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investorstate dispute settlement
'Defeat for Justice': Ecuador to Pay Amazon-Polluting Chevron $220 Million
"A debt is not owed to Chevron. A debt is owed to the Amazonian families still waiting for truth, justice, and full reparation."
Dec 09, 2025
A US advocacy group, American human rights lawyer Steven Donziger, and the group in Ecuador behind a historic legal battle against Chevron over its dumping of toxic waste in the Amazon rainforest are condemning the Ecuadorian government's plans to pay the oil giant hundreds of millions of dollars due to an arbitration ruling.
In response to the legal fight in Ecuador that led to a $9.5 billion judgment against Chevron—which bought Texaco—the fossil fuel company turned to the investor-state dispute settlement (ISDS) system, suing the South American country in the Hague-based Permanent Court of Arbitration. As part of the latter case, Ecuadorian Attorney General Diana Salazar Méndez's office announced Monday that the government would pay the US company only around $220 million, rather than the over $3 billion Chevron sought.
While Chevron said in a statement that it was "pleased with the resolution of this matter" and claimed the decision "strengthened the rule of law globally," and Salazar Méndez's office celebrated the dramatically lower figure, and the Union of Peoples Affected by Chevron-Texaco (UDAPT)—the group that began the case against oil company in 1993—pushed back against the government's framing of the reduction "as if it was a success and an economic achievement."
"The reality is it is a defeat for justice," UDAPT argued in a Tuesday statement. "For 32 years, UDAPT has documented pollution, environmental crime, and lives broken by Chevron, proving what should be obvious: Communities have not recovered, health has not been restored, clean water has not returned, and the territories that sustain life remain contaminated. A debt is not owed to Chevron. A debt is owed to the Amazonian families still waiting for truth, justice, and full reparation."
Amazon Watch deputy director Paul Paz y Miño similarly said Tuesday that "this illegitimate arbitration process is nothing more than Chevron abusing the law to escape accountability for one of the worst oil disasters in history."
"Ecuador's courts ruled correctly and based largely on Chevron's own evidence, that Chevron deliberately poisoned Indigenous and rural communities, leaving behind a mass cancer zone in the Amazon," the campaigner continued. "Adding insult to injury, the idea that Ecuador's people should now pay a US oil company that admitted to deliberate pollution is the epitome of environmental racism."
Ecuadorian President Daniel Noboa "must not honor this ISDS award, and the international community must stand behind the victims of Chevron's crimes and demand that the company clean up Ecuador once and for all," Paz y Miño added. "Amazon Watch stands with the affected Indigenous peoples and communities of the Ecuadorian Amazon. We urge President Noboa to reject this illegitimate award, disclose any negotiations with Chevron, and enforce Ecuadorian law by ensuring Chevron pays its debt to those it poisoned."
Donziger—who was detained in the United States for nearly 1,000 days after Chevron went after him in the American legal system for representing Big Oil's victims in Ecuador—was also sharply critical, saying Tuesday that "the decision by a so-called private corporate arbitration panel that claims to absolve Chevron of its massive pollution liability in Ecuador has no legitimacy and does not affect the historic $9.5 billion damages judgment won by Amazonian communities."
"That judgment still stands as the definitive public court ruling in the case," he said. "The private arbitral panel has no authority over the six public appellate courts, including the Supreme Courts of Ecuador and Canada, that issued unanimous decisions against Chevron and confirmed the extensive evidence that the company devastated local communities by deliberately dumping billions of gallons of cancer-causing oil waste into rivers and streams used by thousands of people for drinking, bathing, and fishing."
"I also strongly condemn President Daniel Noboa for his plans to betray his own people by agreeing to send $220 million from the public treasury to Chevron, a company that owes Ecuador billions under multiple court orders for poisoning vulnerable Indigenous peoples with toxic oil waste," Donziger added. "Noboa would effectively grant Chevron a taxpayer-funded bailout financed by the same citizens who remain victims of the company's pollution. This would be an outrageous dereliction of duty and a violation of his oath of office, warranting removal."
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Repairing the Harmful Legacy of Corporate-Dominated Trade in the Americas
As a former ISDS defense attorney, I represented Latin American governments against corporations and witnessed firsthand the devastating impacts of this mechanism on local communities, economies, and environments.
