Chevron Hides Behind Legal Fiction; Ecuador Fight Far from Over

Reposted from the Huffington Post

Supporters of the heroic 20-year effort to hold Chevron accountable for its indisputable toxic dumping and destruction of the Amazon rainforest in Ecuador should not despair over recent court rulings that have slowed the seizing of the oil giant's assets in Argentina and Canada.

The fight is far from over.

First and foremost, the evidence and the science are on the Ecuadorians' side. Texaco, now owned by Chevron, dumped 16 billion gallons of toxic water into streams from the early 1970s until 1992, harming the environment and the people who used them for drinking water, cooking and cleaning. Texaco never tried to prevent this from happening, never cleaned up the contamination or compensated victims. That is a fact even Chevron does not deny.

Secondly, court appeals are underway in both countries, and the chances of winning them are excellent.

In Toronto, in an unusual decision without any precedent in Canadian law, a court found that because Chevron operates only through subsidiaries, the case must be stayed. The vast majority of Chevron's assets lie with its subsidiaries, not in its corporate shell. Meanwhile, a recent Argentine court decision to lift a freeze on Chevron's assets will have little impact on a parallel judgment recognition action, which is proceeding. That action will allow the rainforest communities to seize up to $3.5 billion of assets if successful.

Chevron has roughly another $15 billion in assets in Canada and another $4 billion in Brazil that are being targeted in court actions based on the valid Ecuador judgment. That's real risk no matter how Chevron's management team -- including its conflicted CEO, John Watson -- try to spin it.

Under oath in court, where company officials are obligated to tell the truth, a Chevron comptroller recently claimed such asset seizure actions will cause the oil giant "irreparable harm" and will disrupt its global business operations. Chevron also operates via its subsidiaries in dozens of countries around the world that could be targeted.

There also is a deeper reality to the reasoning behind the recent Canada and Argentina decisions that should disturb concerned citizens everywhere. In effect, based on legal technicalities, these courts are flirting with a total grant of impunity to human rights violators like Chevron.

Let me explain.

In Canada, a trial judge ruled that Chevron is a separate company from its local subsidiary even though that subsidiary is 100 percent owned by Chevron. Yet Chevron itself operates only through its many subsidiaries around the world. The company does not even own its own building housing its headquarters near San Francisco.

It was also Chevron officials (operating under the Texaco brand) who made the decision to deliberately dump billions of gallons of toxic waste in Ecuador, decimating indigenous groups and farmer communities. Chevron itself stripped almost all of its assets from Ecuador in recent years in anticipation of losing the case. It then refused to pay the judgment.

The upshot is this: when Chevron wants to increase its profits by dumping toxic waste, it can deliver a high level of fake value to its shareholders by externalizing the costs of pollution to impoverished local residents. But when it comes time to pay the hefty tab for that dumping, it plays the corporate shell game and hides behind its subsidiaries.

That's Chevron's conception of impunity.

The cultural mindset that it produces in a large oil company leads to excessive risk-taking and arrogance. And that explains why Chevron always seems to be dealing with a massive number of environmental problems around the world, including in the U.S. where it is currently under criminal investigation for a recent refinery fire in Richmond, CA.

Courts in most countries would not allow Chevron to get away with this brazen mockery of the rule of the law. Many of Chevron's own shareholders are also disturbed enough to have sternly rebuked Watson for mishandling the fallout from the Ecuador judgment.

Knowing it cannot win the Ecuador battle on the merits, Chevron also cleverly tries to exercise improper political influence over governments and courts. In Argentina, after the freeze order became a viable possibility, Chevron suddenly decided to "invest" $1.5 billion in a large gas field with the local state-owned oil company, YPF.

Chevron also took out full-page advertisements in Argentine newspapers claiming impending national doom if the Ecuador judgment were to be enforced. Its local representative publicly announced Chevron would only follow through on its investment if the freeze order was lifted.

Suddenly, after some furious behind the scenes lobbying, Argentina's Attorney General recommended the freeze order be lifted. Voila!

We think Canada's appellate court will see Chevron's rope-a-dope for what it is: a sneaky attempt to play the corporate shell game to escape justice. Ultimately, we feel Argentina's courts will see it the same way.

