A court in Toronto will soon begin deliberating over whether or not to seize Chevron's Canadian assets in order to force the company to comply with an $9.5-billion judgement in Ecuador.

The company doesn’t deny that Texaco, which Chevron bought in 2000, deliberately dumped billions of gallons of toxic oil waste in the Ecuadorian Amazon, resulting in massive environmental devastation and a health crisis affecting thousands of people. But the company claims it did its part to clean up the rainforest.

But the settlement Chevron had with the Ecuadorian government and the state-run oil company, PetroEcuador, does not preclude citizens affected by that oil pollution from seeking damages. Ecuadorian plaintiffs first filed a suit against the company in 1993. Chevron lost a high-profile trial in Ecuador in 2011, and every Ecuadorian court that has considered the evidence since then — including an appeals court and the country's Supreme Court — has ruled against Chevron.

Yet still the company refuses to pay. Chevron has even gone venue shopping in an attempt to avoid paying for a cleanup of its toxic mess — filing an investor-state dispute at the Hague, pressing RICO charges against the Ecuadorians and their lawyers in a New York court. But the communities in Ecuador affected by Chevron’s pollution have not remained idle, and have instead pursued Chevron in Canada to try and collect on the company's debt.

The Supreme Court of Canada ruled unanimously in 2015 that the Ecuadorian plaintiffs could pursue an enforcement action against Chevron. In the majority opinion, Justice Clément Gascon wrote: “In a world in which businesses, assets and people cross borders with ease, courts are increasingly called upon to recognize and enforce judgments from other jurisdictions. Sometimes, successful recognition and enforcement in another forum is the only means by which a foreign judgment creditor can obtain its due.”

Now, in an open letter released this week, more than a dozen Canadian organizations, including Friends of the Earth, Greenpeace, Idle No More Canada, MiningWatch, Sierra Club British Columbia, United Steelworkers, and Unifor, have called Chevron out for its attempts to abuse the civil justice system and evade paying the Ecuador judgment.

“While Chevron continues its international litigation ‘shell game’ thousands of people continue to be systematically poisoned and suffer daily from Chevron's refusal to pay a $9.5 billion judgment to clean up its toxic waste in Ecuador,” the letter states. “Chevron's refusal to honor the judgment against it has forced these communities to come to Canada in a last ditch effort to seize assets to force Chevron to comply with the rule of law.”

"We are grateful that the people of Canada, just like their Supreme Court, have chosen to side with those of us affected by Chevron's deplorable actions when it polluted our communities and water supply,” Humberto Piaguaje, President of the Union of Affected Communities in Ecuador, who will be attending the court sessions in Canada, said in a statement. “The indigenous peoples of Ecuador deserve full access to justice and a healthy environment so that we and our Amazonian neighbors can live with dignity.”

There are signs, however, that Chevron is already attempting to circumvent enforcement of any ruling against the company in Canada. Recent reports have stated that Chevron is currently trying to sell several billion-dollars-worth of its Canadian assets. After insisting the original trial over its pollution in the Amazon be held in an Ecuadorian court, Chevron stripped its assets from the country, which some saw as a deliberate attempt to avoid having to pay any adverse judgement against the company. The fear is that Chevron is attempting the same thing in Canada.

Canadian Civil Society: Freeze Chevron Assets, Use To Cover #Ecuador Judgement on #Amazon Destruction https://t.co/ZL1Y4l8TNS #cdnpoli

— DeSmog Canada (@DeSmogCanada) September 13, 2016

In their letter, the groups call on Canadian authorities to stop Chevron from selling its Canadian assets before a decision can be reached in the trial, stating in the letter that it "would set a terrible precedent for other corporations intending to evade responsibility for environmental and human rights crimes."

Chevron’s tactics of delay and obfuscation are nothing new for the oil industry, of course. BP held out for two years before finally agreeing to pay $1 billion to fishermen and others affected by the Deepwater Horizon oil spill and disaster in the Gulf of Mexico. And the recent #ExxonKnew scandal erupted after it was discovered that the oil giant’s own scientists had been warning of the dangers of carbon pollution leading to runaway climate change since at least the 1970s — but Exxon continued to fund climate denial anyway.

Sierra Club BC Campaigns Director Caitlyn Vernon said that oil companies have operated with impunity for years, despite leaving a legacy of environmental destruction and human rights abuses. "Whether in Canada or around the world, oil companies such as Chevron, Enbridge and Kinder Morgan must be held accountable for oil spills, climate change impacts, and their treatment of local and indigenous populations," she said.

Now, environmentalists say, the Canadian court system has the opportunity to see some small measure of justice is done in this precedent-setting case.

"The Canadian environmental and human rights community has joined forces with the affected communities in Ecuador because we recognize this to be one of the most important corporate accountability cases in history," said Melina Laboucan-Massimo, Climate & Energy Campaigner with Greenpeace Canada. "Chevron must not be allowed to evade its legal and moral responsibilities simply because it has the might to fight on indefinitely in the courts.”  

