Lago Agrio: My Interview with Ambassador Cely

Ecuadoran Embassy
Credit: David Monack

I traveled to Washington on Wednesday for an interview with Nathalie Cely Suárez, Ecuador’s ambassador to the United States, at the embassy in Washington’s Columbia Heights neighborhood. The building itself is a handsome Renaissance Revival-style mansion. I arrived a few minutes early and watched the comings and goings in the main room on the first floor. A military officer in a very grand overcoat with epaulettes came in while I was waiting. He marched up the staircase, pausing at the landing to give a smart bow to the national flag on display there before proceeding upstairs. On the table where I was waiting, there was a copy of Solidarity Magazine, some ads for a local Latin American theater festival, and a newspaper I’d never read before, the Washington Diplomat, with articles like “Obama: Defender of Democracy or Ambivalent Bystander?” and “Minority Rule: Democratic Safeguard or Source of Political Dysfunction?” When the time for the interview arrived, I was shown up to the ambassador’s office on the second floor.

After we chatted a bit about Boston (Ambassador Cely studied at the Kennedy School for several years and loves the city), we got down to it. I began by asking about the current conditions in the Lago Agrio region and what was being done for the people there. Ambassador Cely surprised me by suggesting that the Ecuadoran government had been doing more to remediate the environmental problems in the Lago Agrio region but had stopped because Chevron had begun to use the government’s remediation efforts to argue that Ecuador itself believed it was responsible for the remediation. “I found it outrageous. I mean, one of the questions that I asked very candidly to my government was, ‘Why didn’t we remediate this, if we care so much about this?’ And I found out that we—it’s very sad that the system hasn’t been able to provide a concrete, final solution to the community.”

I asked about how the Chevron case fits in to the broader US/Ecuador bilateral relationship. The ambassador, who is an economist by training, clearly would prefer to focus the relationship on trade—Ecuador is a growing market for US exports, and it exports products such as cut flowers to the US. But it’s clear that the Chevron case comes up in most or all of Ambassador Cely’s bilateral meetings.

We talked a bit about lobbying. Ambassador Cely noted Chevron’s lobbying efforts at the USTR, which she called unfair: “Sometimes I think that it’s not very ethical to try to hold jobs in Ecuador hostage in your fight. Just think about the thousands of farmers in Ecuador who could have lost their access to this market just because Chevron” sought to persuade the US government not to renew the ATPA trade preference.

Interview with Ambassador Cely
Not Exactly Frost/Nixon
I noted that Chevron wasn’t the only one with a lobbying firm: Ecuador has lobbyists, too. But Ambassador Cely then told an interesting story: “I wanted to hire a big firm here, a huge firm. … The president of Chevron called them—we were about to hire them, and the president of Chevron called them and said, ‘If you take this case, you’re not going to have any oil business—not just my business.'” She later identified the firm as Husch Blackwell. I’ve asked Husch Blackwell for comment but have not heard anything. Chevron denied the ambassador’s account and said, “This is yet another baseless accusation against Chevron by the Republic of Ecuador.”

I asked about the arbitration and Ecuador’s unwillingness or inability to obey the interim order of the tribunal regarding suspension of the effectiveness of the Lago Agrio judgment. Ambassador Cely laid out Ecuador’s familiar position: it was impossible under the Ecuadoran constitution for the executive to order the judiciary to suspend the effectiveness of the judgment (Doug Cassel, I hear you harrumphing), and in any case human rights considerations (which, she said, were actually part of Ecuador’s domestic constitution) trumped whatever obligation the state had in the arbitration. I noted that the interim award was just that—interim relief meant to preserve the status quo, and that it wasn’t clear how preserving the status quo would violate anyone’s human rights, but she returned to the separation of powers issue. As in the Medellin case, I think the ambassador’s argument is plainly right in the sense that sometimes domestic constitutional constraints can prevent a state from carrying out its international obligations and plainly wrong to the extent she means to assert that the constitutional problem relieves the state from the international obligation. 1 She began to argue about biased arbitrators in international arbitration generally, but she demurred when I asked her point-blank whether she thought the arbitrators were biased in this case.

Why didn’t Ecuador have a real PR effort in the case sooner? How did it allow itself to be so overmatched by Chevron’s PR? “Because of the lawyers. The lawyers said, ‘Don’t say anything. The government doesn’t have to defend. These are private issues.’ We played by the rules. We listened to every word that the lawyers said about this.”

