Eye on the Amazon

Chevron's Kangaroo Court: Citizens United on Steroids

Kangaroo Court favors Chevron. Surprise, Surprise!

President Rafael Correa is no stranger to hyperbole, but his recent comments about Chevron's private corporate arbitration panel were right on the mark:

"It's the end of sovereignty, the end of our independence; we have become colonies with these rulings from international courts."

There has been a growing trend of transnational corporations capitalizing on investment treaties to subvert the sovereignty of the countries in which they operate. The Transnational Institute recently documented that a small circle of corporate lawyers that some refer to as an "inner mafia" – just 15 lawyers have decided 55% of all disputes – receive up to $1,000 per hour per lawyer to sit on the panels.

Over the last 15 years these arbitrations have increased more than tenfold with 38 in 1996 and 450 in 2011. In over a third of those cases corporations have sued countries for over $100 million. Some of these arbiters are former board members of multinational corporations that have sued developing nations. They are agents of what writer Naomi Klein has dubbed "disaster capitalism," targeting countries in the Global South and capitalizing on nations in the midst of crisis. They sue governments when corporations believe that governments have treated them unfairly by adopting environmental protections or public health laws.

However, the Chevron panel is going even further and taking the unprecedented step of trying to use an investment treaty to nullify the ruling of a sovereign domestic court that Chevron delayed for years. What makes the attempt even more shameless is that Ecuador was not even party to the 19-year court case; the plaintiffs were the 30,000 indigenous and campesino people who are still suffering from the toxic consequences of Chevron's contamination in the Amazon.

Chevron is asking the panel to demand that Ecuador pays the $19 billion judgment as a punishment for not ruling in Chevron's favor. As an earlier Amazon Watch publication noted, "one of the wealthiest corporations on the planet with revenues of $240 billion in 2011 is seeking a taxpayer-funded bailout in Ecuador where the per capita income is $4,000 per annum. In other words, it wants the victims of its contamination to pay for the clean-up of their ancestral lands – sort of like executing someone before a firing squad and sending their family an invoice for the bullets."

If Citizens United has given corporations an oversized voice, then corporate arbitration panels ensure that they are the only voice. In short, corporate arbitration panels are Citizens United on steroids, uprooting the executive, legislative, and – in the case of Chevron – even the judicial sovereignty that define an independent state.

Chevron's corporate overreach is about more than just this case. If Chevron is able to use a secretive corporate panel to overturn a seminal ruling in another country, it will subvert the sovereignty of justice systems around the world, rendering them powerless in the face of truly unlimited corporate power.

Chevron is facing diplomatic pressure over this unprecendented move. The Bolivarian Alliance for the Americas (ALBA), a regional diplomatic body started by Venezuela, has come to Ecuador's defense. Venezuela, which holds billions of dollars of Chevron's assets, has called for a regional meeting to address Chevron's "aggression" against Ecuador.

The panel is Chevron's last-ditch effort at the end of a 20-year losing game. Chevron fought for years to move the case from the U.S. to Ecuador in hopes that it could buy justice from what was then an extremely "pro-US business" administration. It even filed 14 sworn affidavits in U.S. court "praising the fairness of the Ecuadorian judicial system" and promising to abide by its eventual ruling. After losing an eight-year court battle in Ecuador it's scrambling for a Hail Mary. It's even tried a similar stunt before and failed: in 2004 Chevron sued Ecuador to demand that the country indemnity the company. The claim was moved to U.S. Federal Court, where it was quickly rejected. Chevron's playing dirty with the corporate arbiters, showing the world how truly desperate it is.

Update: Chevron is more desperate than we thought. New court filings show that Chevron is bankrolling over 2,000 lawyers and legal professionals in an attempt to steal justice from the 30,000 indigenous and campesino plaintiffs. In the past thirty days Chevron has served the Ecuadorians and their legal team with more than 10,000 pages of motions, letters, notices, and briefs. Amazon Watch is amongst those targeted as we've had to spend countless hours working with our legal defense team at Earth Rights International to defend ourselves against outrageous demands to turn over tens of thousands of internal documents.

Chevron spent $400 million just this year in an attempt to evade the Ecuador judgment and has spent close to $2 billion dollars on the case. I can't imagine that Chevron's shareholders are too happy about these revelations...

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