In 1993, U.S. lawyer Steven Donziger and others filed a lawsuit in New York against Texaco on behalf of Indigenous nationalities and campesino communities in Ecuador’s Amazon whose land and water had been thoroughly contaminated over a 26-year period.
From 1964-1990, Texaco ran all drilling, waste disposal, and pipeline operations in the region and admitted it had dumped 16 billion gallons of oil waste into rivers and streams relied on by local inhabitants for their drinking water, bathing, and fishing. The damage has been called the “Amazon Chernobyl” by locals and is considered by some experts to be the worst oil-related environmental disaster on the planet and credibly linked to unusually high cancer rates in the area.
Texaco spent almost 10 years fighting to get the lawsuit moved to Ecuador’s courts, which it praised in numerous sworn affidavits. In 2001, Chevron (which had just merged with Texaco) won that battle and agreed to abide by any judgment issued in Ecuador, subject only to narrow enforcement defenses.
In 2013, after years of delay, the Ecuadorean Supreme Court upheld lower court rulings against Chevron and awarded US$9 billion in damages to the affected communities. This is the largest trial court judgment in history against an U.S. oil company for environmental damage although it pales in comparison to BP’s liability for the Deepwater Horizon spill in the U.S.
By the end of the trial in Ecuador, Chevron had sold almost all its assets in the country and forced the victims’ lawyers to chase it around the world to collect. The most advanced collection action has targeted Chevron’s assets in Canada, where the company has an estimated US$25 billion in assets. Canada’s Supreme Court already issued a unanimous decision denying Chevron’s jurisdictional objection to the case and allowing the villagers to proceed with an attempt to seize those assets to pay the full amount of the judgment, plus interest.
Donziger agreed to answer some questions about this seemingly never-ending but historic legal battle.
Emersberger: What are the broader implications of this case, the wider dangers of Chevron getting its way?
Donziger: The case is a direct challenge to the fossil fuel industry’s environmentally destructive business model which assumes large oil companies can artificially inflate profits by dumping toxic waste in far-flung communities that do not have the money to fight back.
This is the first successful attempt by those communities to hold a major oil company accountable for this misconduct. Chevron has used subterfuge, intimidation, fraud and threats to delay the judicial process every step of the way. Chevron’s strategy is to avoid litigation on the merits and kick the can down the road until the lawyers give up. They have employed 2,000 lawyers and 60 law firms to delay the process, calculating it’s cheaper to pay huge sums to lawyers than to meet its legal responsibilities to clean up its toxic dumping in Ecuador. People are dying because of the company’s delaying tactics.
More broadly, the entire world needs to watch this case to make sure Chevron’s abuse of the civil justice system does not continue. This case is also critical vehicle to force the oil industry to pay for its environmental misconduct which to us is a central tenant in the battle to preserve the planet from global warming. The fossil fuel industry must change for the planet to survive. Part of that change process is to make sure the industry does not externalize the costs of its production to local communities who pay a high price for pollution while the company flees North with its unjust profits, as Chevron has done in Ecuador.
E: How did the Indigenous groups get the resources to bring their case and keep it going for more than two decades?
Donziger: This is a privately-financed case based largely on the contingency-fee model which is widely used in the U.S. That means that the lawyers fund all of the expenses of the case and do the work and then take a small percentage of the recovery if they win; if they lose they do not get paid. This model creates a partnership between the victims and their lawyers and for the Indigenous communities it creates a viable path to access the justice system which is what oil companies fear the most. Chevron’s first line of defense in these situations is that the people affected never get to court because they can never find the money to pay good lawyers. That part of Chevron’s strategy has failed utterly in this case. Several individuals also have supported the villagers with donations and financing which is being used to pay lawyers and case expenses.
The Indigenous groups have not even paid even a dollar for their representation but they have been assisted by some of the most talented lawyers and most prestigious law firms in the U.S. and Canada, including Patton Boggs, Keker & Van Nest, and Lenczner Slaght. The fact top law firms around the world are helping the Ecuadorean villagers is terrifying to Chevron and the fossil fuel industry and completely changes the risk calculus of oil drilling in delicate ecosystems.
These firms normally represent the oil industry; now they are representing groups fighting that industry. That’s never happened before. Before, it was assumed a large corporation could pollute in places like Ecuador and not pay a price. Now, it is clear there is potentially a very steep price to be paid similar to what a company would have to pay in the U.S. if they were to dump toxic waste, as BP did in the Gulf of Mexico. Evening out questions of costs and liability between South and North has been a goal of the communities and they have achieved that to a great degree over the history of this battle, even though it continues still.
Taking a step back, we believe we have created an important new human rights litigation model that allows indigenous groups to sustain a legal fight against Big Oil for as long as it takes. The model robs Chevron of its main defense, which is the company’s hope that the communities will run out of money and therefore their lawyers will abandon them such that they are left defenseless. That’s not going to happen. Our team is too strong and there is too much support. It is important to point out that even with the tremendous financial support received, the indigenous groups will get the vast majority of any recovery with the balance going to repay the lawyers and supporters for their contributions.