We talked about corruption in the Ecuadoran judiciary—both plain old graft, or what she calls “petty corruption,” and political influence. With regard to petty corruption, she says she read and was “upset” by Judge Guerra and the tawdriness of the graft he claimed took place (though she said she didn’t know whether to believe his story or not, calling it “unbelievable”). But she noted that measures have been put in place to try to reduce the problem, for example increases in judicial salaries, a change in court procedures towards more oral proceedings, better training for judges, creating mechanisms for litigants to complain about corruption, a merit-based system of judicial selection, and so forth. But she agreed that there was a problem, in the past and today. She recognized that the executive branch of the government in Ecuador had undertaken a radical restructuring of the judiciary, but she argued that this had been done democratically, with the approval of the voters. “When the government got tired of the justice system not improving, the government asked the citizens of Ecuador if they wanted to provide the executive branch with special powers, for a year and a half, to conduct this process. The citizens of Ecuador said yes.” Now, it’s possible to understand this as either benign or sinister; readers may want to consider the dialogue I had with Chevron advocate Doug Cassel on this point recently. It seems to me that it’s impossible to know how to think about the judicial restructuring in Ecuador without making a political judgment about motives, earlier problems with the judiciary, and the like. Doug has, I think, come to the view that the politics behind the moves were sinister. I am not so sure; my main view on this is that much caution and humility is needed here.

When we got to political influence, I said that the thing that gave me the most pause was the fact that some of the Lago Agrio plaintiffs themselves had taken the position that the courts of Ecuador have systemic problems and are unfair. I was surprised that she was surprised by the question. 2 Unfortunately, because she hadn’t heard about the Huaorani case, she wasn’t able to comment on this. Her basic view is that when President Correa was elected, he persuaded Ecuadorans of the need to radically restructure the government and the social structure. Before, she claimed, power and wealth was centralized in a few wealthy families that owned banks and media outlets. She describes the redistribution of political and economic power and increased public investment in things like infrastructure as President Correa’s main accomplishment, which has led to a dramatic increase in the identification of Ecuadorans with their government. In the past, “if you had asked Ecuadorans who they believed, they would say the church, the media, and in third place it was debatable who they believed. Now if you ask, they say the government.” Depending on your politics, this could be wonderful or it could be terrible. She suggested that critics such as Álvarez Grau, whose declaration we reviewed in a prior post, are really expressing the resentment of the groups that no longer are in power. After the interview, Ambassador Cely sent me a redacted version of Ecuador’s counter-memorial on the issue of political influence that it submitted earlier this year in the arbitration. I hadn’t seen it before, and I still haven’t digested it, but I’m including it here as it sets out Ecuador’s position on this, which to me is one of the most interesting issues in the whole affair.

Does Ecuador accept that Donziger and the LAPs acted wrongly in the Lago Agrio litigation by making payments to Cabrera, ghost-writing his report, etc.? “We don’t have an opinion. We don’t want to have a public opinion about Donziger.” Not exactly a ringing endorsement. She called the accusations against Donziger “sad” and said that “the end does not justify the means,” though she said she “appreciated that he had been fighting with such passion” for a long time. “The law needs to be served, and the means need to be legitimate.”

Bearing in mind that Ambassador Cely is not a lawyer, I asked a procedural question that has arisen in light of the criticism of the recent cassation decision, namely that the National Court of Justice did not review any factual allegations of fraud, but limited its review to questions of law. Was there some remedy or mechanism by which Chevron could have presented its “new” evidence of fraud? The answer wasn’t clear to me, but the ambassador did point to Chevron’s delay in bringing its evidence forward. There’s something to this, since if Judge Guerra is to be believed, he solicited a bribe from Chevron on behalf of himself and Judge Zambrano while the case was still ongoing in Ecuador. I discussed this issue, and Chevron’s response, in an earlier post. It does seem, however, that there may be another appeal available to Chevron—an appeal to the Constitutional Tribunal.

Red Sox
Beloved the World Over
We concluded the interview on a very serious note. Ambassador Cely, giving the matter due consideration, revealed that her choice is the Red Sox, not the Yankees. I thanked her for her time and for allowing me, as a non-traditional reporter, to commit an act of journalism.

Notes:

  1. That’s probably too simplistic—see this article by Luke Eric Peterson.
  2. Incidentally, what are the Huaorani and their lawyers thinking? If they defeat Donziger’s forum non conveniens motion, won’t they later be estopped to say that the Ecuadoran courts are fair and adequate? And if so, won’t they have undercut the Ecuadoran judgment that they claim to have an interest in? Odd.

About Ted Folkman

Ted Folkman is a shareholder with Murphy & King, a Boston law firm, where he has a complex business litigation practice. He is the author of International Judicial Assistance (MCLE 2012), a nuts-and-bolts guide to international judicial assistance issues, and of the chapter on service of process in the ABA's forthcoming treatise on International Aspects of US Litigation, and he is the publisher of Letters Blogatory, the Web's first blog devoted to international judicial assistance, which the ABA recognized as one of the best 100 legal blogs in 2012, 2014, and 2015.

7 thoughts on “Lago Agrio: My Interview with Ambassador Cely

  1. Dear Ted,

    Congratulations on an informative interview with Ambassador Cely. There is much on which to comment. For now I will address four points.

