A group of Indigenous Ecuadorians are arguing in an Ontario court that they should be able to seize shares of Chevron Canada to pay for the pollution its parent company allegedly left in their homeland.
It’s been 25 years since the case was originally launched by a group representing 30,000 Ecuadorians, who say their land and people have been poisoned by 900 pits of toxic waste left behind in the Amazon by Texaco, a company now owned by Chevron.
Chevron shut down its operations in Ecuador decades ago, and a U.S. judge barred any American court from enforcing an Ecuadorian Supreme Court ruling against Chevron.
The plaintiffs are now asking Canada’s justice system to enforce that $ 9.5-billion (U.S.) Ecuadorian judgment against Chevron Canada, even though the ruling was made against Chevron Corp., an American company that owns Chevron Canada via seven intermediary subsidiaries.
The plaintiffs do not allege wrongdoing by Chevron Canada.
After a Supreme Court of Canada decision allowed the case to go ahead here, the fate of the Ecuadorians has drawn interest from Indigenous groups from around the world who are dealing with industrial pollution.
“Just look at Grassy Narrows in northern Ontario — it’s the same thing. A forestry mill polluted the water and the Indigenous people were affected by mercury poisoning,” said Perry Bellegarde, national chief of the Assembly of First Nations, who came to watch the proceedings and show his support in the courtroom.
“Investor rights should not supersede Indigenous rights,” Bellegarde said. “The corporate veil shouldn’t be something that anyone hides behind when lands and waters and health is affected.”
Over two days of arguments at the Ontario Court of Appeal, Alan Lenczner, a lawyer representing the Ecuadorian Indigenous people, argued that Chevron Corp.’s 1,500 subsidiaries and holding companies, including Chevron Canada, are essentially operating as a single company.
He noted that Chevron Canada cannot make independent decisions because its policies require it to ask executives at Chevron Corp. for permission to spend any significant amount of money. The Canadian company even had to seek approval from its parent in California to lease its head office in Calgary, Lenczner said.
“Other than day-to-day operations, Chevron Canada has no significant authority to engage in its core and fundamental business. Every step … has required (outside) approval,” he told a three-judge panel.
Benjamin Zarnett, representing Chevron Canada, argued the two companies are distinct and separate. “Corporations are separate legal entities even if they’re part of a group. It’s not an economic reality, but it’s a legal reality,” Zarnett said.
In response to Lenczner saying the polluter must pay, Zarnett responded: “That principle has nothing to do with Chevron Canada.”
The U.S.-based Chevron Corp. is also named in the Canadian suit. Its lawyer, Larry Lowenstein, said a U.S. Appeals Court found that the Ecuadorian decision was based on fraud and the attempt to enforce it in Canada should be dismissed.
“The plaintiff’s problem is not Chevron’s corporate structure. The plaintiff’s problem is that they were subject to a finding of fraud,” said Lowenstein.
Developments since that U.S. decision in 2014 cast it in doubt, said Aaron Marr Page, an American lawyer who pleaded that case for the Ecuadorians and was in the public gallery Wednesday.
One such development is that witness Alberto Guerra told the U.S. court he participated in a conspiracy to bribe the Ecuadorian judge and ghostwrite the ruling, according to media reports. Guerra has since recanted much of his testimony — in an international arbitration in the U.S. in 2015, where the parties were arguing some of the same issues, Guerra said he lied in the U.S. court, those media reports said.
A decision in the Ontario case is expected in the coming weeks.