Are Chevron’s Hands Really Clean? A Reply To Doug Cassel

Ambassador Nathalie Cely responds to Chevron advocate Doug Cassel’s recent comment on Ecuador’s charges that Chevron was guilty of misconduct in the lead-up to the judicial inspections in Lago Agrio. I’m very pleased that partisans on both sides have been able to give their views an airing here. A note for email subscribers: there are lots of footnotes; please read this in your browser!

I write to respond briefly to Mr. Doug Cassel. He states that he has now investigated my charge that Chevron misled the Lago Agrio court during the judicial inspections. I, of course, respect Mr. Cassel’s willingness to engage in this debate in the first instance and appreciate that he does not have much of the information at his fingertips. I confess, though, that I find it interesting that he was nonetheless able to generate within 24 hours a point-by-point response, in impressive detail, that echoes Chevron’s arguments in the arbitration, all the while denying links to the company.

I also appreciated that Mr. Cassel is not an environmental expert and that he has not been afforded access to all of the documents which the Republic has received through U.S. discovery from Chevron’s numerous experts. But the gist of what Chevron did is not all that complicated: Chevron systematically used its pre-inspection data to avoid sampling during the judicial inspections where it knew there would be contamination.

Does Chevron deny that it conducted extensive, expensive pre-inspection testing? And does Chevron truly contend that it did not use those results to determine where they would sample during the judicial inspections? To me the notion that Chevron’s experts by happenstance chose locations that generally did not repeat findings of pollution strains any sense of reasonableness.

There has been so much noise in this debate that too often the voices of our indigenous citizens have been drowned out. Chevron accuses the indigenous citizens’ lawyers of fraud. One trial court in the U.S. has sustained that charge. Chevron has attacked the Republic’s elected officials and its judiciary. And my government too has responded in kind to Chevron’s attacks. At some point, after the parties are finished attacking one another, it would be helpful to lower the rhetoric and study—and confirm—what we know: that massive, widespread contamination exists in the Oriente and that a large portion of that is the direct result of Texaco’s actions.

In his original reply to my post, Mr. Cassel proposed a resolution of this long-running dispute based on a “credible, impartial mechanism to assess whether there is ongoing environmental damage and, if so, who is responsible.” Regardless of what the indigenous plaintiffs’ lawyers may or may not have done, the fact is that Chevron asked that the dispute be resolved by an Ecuadorian court but Chevron has since disavowed the resulting judgment. Here’s the question: What will Chevron accept? If, as Mr. Cassel suggests, any resolution of the dispute depends on an honest analysis of conditions in the Oriente, where will that analysis come from that is satisfactory to all parties? And given the concerns above, will Chevron actually permit an honest assessment from anybody, and free from the tactics it has employed to date?

In the absence of reasoned discourse, the dispute will continue to be a source of conflict that will help nobody. If, on the other hand, Mr. Cassel does have any influence at Chevron, I would ask him to advocate for the honest assessment he has previously proposed so that the true victims can be helped. But until such time, this dispute will remain in the hands of the lawyers and experts, and my business will remain the traditional duties of an Ambassador in a foreign land—to represent my country’s political and economic interests in this great country.

* * * *

Mr. Cassel makes two broad points. First, Mr. Cassel points out that Texaco was a minority participant in a joint venture with the state oil company and that Texaco signed an agreement with the state to clean the Oriente. What Mr. Cassel ignores is what I discussed in my original post: For 25 years Texaco was the Operator of the oil extraction operations in the Oriente and as the Operator, Texaco made all of the decisions related to finding, extracting, and cleaning up crude oil.

Second, Mr. Cassel points to the state-owned oil company’s practices as if they excuse Chevron’s liabilities. But as far as I understand the Lago Agrio court’s decision, it did not require Chevron to pay for the clean up of contamination caused by the state owned oil company. The Republic is working with its state-owned oil company to change its practices and to take care of its people. The difference there is that the state-owned oil company is doing its part. As I’ve said, we are not running away from PetroEcuador’s responsibility. And Chevron should stop running away from its own.

