Ecuador Shakedown

Chevron, Ecuador: Bob McCarty's Great Blog Post On Ecuador

2009-07-01T23:49:00.000-07:00

Bob McCarty is a blogger who pulls no punches and that's especially true in the matter of Chevron and Ecuador. This is his best blog post on the matter yet:

What Will Be The Outcome of the Amazon Defense Coalition’s Lawsuit Against Chevron in Ecuador?

Chevron, Ecuador: Amazon Post Is Chevron's new blog on Ecuador

2009-07-01T23:26:00.000-07:00

Chevron's worked to get its side of the story regarding the Ecuador oil spill environmental issue and the involvement of Petroecuador, which took over oil production from the American oil giant in 1992. Frustrated in its attempts to counter the constant online assault wages by Amazon Watch, Chevron created a new site to tell its story: The Amazon Post.

The Amazon Post is a clean looking blog with three posts so far (they need about 57 more posts to have a site that starts making search engine hay) and the content focuses on the actions of the Ecuador Government. For example, "Ecuador government signed off on Texaco cleanup in 1998" or "Amazon Defense Coalition Fabricates Texaco Profit Figures In Ecuador"

Chevron has a good start, but it needs more content. The company does have a story to tell, and it should use the space to get the word out as often as possible.

Larry Bowoto's Nigerian Claims Against Chevron All False?

2008-06-23T13:43:00.000-07:00

A trial starts in September 2008 in San Francisco federal court against Chevron by Larry Bowoto who claims that he and his companions were attacked by Chevron Nigeria and the Nigerian government. But after almost a decade, Bowoto’s legal team very quietly dropped half the case against Chevron earlier this year, raising questions about how real Bowoto and the others’ claims are against Chevron. It is looking more and more likely that Bowoto and his gang took over the Chevron oil platform in a hostage takeover which is a far cry from their claims of human rights abuse.

How can Bowoto claim to be abused when it was he and 150 of his gang members who took over the Chevron platform and held Chevron’s employees hostage until they could be rescued?

The Chevron Nigeria Bowoto case looks like an abuse of the Alien Tort Statute—this is the law that allows foreigners to sue American companies in U.S. courts and try to get compensation even when the foreigners have no evidence or proof that anything was done wrong to them. Perhaps we should look at reforming and rewriting this law as it is abused by so many foreigners as well as American plaintiffs attorneys who are looking for money, not justice.

U.S. Federal Court Dismisses Remaining Ecuador Cancer Claims Against Chevron

2008-04-21T10:39:00.001-07:00

U.S. Federal Court Dismisses Remaining Ecuador Cancer Claims Against Chevron

Follows October ruling levying sanctions and fines against plaintiffs' Lawyers

SAN RAMON, Calif., November 19, 2007 - The U.S. District Court for the Northern District of California has dismissed the remaining two claims against Chevron alleging health impacts to Ecuadorian citizens resulting from Texaco Petroleum Company's Ecuadorian oil operations that ended in 1992. The ruling, based on California's two-year statute of limitations, effectively brings the matter to an end.

The lawsuit is the third in a series of suits that has been launched by Cristobal Bonifaz, a Massachusetts-based trial attorney claiming to represent Ecuadorian plaintiffs. The U.S. District Court proceeding has been notable for its many irregularities, culminating in the Oct. 16, 2007 sanctions and fines levied against plaintiffs' counsel for presenting fabricated cancer claims.

For additional information on the Ecuador litigation, please visit http://www.texaco.com/sitelets/ecuador/en/.

Chevron: Ecuador Tests Flawed - LATIN BUSINESS CHRONICLE STAFF

2008-04-21T10:32:00.000-07:00

Chevron: Ecuador Tests Flawed

REAL CULPRIT: Chevron says Ecuador's inefficient state oil company Petroecuador is to blame for any contamination in the Amazon. (Photo:Petroecuador)

Chevron denounces faulty "evidence" and "expert" bias in the $6 billion contamination case in Ecuador.
BY CHRONICLE STAFF

They want U.S. oil company Chevron (CVX) to pay for alleged damages in the Ecuador Amazon. But their tests are flawed and they have blocked eight attempts to inspect the laboratory they use for their tests. Welcome to the $6 billion case against Chevron in Ecuador, which the U.S. oil company says is increasingly becoming "a judicial farse".

More than 75 percent of the laboratory data presented by the group suing Chevron in Ecuador comes from the Havoc laboratory located in Quito. However, an independent test of soil and water samples by the laboratory shows results that are seriously flawed, Chevron says.

"This independent analysis verifies what we have suspected and what the plaintiffs are clearly trying to hide – the Havoc lab is incompetent and the reports they have prepared [on] behalf of the plaintiffs cannot be trusted," Ricardo Veiga Managing Counsel for Chevron Latin America, said in a statement last week.

