Ecuador Court Rejects Latest Chevron Attempt to Block Enforcement of $18 Billion Judgment, Says Amazon Defense Coalition

To: ENERGY, FOREIGN AND LEGAL AFFAIRS EDITORS

QUITO, Ecuador, Feb. 20, 2012 /PRNewswire-USNewswire/ -- With its options dwindling and the mistakes of its legal team mounting, Chevron has suffered another courtroom setback in its eleventh-hour attempt to block indigenous rainforest communities from enforcing their $18 billion judgment against the oil giant's assets around the world.

A three-judge appellate panel in Ecuador on Friday ruled that a Chevron request for a special bond waiver had no basis in Ecuadorian law, thereby paving the way for the commencement of enforcement actions. Chevron has stripped its assets from Ecuador, forcing the rainforest communities to consider standard judgment collection lawsuits against the oil giant in other countries.

"We intend to do everything in our power to ensure Chevron's management team meets the company's legal obligations and pays the full amount of the judgment," said Pablo Fajardo, the lead lawyer for the 30,000 Ecuadorians who initiated the lawsuit against the oil giant in U.S. federal court in 1993.

"Chevron broke the rainforest of Ecuador," said Fajardo. "Now it must fix it."

Once the judgment against Chevron was affirmed by the same Ecuador appellate panel in early January, the oil giant was obligated to request the bond pending an extraordinary final appeal to the nation's highest court. Payment of such a bond was the only way under Ecuadorian law to temporarily suspend enforcement of the judgment, but Chevron's legal team blundered by never asking for it, said Fajardo.

Instead of requesting the bond -- which easily could have been paid given Chevron's annual revenues of $240 billion -- Chevron requested an unprecedented waiver of the bond requirement. After Chevron sought the waiver, the rainforest communities charged the oil giant was seeking "special treatment" not available to any other litigant in Ecuador.

The court, in a four-page decision, said seeking a bond "is the only established legal mechanism to give litigants in Ecuador the opportunity to suspend execution of a judgment." In reference to Chevron, it added: "The losing party decided not to exercise this right."

Separately, the court rejected an "order" issued Thursday from a private investment arbitration that Ecuador's government freeze the 18-year litigation until it can rule on a separate set of Chevron claims that it the court system in Ecuador treated it unfairly. See here. The private investment panel has been harshly criticized by jurists for violating international law, and the rainforest communities have said its actions have no bearing on their claims given they are not a party to the proceedings. See here and here.

In a detailed analysis of the international law obligations of Ecuador's government, the appellate panel said the Inter-American Convention of Human Rights and Ecuador's Constitution trumped any authority from the investment panel, which was convened by Chevron under the U.S.-Ecuador Bilateral Investment Treaty. The rainforest communities recently filed a petition with a noted human rights court to block any order from the secret arbitral panel, whose members -- all private lawyers -- stand to reap millions of dollars of fees for simply granting jurisdiction over the case.

"No part of this Convention can be interpreted to permit any person (such as Chevron or the Arbitral Panel) to interfere with the enjoyment and exercise of rights and liberties recognized in the Convention, nor can it override other rights and guarantees that are inherent in the rights of all men," the panel wrote in its decision.

The panel also ruled that international law to protect investors can never override international treaties that protect fundamental human rights of individuals, including the right to life and the right to seek legal redress, both of which are being exercised by the rainforest communities.

"A simple arbitral award ... cannot obligate judges to do violence to the human rights of the citizens of the country where it sits," said the panel.

A representative of the rainforest communities was pleased with the decision, which she said protects the independence of Ecuador's courts and ensures that a private investor treaty cannot trump the fundamental human rights of ordinary citizens. The trial was held in Ecuador only after Chevron moved it there from U.S. federal court, promising to abide by any adverse judgment.

"The Ecuador appellate panel spoke in a way that is consistent with both Ecuador's laws and the country's international treaty obligations," said Karen Hinton, the U.S. spokesperson for the rainforest communities. "It shows that Ecuador's independent courts will not succumb to Chevron's political pressure nor its request for special treatment."

"After 18 years of dealing with Chevron's bad faith and abusive litigation tactics, the rainforest communities have a final and enforceable judgment," she added.

The Ecuador appellate court did grant Chevron's request for an extraordinary appeal to the National Court of Justice, a process that likely will take one to two years to conclude.