Finally, Mr. Cassel has raised a number of detailed responses to the evidence I had presented earlier. I respond to some of those points below. But, like Mr. Cassel, I am not an environmental engineer. All of these points have been argued by Chevron and the Republic in the arbitration. I will leave it to the Republic’s lawyers and experts to rebut Chevron’s arguments in the arbitration where all of the evidence may be heard.

Secret Pre-Testing: Contrary to Mr. Cassel’s assertions, the secret tests done by Chevron were neither open nor done by both sides. While it is true that both parties conducted court-ordered site assessments immediately before each judicial inspection, that is not the secret testing I mentioned. Instead Chevron conducted several inspections at each site months before each judicial inspection, creating what its experts called “Playbooks” for each site that directed them how to identify the contamination and how best to avoid it at the judicial inspections. 1 If Chevron’s secret pre-inspections really had been open and court-authorized as Mr. Cassel claims, Chevron’s experts would not have had “access issues” to these sites during their secret testing. 2

On the single occasion when the indigenous plaintiffs conducted a site assessment more than the days before a judicial inspection (in that case one week in advance of the very first Judicial Inspection), the stated purpose was to verify their sampling procedures—not to guarantee or skew any results. 3

And unlike Chevron, the indigenous plaintiffs did not take samples from locations involved in their pre-JI site assessments for purposes of the official Judicial Inspection itself and indeed openly marked the locations at which they sampled. 4

Paradoxically, Chevron vigorously objected to the indigenous plaintiffs’ exercise. The day before the Sacha 6 Judicial Inspection, Chevron went so far as to ask that the Sacha 6 JI be cancelled or postponed precisely because the plaintiffs had conducted sampling outside of the JI process. According to Chevron, any sampling or inspections not in the presence of the court was illegal. Because of plaintiffs’ sampling days before, Chevron claimed that the “sites have been unlawfully altered, which makes it impossible to comply with any procedural steps there with evidentiary force.” 5 Chevron went so far as to claim that the plaintiffs’ actions were “a violation of rights to legal security and the due process of law provided for in Article 23(26) and (27) of Ecuador’s Political Constitution.” Not only were they illegal, Chevron argued, but “Plaintiffs’ ‘furtive’ actions by themselves constitute a severe environment negative impact whose magnitude is unknown.” 6

The day after their Court filing, at the Sacha 6 Judicial Inspection, counsel for Chevron expressly assured the court that “no technical team from ChevronTexaco Corporation has performed any secret tests here.” 7 Yet by that time Chevron’s experts had conducted PIs at many sites and taken hundreds samples.

Surveillance: To clarify, my concern with Chevron’s use of aerial imagery and resident interviews to find hidden pits is not that they found those pits. My concern is that those pits were hidden and not reported in the first place. One of the difficulties in unraveling the facts of oil operations in the Oriente is that Chevron’s affiliate did not maintain adequate records of its operations and in fact explicitly ordered its people to destroy adverse evidence. 8 And further, even after Chevron identified these pits that had been covered and not previously reported, Chevron often did not notify the Court of their existence.

Abuse of pre-testing: As Mr. Cassel discusses, Chevron claims to have established a “clean perimeter” around its former operations. But it would have been one thing if Chevron had found a “clean perimeter” and then acknowledged that what is inside that perimeter is contaminated. Chevron instead went to great lengths to find a “clean perimeter”—and then claimed that the clean samples from this perimeter were representative of what was inside that perimeter. Ironically for Chevron, it appears the Lago Agrio court used Chevron’s “clean perimeters” for what they were, an admission by Chevron that everything inside of the “clean perimeters” was dirty and must be remediated.

