Ecuador Archives - Shopfloor

Andean Trade Preferences for Ecuador Should be Revoked Immediately

By | Trade | One Comment

As the Office of the U.S. Trade Representative (USTR) conducts its annual review to determine whether Ecuador still qualifies for trade preferences under the Andean Trade Preferences Act (ATPA), the NAM has urged USTR to examine carefully whether Ecuador has lived up to its ATPA eligibility requirements. 

The NAM has long been concerned with Ecuador’s repudiation of its legal obligations and its breaches of the basic rule of law.  In May, the NAM recommended to USTR that Ecuador be granted three additional months to prove its ability and willingness to live up to its ATPA obligations.

Regrettably, those three months have passed and Ecuador’s actions with respect to U.S. companies or ensuring the rule of law have not improved.  Indeed, Ecuador has taken action in the past months directly contrary to international arbitration awards issued pursuant to the U.S.-Ecuador Bilateral Investment Treaty.  As a result, Ecuador is out of compliance with the mandatory ATPA eligibility requirements and its benefits under ATPA should be promptly revoked.

U.S. preference programs should not be treated as an entitlement, but rather as a partnership between the United States and nations willing to live up to the specified eligibility criteria, which includes abiding by basic standards of the rule of law and protection for U.S. investment.

To continue granting Ecuador preferential treatment under ATPA despite its failure to meet such standards, would send a dangerous message to other nations that they can disregard the basic eligibility criteria without consequences, thereby diminishing the incentive that nations have to live up to their international obligations.

Jessica Lemos is director of international trade policy, National Association of Manufacturers.

Ecuador Must Live Up to Its Obligations Under Trade and Investment Agreements

By | Trade | No Comments

Late last week the National Association of Manufacturers (NAM) sent a letter to Deputy National Security Advisor for International Economic Affairs Michael Froman about manufacturers concerns over Ecuador’s disregard of its obligations under the Bilateral Investment Treaty (BIT) and recent findings of the International Tribunal.

The NAM believes that Ecuador is not in compliance and meeting its obligations of the BIT and should be given three months to show it is willing to comply. One needs to look no further than the claim filed against the Government of Ecuador by Chevron for violations under the United States-Ecuador BIT. Below is an excerpt from the letter to Mr. Froman:

The highly visible case in point is the international arbitration claim against the Government of Ecuador (GOE) filed by Chevron for violations of the Ecuadorian government’s obligations under the United States-Ecuador Bilateral Investment Treaty (BIT). Ecuador had issued an $18 billion judgment against Chevron, in a case in which fraud has been documented by at least seven courts in the United States. The BIT arbitral panel has issued several awards directing the GOE to take measures to prevent enforcement of this judgment pending final disposition of the case by the BIT panel. Further, early this year the International Tribunal made additional rulings rejecting all of Ecuador’s objections and also issued for the second time an order directing Ecuador to take all measures necessary to suspend the enforcement and recognition within and without Ecuador, of the judgment.

Manufacturers believe it’s critical that all nations adhere to the rules of trade and investment agreements. Ecuador must live up to its Andean Trade Preference Act (ATPA) eligibility requirements or lose its preferences.

The NAM is asking the Administration to give Ecuador three months to meet the requirements and standards or it should be removed from the ATPA, resulting in a loss of trade preferences. If Ecuador is able to continue to receive preferences while failing to meet such standards it sends a dangerous message to other developing nations.

Chevron Seeks Additional Evidence of Corruption in Ecuador Suit

By | Energy | No Comments

Earlier this week the Wall Street Journal’s Mary Anastasia O’Grady penned an editorial about the current state Chevron’s fight against the corrupt judgment brought against it by an Ecuadorian court in February of last year. Chevron has been waging a battle to prove that the judgment in the case is the result of corruption and the evidence continues to mount.

