The Incredible Corporate Sovereignty Saga Involving Ecuador And Chevron Continues

Techdirt has been trying hard to follow the twists and turns of one of the longest-running corporate sovereignty cases -- that involving Chevron and Ecuador -- for many years. Public Citizen's "Eyes on Trade" blog has a good, one-paragraph explanation of the key legal disputes:

In one of the Chevron v. Ecuador cases, a three-person tribunal last year ordered Ecuador's government to interfere in the operations of its independent court system on behalf of Chevron by suspending enforcement of a historic $18 billion judgment against the oil corporation for mass contamination of the Amazonian rain forest. The ruling against Chevron, rendered by Ecuador's courts, was the result of 18 years of litigation in both the U.S. and Ecuadorian legal systems. Ecuador had explained to the panel that compliance with any order to suspend enforcement of the ruling would violate the separation of powers enshrined in the country’s Constitution -- as in the United States, Ecuador's executive branch is constitutionally prohibited from interfering with the independent judiciary. Undeterred, the tribunal proceeded to order 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 [against Chevron]."

However, that's only a bare summary of the amazing events in this case, which include a filmmaker being forced to hand over footage to Chevron, email companies supplying nine years of metadata to the oil company, and Chevron's star witness admitting he lied in his sworn testimony. Probably the best explanation of the complicated story is a long, well-written feature in The New Yorker. That appeared in 2013 and concluded by noting that Chevron was appealing once more to an international tribunal in an attempt to block Ecuador's lawsuit. The arbitration court in the Netherlands has now handed down its verdict, reported here by Telesur:

A panel from the District Court of the Hague rejected Ecuador's arguments, stating that the country was bound to the terms of the bilateral investment treaty. The panel also affirmed Chevron's claim that they could not be held accountable for the contamination since the Ecuadorean government certified the remediation work carried out by the oil company. President Correa has questioned the legitimacy of that decision by the government of then president Jamil Mahuad. "All of this is the product of corruption: having signed in 1998 that Chevron had cleaned 'everything'," said Correa Sunday via his official Facebook account.

As that makes clear, the tribunal seems to have based its decision in part on the fact that a previous Ecuadorean administration had agreed with the oil company that the contaminated land in question had been cleaned up sufficiently. The country's current president claims that was because of corruption at the time. So the tangled mess of this case now involves issues of the validity of that previous agreement, and what impact it has on the responsibility of Chevron.

The latest ruling by the international tribunal offers little hope that the Ecuadorean government will be collecting much, if any, of the final $9.5 billion awarded by the local courts -- Chevron prudently removed all its assets from the country many years ago. As Escobar is quoted as pointing out in the Telesur report:

Should Ecuador lose the final ruling by the investment tribunal, the price would ultimately be paid by the Ecuadorean people, as the state, in the face of international reprisals and without access to credit, would lose the ability to invest in social programs.

As usual, it's the poor and powerless that end up suffering -- and the lawyers involved in the corporate sovereignty tribunals who come out smiling.

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