Canada: $9.5 Billion Dollar Claim To Enforce Judgment Dismissed

Last Updated: May 2 2019
Article by Paula Lombardi

On Thursday, April 4, 2019 the Supreme Court of Canada dismissed the attempts of Ecuador's Lago Agrio Region requiring Chevron to pay for water and soil contamination relating to Texaco's activities in the area. The contamination was caused by Texaco's activities between the years 1964 and 1992. Chevron acquired Texaco in 2001.

In 2011 the villagers of the Lago Agrio Region obtained a judgment against Chevron in Equador. Chevron however has no assets in Ecuador and the villagers have been attempting to turn to the courts in the United States, Canada, Brazil and Argentina to enforce the decision.

In 2017 the Ontario Court of Appeal confirmed that Chevron Canada was a separate entity from its parent company and because of that its share and assets could not be seized to enforce the judgment issued by the Ecuadorian court.

This case first began when 6 indigenous nations and more than 80 impacted communities founded the Union of People Affected by Texaco-Chevron Operations ("UDAPT"). The goal of UDAPT has been to seek environmental remediation and reparations for damages caused by the activities of the oil company to the local communities. The allegations included that the company dumped 16 billion gallons of toxic wastewater into waterways and open pits in the Ecuadorean Amazon between the years 1964 and 1992, affecting over 30,000 Indigenous people and Campesinos in the area.

A claim was brought against Texaco in the US in 1993. However, at the request of Texaco the case was transferred to Ecuador and the hearings, referred to as the Lago Agrio case, were held at the local Sucumbíos provincial court. On February 11, 2011, after approximately twenty years, the Sucumbíos court ruled in favor of the UDAPT and sentenced Chevron-Texaco to pay a 9.5 billion dollar fine to compensate for the environmental harm and damages.

Chevron filed an appeal, and the ruling was ratified by the judiciary in Ecuador – including the National Court of Justice and the Constitutional Court (the highest court in Ecuador). According to the information available the Constitutional Court's ruling of July 2018 recognized that "many rights of indigenous peoples and peasants had been violated by the company."

More recently however, numerous courts throughout the world, including the international Permanent Court of Arbitration at The Hague, unanimously found in favour of Chevron holding them not liable. In September 2018 the Permanent Court of Arbitration ruled that Ecuador was guilty of violating a bilateral investment treaty executed with the United States in 1997. The International Tribunal also ruled that Ecuador will have to compensate Texaco for losses arising as a result of the legal proceedings. Chevron requested that Ecuador assume the US$9.5 billion judgment that the provincial court of Sucumbios in Ecuador sentenced Chevron to pay to the impacted communities.

The lawsuit against Chevron began in 1993 when the UDAPT sued for environmental damages in the state of New York. Chevron however took the position that the state of Ecuador violated an agreement in which Petroecuador, the state's oil company, agreed to assume all responsibilities for environmental damages when it permitted the Indigenous communities to sue Chevron-Texaco.

The arbitration court ruled that Ecuador did violate the 1997 bilateral investment treaty. However, Ecuador argued that there was no violation of the treaty as the 1997 investment treaty came into effect only after the communities' filed their lawsuit.

The case raises an increasingly difficult issue relating to the rise of environmental and social incidents involving multinational corporations. For example, the release of the mining waste dams of the Vale and BHP corporations in Brazil, repression of communities and recent deaths of environmental defenders such as Berta Cáceres and others highlights the concerns relating to international environmental issues, environmental defenders, and the difficulties in reaching a resolution and remediating years of environmental degradation and harm.

In January 2019, in Brazil, one of the dams associated with the mining firm Vale collapsed killing more than 150 people representing the second incident in approximately three years. The collapse of the dam resulted in approximately 11.7 m3 (413 m cubic ft) of mining waste entering into the valley, covering houses and leaving a path of clotting mud up to 8 metres (26ft) deep in some areas. In November 2015 another Vale-affiliated dam collapsed, killing 19 and contaminating the river for approximately 500 miles with the contamination heading to the Atlantic Ocean.

In March 2016, Berta Cáceres, the Honduran environmental rights activist and co-founder of the Council of Indigenous Peoples of Honduras (COPINH) was murdered by two gunmen in her own home. This occurred barely a week after she was threatened for opposing a hydroelectric project. Berta Cáceres was a vocal defender of the land and known for her devotion to the protection of Indigenous and campesino cultural rights as well as women's rights.

UN Environment defines an environmental defender as anyone who is defending environmental rights, including constitutional rights to a clean and healthy environment in circumstances where the exercise of those rights are under attack. What is surprising is that violations of environmental rights are growing internationally due to increased competition for natural resources, lax enforcement of environmental laws, and the continued exploitation of land and water and other natural features.

On October 21, 2016 the UN Special Rapporteur, Michel Forst, spoke in New York about the importance of environmental human rights defenders stating that "they are critical to our future but they face unprecedented risks" according to the new report released by the UN. Mr. Forst stated: "I am extremely worried and appalled by the growing number of attacks and murders of environmental defenders, but also by the continuous resistance of States to act in front of egregious human rights violations." Mr. Forst urged the international community to protect environmental defenders stating: "It is the responsibility of the States and international community to empower and protect these defenders. We should listen to those who raise an alarm against environmental disasters, climate change and irresponsible resource exploitation, not repress them," recommending a zero-tolerance approach to any violence against environmental human rights defenders.

References:

https://www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?NewsID=20730&LangID=E https://www.ohchr.org/EN/Issues/SRHRDefenders/Pages/AnnualReports.aspx
https://www.unenvironment.org/explore-topics/environmental-rights-and-governance/what-we-do/advancing-environmental-rights/who
https://www.ccij.ca/cases/berta-caceres-honduras/
https://www.theguardian.com/world/2016/mar/03/honduras-berta-caceres-murder-enivronment-activist-human-rights
https://www.greenpeace.org/usa/forests/justice-for-berta-caceres/
https://ca.reuters.com/article/idCAKCN1RG2GP-OCADN
https://www.bloomberg.com/news/articles/2019-02-20/brazil-s-deadly-dam-collapse-could-force-the-mining-industry-to-change
http://amazonwatch.org/news/2019/0327-chevron-vs-ecuador-international-arbitration-and-corporate-impunity
https://news.mongabay.com/2019/02/dam-deja-vu-2-brazil-mining-waste-disasters-in-3-years-raise-alarms/
https://www.scc-csc.ca/case-dossier/info/dock-regi-eng.aspx?cas=35682
https://www.scc-csc.ca/case-dossier/info/dock-regi-eng.aspx?cas=38183
https://www.cnbc.com/2019/04/04/reuters-america-canadian-court-dismisses-9-point-5-bln-ecuadorian-claim-against-chevron-canada.html
https://www.stopcorporateimpunity.org/corte-constitucional-de-ecuador-ratifica-la-condena-contra-chevron/?lang=es

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