Chevron Attempts to Evade 18 Billion Dollar Liability in Ecuador
A distinguished international law jurist from Latin America has issued a letter to United Nations Secretary General Ban Ki-moon, asking for a review of Chevron's "egregious misuse" of an investor treaty to evade its $18 billion liability in Ecuador for creating one of the world's worst oil-related disasters in the Amazon rainforest, according to a letter released to thousands of arbitration specialists around the globe.
Jose Daniel Amado, a leading law scholar in Peru and a specialist in international arbitration, told the Secretary General that Chevron's latest attempt to deny the legal claims of the rainforest communities to be decided by an arbitration panel that meets in secret "stands in direct violation of international law" and would "quash" the fundamental human rights of the 30,000 citizens who initially brought suit against Chevron in the U.S. in 1993.
Chevron shifted that lawsuit to Ecuador in 2002 after praising the country's judicial system and promising to abide by any judgment there, subject only to narrow enforcement defenses that did not include international arbitration.
"Chevron has constructed what appears to be a calculated plan to manipulate a commercial investment dispute system to evade the outcome of a private litigation," wrote Amado, who has served as a consultant to the Ecuadorian plaintiffs.
Amado asked the Secretary General to conduct a review of the matter "to ensure that the Bilateral Investment Treaty (BIT) arbitration system is not used by Chevron to undo international law protections guaranteeing access to justice."
In January, after a nine-year legal proceeding, a three-judge panel of the Ecuador appellate court confirmed an $18 billion award against Chevron for the deliberate dumping of billions of gallons of toxic waste into Amazon waterways that local inhabitants relied on for drinking water. The Ecuador trial court found evidence that Chevron's contamination decimated indigenous groups and caused an outbreak of cancer and other oil-related diseases. For more information, click here and here.
The trial in Ecuador produced 220,000 pages of evidence and more than 64,000 chemical sampling results from independent laboratories which proved that dozens of Chevron oil production facilities suffer from extensive levels of life-threatening heavy metals and toxins, according to the findings of the Ecuador court.
On Jan. 4, the day after the Ecuador appellate court decision, Chevron petitioned a private arbitration panel convened under the U.S.-Ecuador BIT to order Ecuador's executive branch to interfere in its independent judiciary and block the ability of the Ecuadorian citizens to enforce their judgment in countries around the world. Chevron had stripped its assets from Ecuador to avoid paying the judgment.
Lawyers for the Ecuadorians say the arbitration panel does not have such authority, and that in any event Ecuador's government is obligated to ignore its orders given its own binding legal obligations under the Ecuador Constitution and various international treaties protecting the human rights of its citizens. See the letter from Ecuadorian lawyer Pablo Fajardo by clicking here.
The arbitration panel prohibits the Ecuadorians from appearing before it and takes no steps to inform them (or the public) of the status of its proceedings or when or where it is meeting. Nor does it release its decisions in a system that clearly lacks due process of law, said Aaron Page, who represents the Ecuadorians and who has represented governments in the arbitral proceedings.
Some commentators have likened the secret arbitration panel to a "kangaroo court" rife with conflicts of interest and imbued with a pro-business culture. See this article by clicking here.
The arbitrators are private sector lawyers who generally rule in favor of investors and against sovereign governments—a fact which in recent years has led several countries to withdraw or threaten to withdraw in recent years from the arbitral system, said Page.
"Chevron's radical request for relief in this case potentially undermines the credibility of the entire investor arbitral regime," Page said.
In the letter to Ban Ki-moon, Amado noted that a recent "interim" order by the arbitration panel asking Ecuador's government to freeze the environmental case "makes a travesty of the bilateral commercial treaty system" and represents an "illegal expansion of arbitral powers with wide-ranging implications for well-settled principles of international law, including fundamental human rights and state sovereignty."
"Such a result is simply untenable under international law—BIT arbitral panels cannot be called on by investors to set aside countries' constitutional systems and sovereignty, which are essential components of modern democracies," he added.
Concern over Chevron's latest stratagem, Amado pointed out, is shared by a U.S. federal appellate court which ruled last year that the longstanding legal claims of the Ecuadorians "cannot be settled" through the BIT arbitration given that they are not a party to those proceedings.
"The international legal community was shocked by this [interim] Order, which Chevron interpreted to force the Ecuadorian executive branch affirmatively to interfere in a judicial process and limit Ecuador's sovereignty vis-a-vis a case that has been in the courts for 18 years," he said.