On May 4th Chevron asked the U.S. federal court in Miami for records of several bank accounts with Banco Pichincha in Ecuador. It’s believed that these Bank records will show that one of the court-appointed independent experts, a geological engineer, was bribed by the plaintiff’s lawyers:

One of Chevron’s allegations is that geological engineer Richard Cabrera, the court-appointed “independent” expert who would assess the rain forest damage, was working secretly for the plaintiffs lawyers. It cites outtakes from the ADC film “Crude” that show the two sides meeting together before his appointment and documents secured through discovery in U.S. courts to support that allegation. Chevron also claims that documents prepared by the plaintiff’s lawyers became part of the Ecuadorean court’s judgment, which it says casts doubt on the court’s neutrality.

Chevron has continued to go to court in the U.S., now more than 20 times to show that fraud was committed in the case and in nine instances U.S. courts have been critical of the Ecuadorean Court proceedings. From the WSJ:

In one instance, addressing Chevron’s claim that the plaintiffs’ representatives “ghostwrote” Mr. Cabrera’s report, the U.S. District Court for the Western District of North Carolina observed that “While this court is unfamiliar with the practices of the Ecuadorian judicial system, the court must believe that the concept of fraud is universal, and that what has blatantly occurred in this matter would in fact be considered fraud by any court. If such conduct does not amount to fraud in a particular country, then that country has larger problems than an oil spill.”

Chevron is continuing to move forward with their RICO suit in the NY Southern District Court against Amazon Defense Coalition, one of the nongovernmental organizations advocating for the plaintiffs in the suit. And it’s becoming more and more clear that this judgment was arrived at with fraud and corruption.

Activist Ignore Evidence to Back Shakedown Suit Against Chevron

By | Briefly Legal, Energy | 5 Comments

Activists and apologists for the shakedown litigation over supposed environmental damage in Ecuador once again tried to turn Chevron’s annual stockholders’ meeting in San Ramon, Calif., into a circus today. By now the Amazon Watch theatrics are old hat, and the cause they support — a lawsuit orchestrated by U.S. trial lawyers — has been revealed as fundamentally corrupt. Flying a banner off a bridge to promote a contingency-fee lawsuit demonstrates only witless fanaticism.

Chevron put together a short video to present its side of the case to the stockholders, shown at the meeting after Amazon Watch’s Atossa Soltani raised the issue. Its showing produced a round of vigorous applause from the attendees.

Concise and pointed. Very well done.

We wrap up the trial lawyer, activist, politician and media alliance that has gone after Chevron in a post immediately below, “More than a Lawsuit: A Circle of Political Pressure Against Chevron.”

More than a Lawsuit: A Circle of Political Pressure Against Chevron

By | Briefly Legal, Energy, Trade | No Comments

Chevron’s Dilemma: Creating an Untenable Situation for a Multinational – Winter 2009

Chevron held its annual stockholders meeting in San Ramon, Calif., today, and environmental activists again demanded that the company settle a lawsuit brought against it in Ecuador. But new documents show these demands, like most before them, to be serving not justice but instead the pecuniary interests of a small group of contingency-fee lawyers and their allies.

The U.S. trial lawyers suing Chevron over alleged environmental damage in Ecuador have worked from a sophisticated political and PR plan that has sought to use Congress, state governments and major media and even directly influence President Obama to force the oil company into a settlement.

Documents obtained by Chevron in court proceedings* reveal the true nature of the campaign against the company: It’s not about using the law to find the truth, but rather applying the maximum amount of political pressure to extort billions of dollars from the U.S. corporate target. From those billions, the American contingency-fee attorneys and their operatives would take a huge share for their own enrichment.

Effectively using the discovery process to delve deep into the scheme, Chevron has uncovered sufficient proof of wrongdoing to bring a federal racketeering suit against the key actors behind the shakedown lawsuit.

Evidence of fraud at the heart of the anti-Chevron campaign has led a U.S. federal judge to block any effort by the “Lago Agrio” plaintiffs and their U.S. lawyers to collect on an $18 billion judgment handed down by an Ecuadorian court against the San Ramon, California company.

Chevron is the target because the company acquired Texaco in 2001; Texaco had operated in Ecuador’s Amazon in a consortium with the state-owned oil company, Petroecuador, from the 1960s until 1992. Texaco remediated any environmental damage before it left Ecuador, while Petroecuador continued operations (and pollution).

