Eye on the Amazon

Chevron turns to "Arbitration" Star Chamber to Try to Cheat Justice

Humberto Piaguaje and Guillermo Grefa are visiting Washington to draw attention to this corporate star chamber

What kind of court pays its judges millions of dollars, gives them huge vested interests in blocking environmental and social protections, and acts in total secrecy?

Answer: Chevron's last hope in the marathon Ecuador lawsuit.

After losing court rulings in Ecuador and the United States in recent weeks, Chevron has one remaining hope: Betting everything on an obscure private arbitration panel acting under the mantle of the U.S.-Ecuador Bilateral Investment Treaty.

On Saturday and Sunday, February 11-12, the panel will hold a hearing in Washington D.C. that could play a crucial role in the case.

Just two weeks ago, on January 25, the panel showed its sympathy for Chevron by strengthening a previous measure ordering the Ecuadorian government to do everything in its power to stall the Chevron lawsuit.

The company has asked the arbitration panel to declare that the marathon process of trial and appeals in Ecuador is essentially null and void, and to order that the Ecuadorian government must pay Chevron's $18 billion in damages. That would be a game changer, Chevron hopes, tying the plaintiffs' hands and guaranteeing years more of costly litigation.

The global network of arbitration panels has long served a legitimate yet narrow purpose: to facilitate commercial dispute resolution across international borders in a way that promotes economic development and consistency in the law. But they have no legal authority to decide major questions of international law. Members of this panel apparently are claiming the outrageous power to override decisions of any public court system of any sovereign nation. Meanwhile, the arbitration rules prohibit third parties who are the most affected, such as the Ecuadorean plaintiffs, from being represented on the panel.

Amazon Watch, Rainforest Action Network and other environmental groups are deeply concerned that this case could set a dangerous precedent in which environmental protections and human rights worldwide are essentially vetoed by arbitral tribunals that have no rights to do so under international law.

What's worse, the arbitration process has a built-in conflict of interest. Unlike judges at a real court, who receive a fixed salary, commercial arbitrators are typically paid at top lawyers' hourly rates, thus earning millions of dollars from a drawn-out case, which typically last several years. Arbitrators who are seen as business-friendly are guaranteed a steady stream of lucrative cases, thus compounding the potential profit motive. In other words, by blocking justice for Ecuadorians, the panel members will enrich themselves by millions of dollars each.

Sound like a predatory corporation's dream come true? Chevron probably thinks so.

In the past few days, Amazon Watch has hosted Ecuadorian indigenous leaders Humberto Piaguaje and Guillermo Grefa in a visit to Washington, D.C. We have tried to draw attention to this corporate star chamber and to pull its mysterious panelists out of the shadows.

V.V. Veeder, Horacio Grigera Naón, Vaughan LoweOn Feb. 8, Amazon Watch, RAN and Public Citizen wrote a letter to the three arbitration panelists: V.V. Veeder, Vaughan Lowe, Horacio Grigera Naón. The letter made several sets of requests: Open the proceeding to public, disclose how much money they have been paid, what their rates are, how much they expect to earn from the case if they decide to pursue a full hearing of the process, and their professional and personal relations with Chevron's lawyers.

The very next day, the panel wrote back to usthe panel wrote back to us, saying cryptically, "the matters raised therein will be considered presently by the Tribunal." They're clearly feeling the heat. So we will be watching and waiting for more information.

PS – Breaking News: Taking additional steps to prevent the violation of their rights, Ecuadoran plaintiffs have filed a petition against Ecuador before the Inter-American Commission on Human Rights. They are seeking an order under Article 25 of the Commission's Rules of Procedure requiring Ecuador to:

"refrain from taking any action that would contravene, undermine, or threaten the human rights of the Afectados to life, physical integrity, and health, or their rights to a fair trial in all respects, to judicial protection, to the determination of remedies for their claims and the enforcement of any remedies so determined, and to equal protection of the law without discrimination..."

More information about this new petition to the IACHR can be found here.

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