The Incredible Corporate Sovereignty Saga Involving Ecuador And Chevron Continues
from the not-looking-good-for-the-poor-and-powerless dept
Techdirt has been trying hard to follow the twists and turns of one of the longest-running corporate sovereignty cases -- that involving Chevron and Ecuador -- for many years. Public Citizen's "Eyes on Trade" blog has a good, one-paragraph explanation of the key legal disputes:
In one of the Chevron v. Ecuador cases, a three-person tribunal last year ordered Ecuador's government to interfere in the operations of its independent court system on behalf of Chevron by suspending enforcement of a historic $18 billion judgment against the oil corporation for mass contamination of the Amazonian rain forest. The ruling against Chevron, rendered by Ecuador's courts, was the result of 18 years of litigation in both the U.S. and Ecuadorian legal systems. Ecuador had explained to the panel that compliance with any order to suspend enforcement of the ruling would violate the separation of powers enshrined in the country’s Constitution -- as in the United States, Ecuador's executive branch is constitutionally prohibited from interfering with the independent judiciary. Undeterred, the tribunal proceeded to order Ecuador "to take all measures at its disposal to suspend or cause to be suspended the enforcement or recognition within and without Ecuador of any judgment [against Chevron]."
However, that's only a bare summary of the amazing events in this case, which include a filmmaker being forced to hand over footage to Chevron, email companies supplying nine years of metadata to the oil company, and Chevron's star witness admitting he lied in his sworn testimony. Probably the best explanation of the complicated story is a long, well-written feature in The New Yorker. That appeared in 2013 and concluded by noting that Chevron was appealing once more to an international tribunal in an attempt to block Ecuador's lawsuit. The arbitration court in the Netherlands has now handed down its verdict, reported here by Telesur:
A panel from the District Court of the Hague rejected Ecuador's arguments, stating that the country was bound to the terms of the bilateral investment treaty.
As that makes clear, the tribunal seems to have based its decision in part on the fact that a previous Ecuadorean administration had agreed with the oil company that the contaminated land in question had been cleaned up sufficiently. The country's current president claims that was because of corruption at the time. So the tangled mess of this case now involves issues of the validity of that previous agreement, and what impact it has on the responsibility of Chevron.
The panel also affirmed Chevron's claim that they could not be held accountable for the contamination since the Ecuadorean government certified the remediation work carried out by the oil company.
President Correa has questioned the legitimacy of that decision by the government of then president Jamil Mahuad.
"All of this is the product of corruption: having signed in 1998 that Chevron had cleaned 'everything'," said Correa Sunday via his official Facebook account.
The latest ruling by the international tribunal offers little hope that the Ecuadorean government affected communities will be collecting much, if any, of the final $9.5 billion awarded by the local courts -- Chevron prudently removed all its assets from the country many years ago. As Escobar is quoted as pointing out in the Telesur report:
Should Ecuador lose the final ruling by the investment tribunal, the price would ultimately be paid by the Ecuadorean people, as the state, in the face of international reprisals and without access to credit, would lose the ability to invest in social programs.
As usual, it's the poor and powerless that end up suffering -- and the lawyers involved in the corporate sovereignty tribunals who come out smiling.
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Filed Under: corporate sovereignty, ecuador, isds
Companies: chevron
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I'm afraid I'm with Chevron on this
However on this occasion I think I'd have to side with Chevron. When a company does any business with a nation state they do deserve to be able to rely on agreements with that state, a lack of certainty can be a killer. If the government of the day in Ecuador said all fine then as far as I'm concerned the case is over.
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Re: I'm afraid I'm with Chevron on this
There's also this not so minor issue:
Ecuador had explained to the panel that compliance with any order to suspend enforcement of the ruling would violate the separation of powers enshrined in the country’s Constitution -- as in the United States, Ecuador's executive branch is constitutionally prohibited from interfering with the independent judiciary. Undeterred, the tribunal proceeded to order Ecuador "to take all measures at its disposal to suspend or cause to be suspended the enforcement or recognition within and without Ecuador of any judgment [against Chevron]."
Wherein the tribunal is ordering the government to do something that is not legal according to Ecuadorian law. Having a third party order a government to do something that violated their laws is a huge problem, as it's basically putting the tribunal's orders above the country's laws.
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Re: Re: I'm afraid I'm with Chevron on this
1) Whether the Ecuador court should have levied the penalty to begin with - I don't think they should per the government's prior approval. My view here is that the people who should be punished are the members of the previous government who were corrupt. Having said that, if corruption can be proved, if it is shown that the company bought the government then I would think that is a quite separate issue and the company should be nailed for that in the Ecuador court system. I would suggest that the penalty the company should pay should be roughly equal to the amount the company is trying to avoid through the Tribunal.
2) Whether, once the penalty was levied, the international Tribunal should be able to undermind Ecuador's constitution - again I don't think they should be able to for the same reasons you list.
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Re: the ecuator and the surrounding hearing loss
(H/T to Google Translate!)
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Re: Re: Re: I'm afraid I'm with Chevron on this
You miss the point here - the government - aka the executive is not the same thing as the Ecuadorian State. This is true of any modern democratic country and was true even before modern democracies came into being. It was the main point of the Magna Carta.
Yes a company should be able to rely on a government provided that government is acting lawfully. It is the responsibility of the company to determine whether this is the case. If the company is actually complicit in unlawfulness then that is even worse.
Without this separation it would have been impossible to impeach President Nixon (for example).