The campaign against Chevron is multifaceted and organized. We have referred to it as the “combine,” an alliance of trial lawyers, politicians, activists and supportive media. But the lawyers themselves depict the campaign as an encirclement, orchestrating numerous actors to pressure the company toward a settlement.

Above right is a chart created in January 2009 by Andrew Woods, an attorney who works with the Amazon Defense Coalition, the PR front group for New York trial lawyer Steven Donziger, his team of contingency-fee attorneys and the Ecuadorian plaintiffs suing Chevron. The document’s title is “Chevron’s Dilemma: Creating an Untenable Situation for a Multinational – Winter 2009.” (Click for a larger picture.)

Chevron submitted the chart on April 26 to the U.S. District Court for the Southern District of New York, one of a batch of 29 new submissions to support the company’s motion to hold Donziger in contempt for failing to disclose tens of thousands of documents he was under court order to make available to Chevron.

Each of the circles represents one of pressure points the lawyers are bringing to bear as they attempt to create “an untenable situation” for Chevron.

There’s the circle for “Crude,” the documentary-style film that director Joe Berlinger originally claimed was an independent and balanced exploration of the effects of oil development on Amazonian Indians. But New York trial lawyer Steven Donziger originally sold him on the project and subsequently Berlinger has conceded he let the lawyers make key editorial decisions to avoid undermining their storyline that Chevron is evil. In the circle you can see how the legal team planned to use the film:

“Crude” Film

  • To be shown in local communities of the [Chevron] Board of Directors; Can generate media attention in home communities of BOD members.
  • To be shown on Capitol Hill in coordination with Rep. McGovern
  • Potential screening in White House.

Rep. McGovern is Jim McGovern (D-MA), one of the lawyers’ key allies on Capitol Hill. He spoke at a showing of the film in downtown Washington in October 2009, recalling a trip he had made to Ecuador — here’s a photo of the Congressman with Donziger in the jungle — and describing his efforts to bring President Obama into the anti-Chevron fight. “Ramp up the pressure!” McGovern urged the crowd at the Landmark E-Street Theatre. (See earlier Shopfloor posts on the movie.)

President Obama gets his own circle [below right], denoted, “Ongoing pressure of new administration publicly unfriendly to big oil companies.” Not just unfriendly to big oil companies, the President was a Harvard Law School classmate and former basketball playing buddy of Steven Donziger. How about that for an avenue of influence?

The trial lawyers knew they had an ally. As a Senator, Obama joined Sen. Patrick Leahy in writing a letter in 2006 to then-U.S. Trade Representative Rob Portman, highlighting the cause of the Amazonian Indians against Chevron. The Senators rejected any efforts to tie U.S. trade preferences for Ecuador to the country’s treatment of Chevron in the litigation, telling Portman: “While we are not prejudging the outcome of the case, we do believe the 30,000 indigenous residents of Ecuador deserve their day in court.”

That being the corrupted and politicized courts of Ecuador, which in February produced a $18 billion judgment against the company.

While the White House has stayed out of the issue publicly, the Obama Administration continued to support trade preferences for Ecuador, despite the continued assault on democratic institutions and U.S. interests by the leftist government of Rafael Correa. Read More

Accused of Racketeering, Anti-Chevron Consultants Now Work for Feds on Gulf Spill

By | Briefly Legal, Energy | 2 Comments

One of the central players in the multi-billion-dollar litigation shakedown against Chevron for supposed environmental damage in Ecuador is Stratus Consulting. When New York attorney Steven Donziger and his team of trial lawyers wanted support for their outrageous environmental claims against the oil company, they turned to the Boulder, Colorado-based firm. But Stratus’ involvement with Donziger and the others behind the Ecuadorian lawsuit has been so close and so suspect that Chevron felt justified in including Stratus in its federal civil racketeering suit.

