Courts

Ecuador Mobilizes Celebrity Friends as Chevron Verdict Nears


Ecuadorian President Rafael Correa during a visit to the Amazon on Sept. 17

Photograph by Jose Jacome/Corbis

Ecuadorian President Rafael Correa during a visit to the Amazon on Sept. 17

Mia Farrow has issues with Chevron (CVX). So do Sting, Danny Glover, and Cher. Actors, musicians, and other celebrities have long campaigned against the San Ramon (Calif.) oil producer, blaming it for pollution in the rainforest in Ecuador. Now, with a federal court in New York poised to issue a critical ruling in the two-decade-old controversy, the government of Ecuadorian President Rafael Correa is stepping in with a media campaign promoting the stars’ animosity toward Chevron.

There’s a snappy website called the Dirty Hand, a reference to the ritual of environmental activists traveling to the Amazon to dip their hands in pools of waste oil that dot the verdant jungle east of the Andes. Actor Daryl Hannah popularized this practice seven years ago.

Also, a U.S. public-relations firm called FitzGibbon Media sends journalists regular dispatches about what the celebrities are doing and saying during their trips to Ecuador. “I personally would drive further to avoid a Chevron station,” Farrow is quoted as urging American consumers. “I would write Chevron and I would encourage anyone to write to them and say, ‘Step up and do the right thing for Ecuador and for this planet.’”

FitzGibbon is coordinating other efforts as well, such as an advertisement that ran earlier this month in the Houston Chronicle in conjunction with a Chevron-sponsored marathon in the south-Texas oil industry hub. “Chevron Houston marathoners run for the finish line,” the ad said. “Chevron runs from justice.” When I asked Alec Saslow of FitzGibbon who was paying for all this, he said the National Secretariat of Communications of Ecuador. Why? Not a short or simple story.

In the 1970s and 1980s, Texaco left behind a lot of oil contamination in the Ecuadorian jungle. In 1993, American lawyers representing rainforest residents sued Texaco in federal court in New York. During the next several years, Texaco struck a deal with the government of Ecuador under which the company agreed to clean up one-third of the oil pollution sites, with the host country responsible for cleaning the other two-thirds. In the U.S. court, meanwhile, Texaco sought to get the mass-injury lawsuit dismissed on the grounds that any such litigation should take place in Ecuador. Ultimately, Texaco prevailed, and the suit was dismissed.

Chevron acquired Texaco in 2001. Rather than surrender, though, as Chevron expected them to do, the American plaintiffs’ lawyers restarted the suit in Ecuador in 2003. The Ecuadorian lawsuit resulted in a $19 billion verdict against Chevron. The company refused to pay a dime on the 2011 judgment, saying that any remaining pollution had been caused by Petroecuador, the national oil company that inherited the former Texaco operations. Chevron also complained that the Ecuadorian lawsuit had been tainted by rampant fraud, coercion, and bribery. More recently, Ecuador’s top court halved Chevron’s liability to $9.5 billion—still not chump change, even for a gigantic multinational.

Determined to undermine the Ecuadorian verdict, Chevron filed a civil-racketeering suit in New York against the lead American lawyer, Steven Donziger. The oil company accused Donziger of orchestrating the courtroom equivalent of an extortion conspiracy with Chevron as the innocent victim. Donziger has denied the charges and accused Chevron of trying to demonize him to get out of paying what the company owes in Ecuador.

After a six-week trial last fall, a federal judge in New York is expected to rule any day now on Chevron’s racketeering allegations. Judge Lewis Kaplan is expected to side with Chevron and find that Donziger did indeed commit all manner of fraudulent acts in New York and Ecuador. Even Donziger has conceded he’s going to lose at trial. He has condemned Kaplan of bias and has hired a battery of high-powered appellate lawyers.

Ecuador, for its part, is trying to support Donziger and sully Chevron in the court of public opinion. The Andean country is doing this for two reasons. First, its left-leaning populist president, Correa, likes to bash the U.S. and foreign corporations. Second, Ecuador faces a real problem at home: It never cleaned up its share of the polluted oil sites. By focusing celebrity and popular ire on Chevron, Correa hopes to distract his own people and anyone else who’s paying attention from the harsh reality that poor Ecuadorians in the jungle have their own government to blame—at least in part—for a continuing environmental fiasco.

There’s a coherent argument for seeking Chevron’s participation in the cleanup that’s necessary in Ecuador. And the company has undeniably spent hundreds of millions of dollars trying to avoid liability. Chevron has engaged in expensive PR campaigns of its own and has employed an army of well-compensated lawyers for many years.

The government of Ecuador’s attempt to shift all blame to the American company, however, obfuscates the complicated story of what happened decades ago in the Amazon—and what’s still happening, and not happening, today.

Barrett_190
Barrett is an assistant managing editor and senior writer at Bloomberg Businessweek. His new book, Law of the Jungle, which tells the story of the Chevron oil pollution case in Ecuador, will be published by Crown in September 2014. His most recent book is GLOCK: The Rise of America’s Gun.

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