Chevron has presented the results to the Superior Court of Nueva Loja. U.S.-based laboratory Wibby Environmental at Chevron’s request sent water and and soil samples spiked with specific, known amounts of hydrocarbons and metals to Havoc laboratories to determine if Havoc could get the correct results. "The Havoc laboratory’s analysis showed levels of barium, cadmium, copper & nickel that exceeded the concentrations in the samples they were sent," Chevron says in a statement. "Havoc’s analysis for polycyclic aromatic hydrocarbons, or “PAHs” (petroleum compounds) was incomplete. The lab's analysis of soil samples showed “unacceptable” results for barium, cadmium."

The source of the samples, and the sponsor of the analysis, was withheld from Havoc in order to ensure an unprejudiced result, the statement says.

HIDING SOMETHING?

Meanwhile, even local Ecuadorian authorities have been unable to inspect the Havoc laboratory. The eighth attempt by the 20th Civil Court of Pichincha since February 2006 was scheduled to occur three weeks ago, but was like the previous attempts - blocked by the attorneys for the group suing Chevron.

"Plaintiffs’ lawyers are afraid that if the truth were exposed about this lab, the Court and the world would see that their allegations against Chevron are made up of nothing but lies and fabrications," Veiga said. "We insist that the plaintiffs’ attorneys and the activist groups that have brought this baseless lawsuit be called to explain the deceit and the fraud they have perpetrated against the Court, their clients, and Ecuador."

The U.S. oil company calls the last-minute maneuvers to prevent a judge of the Civil Court of Pichincha from inspecting the laboratory "a shocking and deliberate attempt to obstruct justice."

The inspection was aimed at determining whether the Havoc lab was qualified and had the necessary equipment and technology to undertake the required analysis of water and soil samples from oil sites in the Oriente region. The Civil Court of Pichincha ordered the first inspection last year after Chevron had noted to the Superior Court of Lago Agrio that the laboratory was not properly accredited by the Ecuadorian Accreditation Organization (OAE) to perform the necessary analyses required in the environmental trial against Chevron.

CHRONICLE OF BLOCKED ATTEMPTS

On the first attempt - on February 17, 2006 - the Civil Judge of Pichincha, Dr. Germán González del Pozo, went to the Havoc laboratory himself on the day of the officially scheduled inspection only to find its doors locked and access to the laboratory's facilities denied. The same happened when he tried to inspect the lab the following month. Thereafter, the attorneys for the group suing Chevron presented him with motions to stop his next two attempted inspections in March and May.

In August last year, the judge requested both parties to appoint the experts for the next inspection. Havoc failed to appoint an expert, and, therefore, once again the judge was forced to cancel the inspection, Chevron points out. Then - in October - another inspection was scheduled, but a few days before, the lab's attorneys filed a recusal claim, which forced suspension of the inspection. The seventh attempt - scheduled for April 24 this year - was stopped when attorney's for Havoc and the group suing Chevron filed a legal motion to stop the court from carrying out the inspection.

Chevron is also denouncing that Richard Cabrera, the court-appointed engineer responsible for overseeing the ongoing expert determination in the suit - is using unsanctioned teams to conduct unsupervised and unapproved field research, in clear violation of court directives.

In a petition to the Superior Court of Nueva Loja, Chevron has detailed how Cabrera has deployed unidentified teams of researchers to search for evidence of environmental impacts outside the scope of his court-mandated obligations without first receiving the necessary judicial approvals. The teams began their work in advance of Cabrera even being appointed to and days before his official inspection began, Chevron says.

NULL AND VOID

The U.S. oil company has therefore asked the court to declare the evidence collected by the teams to be considered null and void. Chevron has previously denounced Cabrera's bias against the company (see Chevron: US Victory, Ecuador Doubts). However, its petitions urging the court to reconsider Cabrera's appointment have gone unanswered, as have its requests seeking that he be required to comply with court orders regarding how his work should be carried out.

Separately, several Ecuadorians have also sued Chevron in the United States alleging they got cancer as a result of Chevron-instigated contamination in the Oriente region of Ecuador's Amazon. Their case was thrown out last month by a U.S. federal court.

Last week an independent study released by Chevron showed that the consensus view of leading epidemiologists and tropical health experts is that there is no evidence to support the claim that the Oriente region is experiencing higher rates of cancer, or that cancer in the region is the result of exposure to oil field sites.

"There is no question that the people of the Oriente face a series of challenges regarding their personal and community health," Silvia Garrigo, a Chevron attorney, said in a statement. "However, these people are being deceived in the worst possible way by the lawyers and activists who have brought this lawsuit."

ECUADOR'S RESPONSIBILITY

The major health concerns in the Oriente region are not the result of oil operations, but the lack of water treatment infrastructure, the lack of sufficient sanitation infrastructure and inadequate access to medical care, Chevron says.

