Significant Victory for Ecuadorians in Oil Pollution Case Against Chevron
Indigenous and farmer communities in Ecuador scored a major victory over Chevron yesterday when an Ontario appeals court ruled they have the right to pursue enforcement of a $9.5 billion Ecuadorian court judgment against Chevron's assets in Canada.
The court also ordered Chevron's two Canadian subsidiaries to pay $100,000 in costs to the Ecuadorians.
"After all these years, the Ecuadorian plaintiffs deserve to have the recognition and enforcement of the Ecuadorian judgment heard in an appropriate jurisdiction," said the decision issued by a three-judge panel of the Court of Appeal of Ontario. "At this juncture, Ontario is that jurisdiction."
The decision was lauded by the leaders of the Ecuadorian communities and their lawyers.
"This order will allow us the opportunity to hold Chevron accountable for fleeing the scene of its environmental crimes in Ecuador after a valid judgment was entered against it," said Pablo Fajardo, the lead Ecuadorian lawyer for the villagers.
Humberto Piaguaje, a Secoya indigenous leader who is the director of the Assembly of Affected Communities, said: "This decision is momentous. It proves Chevron cannot hide behind legal technicalities to avoid justice."
Members of roughly 80 indigenous and farmer communities in Ecuador's northern Amazon region, the villagers won their judgment in 2011 after a hotly-contested eight-year trial that Chevron insisted take place in the South American nation. But Chevron has refused to pay the judgment and has stripped most of its assets from Ecuador to avoid collection, forcing the villagers to file lawsuits to satisfy the judgment in places where Chevron has assets.
The Ecuadorians have launched such proceedings in Brazil and Argentina as well as Canada.
Just last month, Ecuador's Supreme Court affirmed the finding of liability against Chevron but cut the damages amount roughly in half, to $9.5 billion. By contrast, BP's liability for the relatively smaller Gulf of Mexico spill is approaching $40 billion.
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The Canadian appellate panel took wry note of Chevron's long history of forum shopping, citing the company's earlier promise to U.S. courts to abide by any adverse judgment in Ecuador as a condition of the case being moved there in 2001. The Ontario court also took a veiled swipe at U.S. federal judge Lewis A. Kaplan for trying to issue an injunction purporting to block the Ecuador judgment. A U.S. appeals court unanimously reversed Kaplan just last year.
"The picture from the above history is an obvious one," the panel wrote. "For 20 years, Chevron has contested the legal proceedings of every court involved in this litigation—in the U.S., Ecuador and Canada. Chevron even sought, and briefly obtained, a global injunction against enforcement of the Ecuador judgment.
"In these circumstances, the Ecuadorian plaintiffs should have an opportunity to attempt to enforce the Ecuadorian judgment in a court where Chevron will have to respond on the merits," the panel ruled.
The panel ruled that jurisdiction over Chevron in Canada "properly opens the door to this hugely significant decision of Ecuador's highest court possibly being recognized and enforced in a jurisdiction, Ontario, where enforcement may be significant to the parties."
The latest decision represents a stunning reversal of fortune for the oil giant, which just finished a six-week trial in New York before Judge Kaplan where it alleged the Ecuadorian plaintiffs and their lawyers had obtained the Ecuador judgment by fraud. The Ecuadorians assert that Chevron is using the fraud allegations to distract attention from its environmental crimes and growing liability in Ecuador. Counterclaims have been filed against Chevron in the New York case.
Chevron's subsidiaries have an estimated $15 billion of assets in Canada, more than enough to pay for the entire Ecuador judgment which just last month was unanimously affirmed by Ecuador's Supreme Court. The villagers hope to use any funds collected to clean-up the billions of gallons of toxic waste Chevron was found to have dumped in their ancestral lands from 1964 to 1992, when the company operated almost 400 well sites under the Texaco brand.
The decision technically reverses a trial court decision that imposed a stay after finding that the villagers could establish jurisdiction over Chevron, but could not target the assets of Chevron because they were held by wholly-owned subsidiaries. The panel did not make a final ruling on whether the Ecuadorians could seize the assets of subsidiaries to satisfy a judgment against the parent company, saying that issue would have to be decided during the enforcement action.
"The appellate decision represents a significant step forward in the two-decade battle by Ecuadorians for justice against one of the world's most profitable corporations," said Anton Tabuns, a Canadian lawyer who represents the villagers.
"We look forward to moving into the merits of recognizing the legitimate judgment from Ecuador in Canada," he said. "Chevron's two-decade history of forum shopping and obstructionism must end now."
Chevron is expected to appeal the ruling to Canada's Supreme Court, but it is unclear whether that appeal—even if accepted—will stay the enforcement proceeding. Under Canadian law, enforcement proceedings are heard by a judge and not a jury.