Notes:

  1. Chevron’s SSF-18 Judicial Inspection Playbook. In the case of SSF-18, Chevron’s secret testing took place on January 17, 2004 and August 12-13, 2005. The Judicial inspection did not take place until October 12, 2005.
  2. Sacha Sur JI Summary at BJORKMAN00061688
  3. Calmbacher Dep. Tr. (Mar. 29, 2010) at 47:7-48:5, 52:19-25
  4. Judicial Inspection Acta for Sacha 6 (Aug. 18, 2004) at 8727 (“We do not intend to obtain samples from the holes that have already been drilled, but rather to go to an undisturbed site, drill holes, extract samples, proceed to analyze them at the field laboratory and obtain the other necessary samples to send to the laboratories.”); see also id. at 8726 (“[W]e have collected soil samples, but not covertly, which is why there are cement markers. … If our intent had been to deceive, if our intent had been to conceal, then we would never have left markers or we would have tried to remove them.”).
  5. Chevron Escrito 17 de agosto 2006, 17H30, c 79, f. 8455 ¶ 6.
  6. Id. ¶ 5.
  7. Judicial Inspection Acta for Sacha 6 (Aug. 18, 2004) at 8704.
  8. Texaco internal letter CGE-398/72 (July 17, 1972).

4 thoughts on “Are Chevron’s Hands Really Clean? A Reply To Doug Cassel

  1. I appreciate the opportunity to engage with Ambassador Cely. She aspires to carry out “the traditional duties of an Ambassador in a foreign land—to represent my country’s political and economic interests in this great country.” I have no reason to question that she does so ably and honorably.

    Let me begin with what I consider to be the most important point, one on which—I hope—there may eventually be common ground. Ambassador Cely notes that I “proposed a resolution of this long-running dispute based on a ‘credible, impartial mechanism to assess whether there is ongoing environmental damage and, if so, who is responsible.’” She then asks whether Chevron would agree to such a proposal, and urges me to advocate that Chevron agree.

    In fact, my proposal was and is explicitly directed to all three principal parties—Chevron, Ecuador and the Lago Agrio plaintiffs—and I urge all three to give it consideration. I do not know whether any of them would agree to it. So far, none has.
    For her part, Ambassador Cely states that “until such time” as Chevron agrees, “this dispute will remain in the hands of the lawyers and experts.” She apparently wants Chevron to agree first, but makes no commitment that, even if Chevron did so, Ecuador would agree. Her phrasing at this stage is understandable: I would not expect litigating parties, including Ecuador, to negotiate in public through blog posts.

    Nonetheless I hope that the parties—all the parties—will consider exploring privately, among themselves, whether there is a way to resolve the controversy fairly and expeditiously. I note that, even though Donziger allies Aaron Page and Karen Hinton have weighed in on other matters in response to my post, they and other plaintiffs’ advocates have been conspicuously silent on my proposal for a “credible, impartial mechanism to assess whether there is ongoing environmental damage and, if so, who is responsible.”

    Their silence, too, is understandable. Plaintiffs’ lawyers are currently attempting to enforce a $9 billion dollar judgment against Chevron. As long as they harbor high hopes of collecting on that jackpot, they are unlikely to agree to an alternative mechanism that would—let’s not kid ourselves—result in a far lower number.

    On the other hand, they might take into account, among other downside risks of adamantly clinging to their judgment, the material risk that it will not be enforced. Consider one of their best cases: suppose Judge Kaplan’s judgment is eventually reversed on some point of law (I do not suggest that it will be). Even then, his findings of fact—that Donziger committed fraud, bribery, extortion, money laundering, witness tampering and obstruction of justice in the Ecuador litigation—are both collectively credible and damaging to the plaintiffs’ chances of enforcing their judgment in any jurisdiction.

    In evaluating their posture, plaintiffs might also consider the most recent judicial development. Chevron has sued Donziger bankroller Russell DeLeon in Gibraltar, his domicile, for conspiring with Donziger to shake down the company. On March 14 the judge in Gibraltar denied DeLeon’s motion to strike out Chevron’s suit. While the judge refrained from findings of fact at this early procedural stage, the tone of his 72-page opinion is not promising for DeLeon (who, like Donziger, has negotiated to pocket a substantial share of any proceeds from the Ecuador judgment). The judge acknowledges, “In normal circumstances I should be reluctant to investigate and determine whether a foreign court which claimed to have considered fully and fairly and determined a Claimant’s allegations had in fact done so.” But in this case, the evidence casts such serious doubt that the judge is exceptionally “allowing a matter to proceed which calls into question the whole integrity of another country’s judicial and political system.”

