New documents are breathing fresh air into a two decade legal battle entangling oil giant Chevron with the people and government of Ecuador.
Since the company was handed a $9.5 billion judgment in 2011, it has gone to great lengths to clear its name and relieve itself of any financial obligations for alleged environmental pollution in the Lago Agrio region of the South American country. In 2009, Chevron initiated international arbitration against the Ecuadorian government under the US-Ecuador Bilateral Investment Treaty.
The first documents from the international tribunal, released today by the Ecuadorian government and provided in advance to VICE News, detail an unprecedented trip made by the three-member arbitration panel to the Lago Agrio region following an invitation by Ecuadorian authorities. Chevron warned against the visit to Ecuador, claiming that the documentation of environmental pollution was irrelevant in a case they hope will prove that the original judgement was the result of a fraudulent judicial process.
After consideration, the arbitration officials, two lawyers from England and an Argentine lawyer practicing in the United States, rolled up their sleeves and got on a plane. The transcripts from the site visits were recorded over two days in early June in the Lago Agrio region. Over more than 100 pages, the dialogue gives a clear sense of the accusations, explosive rebuttals, and sometimes dizzying logic that has dominated the drawn-out legal pingpong between Chevron, affected communities, and Ecuadorian officials.
The country's foreign minister, Ricardo Patiño, told VICE News that the persistent presence of oil pollution reveals Chevron's disregard for the Amazon and its people.
"There was a ongoing debate in the arbitration about whether or not there ever was any pollution, and now, they have personally been witnesses to what happened," he said. "In order to obtain a bigger profit margin, they decided to destroy a piece of the Ecuadorian Amazon."
'It has always been our feeling that the tribunal process lacked legitimacy.'
Legal teams and officials representing Ecuador took the tribunal members across the northeastern region of the country, to four sites: Shushufindi-34, Aguarico-06, Shushufindi-55, and Lago Agrio-02.
For those who worked to win the initial ruling against Chevron, the transcripts have provided vindication in a process that has undermined the findings of the Ecuadoran courts.
"In terms of what they found, it absolutely affirms everything that the court system in Ecuador, and Ecuador's supreme court has found: that Chevron is guilty," said Kevin Koenig, the Ecuador program director for Amazon Watch. "It shows exactly what the Ecuadorian court system found, which was egregious contamination, health risks, and from sites that Chevron allegedly remediated."
But for Chevron, despite whatever evidence of oil contamination may be found on the ground, the company says it is no longer its responsibility. A company representative contends that they have upheld their end of the 1998 settlement agreement, including remediation, which relinquishes it of any liability in the country.
"These transcripts, along with the extensive evidence submitted in Chevron's arbitration against the Republic of Ecuador, reinforce the fact that Texaco fully remediated its share of sites before exiting the country 23 years ago," said Morgan Crinklaw, public affairs officer for Chevron.
"Any remaining environmental remediation is the responsibility of the Ecuadoran government and the state-owned oil company, Petroecuador," he added.
Chevron argues that the Ecuadorian government released it of any environmental liability in 1998, but in a preliminary ruling issued in 2013, the tribunal said the agreement did not release Chevron from individual private claims against the company and that plaintiffs in the original case had raised issues that fell beyond the scope of the release agreement.
The roots of the tribunal case stretch back to the 1960s, when the former American oil company Texaco began drilling along the Amazon River basin in eastern Ecuador. In 1993, one year after Texaco handed its concession over the Ecuador's state-run oil company, Petroecuador, the first lawsuit against the oil company was filed in the United States. In 2001, Chevron bought Texaco and in doing so assumed its legal liabilities. At an estimated $201 billion, Chevron's current market value is more than double the gross domestic product of Ecuador.
In 2011, after being served a $18 billion ruling that was later reduced to the current $9.5 billion, the company filed a civil suit against Donziger and his legal team under the Racketeering Influenced and Corrupt Organizations Act, or RICO, alleging that they had committed mail and wire fraud, money laundering, witness tampering, and obstruction of justice. US District Judge Lewis Kaplan ruled in Chevron's favor in March 2014.
During the site visits in June, members of Winston & Strawn, LLP, the legal team representing the government of Ecuador, went to great lengths to establish that pollution from the oil wells was widespread and still visible as liquid crude on the jungle floor, floating on surface water, and absorbed by the soil being farmed by area residents. The Chevron team, however, repeatedly denied the relevance of the environmental evidence to a case that, it contends, it largely about judicial fraud.
"The environmental issues that have been raised by Ecuador are no defense to the claim that we have presented before you under international law," R. Doak Bishop, legal counsel to Chevron, said in the company's opening statement from the Shushufindi-34 site, in transcripts from the visit. "The only possible relevance by the environmental issues are that they confirmed the denial of justice that we have alleged by showing that the Judgment is factually absurd on its face."