The trial court decision in Ecuador, which came down in 2011, was based almost entirely on Chevron's own scientific evidence documenting the company's substandard practices. In addition to dumping billions of gallons of toxic waste water into the environment, the company abandoned more than 900 open-air toxic waste pits gouged out of the jungle floor. Rates of cancer in the area where Chevron operated have skyrocketed, according to evidence before the Ecuador court.
In Canada, each party had been given three hours to make their case during oral argument in October, underscoring the significance of the matter to Canadian courts—in the U.S., appellate arguments are often limited to ten minutes.
The latest decision also underscores that the separate fraud action in New York federal court initiated by Chevron will not impact foreign enforcement actions, which take place in accordance with each country's laws where the actions are filed. In the New York case, Judge Kaplan has come under criticism for his displays of bias against the Ecuadorians.
Kaplan, who presided over the case from the bench after Chevron dropped damages claims to avoid a jury, also has no authority to block the Ecuador judgment from being enforced in other countries, according to prior decision of New York's federal appellate court.
Enforcement actions from the Ecuadorians have become a major disruptive influence on the oil giant's operations outside the U.S, which collectively account for approximately 75 percent of the oil giant's annual revenue. In Argentina, a trial court froze part of the revenue stream of a Chevron subsidiary pending a judgment recognition ruling. Though the ruling was lifted, recognition actions against the company both there and in Brazil are ongoing.
In Canada, Chevron subsidiaries can produce anywhere between $2 billion and $4 billion annually in dividends for the parent company, according to estimated by the plaintiffs.
Chevron also has been forced to hire major law firms in Venezuela and Colombia in anticipation of enforcement actions being filed in those countries, according to sources. A Chevron comptroller, Rex Mitchell, recently testified under oath in the New York case that the enforcement actions would cause "irreparable harm" to the company's global operations.
The Ontario judges who signed the order are James C. MacPherson, Eileen E. Gillese and C. William Hourigan.
Visit EcoWatch’s ENERGY page for more related news on this topic.
Typhoon Molave is expected to make landfall in Vietnam on Wednesday with 90 mph winds and heavy rainfall that could lead to flooding and landslides, according to the U.S. Embassy and U.S. Consulate in Ho Chi Minh City. To prepare for the powerful storm that already tore through the Philippines, Vietnam is making plans to evacuate nearly 1.3 million people along the central coast, as Reuters reported.
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A stretch of coastline in the Philippine capital, Manila has received backlash from environmentalists. The heavily polluted Manila Bay area, which had been slated for cleanup, has become the site of a controversial 500-meter (1,600-foot) stretch of white sand beach.
Sand Makeup Crucial for Ecosystems<p>While UNEP/GRID-Geneva generally supports finding <a href="https://www.dw.com/en/not-enough-sand-for-construction-industry-despite-abundance/a-49342942" target="_blank" rel="noopener noreferrer">alternative sources of sand</a> so as not to disrupt ecosystems in rivers and oceans when extracting them, Vander Velpen stressed it was vital to use sand which closely matches the makeup of the native sand to protect beach fauna.</p><p>"If you change the core characteristics of the native sand, the original sand, you need to do an environmental impact assessment (EIA) to find out how it's going to impact the ecosystem and nearby ecosystems," he told DW.</p><p>But according to Torres, such an assessment was not done in Manila.</p>
Beautification Stunt Instead of Proper Cleanup?<p>Manila Bay's waters are heavily polluted by oil and trash from nearby residential areas and ports. A huge "No swimming" sign warns visitors to stay away from the ocean.</p><p>Philippines' <a href="https://denr.gov.ph/index.php/priority-programs/manila-bay-clean-up/25-priority-programs/1825-frequently-ask-questions-faqs-on-the-dolomite-and-the-beach-nourishment-project" target="_blank">Department of Environment and Natural Resources (DENR)</a> has denied dolomite sand poses any risk to human health and the ecosystem.</p><p>However, scientists of the University of the Philippines have come forward disputing the DENR's claims. A <a href="https://biology.science.upd.edu.ph/index.php/ib-statement-regarding-dolomite-in-manila-bay/" target="_blank" rel="noopener noreferrer">statement by the Institute of Biology</a> said that using crushed dolomite did not address any of the rehabilitation phases and instead was "even more detrimental to the existing biodiversity as well as the communities in the area," pointing to the case of water birds. "The dumping of dolomite in Manila Bay has effectively covered part of the intertidal area used by the birds thereby reducing their habitat."</p><p>At peak migration season, Manila Bay is home to 90 aquatic bird species, including species of international conservation concern that are facing a very high extinction risk in the wild. </p><p>Authorities should focus on protecting and conserving biodiversity, the Institute of Biology added. "Rehabilitating mangroves is an example of a nature-based solution that is cheaper and more cost-effective than the dolomite dumping project," the scientists said.</p><p>Moreover, <a href="http://www.msi.upd.edu.ph/" target="_blank" rel="noopener noreferrer">the Marine Science Institute</a> has warned that prolonged inhalation of finer dust particles of dolomite could "cause chronic health effects," leading to discomfort in the chest, shortness of breath and coughing.</p><p>They also warned dolomite sand grains would erode during storms and be carried out to sea, essentially being washed away.</p>