Chevron should not take too much comfort from these latest rulings.

The evidence against Chevron for committing a horrific level of environmental contamination in Ecuador is strong. It has been documented not only by the company's internal files and a 220,000-page trial record, but also by independent journalists the world over who have visited the disaster zone.

Only in an unjust world can a corporation get away with murder by hiding behind legal fictions created by bean counters. As this battle rages on, everybody concerned about accountability for corporate human rights abusers should take note and demand that judges stand up for the fundamental principle that polluter pays.

– Karen Hinton

Recent Decisions on the $19b Ecuador Judgment Do Little to Decrease Chevron's Enormous Risk

For indigenous and farmer communities, the fight continues

Reposted from The Chevron Pit

Supporters of the heroic two-decade effort to hold Chevron accountable for its indisputable toxic dumping and destruction of the Amazon rainforest in Ecuador should not despair over recent court rulings that have slowed the seizing of the oil giant's assets in Argentina and Canada.

The fight is far from over and overall trend lines still favor the affected rainforest communities, who have suffered from Chevron's toxic dumping for decades. (For a summary of the evidence, see here; for a video about the case see here or this 60 Minutes segment.)

In Toronto, in an unusual decision without any precedent in Canadian law, a court found that because Chevron operates only through subsidiaries then the case must be stayed. That decision is now on appeal. The court decision this week in Argentina to lift a freeze on Chevron's assets will have little impact on a parallel judgment recognition action which is proceeding. That action will allow the rainforest communities to seize up to $3.5 billion of assets if successful.

Chevron has roughly $15 billion in assets in Canada and another $4 billion in Brazil that are being targeted in court actions based on the valid Ecuador judgment. That's real risk no matter how Chevron's management team – including its conflicted CEO, John Watson -- try to spin it.

Under oath in court, where company officials are obligated to tell the truth, a Chevron comptroller recently claimed such asset seizure actions will cause the oil giant "irreparable harm" and disrupt its global business operations. Chevron also operates via its subsidiaries in dozens of countries around the world that could be targeted.

There is also a deeper reality to the reasoning behind the recent Canada and Argentina decisions that should disturb concerned citizens everywhere. In effect, based on legal technicalities, these courts are flirting with a total grant of impunity to human rights violators like Chevron.

Let us explain.

In Canada, a trial judge ruled that Chevron is a separate company from its local subsidiary even though that subsidiary is 100% owned by Chevron. Yet Chevron itself operates only through its many subsidiaries around the world. The company does not even own its own building housing its headquarters near San Francisco.

It was also Chevron officials (operating under the Texaco brand) who made the decision to deliberately dump billions of gallons of toxic waste in Ecuador, decimating indigenous groups and farmer communities. Chevron itself stripped almost all of its assets from Ecuador in recent years in anticipation of losing the case. It then refused to pay the judgment.

The upshot is this: when Chevron wants to increase its profits by dumping toxic waste, it can deliver a high level of fake value to its shareholders by externalizing the costs of pollution to impoverished local residents. But when it comes time to pay the hefty tab for that dumping, it plays the corporate shell game and hides behind its subsidiaries.

That's Chevron's conception of impunity.

The cultural mindset that it produces in a large oil company leads to excessive risk-taking and arrogance. And that explains why Chevron always seems to be dealing with a massive number of environmental problems around the world, including in the U.S. where it is currently under criminal investigation for a recent refinery fire in Richmond, CA.

Courts in most countries would not allow Chevron to get away with this brazen mockery of the rule of the law. Many of Chevron's own shareholders are also disturbed enough to have sternly rebuked Watson for mishandling the fallout from the Ecuador judgment.

Knowing it cannot win the Ecuador battle on the merits, Chevron also cleverly tries to exercise improper political influence over governments and courts. In Argentina, after the freeze order became a viable possibility, Chevron suddenly decided to "invest" $1.5 billion in a large gas field with the local state-owned oil company, YPF.