Jul 31, 2024
For decades, U.S. trade policy across Latin America has prioritized the profit of U.S. mega-corporations over the well-being of communities, workers, democracy, and human rights. Now, as trade ministers from the U.S. and eleven countries in our hemisphere convene at the Americas Partnership for Economic Prosperity (APEP) Ministerial in Quito this week, they have an opportunity to address one of the worst manifestations of this shameful legacy.
Embedded within trade and investment agreements between the U.S. and many countries in Latin America is a relic of colonialism that empowers multinational corporations to challenge any public interest law and policy that may interfere with their profits in extrajudicial, closed-door arbitration tribunals. This insidious system is called Investor-State Dispute Settlement (ISDS), and it effectively erodes democracy while fleecing governments of taxpayer dollars and diverting public funds. Yet the secretive nature of the ISDS system ensures the public remains largely unaware.
As a former ISDS defense attorney, I represented Latin American governments against corporations and witnessed firsthand the devastating impacts of ISDS on local communities, economies, and environments.
Time and again, I saw how ISDS granted corporations unprecedented power beyond domestic laws to sue foreign governments for any action they argue violates their broad investor rights, even if governments attempt to protect human rights, workers, or the environment.
Only corporations can launch suits, meaning governments cannot hold corporations accountable. Therefore, if a corporation engages in harmful practices and a government tries to mitigate them, the company can launch an ISDS claim. This system has awarded corporations over $100 billion in taxpayer dollars in known cases, with fossil fuel companies being the primary beneficiaries. The actual sum is likely much higher since awards are often kept secret.
The impact of ISDS on Latin America and the Caribbean has been particularly severe. The region faces a disproportionate number of ISDS disputes (nearly a third of all cases) despite having less than 10% of the world’s population. Latin American governments have been forced to pay corporations $33.8 billion in known awards and settlements, diverting critical resources from social needs.
Following colonization, newly independent nations were pressured to adopt trade and investment deals with ISDS provisions supposedly to attract investment. Despite proponents’ claims, studies show no meaningful increase in foreign investment due to ISDS provisions. Brazil does not have any treaties with ISDS and yet receives the most foreign investment in the region. Instead, ISDS has entrenched an imbalanced system where multinational corporations wield disproportionate power and pillage resources unchecked, often at the expense of the environment and local communities, echoing the colonial paradigm.
I have also witnessed many times how ISDS undermines the will of the people and places Indigenous communities in danger, particularly when corporations want to extract resources from their lands.
The right to Free, Prior, and Informed Consent is a cornerstone of Indigenous rights, allowing them to agree to or reject proposals impacting their lands. However, governments may sideline these rights to avoid costly ISDS litigation, undermining Indigenous sovereignty and self-determination. While Indigenous rights are enshrined in international law, they are often inadequately enforced, whereas ISDS obligations are both binding and highly enforceable. Furthermore, ISDS tribunals frequently restrict the participation of local communities before issuing their awards, effectively silencing the voices of the most impacted and vulnerable.
Notably, the APEP ministerial is taking place in Ecuador, a country that has endured egregious ISDS cases highlighting the erosion of sovereignty and environmental injustice perpetuated by the system. For example, after being found guilty of severe pollution and environmental damage to the Amazon and ordered to clean up by Ecuadorian courts, U.S. oil giant Chevron launched an ISDS suit against Ecuador for $9.5 billion instead of complying. Another case involved Occidental Petroleum, which was awarded $1.4 billion after Ecuador terminated a contract due to the company’s violation of domestic laws.
In 2009, after undertaking an extensive audit of its investment treaties, Ecuador denounced ISDS, withdrew its membership from the World Bank’s venue where most ISDS cases are heard, and terminated 16 bilateral investment treaties. Subsequent Ecuadorian governments have unsuccessfully tried to reinstate ISDS. In response to a referendum this past April, Ecuadorian voters rejected ISDS in a landslide. This is a powerful, democratic statement against a system that prioritizes corporations.