Rehabilitation vs. Reclamation<p>Environmentalists say covering up the beach doesn't address the real issues of the bay. Torres and others believe the best way to clean up Manila Bay is not to add anything, but rather remove trash and pollution.</p><p>"There have been studies saying much of the waste comes from already collected waste — so these are open dump sites along the coast that get washed up because of the rain," Torres said.</p><p>She criticized the authorities for continuing to push reclamation projects she says are at odds with each other. These projects will affect large areas of mangrove forests, she said, and experts warn that this, in turn, exacerbates coastal erosion.</p><p>"If you've removed the areas that helped trap the sand, like mangrove forests, then the likelihood increases that you will have to nourish a beach. Same as building right up to the waterfront," said Vander Velpen of UNEP/GRID-Geneva.</p>
Plenty of Sand in the Sea?<p>The question of Manila's contentious white beach echoes larger questions about sand mining worldwide. <a href="https://unepgrid.ch/storage/app/media/documents/Sand_and_sustainability_UNEP_2019.pdf" target="_blank">Global sand consumption has tripled</a> over the past two decades, UNEP/GRID-Geneva has found. A huge chunk of it is now taken up by construction.</p><p>"Many operate on the assumption that natural sand is endless in its supply," said Vander Velpen.</p><p>Sand scarcity is a concern shared by Stefan Schimmels of <a href="https://www.fzk.uni-hannover.de/fzk_start.html?&L=1" target="_blank">Forschungszentrum Küste</a> who's done extensive research on shore nourishment to stop coastal erosion. And as climate change and rising sea levels are threatening coasts, demand for sand will grow even more.</p><p>A large study, the <a href="http://www.stencil-project.de/wp-content/uploads/2019/10/STENCIL_SWOT_Analyse_191026.pdf" target="_blank">Strategies and Tools for Environment-Friendly Shore Nourishments as Climate Change Impact Low-Regret Measures (STENCIL project)</a>, focused on the German island of Sylt, a popular vacation spot.</p><p>About 1 million cubic meter of sand per year is used to maintain the coastal area of Sylt, STENCIL project head Schimmels said. That's about 100 million 10-liter buckets of sand.</p><p>When sand was extracted off the coast of Sylt, underwater craters were formed. "You can still detect these craters even decades later," Schimmels told DW.</p><p>"Also when you add a couple of meters sand onto the beach — you essentially bury all things that do creep and fly," he said. "How quickly will they recover?" Schimmels said more research was needed as there was still too little known about long-term effects on the environment. </p>
Criticism Piling Up<p>As for Manila's artificial white sand, it looks like some might have already been blown away by a recent storm. DENR claims it wasn't washed away, but said that grayish sand, stones and other material had simply piled up over the dolomite sand. People in Manila have tweeted photos showing how the storm has ravaged the beach. </p>
<div id="adc0b" class="rm-shortcode" data-rm-shortcode-id="98f9390db6bb81cb421aaf0bb9d9a6fb"><blockquote class="twitter-tweet twitter-custom-tweet" data-twitter-tweet-id="1318816633280851969" data-partner="rebelmouse"><div style="margin:1em 0">Exactly one month after giving excited netizen a glimpse of Manila Bay white sands, look what happened now after ju… https://t.co/X0Z9i0bPB0</div> — M*A*S*H (@M*A*S*H)<a href="https://twitter.com/Magtira_Matibay/statuses/1318816633280851969">1603265362.0</a></blockquote></div><p>Authorities have been called tone-deaf for spending around 389 million pesos ($8 million) on a beach nourishment project in the middle of a raging pandemic.</p><p>An image of cake iced with the words "It really hurts - that's [worth] 389 million pesos?" has since gone viral.</p>
<div class="rm-shortcode" data-rm-shortcode-id="4387aad52ea316e4db7330052318ca2f"><div class="fb-post" data-href="https://www.facebook.com/theweekendpatisserie/posts/144564207350008"></div></div><p>"It's just a waste of precious resources," Torres said. </p><p>The environmental activist now also worries that she might be labeled a terrorist for speaking out under the <a href="https://www.dw.com/en/philippine-anti-terrorism-law-triggers-fear-of-massive-rights-abuses/a-53732140" target="_blank" rel="noopener noreferrer">Philippines' controversial new anti-terrorism law</a>. She says she could be arrested for inciting fear when talking about environmental dangers.</p>
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