Chevron is defending itself against false allegations that it is responsible for alleged environmental and social harms in the Amazon region of Ecuador. In February 2011, an $18 billion judgment was rendered against Chevron by a court in Lago Agrio, Ecuador, for alleged contamination resulting from crude oil production in the region.
Chevron has never operated in Ecuador. Texaco Petroleum Co., which Chevron acquired in 2001, ceased operations in Ecuador in 1992, and then fully remediated its share of environmental impacts.
Further, Chevron maintains that the judgment is illegitimate because of documented evidence of fraud and unethical action by the plaintiffs' lawyers as well as the Ecuadorian government and judiciary. These fraudulent actions include the plaintiffs' lawyers falsifying data in multiple instances and in the name of supposedly independent environmental experts; paying experts to ghostwrite exaggerated environmental-impact assessments; and bribing the judge who allowed the plaintiffs' lawyers to write the actual judgment issued against Chevron.
Chevron has appealed the fraudulent judgment.
Chevron does not believe that the Ecuador ruling is enforceable in any court that observes the rule of law. Currently Chevron is pursuing the following actions:
The most recent updates about the major components in the case are below.
Ecuador Plaintiffs' Enforcement Efforts in Canada Halted by Canadian Court
On May 1, 2013, the Ontario Superior Court of Justice indefinitely stayed an action initiated by the plaintiffs seeking to have the Ecuadorian court’s $18 billion judgment against Chevron recognized and enforced in Ontario, Canada (see opinion here).
In doing so, the court stated that "the plaintiffs have no hope of success in their assertion that the corporate veil of Chevron Canada should be pierced and ignored so that its assets become eligible to satisfy a judgment against its ultimate parent. There is no basis in law or fact for such a claim.... Ontario courts should be reluctant to dedicate their resources to disputes where, in dollar and cents terms, there is nothing to fight over."
This is a significant setback to the plaintiffs' worldwide enforcement strategy given that it is premised on seeking to enforce the judgment against assets of Chevron subsidiaries that were not even parties to the Ecuadorian litigation.
Ecuadorean Environmental Claims Disavowed Under Oath by Plaintiffs' Own Experts
On April 12, 2013, Chevron settled pending fraud and extortion claims against Boulder, Colo.-based Stratus Consulting, the lead environmental consultants to the plaintiffs' lawyers in the Ecuador trial.
Stratus scientists provided sworn declarations outlining the firm's knowledge of the plaintiffs' lawyers' misconduct in the ongoing litigation as well as testifying that there is no scientific merit to the plaintiffs' damages claims against Chevron and Texaco Petroleum.
In the sworn declarations, Stratus details the role the firm and the plaintiffs' lawyers played in drafting the supposedly independent damages report of Richard Cabrera, which serves as an evidentiary basis of the 2011 judgment against Chevron in Ecuador. Testimony also provides a direct account of lead plaintiffs' lawyer Steven Donziger's control of Cabrera's report and the pressure Donziger applied to contrive damages attributed to Chevron.
Chevron Wins Key Ruling from Permanent Court of Arbitration
On February 7, 2013, an international arbitration tribunal ruled that the Republic of Ecuador has violated the tribunal's prior interim awards by not preventing the attempted enforcement of an $18 billion judgment against Chevron.
The tribunal was convened under the authority of the U.S.-Ecuador Bilateral Investment Treaty (BIT), and administered by the Permanent Court of Arbitration at The Hague. It found that despite its awards, the Republic of Ecuador has facilitated the plaintiffs' pursuit of enforcement. These actions are the result of Ecuador's failure to meet its international law and treaty obligations.
In prior rulings, the tribunal put the Republic on notice that if Chevron's arbitration ultimately prevails, "any loss arising from the enforcement of (the Lago Agrio judgment) may be losses for which the (Republic) would be responsible to (Chevron) under international law."
In February 2012, the tribunal had issued a Second Interim Award ordering the Republic—and all of its branches, including the judiciary—to take all necessary actions to prevent enforcement and recognition of the Lago Agrio judgment, both inside and outside of Ecuador. That award expanded upon an earlier award requiring 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."
Chevron filed its request for arbitration in 2009, claiming that the Republic violated its obligations under the BIT and international law.
Fourth Interim Award (672 KB)
PCA Decision on Jurisdiction (1.2 MB)
Second Interim Award (1.2 MB)
Chevron RICO Lawsuit Against Plaintiffs' Lawyers and Consultants Proceeds to Trial
Chevron's civil lawsuit, brought under the Racketeer Influenced and Corrupt Organizations Act (RICO), will proceed to trial in October 2013. The claim is against the trial lawyers and consultants leading a fraudulent litigation and public relations campaign against the company.
The RICO complaint was filed in February 2011 and seeks to hold the plaintiffs' representatives accountable for fraud, extortion and other misconduct associated with the Lago Agrio litigation. Through the lawsuit, Chevron is seeking damages associated with the cost of defending the Ecuador litigation as well as other relief.
In the most recent pre-trial development, a former Ecuadorian judge acknowledged his direct involvement in orchestrating a fraudulent judgment against Chevron.
In a sworn declaration filed on January 28, 2013, Alberto Guerra, who presided over the case when it was first filed in 2003, reveals that he was paid thousands of dollars by the plaintiffs' lawyers and a subsequent judge, Nicholas Zambrano, for illegally ghostwriting judicial orders issued by Zambrano and steering the case in the plaintiffs' favor. Spectacularly, Guerra attests that the plaintiffs' lawyers were permitted to draft the $18 billion judgment itself after they promised to pay Zambrano a $500,000 bribe out of the judgment's enforcement proceeds. Read More