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Long running saga
This article doesn't specify when that previous administration agreed to the closure of the issue with Texaco/Chevron, but that may be pretty critical to understanding actual moral responsibility (not necessarily legal).
To be honest, I'm pretty damn skeptical of Ecuadorian governments in general, corruption has been a constant feature of every administration there for the past 5 decades. The money doesn't seem intended for the 30k residents contaminated or their homes destroyed to be rebuilt/cleaned up. It seems to be a way of propping up an administration on the backs of someone else.
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Re: Long running saga
Morally, it seems unbelievable that Texaco had no idea the mess wasn't really cleaned up. They knew perfectly well what the situation was, and whether through incompetence or corruption, convinced a government to look the other way so they could save millions or billions of dollars on cleanup. And it looks like it's worked out well for them.
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Has anyone done the math?
We still have to pay to defend against them, good or bad. And, it sounds like we would pay big if we lose any.
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Re: Long running saga
This brings up a legal issue that comes into play. Most merger (or acquisition) agreements include provisions requiring any and all claims to be settled, discharged, or otherwise indemnifying the new owner(s) from said claims as a condition of sale, unless the new owner(s) specifically agree to accept the claims. So it is entirely possible that Chevron has a legitimate case that they are not responsible and from a legal standpoint they aren't.
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The most amazing take away I have about this is...
...it is freaking amazing that an email company has 9 years of metadata!
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Re: Long running saga
I'm sure this wouldn't happen, I mean who would try to get out of billions of dollars of liability by spending millions of dollars on buying politicians?
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Gets a Large amount of Oil wells..
They can sell oil around South america...And make Tons of money..
UNLESS Chevron sabotaged the machines and wells..
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Re:
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Re: Re: the ecuator and the surrounding hearing loss
I have never understood why anyone wanted to use GT. I can't remember seeing an example where it actually did the correct thing. When you can screw it up just by spelling equator with a "c", what's the frigging point? "Damn you autocorrect!", on steroids.
Human languages and their correct usage are far more complex and mallable than computer languages that try to adhere to standards. It was hard enough trying to figure out how to auto-convert Assembly into C. Trying to auto-convert German or Russian into Swahili or Australian Aboriginal or Japanese is bound to fail miserably with hysterical consequences.
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Re: Long running saga
There's an old joke in the oil industry: "Whoever survives the current crash in the price of oil gets to buy up the others." I remember seeing a little electronic doohicky in Anadarko's server room that had seven overlapping Dymo labeler thingies: "Property of Blah-A" covered by "Property of Blah-B", and so on.
Exxon had a few good ones too. "The company name is Exxon-Mobil, but the Mobil is silent."
Central and South America first had to survive the Conquistadors, then Nazi sympathizing in league with military juntas, then US jingoism and the CIA's fat fingering. There's no surprise that this mess occurred.
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Re: Re:
An ice pick in a Nazi Stormtrooper's back would leave a much easier to clean up mess, and it's much quieter than a Kalashnikov. Plus, they fit in a pocket. It's tough to hide the fact that you're armed with a pitchfork.
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Re: Has anyone done the math?
What gains? Unless you're MafiAA or big Pharma, you'll be lucky to never see any gains. We'll be robbed blind once it's passed.
Gee, it sounds like you think everybody being up to their eyeballs in lawyers would be a bad thing. :-O
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Re:
You've got me thinking of Rodney's audacious plan on Stargate Atlantis: "Let's get all the Replicators into the same room. Their combined mass will create a space-time anomaly so heavy, it'll sink into the core of the planet!"
Fatten up your local lawyer. Bwa, ha, haaa.
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Re: The most amazing take away I have about this is...
I have still readable backups that're twenty-eight years old. Data compression software tech is one of the highlights of the computer age. bzip2 + afio rocks!
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Re: Re: Re: the ecuator and the surrounding hearing loss
Because it's free, instantaneous, and a lot better than nothing.
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Anonymous to the rescue?
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Re: Re: Re: Re: the ecuator and the surrounding hearing loss
I'll give you the first two, but that third one I'll dispute. How much bigger than zero is "a lot better than nothing"?
0.0000000000000000000000000000000000000000001%? That's a lot (ten times) bigger than nothing than this:
0.00000000000000000000000000000000000000000001%.
We're talking about concepts described by human languages here, and poets could go on for decades as to how deep that subject is.
GT is pathetic from what I've seen of it. I'd rather wait to read a human's translation. I'm not usually in that much of a hurry. Lots of things can be computerized. Not everything should be. "Don't try to teach a pig to sing. They're not good at it, and it annoys the pig."
Well, at least it's difficult to annoy a computer. They'll do any damned fool thing you tell them to do, following your instructions exactly, for good or ill.
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Re: Anonymous to the rescue?
Sounds great, as long as they grab the Ecuadorian gov't's hidden stuff and release it too at the same time. What's good for the goose ...
Hope & change & transparency. Who loses?
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$18 Billion
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Re: Re:
If cold = negative energy, toodle-oo.
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Re: Re: Re: Re: Re: the ecuator and the surrounding hearing loss
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Re: Re: Re:
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Re: Re: Re: Re: Re: Re: the ecuator and the surrounding hearing loss
You're right. I was thinking only of full sentences or paragraphs or longer.
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Fleecing of Gringos for same activity as national oil company
Ecuador's government would reply that they cannot afford it, but that is the whole point: sovereign Ecuadorian governments made a rational decision to accept some environmental costs to get badly needed revenue they could not get any other way.
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Crude
http://chevrontoxico.com/crude/
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