Shock and Awe, The Chevron Way
How the oil giant made itself a victim—and launched a nearly unprecedented legal offensive—after poisoning a region and its people
With pockets deep enough, you can buy justice. That’s what Chevron assumes since they lost a $9.5 billion verdict at the Supreme Court of Ecuador in 2013. But can Chevron justify their mockery of the justice system at the shareholder meeting on Wednesday, May 25th? Some shareholders are gearing up for a battle.
The funds from the $9.5 billion judgment are needed to set up a health programme for the tens of thousands of victims of Chevron’s toxic dumping in Ecuador, and to clean up a contaminated part of the Amazon rainforest bigger than Lake District. Chevron left Ecuador years ago, but it “forgot” to take home 16 billion gallons of toxic waste that contaminates streams and rivers relied on by local inhabitants for their drinking water, bathing, and fishing.
"Chevron used a US law designed to attack the Mafia in an effort to 'criminalise' human rights advocacy. This allowed Chevron to claim to be a victim of the very villagers it had poisoned." —human rights attorney Steven Donzinger
When the local indigenous villagers fought back, Chevron promised its victims a "lifetime of lawsuits." A company spokesman famously said: "We will fight this until hell freezes over, and then fight it out on the ice." But it’s on that slippery surface that David is well on its way to slaying Goliath.
David is actually a small group of people. Lawyers Pablo Fajardo and Julio Prieto prosecute the legal case against Chevron from Ecuador. Alan Lenczner, a prominent litigator in Toronto, leads the enforcement effort to seize Chevron’s assets in Canada while lawyers Sergio Bermudes and Fabiano Robalinho spearhead the effort in Brazil. But within the US, the efforts boil down to the man who's sued by Chevron for a whopping $60 billion: Steven Donziger.
Sue Chevron at your own risk
Steven Donziger, a US human rights lawyer, who has advised the Ecuadorian villagers since the inception of the lawsuit in 1993, reconstructs the epic battle. He says that for Chevron, the evidence was always against the company but that hell really started to freeze over for the oil major around May 2009.
Steven Donziger: “After a disastrous appearance by Chevron on the popular US news show 60 Minutes, which exposed the company’s environmental crimes and fraud in Ecuador, the company suddenly changed tactics. It knew its pollution case was lost on the merits. So Chevron hired six PR companies and a big new law firm and paid more than $1 billion to employ hundreds to harass, intimidate and sue anyone assisting the victims. Chevron is going by the textbook, the military textbook of the “shock and awe” doctrine. By trying to use overwhelming force against an infinitely smaller opponent, Chevron hopes to discourage any researcher, lawyer or even intern from helping the victims.”
Donziger gives the example where Chevron sued the US-based scientific consultancy that processed soil and water samples taken during the trial.
Steven Donziger: “Chevron harassed the consultancy by writing letters to its clients claiming the company was involved in a “fraud” by participating in the case in Ecuador. The entire goal was to drive the company into bankruptcy. Anyone who ever worked with us suddenly needed to spend money to hire a good lawyer. Chevron also filed some 30 lawsuits targeting more than 100 supporters of the villagers in an effort to get their documents. The company used at least 60 law firms by now.”
Chevron, as part of its counter-attack, launched the RICO (or racketeering) case filed in the US in 2011 against the American and Ecuadorian lawyers representing the villagers, as well as the 47 individuals from the rainforest who had signed on to the class action lawsuit on behalf of those impacted.
"The company is victimized by its own worldview. Chevron’s managers simply do not have the imagination to understand that impoverished villagers from the rainforest possess great intelligence, sophistication, and determination and can actually win from one of the world’s most powerful companies."
Steven Donziger: “Chevron used a US law designed to attack the Mafia in an effort to “criminalise” human rights advocacy. This allowed Chevron to claim to be a victim of the very villagers it had poisoned. The trial court judge mocked the villagers from the bench and tried to overrule Ecuador’s Supreme Court. This was a clear case of American judicial imperialism. The judge, Lewis A. Kaplan, refused to accept any of the evidence of Chevron’s environmental contamination that had served as the basis for the ruling against the company by three layers of courts in Ecuador. He did take into account Chevron’s witness, who claimed that the lawyers for the villagers had “bribed” the Ecuador trial judge. After the judgement, the same witness admitted that he received $2 million from Chevron and committed perjury.”
But by then, the damage was done. Kaplan ruled that Ecuador’s entire judiciary was illegal and that no judgment issued by the courts of the country –the country where Chevron insisted the trial be held – could be considered valid for purposes of international enforcement.
Steven Donziger: “Judge Kaplan did this while maintaining significant personal investments in Chevron, which he never disclosed. The bias was palpable and many of the Ecuadorians considered the judge openly racist. The decision resulting from this flawed proceeding is currently under appeal. Judge Kaplan’s judgement has already been reversed unanimously by an appellate court when he tried to issue an unprecedented injunction blocking worldwide enforcement of the Ecuador judgment. We expect his judgement will be reversed again with this latest decision against the villagers and their lawyers, which in any event has no practical impact on ongoing efforts by the villagers to seize company assets in other jurisdictions such as Canada to pay for their court-mandated clean-up.”
