In 2011, the Ecuadorian judge Nicolas Zambrano ruled against the multinational, condemning it to compensation of $19 billion, the harshest fine to date against an oil company as a result of environmental pollution.
The sentence was subsequently reduced to half, $9,5 billion by the National Court of Ecuador. Chevron has repeatedly refused to pay the fine.