The appellate ruling comes at a time when Chevron officials are furiously trying to cut a side deal with Ecuador's government to illegally quash the environmental case, said Fajardo. The company apparently offered $1 billion to the government to end-run the legal process, an act that could expose Chevron to criminal liability under various anti-bribery statutes in the United States and other countries, he added.

The Ecuador trial court in February 2011 found overwhelming scientific evidence that Chevron deliberately dumped billions of gallons of toxic waste into Amazon waterways when it operated in Ecuador under the Texaco brand from 1964 to 1992. The dumping decimated indigenous groups and caused an outbreak of cancer that could lead to thousands of deaths in the coming years, according to evidence before the court. See here and here.

A video that tells the story of the environmental disaster and of Chevron's fraudulent cover-up can be seen here.

The amount of damages set by the Ecuador court is modest compared to the potential liability of BP in the much smaller Deepwater Horizon disaster in the Gulf of Mexico, said Hinton. BP already has committed $20 billion in compensation for the Gulf spill, an amount that does not include an estimated $60 to $80 billion in additional liability from civil lawsuits now pending in U.S. federal courts.

Contact: Karen Hinton, 703-798-3109, Karen@hintoncommunications.com

SOURCE Amazon Defense Coalition

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Amazon Defense Coalition: Chevron Arbitration "Order" Will Have No Impact on $18 Billion Judgment, Ecuadorians Assert Will Backfire Against Oil Giant in Courts Around World

To: FOREIGN, LEGAL AFFAIRS AND NATIONAL EDITORS

WASHINGTON, Feb. 17, 2012 /PRNewswire-USNewswire/ -- An "order" issued Thursday from a private investor arbitration panel purporting to freeze a nine-year environmental litigation against Chevron in Ecuador violates international law and will have little or no impact on any potential enforcement action against the oil giant in countries around the world, said representatives of the plaintiffs.

The latest move by the three-person investor arbitration panel, issued after a secret, closed-door hearing over the weekend that barred the rainforest communities of Ecuador from appearing, ordered Ecuador's government to take "all necessary steps" to block enforcement of an $18 billion judgment against Chevron that was affirmed on appeal in early January following a nine-year civil trial, according to a source in the American law firm Winston & Strawn, which represents Ecuador's government.

"This arbitration panel has just lost the last remnants of its legitimacy by trying to order a sovereign nation to violate its own Constitution and quash the legal claims of citizens who are literally dying off in the rainforest due to Chevron's pollution," said Karen Hinton, the U.S. spokesperson for the 30,000 Ecuadorians who won the judgment against the oil giant.

"The latest order will have no legal impact in Ecuador or in any country around the world that observes the rule of law," Hinton added. "The United States would never abide by such a ruling; nor will Ecuador or any other country that has a system based on due process of law."

The judgment against Chevron in Ecuador was based on overwhelming scientific evidence that the oil giant dumped billions of gallons of toxic waste into the Amazon, decimating indigenous groups and causing an outbreak of cancer and other oil-related diseases. The trial against Chevron was shifted in 2002 from U.S. federal court to Ecuador at Chevron's request, where the company promised to abide by any adverse judgment.

Because Chevron stripped its assets from Ecuador, the rainforest communities are being forced to consider standard collection actions around the world against the oil giant's assets. It was the possibility of initiating enforcement actions against Chevron that prompted the panel to try to freeze the case in a last-gasp effort to help the oil giant, said Hinton.

The panel -- composed of three highly-paid private lawyers whose hearings are closed to the public -- simply does not have the authority to review a private litigation in the public court system of a sovereign nation, according to Ecuador's government, a growing chorus of international law jurists and a petition filed by the rainforest communities before a noted human rights court. See here, here and here.

One of the three panelists, Horacio Grigera Naon, has consistently ruled against the government of Ecuador in five other international investor arbitrations where he was appointed on the advice of King & Spalding, Chevron's American law firm, said Hinton. In fact, Grigera Naon violated his oath as an arbitrator by agreeing to be appointed to the current arbitration without disclosing his conflicts of interest with Chevron and King & Spalding and therefore should be disqualified, said Hinton.

"It is clear that Grigera Naon is not independent as required by the arbitral rules," said Hinton.

The latest move represents the first time in the history of investor-State arbitrations that a panel has tried to order a sovereign nation to interfere with a court case involving private litigants, said Aaron M. Page, an international environmental and human rights lawyer and co-author of a law review article critical of the investor arbitration panels.

"This latest decision has almost no chance of being respected in any public court system anywhere," said Page. "It essentially renders the Ecuadorian indigenous communities stateless for purposes of exercising their legal rights.