Chevron also took out full-page advertisements in Argentine newspapers claiming impending national doom if the Ecuador judgment were to be enforced. Its local representative publicly announced Chevron would only follow through on its investment if the freeze order was lifted. Suddenly, after some furious behind the scenes lobbying, Argentina's Attorney General recommended the freeze order be lifted. Voila!

We think Canada's appellate court will see Chevron's rope-a-dope for what it is: a sneaky attempt to play the corporate shell game to escape justice. Ultimately, we feel Argentina's courts will see it the same way.

Chevron should not take too much comfort from these latest rulings.

The evidence against Chevron for committing a horrific level of environmental contamination in Ecuador is strong. It has been documented not only by the company's internal files and a 220,000-page trial record, but by independent journalists the world over who have visited the disaster zone.

Only in an unjust world can a corporation get away with murder by hiding behind legal fictions created by bean counters. As this battle rages on, everybody concerned about accountability for corporate human rights abusers should take note and demand that judges stand up for the fundamental principle that polluter pays.

Federal Judge Asked To Stay Case Over $19 Billion Ecuador Judgment

Reposted from The Chevron Pit

A New York federal judge long accused of bias against Ecuadorian rainforest residents over a $19B pollution case is continuing to allow Chevron to "systematically harass" two victims of its toxic pollution and their long-time New York lawyer, according to new motions filed in recent days.

The lawyer, Steven R. Donziger, asked Judge Lewis A. Kaplan to grant a three-month stay to prevent the case from degenerating into a "mockery" where unrepresented defendants are fighting hundreds of Chevron lawyers and are barred by the court from mounting a basic defense using evidence of Chevron's pollution and corrupt acts in Ecuador. The motion is available here.

"This is an extraordinary situation where the evidence suggests that a federal judge is allowing a major oil company to crush its critics by denying them a defense and overwhelming them with abusive legal tactics to drive up their costs, making it virtually impossible for them to obtain counsel," said Donziger.

"Judge Kaplan is now allowing Chevron to pursue litigation over litigation over litigation," said Donziger. "It's unprecedented and offensive."

In the motion seeking the stay, Donziger outlined for Judge Kaplan how he is now litigating alone (pro se) against at least 114 lawyers from Chevron's lead outside firm in a case with millions of pages of discovery documents, a privilege log that is 15,000 pages long, and close to 1,200 docket entries. Chevron also disclosed that it has well over 100 private investigators working on the case, some of who have conducted secret surveillance of the plaintiffs and their lawyers to intimidate them, said Donziger.

Despite the request for a stay, Judge Kaplan is allowing 14 depositions in three weeks, with the first starting tomorrow and the last – of Chevron's CEO, John Watson – scheduled for June 27. Kaplan also is allowing Chevron to depose Donziger for another two days on top of the 16 days he already testified in 2010 and 2011.

"This compressed schedule is a per se violation of my due process rights," said Donziger. "There is simply not enough time to adequately prepare to take depositions, to defend myself in my own deposition, review millions of pages of discovery, and also search for substitute counsel," he said.

Chevron previously identified roughly 2,000 legal personnel and 60 law firms who have worked on the case. An affidavit from a former FBI agent describing some of the surveillance of Donziger can be found here. Kaplan is also allowing Chevron to hide the identities of three Ecuadorian witnesses against the Ecuadorians and Donziger, a blatant violation of their due process rights that a prior lawyer likened to tactics used by courts in the Spanish Inquisition.

In his papers, Donziger said that he has never tried a federal case and that he needed time to procure a new lawyer in the face of a "concerted effort" by Chevron to interfere with his right to counsel.

He disclosed evidence that Chevron has now filed civil suits against four different law firms and one funder who have supported the Ecuadorians, falsely claiming they are part of a "conspiracy" to extort money. Donziger also took aim at Randy Mastro, Chevron's lead lawyer from Gibson Dunn, for making false public statements to the media about the case to "scare off" supporters. (For background on how Mastro and Gibson Dunn have committed ethical violations behalf of Chevron, see here .)

Donziger's former counsel, famed San Francisco-based trial lawyer John Keker, withdrew from the case two weeks ago because Donziger could not pay his fees. On his way out, Keker took the unusual step of publicly criticizing Judge Kaplan for letting the case degenerate into a "Dickensian farce" due to Chevron's abusive litigation tactics.