Donziger also had to live through some hardship as a consequence of the creativity of Judge Kaplan.
Steven Donziger: “Judge Kaplan stretched the law beyond its limits. He allowed Chevron to force me to sit for 19 days of depositions when the federal rule normally allows only one day for a single witness. He allowed Chevron to violate various legal privileges by forcing me and other lawyers to turn over documents to Chevron. He also allowed Chevron to sue me and my Ecuadorian clients for $60 billion, which would have been the largest personal liability in US history. Chevron later dropped all of the damages claims when I demanded a jury trial. But when I filed a countersuit against Chevron for engaging in racketeering and fraud in Ecuador, Judge Kaplan simply refused to hear it.”
Chevron has now lost before all 18 appellate judges in Ecuador and Canada who have heard its claims. But until now, its strategy of perpetual litigation has managed to postpone implementation of the judgement. I ask Steven if the RICO case has delayed justice.
Steven Donziger: “It doesn’t really matter. The villagers can collect the money they are owed in other countries where Chevron has assets. But it does stand as an egregious example of a flagrant abuse of power by a corporation to undermine the rule of law. Chevron was just stunned that an Ecuadorian lawyer who rides his bike to work and another lawyer who works from his flat in Manhattan obtained a multi-billion judgement against them in their courts of their own choosing. Chevron’s distraction strategy has failed utterly. I believe Chevron miscalculated the capacity of the Ecuadorian villagers and our legal team. The company is victimized by its own worldview. Chevron’s managers simply do not have the imagination to understand that impoverished villagers from the rainforest possess great intelligence, sophistication, and determination and can actually win from one of the world’s most powerful companies.”
Meanwhile, Chevron managed to postpone justice from happening by deploying a shock and awe strategy that includes bribing a key witness, suing human rights defenders and espionage. What’s the take home message for other big companies?
Steven Donziger: “Chevron has created a new paradigm of corporate counterattack that is now increasingly used in the US: if you can’t win a legal case on the merits of the case, use the shock and awe doctrine to try to eliminate the lawyers and advocates who represent and fight on behalf of your adversary. Without lawyers and advocates there is no case, and without a case there is no hope for real accountability for this or any other human rights disaster.”
“Chevron has created a new paradigm of corporate counterattack that is now increasingly used in the US: if you can’t win a legal case on the merits of the case, use the shock and awe doctrine to try to eliminate the lawyers and advocates who represent and fight on behalf of your adversary."
Donziger sees Chevron’s massive expenditures as clear evidence that the strategy of the villagers is working as planned and that the company’s managers acknowledge the enormous risk from the case. He believes it’s a just a matter of time before the funds are recovered and justice is won. Chevron has an incentive to hurry because the fine accrues interest and every year increases by around $300 million dollars. A judgement that started at $9.5 billion is now worth approximately $11 billion.
When I press Steven on some personal details of how Chevron harasses him outside the courts, he talks about the spying.
Steven Donziger: “Pablo and Julio have been harassed and threatened in Ecuador. In Manhattan where I live, I have had to hire an ex-FBI agent to engage in surveillance of the people Chevron was paying to spy on me and try to dig up dirt on me.”
Steven says that Chevron paid the private investigative and spy agency Kroll, which employs a number of former CIA operatives, at least $15 million to follow him and his colleagues in the US and in Ecuador.
Steven Donziger: “For several weeks they had three cars parked near my apartment building in Manhattan with two people in each car, parked in opposite directions so they would be ready to go in any direction. They even followed my young child on the way from school to home. They want my wife to worry and tell me that this should stop. But it just makes all of us more determined to carry on.”
Donziger says that he’s neglected by international organisations protecting human rights defenders and his letters to the United Nations Special Rapporteur on the situation of human rights defenders remain unanswered. Despite all this, Donziger stresses that the spotlight shouldn’t be on him
Steven Donziger: “Chevron attacks me personally, but I don’t take it personally. On the contrary, I see the company’s targeting of me, as distasteful as it is, as validation of the righteousness of our fight and something honourable. Much of what Chevron does with me and the people I work with is inappropriate, unethical and even illegal but it demonstrates that the company is feeling tremendous stress from the judgement won by indigenous and farmer communities. That’s a huge historic accomplishment that has never happened before on anything close to this scale. And to be clear, this case is about indigenous groups and farmer communities in the delicate Amazon ecosystem that have been decimated by Chevron’s reckless toxic dumping. Chevron attacks the lawyers because they want its victims to be defenceless. I can assure you: the company’s strategy has failed.”
*Disclosure: the author of this article works for the European Environmental Bureau (EEB), the largest federation of environmental citizens’ organizations in Europe consisting of over 150 member organizations in more than 30 countries and representing 15 million citizens. The EEB launched a fundraising challenge at Grrrowd.org to support Pablo Fajardo and Julio Prieto, the Ecuadorean lawyers who protect the victims of the toxic spills.