But at moments, the members of the tribunal seemed interested in what appeared to be concessions, on behalf of Chevron's team, of persistent environmental pollution.
In one passage, discussing the site visit to Shushufindi-55, which was solely operated by TexPet, the name Texaco used in Ecuador, John Connor, a member of the Chevron legal team, says: "I believe we still have a persistent misunderstanding that it's my position or the position of the other Chevron Experts that if a material is liquid that it's either recent or not degraded," referencing an earlier assertion, by the Ecuadorian team, that Chevron had pointed to the fact that the oil was liquid as evidence that it had come after their operations in the area.
"Again, we know the soil was degraded because it's lost its light infraction, and enough said," Connor added. To this, the head of the tribunal panel, President V.V. Veeder responds: "You agree there is an oil spill or some oil/petroleum there. But how did it get there, in your account?"
"Well, that's a good question. I don't think we know," Connor responded, adding that either sediment dumped on top of a pit that still contained oil or a pipeline break could have pushed the oil to the surface. "Those are two possibilities, but I don't know exactly how it happened," he added. "I know it was a surface release."
At another site visit, to Aguarico–06 — a field has at least six oil pits, four of which Ecuador claims are undisclosed by TexPet in its remediation plan — the Ecuadorian legal counsel asked tribunal members to step off the oil platform to see evidence of leaking petroleum that a farmer had revealed to them the week prior. Chevron objects, and urges the tribunal members to reject the request on the grounds that they weren't advised that this site would be part of the visit.
After some deliberation, the tribunal members responded: "We do think … the Claimants have been caught by surprise, and unfairly so," Vedeer says. "On the other hand, we understand the Respondent's desire to show us what it looks like; that is, to see oil on the surface of water as an illustration."
In the end, the tribunal members agreed that they could be led through the farmland to see evidence of pollution, but that no expert could interpret what they were seeing or smelling.
At the site, Gregory Ewing, legal counsel to Ecuador, pointed to corn growing amidst oil that had leaked from a pit that, according to Chevron, had been plugged.
This farming plot became a sticking point for Eric Bloom, a member of the Ecuadorian counsel, during court proceedings.
"There I am, and I may be only five foot five generously speaking but those corn stalks were certainly above my head and perhaps over your heads as well," said Bloom, in his closing statement to the tribunal members. "And that's what they're growing, that's what they're eating. Now, maybe they shouldn't be planting them there, and there may be other places where they're not planting, but they ought to be able to."
For government officials, larger questions linger about the roles of such international tribunals which continue ;to operate in secretive ways that Patiño believes are not sufficiently monitored.
"We believe that these tribunals, in the way that they have been formed and the way that they function, should be at very least held responsible," Patiño said. "They are not evaluated to see if their process complied with international law or even the principles of law — they don't provide those spaces, and that it why we don't believe they should exist."
His sentiments are echoed by Koenig, who believes the tribunals fail to include some of the most impacted parties in the case.
"It has always been our feeling that the tribunal process lacked legitimacy — you have closed doors, and a panel of jurists that have been traditionally pro-business, that get paid to take these cases," he said. "And in these secret tribunals, where the communities, the people that have been on the frontlines and suffered, who have lost their territory or culture, are not part of the process."
But he was encouraged, nonetheless, that the tribunal made an effort to see the damage first hand.
"I think [the visits] are unprecedented," he added. "I don't know that tribunals routinely do this, and it is certainly more than Kaplan did, when he ruled from his bench a total indictment of Ecuador's judicial system without having any real knowledge of it or making a visit."
While Chevron is seeking a ruling from the tribunal that would clear it of all liability, other courts are looking on. The Second Circuit appellate court, currently evaluating the RICO case against Donziger, has implied that it will look to the ruling from the tribunal with interest.
And just last month, Canada's Supreme Court created a window of opportunity for plaintiffs when they ruled unanimously that Ecuadorian villagers can pursue the estimated $15 billion in Canadian assets held by the US-based oil major Chevron.
Transcripts from the closed-door hearings that took place in Washington DC at the end of April and early May, prior to the site visits described in these transcripts, have yet to be released to the public.
From Shushufindi-34, Attorney General of Ecuador, Diego García Carrión, reminded the tribunal members that the true victims of Chevron's bad practices are not listed as parties to a case, but those who have had no choice but to make a life and a living among the pollution.
"The Lago Agrio Plaintiffs or the persons that you will see in the next few days who live close to these sites are not parties to this arbitration," García said. "Thus, any decision that this Tribunal takes shall fundamentally affect them and the future of the Oriente and the Amazon River's basin."
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