"Through scorched earth litigation, executed by its army of hundreds of lawyers, Chevron is using its limitless resources to crush defendants and win this case though might rather than merit," Keker said in his motion to withdraw. "Encouraged by this court's implacable hostility toward Donziger, Chevron will file any motion, however meritless, in the hope that the Court will use it to hurt Donziger."

Keker also said his firm "would be proud" to represent Donziger at trial if it could get the resources. "We are confident that were we to do so, we would prevail," Keker said.

Donziger also called on Judge Kaplan to allow him and the Ecuadorians sufficient latitude to develop a defense via questioning of key Chevron witnesses, including CEO Watson, Deputy General Counsel Edward Scott, and Rhonda Zyglocki, who used to head Chevron's lobbying and governmental affairs division. All are scheduled to be deposed this month.

Judge Kaplan also appointed – over the objection of Donziger – his former law partner, Max Gitter, as a Special Master to make rulings during depositions. Gitter, who has a history of bias against the Ecuadorians and Donziger, works at a large corporate law firm in New York City and bills at his standard hourly rates, which include $630 per hour for an associate to assist him.

Accompanying Servio to Chevron's "Alternate Reality"

Reposted from Eye on the Amazon

I can't think of a better term to describe the world that the Chevron board and CEO John Watson are living in than "alternate reality." It certainly must seem that way to Servio Curipoma, the peasant farmer I had the honor of accompanying on a journey from the Ecuadorian Amazon to the San Francisco Bay Area to confront Watson at Chevron's Annual Shareholders' meeting over his failure to accept an Ecuadorian court ruling that found the company liable for $19 billion in reparations for its reckless dumping of toxic wastewater into local water sources in the Amazon for over 20 years, resulting in an ongoing public health crisis and wide scale damage to the environment.

Servio sent a heartfelt message to the CEO of Chevron Corporation when he directly asked the board why they have not fired Watson for his decisions – both in Ecuador and in many other countries around the globe – that have cost the company billions of dollars and seriously harmed its reputation. As Watson dodged Servio and other concerned shareholders' questions – or responded defensively with false statements and condescending remarks – what became clear to all critical minds present is that this man, and this company, are either so heartless that they can overlook the true human cost of their profit-seeking operations, or that they are simply living in an alternate reality that the affected communities could never hope to understand.

Servio has lived in the Amazon for 32 years, in San Carlos, one of the communities most affected by Chevron's contamination. Servio's family originally moved to the Amazon from the area of Loja seeking a better life in the newly developing region. Their new life turned to tragedy when Texaco installed oil wells next to their family's home. Servio's parents became sick and died from cancer, as did an aunt and sister-in-law. Servio, who supports his wife and children by growing cacao, has dedicated his life to seeking justice for his parents' death and the health problems that continue to affect his family to this day along with the tens of thousands of affected people in the region.

This was Servio's second trip to the United States and it came at a very difficult time. Only a few days before he was scheduled to fly, Servio's wife got in a near fatal car crash that sent her to the hospital with serious injuries. His 17-year old daughter told him that she would take care of her mother and that he must travel to represent them and their community in the fight for justice they have been waging for almost two decades. Despite nearly losing yet another close family member, Servio maintained a resolve, strength, and sense of humor that brought tears to my eyes on more than one occasion. I found myself looking in the mirror and asking how I could learn to be as humble and kind as Servio despite everything that has happened to him in his lifetime.

On Wednesday, after several days of press conferences and speaking events, we entered Chevron's headquarters in San Ramon along with representatives of affected communities in Richmond, Nigeria, and elsewhere, escorted by police and private security. The false smiles of Chevron employees failed to cover up what they really must have been thinking as they searched us and led us to our seats in the main auditorium. A sickening video presented shareholders with fabricated information about Chevron's safe and responsible practices around the world, calling 2012 it's "safest year yet", despite fires at a refinery in Richmond and explosions at a drilling platform in Nigeria that caused unquantifiable damage to local communities. Another video responded to the Ecuador case, avoiding any mention of the harm caused to local peoples like Servio and focusing solely on unproven charges of fraud by the plaintiffs' legal team.