This story reported today by Greenwire via The New York Times should therefore prompt a serious re-evaluation by the federal government of how it hires contractors in the wake of the Gulf Oil spill. From “Defendant in Racketeering Suit Works as U.S. Consultant on Gulf Spill“:

Boulder, Colo.-based Stratus Consulting, a long-term contractor with the National Oceanic and Atmospheric Administration and other federal agencies, is gathering and analyzing data concerning the Gulf of Mexico spill….

The filing of the racketeering suit raised eyebrows at NOAA, according to a government source familiar with the issue. The agency checked with the Justice Department to make sure it was OK to continue working with Stratus, the source added.

Stratus protests its innocence, as one would expect it to. But the court record — including documents from Steven Donziger himself — belies their protests. Greenwire:

Asked why Stratus believes its contracts with the government should not be affected by the racketeering case, Joe Silvers, an attorney who represents the firm, said it was because Chevron’s allegations “are demonstrably false and its legal maneuverings are a transparent attempt to avoid its environmental responsibilities in Ecuador without, in the least, questioning the science.”

Stratus “never engaged in the misconduct alleged by Chevron, and Chevron knows as much,” Silver added.

Really? One of Chevron’s most powerful accusations is that Stratus Consulting prepared the environmental report by Richard Cabrera, the “independent” expert appointed by an Ecuadorian court to recommend damages against Chevron. Cabrera is the one who eventually came up with the preposterous $27 billion figure — later inflated to $116 billion — seized on by the Donziger-led legal and PR operatives to supposedly prove the seriousness of their charges.

But Stratus wrote Cabrera’s report. That’s right. The U.S.-based consultants paid by the team suing Chevron actually wrote most of the report Cabrera submitted to the Ecuadorian court as his own work.
Who says so? Steven Donziger himself:

[If] Chevron succeeds in obtaining discovery from Stratus and deposing the Stratus principals (which we assume will happen although questions remain about the scope of production), they will find that Stratus wrote the bulk of the report adopted by Cabrera and submitted to the court. Various annexes and an executive summary were provided to local counsel, who provided it to Cabrera, who adopted it. There was significant back and forth collaboration between local counsel and Cabrera, and separately, via local counsel and Stratus. There are also numerous emails between Stratus and local counsel documenting how this work was done, and there are some emails between Stratus and U.S. counsel that show U.S. counsel (relying on guidance of local counsel) approved of this process, encouraged it, and was involved in it from a supervisory perspective. There was also at least one ex parte meeting between Stratus and Cabrera at which U.S. counsel was present. The emails and testimony likely will show some effort to keep the extent of this ex parte collaboration between our local counsel and Cabrera from being disclosed. (The entirety of the emails and production needs to be reviewed and privileges asserted so it is uncertain whether the emails will be disclosed.)

This damning admission, one of many, was made by Donziger in a document he created on April 16, 2010, a memo addressed to “Dear Fellow Counsel.” Read More

A Reasonable Award in Ecuador? Professor, You Can’t Be Serious

By | Briefly Legal, Energy, General, Media Relations, Trade | One Comment

In the flood of news coverage after Ecuadorian Judge Nicolas Zambrano announced an $8.6 billion damage award against Chevron, reporters sought out ostensibly independent experts to comment on the award. We laughed upon reading one such comment in an AP report:

A professor at Loyola Law School in Los Angeles who has studied the case, Georgene Vairo, said the comparatively small judgment is a signal from Ecuador that it is willing to negotiate a smaller fine.

“This is way low compared with what everyone was expecting to happen,” she said. “They are trying to show the world they are reasonable people. This is Ecuador coming to the table.”

Oh, please. The U.S. trial lawyers and their allies in Ecuador are on the record numerous times talking about their strategy to make those most outrageous, exorbitant claim for damages — $113 billion! — so they can pretend anything less is a sign of judicial reason and compromise.

Here’s an example, yet another damning revelation from outtakes from the documentary-style movie on the litigation, “Crude.”