The Amado letter was emailed to 7,000 arbitrators around the world by the Peruvian Arbitration Institute, which said it considered the letter "of high interest" to the international arbitration community.
Amado is a graduate of Harvard Law School and the founding partner of Miranda & Amado, one of Peru's leading law firms. He has published numerous articles on international law topics, has lectured in various countries, and has represented both private investors and governments before BIT arbitration panels.
Amado is also a member of the American Chamber of Commerce in Peru and is president of the Energy Legal Committee of Peru's National Mining, Oil and Energy Society.
The three arbitrators hearing the Chevron claims—all private lawyers who represent investors before other arbitration panels in the same treaty system—stand to personally reap millions of dollars in fees if they grant jurisdiction over the case, which in itself is a hotly contested issue given that Chevron left Ecuador five years before the U.S.-Ecuador BIT took effect in 1997, Page said.
R. Doak Bishop, an American from the firm King & Spalding who is Chevron's lead lawyer in the Ecuador matter, has served as an arbitrator in numerous cases convened under the BIT process while he simultaneously represents private clients in the same system. Ecuador's American lawyers are only putting up a nominal defense, essentially leaving the Ecuador plaintiffs without representation before the panel, said Karen Hinton, the U.S. spokesperson for the plaintiffs.
In any event, it is clear that any "award" from the panel will lack legitimacy in countries that observe the rule of law and will not be an obstacle to enforcement of the Ecuador judgment, said Amado.
"This is a far-fetched strategy by Chevron that has little chance of working," said Amado. "But it is our duty as international lawyers to prevent it from causing collateral damage to the international legal order that protects the human rights of all peoples worldwide."
Chevron operated in Ecuador under the Texaco brand from 1964 to 1992.
A background document on Chevron's arbitration stratagem is available by clicking here.
For more information, click here.
Yet another former Trump administration staffer has come out with an endorsement for former Vice President Joe Biden, this time in response to President Donald Trump's handling of the coronavirus pandemic.
- Trump Denies CDC Director's 2021 Timeline for Coronavirus Vaccine ›
- Trump Orders Hospitals to Stop Sending COVID-19 Data to CDC ... ›
- Two White House Staffers Test Positive for Coronavirus - EcoWatch ›
- Trump Admin to Disband Coronavirus Task Force - EcoWatch ›
- Pence Offers 'Prayers' as Hurricane Laura Hits Gulf Coast While ›
EcoWatch Daily Newsletter
Every September for the past 11 years, non-profit the Climate Group has hosted Climate Week NYC, a chance for business, government, activist and community leaders to come together and discuss solutions to the climate crisis.
- Covering the 2020 Elections as a Climate Story - EcoWatch ›
- Coronavirus Delays 2020 Earth Overshoot Day by Three Weeks ... ›
By Elliot Douglas
The coronavirus pandemic has altered economic priorities for governments around the world. But as wildfires tear up the west coast of the United States and Europe reels after one of its hottest summers on record, tackling climate change remains at the forefront of economic policy.
- German Business Leaders Call for Climate Action With COVID-19 ... ›
- Climate Activists Protest Germany's New Datteln 4 Coal Power Plant ... ›
By D. André Green II
One of nature's epic events is underway: Monarch butterflies' fall migration. Departing from all across the United States and Canada, the butterflies travel up to 2,500 miles to cluster at the same locations in Mexico or along the Pacific Coast where their great-grandparents spent the previous winter.