When it was finally time for the question and answer session, Servio, despite being figuratively in the lion's den, bravely stood his ground and forcefully addressed Watson and the board of directors.

"My name is Servio Curipoma. I am here on behalf of the 30,000 people affected by Chevron's contamination in the Ecuadorian Amazon," he announced. "My question to you all is ‘Why hasn't John Watson been ousted as CEO of Chevron for lying and hiding the truth from the shareholders about Chevron's crimes in Ecuador?'" He continued, "We have won verdicts in both the original case and appeal held in the court that Chevron chose. I lost both of my parents to cancer, and we continue to suffer from the effects of the company's operations. We are seizing Chevron's assets in Argentina, Canada, and Brazil. We will pursue the company to all corners of the world, until they have paid every cent they owe for the harm they have caused in the Ecuadorian Amazon."

Watson, in an offensively condescending manner, responded through a translator that he was sorry for the situation in which the indigenous peoples of Ecuador lived, and that they were being used by American trial lawyers; as if Servio and the thousands of others sick and dying from pollution in the Amazon don't have the mental capacity to think for themselves. He also said that there was "no proof that any of the water in the region is contaminated." Throughout the Q&A session, Watson responded to the barrage of criticism of his management and company operations saying that the affected peoples who confronted him were confused about the facts and should consult Chevron's team of experts. This is Watson and Chevron's alternate reality: in which Chevron's "experts" earning enormous salaries know better about the situation in which these affected peoples live than the people themselves.

Outside the meeting, Servio was greeted by a cheering crowd of over one hundred people and members of the press. He addressed those present, thanking them for their support. He proudly held up a photograph of his mother in the final throws of the cancer that caused her death.
"In Ecuador in the month of May," he shouted, "We celebrate our mothers. My gift to my mother and to all mothers suffering in the Amazon will be to fight until the day that I die or until justice is achieved for her murder caused by this corporation that thinks it is God!" He then held up a plastic bottle of brackish water with crude oil visibly floating on the surface; bottled at the source next to a Chevron-operated well. "Watson claims that the water in the Amazon is not contaminated – then I invite him to come over here and I will drink half of this bottle and he can drink the other half!" The ecstatic crowd applauded.

Later that day Servio said to me, "I didn't think anyone was going to show up in support. I thought that the American public had abandoned us in our fight. I am so happy to see that is not the case!"

As I bid my friend goodbye before his flight I thought: this is why I and others at Amazon Watch are here – to support people like Servio, one of the kindest and most honest people I have ever had the fortune to meet; to fight to ensure that corporations like Chevron cannot continue to get their way and violate human rights and destroy the planet all for the sake of their precious portfolio; to wake them up from their false reality. I feel honored to know Servio. I will see him soon, either in Ecuador or at the next Chevron shareholders' meeting.

– Alex Goff

Forget WallyWorld, at Chevron They Live in WatsonWorld

Reposted from Eye on the Amazon

There are many ways to describe the experience of participating in a Chevron Annual Shareholder Meeting. One is often left wondering if those inside are as completely divorced from reality as their words suggest, or if they are just putting on a show for a room full of cardboard cut outs of corporate yes-men. This past Wednesday was no exception. While hundreds protested outside the 2013 Chevron Annual Shareholder Meeting holding the largest "pink slip" you've even seen reading, "Watson: You're Fired!" Chevron CEO John Watson once again demonstrated that he is largely divorced from reality when it comes to the company's $19B liability in Ecuador and its other environmental problems, both local and global. Watson would hate to admit it, but once again the meeting was dominated by his critics and the largest ever shareholder support for Ecuador-related resolutions.

The Chevron Way: We Know Better

Time and again when faced with shareholder resolutions critical of Chevron or the compassionate voices of community members living with the harsh reality of exposure to the company's toxic operations, Watson claimed it was his critics who were "unfamiliar with the facts". Servio Curipoma, who has lived his entire life in the Ecuadorian Amazon surrounded by Chevron waste pits, who lost his parents to cancer caused by Chevron contamination, does not need Watson to tell him what it's "really like" in Ecuador. Yet Watson dismissed his testimony and offered Servio nothing but his "pity" for being "used by US trial lawyers."

