Chevron Ecuador: Permanent Court of Arbitration Blocks Ecuador From $18 Billion

by

The latest twist in the Chevron Ecuador legal battle has sent Amazon Defense Coalition Spokesperson Karen Hinton into a crazy lather, issuing wild press releases with the angry passion of a diva singer called Samantha who didn’t get the part she wanted in a movie.

But the finding of the Permanent Court of Arbitration in The Hague against Ecuador, and ordering the country to block its own court’s fraudulently-gained ruling against Chevron is perhaps the most powerful evidence yet that the entire issue should be closed.

The untold other side of American business in under-developed countries is how corrupt forces in the culture of the nation, in this case Ecuador, almost consistently work against companies large and small as operatives in the nation seek to gain their cut of what’s produced – often more than is reasonable and with a wildly common degree of use of fraud, bribery, and harassment.

In the case of Chevron in Ecuador, the American oil giant purchased Texaco, which had a deal with the government of Ecuador to stop oil production in 1992, and allow the government’s oil company Petroecuador to take over all oil production facilities by agreement. But the little known fact is that Ecuador has always claimed ownership to what are called “oil resources” – the land and the oil itself. Thus, Ecuador’s government and its oil company Petroecuador was always working in partnership with Texaco and then Chevron Texaco after Chevron bought Texaco.

Texaco did the necessary environmental cleanup under agreement with Ecuador, and to the tune of $40 million. Petroecuador took over, but oil spills were common and are to this day. Meanwhile, a group of American trial lawyers saw an opening for big bucks by suing Chevron, but not Ecuador, and so filed a lawsuit against Chevron in 1993.

The lawsuit effort continued, and the venue was changed from the United States to Ecuador. Then, Ecuador elected Rafael Correa as President, an American-educated Ecuadorian native who embarked on an ambitious plan of nationalization.

He worked closely with American lawyers, most notably Steven Donziger, and together a lawsuit based on “government sanctioned” studies said to be written by a local environmental expert, but were actually made by Steven Donziger’s people, were used as the basis for the presentation of “evidence” against Chevron.

But in a series of events between 2005 and 2010, it was discovered that Donziger not only falsified data, but worked to scare Ecuadorian judges, and basically manipulate Ecuadorian law in his favor. Thus, an $18 billion judgement laid down an Ecuador court against Chevron was no surprise to this blogger. There’s no way any judge in Ecaudor’s going to rule against his own country (I don’t know if there are female judges in Ecuador), and expect to go home and sleep without harassment.

To make a long and detailed story of a flurry of lawsuits short for the purpose of this blog post, Chevron took the matter to the internationally recognized Permanent Court of Arbitration in The Hague (PCA).

The PCA, what the media calls an “international arbitration tribunal,” ruled against Ecuador on February 17th, and said Ecuador “take all measures necessary to suspend or cause to be suspended the enforcement and recognition within and without Ecuador.”

The reaction of Amazon Defense Coalition Spokesperson Karen Hinton was to accuse the tribunal itself – a body with a century-old history – of being rigged against Ecuador, forgetting that Ecuador itself is a member country. Hinton could find no credible impartial legal expert to talk against the Hague’s finding.

Stay tuned.

Leave a Comment