Millions of People Care About Monarchs<p>I will never forget the sights and sounds the first time I visited monarchs' overwintering sites in Mexico. Our guide pointed in the distance to what looked like hanging branches covered with dead leaves. But then I saw the leaves flash orange every so often, revealing what were actually thousands of tightly packed butterflies. The monarchs made their most striking sounds in the Sun, when they burst from the trees in massive fluttering plumes or landed on the ground in the tussle of mating.</p><p>Decades of educational outreach by teachers, researchers and hobbyists has cultivated a generation of monarch admirers who want to help preserve this phenomenon. This global network has helped restore not only monarchs' summer breeding habitat by planting milkweed, but also general pollinator habitat by planting nectaring flowers across North America.</p><p>Scientists have calculated that restoring the monarch population to a stable level of about 120 million butterflies will require <a href="https://doi.org/10.1111/icad.12198" target="_blank">planting 1.6 billion new milkweed stems</a>. And they need them fast. This is too large a target to achieve through grassroots efforts alone. A <a href="https://www.fws.gov/savethemonarch/CCAA.html" target="_blank" rel="noopener noreferrer">new plan</a>, announced in the spring of 2020, is designed to help fill the gap.</p>
Pros and Cons of Regulation<p>The top-down strategy for saving monarchs gained energy in 2014, when the U.S. Fish and Wildlife Service <a href="https://www.fws.gov/southeast/pdf/petition/monarch.pdf" target="_blank">proposed</a> listing them as threatened under the Endangered Species Act. A decision is expected in December 2020.</p><p>Listing a species as endangered or threatened <a href="https://www.fws.gov/endangered/esa-library/pdf/listing.pdf" target="_blank">triggers restrictions</a> on "taking" (hunting, collecting or killing), transporting or selling it, and on activities that negatively affect its habitat. Listing monarchs would impose restrictions on landowners in areas where monarchs are found, over vast swaths of land in the U.S.</p><p>In my opinion, this is not a reason to avoid a listing. However, a "threatened" listing might inadvertently threaten one of the best conservation tools that we have: public education.</p><p>It would severely restrict common practices, such as rearing monarchs in classrooms and back yards, as well as scientific research. Anyone who wants to take monarchs and milkweed for these purposes would have to apply for special permits. But these efforts have had a multigenerational educational impact, and they should be protected. Few public campaigns have been more successful at raising awareness of conservation issues.</p>
<span style="display:block;position:relative;padding-top:56.25%;" class="rm-shortcode" data-rm-shortcode-id="91165203d4ec0efc30e4632a00fdf57d"><iframe lazy-loadable="true" src="https://www.youtube.com/embed/KilPRvjbMrA?rel=0" width="100%" height="auto" frameborder="0" scrolling="no" style="position:absolute;top:0;left:0;width:100%;height:100%;"></iframe></span>
The Rescue Attempt<p>To preempt the need for this kind of regulation, the U.S. Fish and Wildlife Service approved a <a href="https://www.fws.gov/savethemonarch/pdfs/Monarch%20CCAA-CCA%20Public%20Comment%20Documents/Monarch-Nationwide_CCAA-CCA_Draft.pdf" target="_blank">Nationwide Candidate Conservation Agreement for Monarch Butterflies</a>. Under this plan, "rights-of-way" landowners – energy and transportation companies and private owners – commit to restoring and creating millions of acres of pollinator habitat that have been decimated by land development and herbicide use in the past half-century.</p><p>The agreement was spearheaded by the <a href="http://rightofway.erc.uic.edu/" target="_blank">Rights-of-Way Habitat Working Group</a>, a collaboration between the University of Illinois Chicago's <a href="https://erc.uic.edu/" target="_blank" rel="noopener noreferrer">Energy Resources Center</a>, the Fish and Wildlife Service and over 40 organizations from the energy and transportation sectors. These sectors control "rights-of-way" corridors such as lands near power lines, oil pipelines, railroad tracks and interstates, all valuable to monarch habitat restoration.</p><p>Under the plan, partners voluntarily agree to commit a percentage of their land to host protected monarch habitat. In exchange, general operations on their land that might directly harm monarchs or destroy milkweed will not be subject to the enhanced regulation of the Endangered Species Act – protection that would last for 25 years if monarchs are listed as threatened. The agreement is expected to create up to 2.3 million acres of new protected habitat, which ideally would avoid the need for a "threatened" listing.</p>
A Model for Collaboration<p>This agreement could be one of the few specific interventions that is big enough to allow researchers to quantify its impact on the size of the monarch population. Even if the agreement produces only 20% of its 2.3 million acre goal, this would still yield nearly half a million acres of new protected habitat. This would provide a powerful test of the role of declining breeding and nectaring habitat compared to other challenges to monarchs, such as climate change or pollution.</p><p>Scientists hope that data from this agreement will be made publicly available, like projects in the <a href="https://www.fws.gov/savethemonarch/MCD.html" target="_blank">Monarch Conservation Database</a>, which has tracked smaller on-the-ground conservation efforts since 2014. With this information we can continue to develop powerful new models with better accuracy for determining how different habitat factors, such as the number of milkweed stems or nectaring flowers on a landscape scale, affect the monarch population.</p><p>North America's monarch butterfly migration is one of the most awe-inspiring feats in the natural world. If this rescue plan succeeds, it could become a model for bridging different interests to achieve a common conservation goal.</p>
The annual Ig Nobel prizes were awarded Thursday by the science humor magazine Annals of Improbable Research for scientific experiments that seem somewhat absurd, but are also thought-provoking. This was the 30th year the awards have been presented, but the first time they were not presented at Harvard University. Instead, they were delivered in a 75-minute pre-recorded ceremony.