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No Surprise: Ecuador Judge Rules Against Chevron

By | Briefly Legal, Energy, General, Trade | One Comment

Chevron broke the news today that a judge in Ecuador has ruled against the company in the multiyear, multibillion-dollar litigation shakedown by U.S. trial lawyers claiming environmental damage in the Amazon. There has been so much wrongdoing and dishonesty by the plaintiffs in Ecuador and the United States that the ruling comes as no surprise.

From the Chevron news release, “Illegitimate Judgment Against Chevron in Ecuador Lawsuit“:

The Ecuadorian court’s judgment is illegitimate and unenforceable.  It is the product of fraud and is contrary to the legitimate scientific evidence.  Chevron will appeal this decision in Ecuador and intends to see that justice prevails.

United States and international tribunals already have taken steps to bar enforcement of the Ecuadorian ruling.  Chevron does not believe that today’s judgment is enforceable in any court that observes the rule of law.

Chevron intends to see that the perpetrators of this fraud are held accountable for their misconduct.

Reuters quotes Pablo Fajardo, a lawyer for the plaintiffs in Ecuador, that the judge’s award was $8 billion.

The amount of damages sought by the plaintiffs fluctuates according to various manipulated reports and political considerations, rising from $6 billion at one point to $26.7 billion to the most recent $113 billion. Lest one conclude, “Oh, Chevron actually came out OK,” it’s worth remembering that the plaintiffs’ team that organized the shakedown always sought a high damage figure as part of its strategy.

Outtakes from the documentary-style film “Crude” on the litigation revealed as much. Steven Donziger, the New York trial lawyer who has masterminded the suit, is seen discussing possible damages against Texaco (later acquired by Chevron). Donziger says:

  • “If we have a legitimate fifty billion dollar damages claim, and they end up—the judge says, well, I can’t give them less than five billion . . . . And, say, Tex had a huge victory.  They knocked out ninety percent of the damages claim.”  And …
  • “But as a concept, I ask, do we ask for much more than we really want as a strategy?  Do we ask for eight and expect three, so that [the judge] says, ‘Look, Texaco, I cut down the largest part.’”

In any case, the amount has no relation to reality — or justice. A $1 million, $1,000 or $100 finding of damages would be just as wrong because the lawsuit itself is corrupt. Chevron has filed a RICO suit against the U.S. and Ecuadorian lawyers and activists, detailing the multifacted conspiracy against the company.

Chevron’s point of view and numerous legal claims have also been recognized by legitimate judicial bodies of the United States and the Permanent Court of Arbitration in The Hague.

On February 8, U.S. District Court Judge Lewis Kaplan cited the record of widespread wrongdoing to block the plaintiffs from going after any of Chevron’s assets anywhere in the world. (New York Law Journal, Shopfloor)

Last week, the international arbitration panel ruled that Ecuador should not pursue any awards from the litigation pending Chevron’s arbitration vis a vis the country over violations of the Bilateral Investment Treaty. (Reuters: “Arbitrators find for Chevron in Ecuador dispute.”)

The lawsuit against Chevron was always extortionate, an operation meant to damage the company’s reputation enough so it would feel compelled to settle. The judge’s ruling  in Ecuador was supposed to provide the final bit of pressure necessary to force the settlement.

Fortunately, now that U.S. court proceedings have revealed the cynical conspiracy at the heart of the litigation, the ruling in Ecuador provides nothing more than additional evidence of corruption.

UPDATE (4:15 p.m.): In this Spanish-language report, the judge is identified as Nicolás Zambrano.

Judge Blocks U.S./Ecuador Trial Lawyers from Going After Chevron’s Assets

By | Briefly Legal, Energy, General, Trade | One Comment

U.S. District Court Judge Lewis Kaplan of the Southern District of New York has delivered another body blow to the shakedown lawsuit against Chevron by the U.S. trial lawyers and their Ecuadorian allies. On Tuesday, the federal judge ordered a temporary injunction preventing the plaintiffs in the so-called Lago Agrio litigation from trying to seize any of Chevron’s assets if an Ecuadorian court rules against the company.

