Canada's Supreme Court has ruled on one of the most bitterly contested environmental lawsuits in history, deciding on Friday that Ecuadorian villagers can go after Canadian assets of the US-based oil major Chevron.
The villagers are trying to collect on a nearly $10 billion judgement by Ecuador's courts against Chevron, claiming they suffer from lingering health problems from toxic oil residues left behind by a decades-old venture in the Amazon basin. They asked the justices to allow them to pursue the estimated $15 billion that Chevron has in Canadian assets. But Chevron argues the judgement against it was based on fraud — and that in any event, its assets in Canada are owned by its Canadian subsidiary and aren't subject to the ruling.
In the unanimous ruling, the judges clearly highlighted that they would be letting the case proceed, but that the Ecuadorian plaintiffs still have a long way to go to prove that Chevron Canada's assets can actually be seized to enforce the judgement of the Ecuadorian courts.
"This decision is the beginning of the end of Chevron's abusive and obstructionist litigation strategy to avoid paying for the clean-up of the company's extensive toxic contamination of our ancestral lands in Ecuador," Humberto Piaguaje, the executive director of the local organization representing the communities suing Chevron, said in a statement following the decision. "We are confident that once Canadian courts review the fundamental fairness and strength of the judgment, it will be respected and Chevron will be forced to turn over any and all assets necessary to pay the amount ordered by the Ecuadorian court."
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The case dates back to the 1960s, when the former American oil major Texaco began to drill in the Amazon River basin of eastern Ecuador. Texaco handed over its concession to Ecuador's state oil company in 1992, but residents of the surrounding communities say Texaco left behind a toxic residue of tainted soil and water they blame for hundreds, if not thousands, of cases of cancer.
The first lawsuit was filed in the United States in 1993. In 2011, Ecuador's high court found Chevron — which bought Texaco in 2001 — liable for the contamination and ordered it to pay $9.5 billion.
The Ecuadorians have been seeking to collect in several countries. But they're barred from any action in the United States after a scathing 2014 ruling by a federal judge found the judgment in Ecuador "was obtained by corrupt means."
Chevron had demanded the original case be moved from the United States to Ecuador, then went back to court in New York to argue that the Ecuadorian decision was fraudulent. It accused Steven Donziger, the plaintiffs' attorney, and his legal team of extortion and obstruction of justice under the federal racketeering statute used to bust mobsters. The court sided with Chevron. Donziger is appealing that ruling, calling it "appalling," saying the decision ignores "overwhelming evidence" of Chevron's responsibility.
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In the Canadian case, Chevron argued that the Ontario court that first heard the case "had no jurisdiction to hear an action brought by a group of Ecuadorian plaintiffs related to an Ecuadorian judgment against Chevron Corp," the company said in a written statement to VICE News.
"Chevron Canada Limited is not a party to the Ecuador judgment, and Chevron Corp. is based in the United States and has no assets to enforce against in Ontario," it said.
But Paul Paz y Mino, a spokesman for the watchdog group Amazon Watch, which supports the villagers' claims, accused Chevron of trying to have it both ways in Ottawa.
"As far as reporting profits and expansion to their shareholders in the United States, they're very happy to say, 'Chevron Canada is part of us.' When it comes to covering their liabilities, now they want to say Chevron Canada has nothing to do it," he told VICE News prior to the ruling.
Another case is pending in Brazil, and they could resume their efforts to collect in US courts if the 2014 ruling against Donziger is overturned. They're also prepared to go to other courts in South America and Europe if the ruling goes against them.
"A court decision is one thing, but Chevron having to pay for cleanup and health costs is a measure of true justice for the people who have been affected," said Paz y Mino. He believes Chevron is bound to lose in Canadian courts.
"There's no way they can defend themselves against the evidence," he said.
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Justin Ling contributed to this report.
Follow Matt Smith on Twitter: @mattsmithatl