Image Credit: Oil pollution in Lago Agrio, November 2007. Texaco operated dozens of drilling sites in the area before pulling out of Ecuador altogether. Photo via Wikimedia Commons.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

Chevron lost a high-profile pollution case in Ecuador in 2011 and was ordered to pay $9.5 billion for cleanup of billions of gallons of toxic waste in the Amazon rainforest. So far, the company hasn’t paid a dime — but a recent ruling in Canada might finally force Chevron to pay up.

Chevron appealed the 2011 ruling all the way to Ecuador's highest court, the National Court of Justice, which voted 5-0 in 2013 against the company. But Chevron still refuses to comply with the ruling, and since the Big Oil behemoth has no assets in Ecuador, the plaintiffs were forced to seek enforcement of the decision elsewhere.

Last Friday, the Supreme Court of Canada ruled unanimously to allow Ecuadorian plaintiffs to pursue just such an enforcement action. In the majority opinion, Justice Clément Gascon wrote that the ruling had implications for attempts to hold the entire global oil industry accountable for its pollution and other abuses.

“In a world in which businesses, assets and people cross borders with ease, courts are increasingly called upon to recognize and enforce judgments from other jurisdictions,” Gascon wrote in the 7-0 ruling, according to The Globe & Mail. “Sometimes, successful recognition and enforcement in another forum is the only means by which a foreign judgment creditor can obtain its due.”

Some 30,000 Ecuadorians have been affected by the oil pollution in the Amazon, left behind when Texaco (which Chevron bought in 2000) ceased operating hundreds of oil wells in the country in 1990.

Humberto Piaguaje, the Coordinator of the Union of People Affected by Texaco, welcomed the ruling, saying in a statement, “after 22 years we can perform actions to collect the judgment against Chevron and immediately start repairing our territories."

Chevron is fighting a multi-front battle against the Ecuadorian judgement. The company secured a favorable ruling under RICO statutes in a New York court last year after its lawyers convinced a federal judge that the Ecuador ruling was the result of a corrupt judicial process.

The company has also entered into an arbitration process at the Hague, where its lawyers are attempting to argue that the government of Ecuador absolved Texaco of all liability when it ceased its Ecuador operations and left the country 25 years ago, though Chevron’s main legal defense in that case recently hit a major snag when it was rejected by the arbitrators.

Chevron once issued a statement threatening the Ecuadorians with "a lifetime of appellate and collateral litigation" if they continued to pursue their lawsuit — a company official later vowed to "fight until hell freezes over . . . and then we'll fight it out on the ice" — and the company appears to be making good on that threat.

Still, the Canada ruling comes at a bad time for Chevron, which has lost as much as $100 billion in market value over the past year thanks to cratering oil prices and other factors. Among them is the fact that the company made $24.7 billion from operations over that same time period while laying out $41.7 billion in expenditures and dividend payments.

At some point, says Amazon Watch’s Paul Paz y Miño, Chevron investors have to start wondering if the billions spent by the company on its aggressive, scorched earth legal strategy have really been worth it — especially as Ecuadorians continue to get sick and die as a result of the pollution still littering the forest floor.

“What does that say about [CEO John Watson’s] leadership? If I were a shareholder I’d say you have to pay this back to the company. You can’t mismanage the funds of our shareholders any further,” Paz y Miño told DeSmog.

The Financial Post reports that Chevron has assets worth roughly $15 billion in Canada, more than enough to satisfy the Ecuadorian judgement.

The Canadian assets include a network of Chevron gas stations in B.C.; a 20 per cent-stake in the Athabasca Oil Sands Project in Alberta; a 26.9 per cent interest in the Hibernia Field and a 23.6 per cent interest in Hibernia South Expansion off the shore of Newfoundland and Labrador; a 26.6 per cent interest in the Hebron Field in Newfoundland; an interest in the Duvernay Shale Field; and an interest in the Kitimat LNG Project in B.C.

The Ecuadorian plaintiffs say they want to seize and sell the shares of Chevron Canada to satisfy the $9.5 billion judgment — which has actually risen to $10 billion with interest, according to Amazon Watch’s Paz y Miño, who says the Canadian courts will count that interest.

But even if the plaintiffs ultimately win the enforcement action in Canada, a judge will still have to sort through the so-called "corporate veil" and determine whether the seizure of assets owned by Chevron Canada, which is not directly owned by Chevron, can be used to satisfy the latter's debt. No less than seven companies stand between Chevron Canada and its US-based parent company, according to the Financial Post.

In the end, however, Paz y Miño says the lawsuit has never been about money.

“They’re sitting there twisting a knife into the people of Ecuador,” he told DeSmog. “This isn’t about saying, ‘These people were responsible for something that happened in the past, and they should be held accountable.’ It’s about stopping the poisoning of people that’s still going on. Chevron is continuing to poison people, and won’t clean up the pollution.”  

Image Credit: Jeff Whyte / Shutterstock.com

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.