Texaco operated an oil field consortium with Petroecuador from 1964 to 1990, when the Ecuadorian company took over management of the oil field. Texaco continued with a minority stake in the consortium until 1992. In 1995, Texaco agreed with the Ecuadorian government to conduct a $40 million environmental remediation in the area of the former concession. Three years later, the government of Ecuador declared that the remediation was completed according to the terms and parameters agreed upon and released Texaco from any future liability.

In 1993 a group of Indians in the affected areas filed a lawsuit against Texaco in the United States, claiming the U.S. company had contaminated the area. That case was dismissed by the U.S. Court of Appeals of the Second Circuit in 2002, but another lawsuit was filed in Ecuador.

Chevron also says Petroecuador - widely considered one of the most inefficient state oil companies in Latin America - has to take the blame for any oil contamination. In the seven-year period from 2000 to 2006, Petroecuador was responsible for a total of 882 oil spills, Chevron points out.

Chevron Ecuador : Update on Ecuador Litigation

2008-04-21T10:27:00.001-07:00

Update on Ecuador Litigation - From the Chevron Website

Chevron continued in 2006 to vigorously defend itself against litigation alleging environmental damage from Texaco Petroleum Company's (Texpet) former operations in Ecuador. Texpet was a minority partner in an oil-producing consortium from 1964 to 1992 with state-owned oil company Petroecuador.

Chevron is challenging the lawsuit on both scientific and legal grounds. At the close of 2006, the court had completed 45 scheduled field inspections.

The overwhelming body of evidence obtained by Chevron's nominated experts show there are no significant oil-related risks to health and the environment in the areas remediated by Texpet.

The Texpet remediation program was approved by the government of Ecuador, which in 1998 granted a full release of claims and liabilities to Texpet and its affiliated companies. As such, Texpet met all of its obligations and performed in accordance with Ecuadorian government requirements.

We continue to keep the public informed about this lawsuit through updates, in both English and Spanish, on our Web site.

Banana Republic and Friends - WSJ Editorial April 19, 2008

2008-04-20T11:51:00.001-07:00

Banana Republic and Friends

April 19, 2008

Maybe Willie Sutton, the natty thief who robbed banks because "that's where the money is," picked the wrong target. If only he'd gone after oil companies, he could have made more money, avoided jail time, and even picked up an award or two along the way.

Consider Pablo Fajardo and Luis Yanza, two Ecuadorians who on Monday were the toast of San Francisco after winning the prestigious Goldman Environmental Prize. Mr. Fajardo, a lawyer, and Mr. Yanza, co-founder of the Amazon Defense Front, have been waging a long legal campaign against Chevron for allegedly despoiling the Amazon hinterland. Late last month, an Ecuadorian court trying the case was handed a report assessing the damages at between $8.3 billion and $16 billion dollars. Chevron is now girding for an adverse ruling from a clearly politicized court.

The story dates back to the 1960s, when Texaco (which merged with Chevron in 2001) became a minority partner with state-run Petroecuador, a partnership that lasted until the early 1990s when the Ecuadorians assumed full control of their oil operations. At the time, an independent environmental auditing firm recommended that Texaco spend $13.2 million cleaning up its well sites. Texaco ended up spending $40 million. Ecuador later "absolved, liberated and forever freed" the company from "any claim or litigation by the Government of Ecuador concerning the obligations acquired" by Texaco.

By its own admission, Petroecuador has since made an environmental mess in the Amazon, with some 1,000 oil spills in the past five years alone. But that hasn't stopped assorted trial lawyers from prospecting for Chevron's gold beneath Petroecuador's sludge. In 1993, "international human-rights lawyer" Cristobal Bonifaz filed a lawsuit against Texaco in the U.S. for $1.5 billion. Mr. Bonifaz's suit was repeatedly tossed from American courts, most recently last fall when the court also fined Mr. Bonifaz $45,000 for his legal chicanery.

Yet the case has lived on in Mr. Fajardo's parallel suit in Ecuador. According to last month's "expert" report, written by a mining engineer named Richard Stalin Cabrera, Chevron owes $2.9 billion in compensation for 428 cancer-related deaths; never mind that the report fails to establish a causal link between oil spills and cancer. Chevron is also supposed to pay $8.3 billion for its "unjust enrichment," another whopper considering that Petroecuador was by far the greatest beneficiary of its consortium with Texaco. Other alleged Texaco sins include introducing alcohol into the region, a claim said to be substantiated by the alcohol-induced death of an indigenous shaman.

Meanwhile, the case has become the latest environmental cause célèbre. In December, CNN awarded Mr. Fajardo one of its "Hero Awards." Actress Daryl Hannah has had herself photographed dipping her hands in oil spills almost certainly caused by Petroecuador. Groups like AmazonWatch offer one-stop shopping for misinformation about the case. Also in on the act is Ecuador's radical president (and Hugo Chavez ally) Rafael Correa, who has his own reasons to seek a huge Chevron payday.