Likewise, Dr. Henry Clark of Richmond, CA, whose 15,000 neighbors were sent to the hospital last August after Chevron's refinery blew up into a fire, or Laura Livoti, representing JINN and the Nigerians who suffer from never-ending flaring and a rig fire that burned for six weeks in 2012, do not need Watson to tell THEM their reality. They are living it. Watson told Ms. Livoti that she should consult with some of his executives, who have a greater understanding of what goes on in Nigeria. The grim reality is that due in great part to environmental conditions caused by Chevron's operations, the Nigerians in the area only have a 41-year life expectancy. With that dire statistic, it's conceivable that Chevron execs COULD be there on the ground for longer.

To the community of Richmond, long suffering from Chevron's toxic refinery and its poor safety record (now under criminal investigation, Watson's message was that his refinery actually has a better safety record than others in California. Funny, not a single other refinery in California BLEW UP last year!

Amazon Watch founder and Executive Director Atossa Soltani stood to remind Watson, the board and the other shareholders that she was there BEFORE Chevron bought Texaco with over 800 pages of evidence that Texaco was an enormous liability for what it had done in Ecuador. Watson's "bubble" appeared to weaken as he became visibly disturbed when Ms. Soltani reminded everyone that he himself was head of mergers and acquisitions at the time. What was then estimated to be a minor nuisance by lawyers and investment bankers anxious to close the merger deal for their exorbitant fees has since ballooned into a $19 billion judgment that rises every year with interest. Chevron is already spending an estimated $400 million per year just in legal fees, dwarfing the $40 million it claims it spent on its sham clean-up in Ecuador. Unwilling to even reply to Ms. Soltani, Watson turned on a completely unrelated video clip and then had her removed from the room by four security guards when she attempted to respond. The Watson World bubble remained intact, but only to Watson and the true believers (read: personally conflicted managers) he appears surrounded by on his executive team.

Facts vs Fiction: On WatsonWorld up is down

Real World: Texaco (now Chevron) builds and operates a system designed to pollute and then dumps 16 billion gallons of toxic foundation waters into the rainforest over decades causing a wave of cancers and other deadly illnesses.

In WatsonWorld: the local water shows ZERO signs of toxicity and is totally safe to drink, even though Chevron's own lawyers luxuriated with bottled water imported from Quito during the eight-year trial in the jungle. Furthermore, anyone who complains about it and pushes for a clean-up is a "global conspirator" out to extort billions from good global citizen Chevron.

Real World: Socially responsible investment firms collaborate with human rights and environmental organizations to challenge a company's false assertions and work with shareholders with billions of dollars of assets in Chevron to create reform from within.

In WatsonWorld: every single person involved should be forced to turn over every private communication they've ever made about Chevron because if they are critical they must therefore be part of a massive global conspiracy to defraud the company.

Real World: An offshore rig burns for six weeks off the coast of Nigeria, killing workers, destroying fishing, and sickening communities.

In WatsonWorld: That's called, "no damage to the community."

Real World: Chevron spills over 100,000 gallons of crude oil off the coast of Brazil, resulting in hundreds of millions in fines and billions of dollars of potential liability.

In WatsonWorld: There's no need for greater oversight of Chevron's offshore work because Chevron is "committed to safe operations."

Back to Earth

Outside, hundreds of protesters representing dozens of environmental and human rights organizations, and communities who live in the harsh REAL world of Chevron's operations, reminded Watson and Chevron that no amount of misdirection and factual distortion is going to make them go away. They continue to call for his firing and for true accountability and they pledge to stand up to Chevron until justice is achieved.

Perhaps sweetest of all is the fact that Watson will be forced to testify soon under oath about the Ecuador disaster in a case brought by Chevron itself that is rapidly threatening to bite the company on its own backside. Without his protective WatsonWorld bubble, he's likely to find that in the real world there are penalties for lying about Chevron's actions and misdeeds.

– Paul Paz y Miño