"It also sends a frightening signal to sovereigns around the world that there is a group of private arbitrators who think they have some sort of veto power over public court systems worldwide," he added. "No country in the world would accept such a notion, and no treaty authorizes such a radical conception of arbitral power."

The "decision" from the panel also violates various provisions of Ecuador's Constitution -- which prohibits interference in its court system -- as well as several international treaties that obligate the government of Ecuador to protect the rights of its citizens to seek legal redress through the courts, said Pablo Fajardo, the lead lawyer for the Ecuadorian indigenous and farmer communities who won the landmark judgment.

There is no expectation that Ecuador will actually comply with the arbitral panel given that carrying it out would be illegal under the nation's laws, said Page. Most governments, including the United States, simply ignore decisions from international courts that purport to order them to interfere with pending litigation in their court systems, he added.

The arbitral panel convened by Chevron bars the rainforest communities from appearing before it, does not publish its decisions, and does not inform the public about when and where it meets, said Hinton. Further, each panelist stands to reap millions of dollars in fees paid in part by Chevron simply by granting jurisdiction over the case when there is little if any basis to do so.

Ecuador's government has argued that the oil giant has no right to even file the claim under the BIT given that the treaty did not take effect until 1997, or five years after Chevron left the country.

Chevron's attempt to use the arbitration to undermine the rule of law prompted renowned Latin American jurist Jose Daniel Amado to send a letter to U.N. Secretary General Ban Ki-moon asking for a review of what he called an "improper and illegal expansion of arbitral powers" by the panel. See here and here. The Amado letter gained immediate support from jurists around the world, who sent a separate letter backing Amado's arguments to the U.N. official in charge of international arbitration, Renaud Souriel.

In the meantime, the three lawyers who serve as arbitrators -- Grigera Naon, Vaughn Lowe, and V.V. Veeder -- were blasted last week by civil society organizations for illegally interfering in the Ecuador trial. All have refused demands to disclose how much they are charging for their services.

Grigera Naon, an Argentine who lives in the United States, repeatedly has been appointed to investor arbitration panels by the Chevron law firm King & Spalding in cases where the government of Ecuador is a defendant. Grigera Naon has never ruled in favor of Ecuador, and on two occasions he wrote highly unusual dissenting opinions where Ecuador won to position himself to be appointed by Chevron in the current arbitration, said Hinton.

"An analysis of Grigera's rulings shows he has never ruled against a King & Spalding client," said Hinton. "The man simply has no independence."

Contact: Karen Hinton, 703-798-3109, Karen@hintoncommunications.com

SOURCE Amazon Defense Coalition

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Obama Proposes $27 Billion Budget for Department of Energy

According to the Department of Energy, President Barack Obama has made a $27 billion budget request for fiscal year 2013 to pursue an "all of the above" approach to energy development in the nation. Here are the details.

* According to the DOE, the request is part of the president's blueprint for the American economy, focusing on job creation through cheaper, cleaner energy.

* In the request is $770 million for nuclear energy, which includes money to support the development of small nuclear reactors as well as funds to pursue nuclear waste options that were set out in the Blue Ribbon Commission on America's Nuclear Future report.

* Obama's budget request also calls for $276 million to research and develop fossil fuel power systems that include carbon capture technology to enable the continued use of the nation's coal resources.

* $5 billion is requested for research activities, advanced computing technologies and advanced biological design principals through the Office of Science. According to the department's request, underlying these requests is the investment in the education of scientists and engineers.

* About $14 billion of the budget request is needed for nuclear deterrence and nuclear nonproliferation programs, the DOE reported, providing for the Navy's nuclear propulsion needs and securing vulnerable nuclear material around the world.

* The president's budget request also includes funding that will promote efforts to make solar energy more affordable by reducing its cost by up to 75 percent, the DOE stated. The department's goal, as stated in the report, is to make solar energy competitive with other forms of energy, without subsidies, by the end of the decade.

* Included in the request are efforts to reduce operating costs from the DOE, including selling 4.6 acres of real property, mainstreaming the department's websites by 40 percent and reducing its time-to-hire employees by 45 percent.

* $143 million was requested for the continued support of grid modernization technology, with money to award to states for grid modernization as well as to help recovery from energy supply disruptions.

* Money has also been requested to continue to provide weatherization programs as well as to begin new programs that will provide rebates to customers who purchase energy-efficient appliances.

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