    1. The Ambassador touts her country’s judicial reform efforts. Rather than repeat what I have written previously in Letters Blogatory, I think the following assessment by Human Rights Watch, in its WORLD REPORT 2013, sums up the problem well: “Corruption, inefficiency, and political influence have plagued Ecuador’s judiciary for years. Despite a judicial reform program that the Correa administration initiated in 2011, political influence in the appointment and conduct of judges remains a serious problem.”

    2. A prime example of political influence in judicial appointments is Ecuador’s new Constitutional Court. Although the National Court did not address the evidence of fraud in the Lago Agrio proceeding, Chevron may yet have recourse, as you note, before the Constitutional Court. Article 94 of Ecuador’s Constitution provides that, once ordinary remedies are exhausted, an “extraordinary action for protection” may be filed in the Constitutional Court against judgments or court orders which, by action or omission, violate constitutional rights (such as due process and the right of defense).

    The Constitutional Court consists of nine judges, of whom six were newly appointed in 2012 and three were carryovers from the former Constitutional Tribunal. Let us consider both who named them, and who was named.

    The nine judges were selected from among 27 nominees, one third each nominated by the executive (i.e., Correa), by the national assembly (controlled by Correa’s party, Alianza País), and by the “Transparency and Social Control” branch (dominated by Correa allies). The final selection was made from this list by one of the organs of the Transparency and Social Control branch, called the “Citizen Participation and Social Control Council.” This body, in turn, established a committee to evaluate the candidates. The committee was chaired by a former close aide to Correa.

    In short, Correa had effective control of the selection process. No one his party wanted to exclude had a chance of gaining a seat on the Constitutional Court.

    Now consider who was selected. As one Ecuadorian newspaper headlined, “Eight of the nine judges of the new Constitutional Court are close [afines] to Correa.” (La República, November 5, 2012.) Since La República is critical of Correa, let’s not take its headline at face value, but consider the positions held by the judges immediately prior to their appointments.

    One (Alfredo Ruiz Guzmán) is a former law school dean. I am not aware that he has any links to Correa.

    But the other eight do. One (Patricia Tatiana Ordeñana) was a Correa ally on the Correa-dominated Citizen Participation and Social Control Council. Another (María del Carmen Maldonado) was assistant to the President of that Council. A third (Fabián Jaramillo) was legal coordinator for Correa’s economic planning office. A fourth (Antonio Gagliardo) was the prosecutor who dismissed charges against Correa’s lawyer and against the judge who entered Correa’s libel judgment against the El Universo newspaper — despite what Human Rights Watch calls “credible evidence” that Correa’s lawyer had given the judge a “draft of the sentence in a pen drive beforehand.”

    That leaves four new judges. Three (Court President Patricio Pazmiño and Judges Ruth Seni Pinoargote and Manuel Viteri) were members of the prior Constitutional Tribunal. The fourth (Wendy Molina Andrade) was assistant to Pazmiño when he was President of the prior Constitutional Tribunal.

    The problem is that the prior Constitutional Tribunal was a Correa patsy. In January 2011 (over a year before Chevron first contacted me about its case), I co-signed a letter to the Inter-American Commission on Human Rights, together with, among others, Hernán Salgado Pesantes, who during 1991 to 2003 was the only Ecuadorian ever elected to serve as a judge, and later Vice President and President, of the Inter-American Court of Human Rights. Our letter was later endorsed by, among others, José Ayala Lasso, the former Ecuadorian diplomat who in the 1990s served as the first United Nations High Commissioner for Human Rights.

    Our letter advised the Commission of “serious questions regarding the impartiality of the decisions of the Constitutional [Tribunal], which has favored the interests of President Correa’s Regime almost unconditionally during recent years.” We cited the Tribunal’s review of the constitutionality of “more than ten decrees of states of exception declared by the President,” pointing out that the Tribunal “has ruled constantly in favor of the Executive, ignoring [evident] violations of the constitution …”

    In his separate letter, Ambassador Ayala Lasso deplored the response given by President Correa when asked about a possible Constitutional Tribunal ruling against his proposed referendum to reform the judiciary. With disarming candor, Correa answered that he “will not permit it” (“no lo permitirá”). In fact, Correa had no worries; sources inside the Tribunal informed me at the time that President Pazmiño had already decided to approve the referendum, even before receiving the formal request to review its constitutionality.

    These nine judges, then, will review any request by Chevron for constitutional review. What are the chances that they will conduct a serious and impartial review of Chevron’s now overwhelming evidence that plaintiffs’ lawyers and the trial judges rigged the trial?