    I would not presume to advise plaintiffs’ counsel on their odds of success. They will make their own evaluation. Unless and until they conclude that their judgment is in trouble, they are unlikely to take seriously my proposal for an alternate resolution. And without plaintiffs’ agreement, it becomes more difficult for Chevron and Ecuador—even assuming they could devise a bilateral agreement—to resolve the controversy.

    So an alternate resolution will not be easy; above all, it will require “political will” by at least two and perhaps all three parties. But without an alternate resolution, the prospects appear dim for any early vindication of whatever legitimate claims the residents of Lago Agrio may have.

    This brings me to the main thrust of the Ambassador’s post, namely Ecuador’s claim that Chevron has dirty hands. Her lawyers, it seems, have drafted a point-by-point counter-memorial on Chevron’s sampling techniques. Their characterizations differ from my understandings. But rather than perpetuate this litigation-by-blog on sampling methodologies, by my batting the ball back, let us simply accept that the question is before the arbitrators, who will be in a position to resolve it on the basis of full briefing by both sides. I am content to accept their resolution.

    The important point is that the outcome on sampling—whatever it may be—will not render reliable the falsified evidence presented by plaintiffs’ counsel in the Lago Agrio litigation. Nor will it reveal the true extent of any ongoing environmental harm in Lago Agrio. Nor will it tell us which party—Texaco or the State oil company—is responsible for any ongoing harm.

    I am thus in partial agreement with Ambassador Cely’s statement that, “At some point, after the parties are finished attacking one another, it would be helpful to lower the rhetoric and study—and confirm—what we know: that massive, widespread contamination exists in the Oriente and that a large portion of that is the direct result of Texaco’s actions.” I agree that we should focus on the extent of ongoing contamination in the Oriente. I do not agree that we “know” whether a “large portion” of that is due to Texaco’s agreed portion of the clean-up, or how much is due to the State oil company. But there is no need for us to agree on these issues in advance. An honest and professionally capable study should supply credible answers.

    In short, the real issues were not credibly resolved by the fraudulent Lago Agrio proceeding. Until they are credibly resolved, justice promises to remain elusive.

    1. Over the last couple of weeks, Mr. Cassel and I have had an opportunity to exchange our respective thoughts on the ongoing and multiple disputes regarding Chevron’s liability for the pollution of the Ecuadorian rainforest. I appreciate Mr. Folkman’s efforts in facilitating the dialogue, and I likewise appreciate the reasoned tone offered by Mr. Cassel. We always welcome thoughtful, constructive and honest dialogue.

      Our concern over the last several years is that there has been much too little of such reasoned dialogue. It instead appears that our litigation adversary concluded that the company would be better served by publicly targeting not only the indigenous plaintiffs, but also by attacking Ecuador’s political leadership. In doing so, Chevron awakened a sleeping giant. Call it a cultural phenomenon or whatever one would like but political leaders in Ecuador and, for that matter, across Latin America, consider it a duty on behalf of the State to defend the sovereign and to vigorously respond when attacked.

      We hope by this recent exchange that Mr. Folkman’s readers will learn that Chevron is not the only party feeling aggrieved. Ecuador too believes that it has been wronged—wronged by Chevron’s multi-year public relations war, and wronged by what we now believe to have been an elaborate, multi-faceted effort by Chevron to mislead the Ecuadorian courts in an effort to cover up Texaco’s pollution.

      Only reasoned discourse will allow for the resolution of these serious issues.

      Until then it is my fervent hope that neither the parties to the dispute nor the media forget for one moment the plight of the indigenous citizens of Ecuador who confront every day hazardous conditions that threaten their heath and the health of their families. I instead encourage all parties to keep our indigenous citizens in your prayers.

      1. I very much appreciate the Ambassador’s constructive tone. I will do everything I can to assure that prayers lead to progress.

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