Ecuador Communities Target Chevron's Secret Investor Arbitration in New Court Filing, Says Amazon Defense Coalition

Petition Accuses Oil Giant of Trying to Deny Human Rights to Thousands of Rainforest Inhabitants

WASHINGTON, Feb. 10, 2012 /PRNewswire-USNewswire/ -- Indigenous rainforest communities from Ecuador who recently won an $18 billion judgment against Chevron for environmental damage have filed suit  before a renowned international human rights court seeking an order that would prevent the oil giant from using a secret arbitration to violate their legal rights.

The Ecuadorians filed a petition before the Inter-American Commission on Human Rights strongly criticizing Chevron's "egregious misuse" of the U.S.-Ecuador Bilateral Investment Treaty ("BIT") to violate human rights protections. They are seeking an order requiring Ecuador's government to protect their right to life, physical integrity, health, a fair trial, and equal treatment under the law as guaranteed by the American Declaration of the Rights of Man and other international human rights treaties.

The petition was filed against Ecuador's government because Chevron is seeking an order from the private investor arbitration panel mandating that the country's President freeze the court proceedings until the BIT panel can rule, a process which normally takes three years.  Such an order would violate Ecuadorian and international law as well as the human rights protections that the Commission is sworn to uphold, said Pablo Fajardo, the lead lawyer for the Ecuadorian plaintiffs in the underlying environmental case.

The Commission, located in Washington, D.C., hears claims for emergency relief from individual human rights victims and derives its authority from the the multilateral international treaty that created the Organization of American States, of which Ecuador and the United States are members. Any order from the Commission is binding on the government against which it is issued.   

"The threats are serious and urgent," the plaintiffs wrote in their petition, referring to their own plight living near extensive levels of toxic oil contamination in the Amazon rainforest for almost 50 years.  An Ecuadorian court in 2011 found Chevron liable for dumping billions of gallons of toxic waste into the Amazon when it operated under the Texaco brand from 1964 to 1992, causing dramatically increased rates of cancer and decimating indigenous groups. See here and here.

"The idea that an arbitral panel would even contemplate ordering a sovereign state to violate its human rights obligations is repugnant not only to the substance of international human rights law but to the very core of the international legal order," the petition added.

The petition also argues that the relief sought by Chevron extends well beyond the scope of the BIT in that it does not authorize private investor arbitration panels to act as a "transnational" appellate court that can override decisions in a public court system of a sovereign nation.  The BIT is normally limited to allowing investors to seek monetary damages directly from a government if it feels it has been treated unfairly, a claim that Chevron makes but that the indigenous communities reject.  

The Ecuadorians believe the investor arbitral panel convened by Chevron violates international law in that it bars the rainforest communities from appearing before it, does not publish its decisions, and does not inform the public about when and where it meets.  Further, its three members -- all practicing lawyers -- suffer from a conflict of interest in that they each stand to reap millions of dollars in fees paid in part by Chevron simply by granting jurisdiction over the case when there is little if any basis to do so.

"What Chevron is trying to with this secret arbitration is utterly offensive to anybody who believes in the rule of law," said Fajardo, whose clients initially filed the environmental lawsuit against Chevron in 1993 in U.S. federal court in New York before it was shifted to Ecuador at Chevron's request.   

"Chevron is trying to convince the private arbitral panel to override the decisions of a public court in a sovereign country where Chevron chose to litigate, even as Chevron continues to pursue appeals in that country making the same arguments it makes before the secret panel," he added.  "It's just an outrageous abuse of judicial process." 

"Any decision by the panel granting Chevron's requests would violate international law and certainly would not bind the indigenous communities who are not a party to the proceedings," he added.  "We also believe it will backfire against Chevron if the company carries through on its threats to try to block enforcement of the legitimate Ecuador judgment in courts around the world."

Ecuador's government has argued that the oil giant has no right to even file the claim under the BIT given that the treaty did not take effect until 1997, or five years after Chevron left the country.  

Chevron's latest maneuver prompted renowned Latin American jurist Jose Daniel Amado to send a letter to U.N. Secretary General Ban Ki-moon asking for a review of what he called an "improper and illegal expansion of arbitral powers" by the panel. See here and here. The Amado letter gained immediate support from jurists around the world, who sent a separate letter backing Amado's arguments to the U.N. official in charge of international arbitration, Renaud Souriel.

Souriel is hosting a meeting this week in New York to evaluate the issue of "transparency in investment-State arbitration."

Chevron is seeking any forum it can to delay the Ecuador proceedings given that the company could soon face judgment enforcement actions around the world, said Fajardo. Chevron stripped its assets from Ecuador and a company spokesman said the oil giant would fight the rainforest communities "until hell freezes over, and then skate it out on the ice." 

"Chevron lost the trial," Fajardo said.  "It lost the first-level appeal in Ecuador.  It lost in the United States.  It has very few options left other than a secret arbitration that will carry no weight in any country that observes the rule of law.  

"Nevertheless, by filing this petition, we are showing that we will use every legal means available to expose Chevron's disrespect for the rule of law and to protect the rights of our clients."

Chevron tried a similar maneuver before, and it backfired.

Last year, Chevron convinced a U.S. federal judge in New York to issue an unprecedented worldwide injunction blocking enforcement of the Ecuador judgment.  A New York appellate court recently overturned that decision and strongly rebuked Chevron for mischaracterizing the law, the latest in a string of legal defeats for the oil giant. See here.

SOURCE Amazon Defense Coalition