    3. Your interview reports that Ambassador Cely pointed to Chevron’s “delay in bringing its evidence forward.” Yet Chevron can hardly be blamed for the cloak and dagger techniques (secret bank accounts, secret meetings, code names, and coded messages) with which plaintiffs hid their fraud. Only in January 2009, when the documentary film “Crude” was shown at the Sundance Film Festival, did plaintiffs’ cover-up begin to unravel. Noting improper conduct in one scene, Chevron’s lawyers asked a New York federal judge to order the filmmaker to turn over the outtakes. Not until May 2010 did the judge agree to this unusual and controversial request. That summer the court of appeals largely affirmed. Based on the outtakes, in November 2010 the federal judge ordered discovery and a deposition of plaintiffs’ lawyer Steven Donziger (who had commissioned the film).

    Meanwhile plaintiffs and their Ecuadorian judges were racing to close the evidentiary record in Lago Agrio. On September 17, 2010 – two months before discovery was ordered against Donziger in New York – the Ecuadorian trial judge closed the record. He was then recused, but the new judge – Judge Zambrano – again ordered the record closed on October 19, 2010 — even as Chevron’s lawyers were presenting him with what limited evidence of fraud they had at the time and were asking him to investigate. Zambrano refused to investigate. Soon thereafter (February 2001), he entered the $18 billion judgment against Chevron.

    In short, it appears that Chevron acted diligently to attempt to uncover the fraud, while the Ecuadorian trial judges hastened to close the record before the company’s efforts could bear fruit.

    4. On one point I agree with Ambassador Cely. It is indeed “outrageous” that Ecuador ceased cleaning up Lago Agrio because of litigation tactics. As she rightly asks, “Why didn’t we remediate this, if we care so much about this?” The answer, it would appear, is that the Government cares more about winning its battle with Chevron than it does about the health of the residents of Lago Agrio, who have now endured over two decades of contamination by the State oil company, only to see the clean-up halted. If the Government wants to show that it actually cares about human rights, as the Ambassador claims, a good place to start is by resuming the clean-up of Petroecuador’s pollution of Lago Agrio.

    1. Thanks, Doug. I don’t want to rehash old ground, so I’ll just respond briefly to two of your comments.

      First, on the issue of Chevron’s delay, you take a harder line than does Chevron itself, I think. Your view is basically that there was no delay. But as I noted in a previous post, Chevron takes the view that it would have been futile to report what it knew about Judge Guerra, for example, because “[a]s US courts have found, the authorities in Ecuador are in league with plaintiffs’ lawyers. Recall that at this point in time, the government was persecuting two Chevron attorneys already. And Zambrano has an extensive history of misconduct that had gone unprosecuted.”

      Second, on the question of why the government didn’t do more to remediate, I think this is a “pox on both their houses” kind of thing. It’s not uncommon to see the imperatives of litigation drive bad decision making, and both sides are probably at fault to some extent: Ecuador for not remediating, and Chevron for seeking to punish Ecuador in the litigation for the remediation it undertook. Another way of looking at this: if both parties with money (Ecuador and Chevron—I take it the LAPs themselves don’t have much in the way of cash) had spent on remediation what they have spent on legal fees, I’m sure a lot of good could have been accomplished in the affected area.

      1. Dear Ted,

        Without quibbling on the two points you raise, let me pick up on your comment on remediation. It seems to me that, even now, what is needed is a credible, objective assessment of the current environmental situation and of any real needs for clean-up.

        That could be done by a neutral agency, such as the United Nations Environmental Programme, which has done similar work in West Africa. The assessment would also have to determine the relative responsibilities of Petroecuador and of Texaco (if any remains, after the clean-up done in the 1990s) — unless a settlement were worked out, in which Ecuador and Chevron might agree jointly to fund a clean-up, regardless of who caused the pollution. From everything I have read, it appears that the total costs of a real clean-up would be manageable, and far less than the bogus billions awarded by Judge Zambrano.

        Unfortunately, in the current litigation climate, no settlement discussion seems realistic in the short term. Plaintiffs (backed by the Correa government) are attempting to enforce their judgment in Argentina, Brazil and Canada; while Chevron’s RICO suit in New York and the arbitration between Chevron and Ecuador remain pending. Both sides currently appear to have too many hopes of winning in a courtroom to settle. But that could change, perhaps dramatically, and perhaps next year. Once the litigation dust clears, i.e., if and when further judicial decisions clarify the legal odds, in my personal view (I do not speak for the company or anyone else) we might all productively redirect our attention from the litigation to the issue of how best to assess and meet the needs of the people of Lago Agrio.

        1. You see? You’re doing it too! You want to make a humane suggestion, but the realities of the litigation cause you to put in a disclaimer, lest Chevron also be accused of wanting to make a humane suggestion! :-)

  2. For several years, Texaco said before a US court that it trusted Ecuadorian justice. They didn’t want the NY court to rule in the case. They went themselves to Lago Agrio.

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