Ecuador’s lengthy legal battle to win oil pollution settlement from Chevron Oil moves to the Canadian Supreme Court

Dec 16, 2014 | 0 comments

chl oil fight

Mercedes Mikaela Jimenez Romero says she can’t afford to leave her home in Lago Agrio.

On the banks of the Aguarico River, where the only respite from stifling humidity and the blazing sun is a dip in the contaminated water, Eduardo Silvio Chapal’s grandchildren splash, oblivious to the decades-long battle over who is responsible for cleaning up their jungle playground.

Chapal, 64, was born and raised here, in Ecuador’s Lago Agrio region, in an indigenous community of about 80 families. So were his children and his grandchildren. From his hammock, he lists his complaints: the children now are shorter and sicker; there are more stillborn babies; there are fewer animals.

“And fish,” he sighs. “They had a delicious taste, a nice taste. Now … it smells like petroleum.” But the people still catch, cook and eat them.

Chapal is one of roughly 30,000 people who inhabit the 1,500-square-kilometre area, some 300 kilometres east of the capital Quito. They call themselves Los Afectados — the Affected Ones. What affects them is pollution — caused, they claim, by oil drilling that Texaco, which merged with Chevron Corp. in 2001, did there years ago.

While the Supreme Court of Canada in Ottawa is far from Lago Agrio, it’s there, beginning Thursday, that Los Afectados hope to gain the right to attempt to enforce an Ecuadorian verdict of $9.51 billion (U.S.) against Chevron Canada Ltd., the company’s Canadian subsidiary.

It’s the latest chapter in one of the world’s longest-running and bitterest environmental disputes. The battle has lasted longer than Texaco’s time in Ecuador.

In 1964, Texaco partnered with Ecuador’s state-owned oil company, Petroecuador, to drill for oil. By 1972 the oil had begun to flow. Over two decades, some went astray. In 1992, Texaco sold its interest in the consortium to Petroecuador, thereby disposing of its Ecuadorian assets.

Texaco had scarcely left Ecuador when it found itself defending a legal action brought by Los Afectados, demanding money to clean up the toxic mess left behind. Lawyers for the indigenous people filed suit in the United States in 1993. A federal trial court dismissed the case on the condition that Texaco agree to “submit to the jurisdiction of the Ecuadorian courts.” It did.

During the trial, Texaco entered into a remediation agreement with Ecuador. This required Texaco to remediate selected production sites while Petroecuador committed to perform any remaining cleanup. The government of Ecuador oversaw Texaco’s $40-million remediation and certified its completion in 1998, thereby releasing Texaco from further environmental liability. Petroecuador, however, failed to do its part. It continued and expanded its drilling in Lago Agrio.

More than a decade later, in 2011, the Ecuadorean court awarded Los Afectados $18 billion (U.S.) — a judgment later reduced to $9.51 billion. Chevron, which had taken over Texaco, fought what it called a “fraudulent” decision by filing a civil lawsuit against Los Afectados’ attorneys.

Last March, the court ruled in Chevron’s favour.

“The pattern at issue in this case comprises, at the very least, a five-year effort to extort and defraud Chevron,” the judge wrote in his almost-500-page decision.

Though the judge ruled that the Ecuadorian verdict was unenforceable abroad, that was overturned on appeal. Chevron has no assets in Ecuador, and so Los Afectados continues their systematic fight to have the Ecuadorian judgment enforced in countries where Chevron still has assets, including Canada.

Alan Lenczner, the Toronto-based lawyer representing Los Afectados, expects the Supreme Court of Canada to rule in his client’s favour. “I’m hopeful, more than hopeful,” he said. “I believe that they will.”

The first round of the Canadian fight went to Chevron: the Ontario Superior Court agreed Ontario had the jurisdiction to hear foreign proceedings, but stayed the case because Los Afectados “have no hope of success” in accessing Chevron’s assets from within the province. That ruling was overturned on appeal.

The Ontario appeal court noted the broader pattern of the struggle: “For 20 years, Chevron has contested the legal proceedings of every court involved in this litigation — in the United States, Ecuador and Canada.”

Chevron continues to fight.

In an emailed statement, Chevron spokesperson Morgan Crinklaw said: “Chevron Corp. and Chevron Canada Limited look forward to demonstrating to the Supreme Court of Canada that the trial court in Ontario has no jurisdiction to hear the action brought by the Ecuadorian plaintiffs.”

Chevron’s resolve was never clearer than when a company spokesperson — reacting to the Ecuadorian trial, but seemingly foreshadowing the Canadian lawsuits to come — said: “We’re going to fight this until hell freezes over. And then we’ll fight it out on the ice.”

From her home less than 16 metres from one of the old Texaco-Petroecuador oil wells, Mercedes Mikaela Jimenez Romero awaits the outcome of each and every legal battle.

The mother of 11 is skeptical Los Afectados will ever see the land and water remediated; the idea that any areas were ever remediated makes her snort.

Indeed, if you dig a few centimetres into the earth you find fetid, sludgy dirt. Mix it with water and it sticks to your fingers, oily and sparkling in the sun.

“If we had money we would have left a long time ago,” Jimenez Romero said. She relies on a donated rainwater collection and filter system to drink. Even that is yellow-tinged and her stomach always hurts. It’s better than the alternative: “When it doesn’t rain, we don’t have water.”

Credit: The Toronto Star,



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