In his order (available here), Kaplan wrote:

The Court is satisfied, for the present purpose, that Chevron is faced with a serious threat of immediate and irreparable injury. This is most assuredly true if the anticipated judgment were rendered and influenced by corruption or undue influence. It would be true in any case, however, as the threatened multiplicity of enforcement actions around the world invokes the traditional equitable ground for relief against a multiplicity of suits, particularly where, as here, there appears to be evidence that the purpose and effect of the multiplicity of actions may be to create so much disruption to Chevron’s operations as to coerce a settlement without regard to the merits of the case for enforcement of any Ecuadorian judgment.

The Court is satisfied also, on the existing record, that the balance of hardships tips decidedly in favor of Chevron. The Lago Agrio plaintiffs would not be injured in any material way by a delay in judgment enforcement proceedings of sufficient length to permit determination of the preliminary injunction motion whereas Chevron likely would be seriously injured in the interim in the absence of a temporary restraining order.

Finally, there appear to be at least sufficiently serious questions going to the merits of Chevron’s claims that the anticipated judgment cannot properly be enforced to make them a fair ground for litigation.

A hearing is scheduled for next Tuesday, Feb. 18, for further action on the restraining order. Chevron has filed a RICO suit against the plaintiffs and is seeking to prevent them from having any access to Chevron’s global assets if, as expected, the Ecuadorian court hands down some unjustified award drawn from an extortionate lawsuit and judicial corruption.

Meanwhile, one of the plaintiffs’ legal representatives, the law firm of Emery Celli, has moved to withdraw from the case. Sauve qui peut! (Or the Spanish equivalent.)

Coverage …

Judge Lends Weight to Chevron’s RICO Suit over Shakedown

By | Briefly Legal, Energy, General, Trade | No Comments

In filing civil a RICO suit on Feb. 1 against the Ecuadorian plaintiffs, U.S. trial lawyer Steven Donziger, his numerous Ecuadorian associates — lawyers and activists — the Amazon Defense Front and a Colorado consulting firm, Stratus, Chevron is seeking several major forms of relief. (Chevron complaint, news release.)

First, it seeks damages, including treble damages allowed under civil RICO, caused by the organized scheme to damage the company’ reputation, defraud the justice system, and extort billions of dollars from Chevron for supposed environmental damage from oil operations in the Ecuadorian Amazon.

Second, the company seeks to prevent the defendants and their allies (co-conspirators according to Chevron) from aiding Ecuador in any way from enforcing a court order claiming any of Chevron’s assets. A judge in Ecuador could hand down a multi-billion judgment against Chevron based on fraud and conspiracy, and then the U.S. trial lawyers and their partners in the shakedown suit would try to get their piece of the prize by going after Chevron’s asset around the world. (For specific language from the suit, see the extended entry of this post*.)

U.S. District Judge Lewis Kaplan of the Southern District of New York is taking the issues raised by Chevron very seriously. In an order issued Thursday, the judge scheduled a “show cause” hearing next Tuesday in Manhattan over the granting of a preliminary injunction as requested by Chevron. The defendants are to:

show cause before this Court… why an order should not be issued, pursuant to Rule 65(b) of the Federal Rules of Civil Procedure, temporarily enjoining and restraining, until after thee Court has had an opportunty to rule on Chevron’s application for a preliminary injunction “defendants and any persons acting in concert with them from funding, commencing, prosecuting, advancing in any way, or receiving benefit from, directly or indirectly, any action or proceeding for recognition or enforcement of any judgment entered against Chevron in Maria Aguidan y Otros v. Chevron Corporation, No. 002-2003 (“Lago Agrio Litigation”) currently pending in the Provincial Court of Justice of Sucumbios in Ecuador, or for prejudgment seizure or attachment of assets based on any such judgment.

A central strategy of the U.S. trial lawyers behind this shakedown lawsuit has been to corrupt the courts in Ecuador to gain a judgment and then to immediately use the courts around the world to seize or otherwise tie up Chevron’s assets, thereby increasing the pressure on the company to settle out of court.

Throughout the process, Judge Kaplan has been saying, “Not so fast.” Pretty soon, he may just say, “No.”
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