How all this will play out is anyone's guess. Charles James, Chevron's general counsel, says his company does "not intend to succumb to extortion." The company will seek international arbitration should it lose in Ecuador's kangaroo courts. That could take years. In the meantime, we wonder whose interests are served by a case that deflects attention from the real source of Ecuador's pollution while burnishing the country's reputation as a banana republic. Certainly not the people of Ecuador.

Ecuador Shakedown: Rafael Correa v. Chevron

2008-04-20T11:48:00.000-07:00

Ecuador Shakedown

See also WSJ Editorial on Chevron and Ecuador

By INVESTOR'S BUSINESS DAILY | Posted Thursday, April 17, 2008 4:30 PM PT

Latin America: Ecuador's leftist leader, Rafael Correa, a U.S.-trained economist, presumably knows there's no free lunch. With one exception: when there's a U.S. oil company to shake down and U.S. tort lawyers to help.

Ecuador's government is part of a trifecta supporting a $16 billion lawsuit against Chevron Corp. on behalf of 30,000 rain-forest dwellers supposedly suffering from pollution created by the multinational.

There's pollution all right, but it's not Chevron's. It's the doing of Ecuador's inefficient state oil company, which has operated without Chevron's investment since 1992, creating the same toxic mess that state-owned firms from Mexico to Russia to Cuba to China do.

So blaming San Ramon, Calif.-based Chevron, or Texaco, the company it bought in 2000, makes zero legal sense. But the lawsuit goes on anyway because it's a deep-pocket target.

In America, the suit was laughed out of court several years ago. But in the fruity logic of the country once famed as a "banana republic," it still has legs. Ecuador already seized $1 billion in Occidental Petroleum assets and has had few investors to bilk since.

How better to make up for it than by bringing in environmental activists and their radical lawyers to recycle an old case into a shiny new model for even more shakedowns of U.S. companies?

It started when Chevron bought Texaco, a company with a 33% minority partnership investment with PetroEcuador, in 1991. Texaco pumped Ecuador's oil in the 1960s when no one else would. It paid Ecuador $24 billion in taxes and royalties for its effort.

The partnership ended in 1992, and Chevron settled environmental claims with a $40 million cleanup. With that, it got a clean bill of health from Ecuador's government in 1998.

But without the $24.5 billion in taxes and royalties that Texaco had paid to the Ecuadorean government for the oil, PetroEcuador rapidly let the place become an environmental mess.

Enter radical nongovernmental organizations seeking to "save" the rain forest, along with their U.S. tort lawyers. Suddenly Chevron, the long-gone investor, became the biggest target available.

For Ecuador, it was an especially welcome idea. Correa won the election promising huge spending for poor indigenous groups. Past governments hadn't bothered to develop Ecuador's hinterlands after Chevron left, and most of the infrastructure Chevron put in had gone to seed. Correa, a socialist, can no longer attract capitalist investment and relies on handouts from Hugo Chavez's Venezuela.

Correa went for broke on the Chevron shakedown, saying: "I call on the world to see the barbarity committed by this multinational." He brought in Hollywood actress Daryl Hannah to shill for him.

Meanwhile, Ecuador's congress changed laws to negate past settlements and to fix the case against Chevron. With a group called Amazon Watch looking to make a name for itself and an army of American tort lawyers looking for a payday, it became a plateful of trouble as colorful as anything on Carmen Miranda's head.

The lawsuit looked like a handy way to force a big oil company to pay for the roads, potable water and sewer systems that are the government's job, and which had been promised to angry voters in the past election.

A look at the claims shows that: Ecuadorean activist Richard Cabrera, in an April 1 report filed in an Ecuadorean court, absurdly claimed that Chevron owes the Amazon Defense Fund $1.7 billion for environmental impacts, $480 million for a new Ecuadorean health care system, $428 million to rebuild Ecuador's potable water system, $375 million for infrastrucure projects, and another $8 billion to the activists for "unjust enrichment."

What this really does is force Chevron to fund the government without even getting its oil. In this way, Ecuador and its left-wing allies take profits rather than property, a tactic that will surely become the envy of more conventional petrotyrants, who merely "nationalize" foreign oil companies.

For the rest of us, it's bad news. Oil companies take big risks to invest in foreign countries and often encounter the threat of expropriation when oil prices rise.

To let failed, rapacious governments like Ecuador's pursue companies like Chevron is surely an incentive for other radical tyrants. It's nothing but a $16 billion shakedown of Chevron. If these activists succeed, all that's left will be even less oil and investment in it than there is now.

Welcome to Ecuador Shakedown

2008-04-20T11:02:00.000-07:00

Welcome to Ecuador Shakedown