E: How did you get involved?
Donziger: When I was in law school in the early 1990s, a classmate whose family was from Ecuador told me about the problem. We went down and saw it with our own eyes, and the extent of the pollution and the fact it was done deliberately to increase profits it was just shocking. So we commenced a lawsuit to hold the guilty party, Texaco, accountable. Texaco was the exclusive operator of the oil fields and essentially engineered the pollution to lower its production costs.
I’ve been involved since the case was filed in 1993, but there have been dozens of lawyers involved at various times through the years including a fabulous team of young Ecuadorian lawyers who actually won the case in their home country. For the last several years I have spent a substantial part of my professional life on this matter. I’ve traveled to Ecuador to attend the trial or to talk to the affected communities more than 200 times.
E: If I understand it correctly, a court in Toronto has just ruled that your clients can try to collect US$12 billion in damages from Chevron in Canada but said that the company’s assets might be off limits due to a technicality. Is that correct?
Donziger: A trial judge ruled that the villagers could go forward and try to seize Chevron’s assets in Canada. That’s a huge victory for human rights victims worldwide and is consistent with a prior ruling in favour of the villagers by Canada’s Supreme Court. The judge made a critical mistake, though, in that he ruled that a wholly-owned company subsidiary in Canada called Chevron Canada cannot be seized to pay the debt. We are appealing that part of the ruling and expect it to be reversed.
Most of Chevron’s assets in Canada are in the subsidiary which is totally controlled by Chevron. Chevron tried to claim it is a separate company and the judge bought it. The implications of this part of the decision are terrifying for human rights victims; it means they can fight for many years to win a case, get it affirmed on appeal, and see the defendant hide behind shell companies to protect assets. We respectfully believe the trial judge was just wrong on this part of the decision.
E: Why do you think the judge got it wrong?
Donziger: It might have been a simple mistake. Well-meaning judges sometimes get it wrong and that’s understandable; that’s why we have appellate courts. But generally, we have found it is very difficult for some of these solitary trial judges to go against Chevron given the power and influence of the company around the world. We have evidence that Chevron essentially is running an intimidation campaign in courts to scare judges into not enforcing the Ecuador judgment.
We have seen this in various countries such as Argentina and Brazil where the company lobbied political officials to try to kill off enforcement actions. It is part of what we consider Chevron’s soft corruption. In Toronto, they sent 30 lawyers from large law firms into a small courtroom during a recent motions hearing overseen by one judge.
Many of the Chevron lawyers there have influence over judicial appointments in Canada. It appeared most were there not to do any work but to just stare down the judge from the gallery. To me, it seemed like an exercise in intimidation. In any event, the part of the decision protecting Chevron’s subsidiary bought the company another year for its strategy of delay. More people will suffer and die during this delay. Court decisions that miss the mark can lead to drastic human consequences in the rainforest.
E: To an unprecedented degree, Donald Trump is discrediting the U.S. political system, including its judiciary, before the entire world. How do you see that impacting the case?
Donziger: Courts should decide this case like they should with all cases, which is based on the law. Chevron always plays the political game to influence courts and they view courts as a component piece of a larger political and power strategy.
In Ecuador, they have tried repeatedly to get the President to kill off the environmental case via political means; they once considered floating a US$700-million aid package from the U.S. State Department to Ecuador’s President in exchange for a politically-engineered dismissal of our case, which is a private case brought by private citizens against a private company.
Chevron has constantly tried to get the U.S. government to pressure Ecuador’s government to kill off the case. In Argentina, Chevron got our enforcement action blocked by agreeing to make a major investment in the country that was negotiated directly by Chevron’s CEO John Watson. In Canada, Chevron is trying to get government leaders and others of influence to claim if the indigenous groups are allowed to enforce their judgment then it will be bad for foreign investment in Canada and will hurt the economy. We have confidence in Canadian courts which are far less vulnerable to political pressure than those in the U.S. It is hard to predict how Chevron will try to exploit the Trump effect, but there is no doubt that if there is way to get an advantage from it, they will try to find it.
E: What are your next steps?
Donziger: Our focus is primarily on Canada but there are other opportunities around the world that we are exploring. In Canada we are going to do a quick appeal of the issue regarding the corporate subsidiary and then hopefully head to an enforcement trial to determine whether the communities can force Chevron to pay the Ecuador judgment. This is hugely important to the world community and to human rights victims in Ecuador and the world over.
If we win that trial, the communities will get funds needed to begin the arduous clean-up process which will take another ten to twenty years to complete. If that process can happen, thousands of lives can be saved and the oil industry will change dramatically in ways that will help protect vulnerable communities and save the planet.
Already, the case against Chevron has imposed a huge measure of accountability on the company which has been exposed around the world for its reckless practices in the Amazon and has been forced to spend an estimated US$2 billion defending itself. The only step left is to collect the judgment and start the environmental remediation which are confident will happen soon.