Ecuador’s struggle with ISDS is emblematic of the broader issues countries face, and the global opposition to ISDS is growing. The European Union recently exited the Energy Charter Treaty, which granted ISDS powers to fossil fuel companies, citing concerns that it undermined the fight against climate change. Bolivia, Honduras, India, Indonesia, Pakistan, South Africa, and Venezuela have also taken steps to eliminate their ISDS liability. United Nations experts have called for the abolition of ISDS, citing its undermining of state sovereignty, democracy, and the rule of law.
Domestically, there is increasing bipartisan pressure to end ISDS. Both the previous and current administrations have taken steps away from ISDS. President Biden pledged to abstain from including ISDS provisions in new trade deals. Last year, over 200 U.S. labor unions, faith groups, and environmental organizations urged President Biden to eliminate ISDS from existing treaties, highlighting its detrimental impact on public health, climate protections, Indigenous land rights, and democratic sovereignty. Members of Congress have echoed these calls, emphasizing the need to address ISDS to tackle the root causes of migration, protect the environment, and uphold democratic values.
Achieving APEP’s stated goals of fostering inclusivity and sustainable economic development hinges on reconciling past policy mistakes. Members of Congress recently urged USTR to establish a working group within APEP to explore options for eliminating ISDS provisions in existing trade deals. Not only is this possible, but it is also essential to align trade policy with the values of democracy, human rights, and environmental protection.
APEP ministers should seize this opportunity and eliminate ISDS once and for all to give a sustainable future for people and the environment a fighting chance. The stakes are too high to do otherwise.
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Sensing Keystone XL Rejection, TransCanada Scopes NAFTA Lawsuit
Provisions in trade pact may provide legal basis for suing U.S. over tar sands pipeline
Aug 10, 2015
TransCanada Corporation, the company behind the controversial Keystone XL tar sands pipeline, is furtively planning its next steps--including suing the U.S. government--if U.S. President Barack Obama rejects the permits which would allow construction of the project to move forward, the Canadian Press reported on Monday.
While the company has publicly maintained hope that Obama will permit it to build the pipeline, those close to the project say TransCanada expects rejection and is quietly considering suing the government under the North Atlantic Free Trade Agreement (NAFTA), using articles in the pact that protect companies from discrimination, unfair or arbitrary treatment, and expropriation.
NAFTA also includes a mechanism known as the Investor-State Dispute Settlement (ISDS), which allows corporations to sue a country for damages based on projected "lost profits" and "expected future profits." As Common Dreams has previously reported, the potential award has no monetary cap.
Experts have warned that TransCanada could bring a NAFTA challenge over Keystone XL. Natural Resources Defense Council international program director Jake Schmidt told Politico in February that such a case was "definitely a possibility."
Derek Burney, former Canadian ambassador to the U.S. and chief negotiator on the trade deal, as well as its U.S.-Canada predecessor, told Politico at the time, "If the pipeline is actually vetoed on so-called environmental grounds, I think there is a very strong case for a NAFTA challenge."
But would suing the government under NAFTA work? It's unlikely.
The Canadian Press continues:
The U.S. government has a 13-0 record in NAFTA cases. A suit would likely fail, cost the company a few million dollars, and possibly antagonize the U.S. government, said David Gantz, who was been a panelist on NAFTA cases and who teaches trade law at the University of Arizona.
....But another expert said the company might as well try. She said a recent decision against the Canadian government in the Bilcon case involving a Nova Scotia quarry could give TransCanada some hope.
"Why not? And see where it goes," said Debra Steger[.]
Another option on TransCanada's radar is immediately filing another permit application with the U.S. State Department ahead of the 2016 presidential election.
Opponents of the Trans-Pacific Partnership (TPP), a corporate-friendly agreement between the U.S. and 12 Pacific Rim nations described as "NAFTA on steroids," have cautioned against including an ISDS mechanism in the still-pending deal.
"Given NAFTA's record of damage, it is equal parts disgusting and infuriating that now President Barack Obama has joined the corporate Pinocchios who lied about NAFTA in recycling similar claims to try to sell the [TPP]," Lori Wallach, director of Public Citizen's Global Trade Watch, said in February.
The project source told the Canadian Press that whenever the announcement comes, TransCanada will "let it cool for a while. And then we'd have this more vigorous discussion."
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