Lago Agrio: More Details On Lobbying and Trade Pressure

The wheels of the FOIA office at the State Department turn slowly, but they do turn. I recently received the latest batch of documents, these from the Office of the Legal Adviser. These new documents, which relate to my Freedom of Information Act case against the State Department seeking information about lobbying relating to the Lago Agrio case, show additional lobbying, both by Chevron itself and by trade groups, and attempts to exert pressure against Ecuador in connection with valuable trade preferences.

Of particular interest, to me anyway, is an undated letter from Chevron (it’s not clear who wrote it) to Gloria Blue, the executive secretary of the Trade Policy Staff Committee of the office of the USTR. It may be that this letter is available in an online administrative docket, but if so, I wasn’t able to find it. The letter is interesting because it notes the United States’s efforts to encourage a settlement between Chevron and Ecuador, and because Chevron’s apparent willingness to engage in settlement discussions is not quite in tune with its later “hell freezing over,” “not one penny ever” stance:

As part of the discussion surrounding our problems in Ecuador, the U.S. government suggested that Chevron explore the possibilities for finding a reasonable solution to the contract dispute [ed. this is a reference to Ecuador’s repudiation of contracts with TexPet, not to the Lago Agrio case itself.] In that spirit, Chevron engaged in what it believed were good-faith discussions in February 2008 with Ministerial-level officials from the government of Ecuador. Indeed, the Ministry promised Chevron additional meetings to discuss the contract dispute and the ongoing litigation in Ecuador, but unfortunately no follow-up meetings were scheduled. Despite several attempts to re-engaged the Ministry, Chevron was repeatedly rebuffed. Instead, the government of Ecuador publicly proclaimed that it would only “mediate” between Chevron and the private plaintiffs—to whom President Correa has publicly pledged his full support [ed. this is apparently reference to the Lago Agrio case itself.] Chevron sought another meeting with a Ministry official in July 2008 during a bilateral visit to Washington, and although this meeting did take place, the government of Ecuador once again failed to follow through on any subsequent action.

More recently, Chevron has sought US pressure on Ecuador to comply with the awards in the BIT arbitration:

It is urgent and imperative that the USG send a strong message to the GOE that you expect that Ecuador will abide by the award issued by the BIT Tribunal and take measures to prevent enforcement of the judgment pending final disposition of the claims by the BIT proceeding. We are well past the point of having the GOE treat us fairly in the Lago Agrio litigation; that will be determined by the BIT Tribunal. The key now is for the USG to convey that the GOE must live up to its BIT treaty obligations and failure to do so could have consequences for the US preference programs whose criteria include adherence to BIT/international investment awards.

It’s unclear, though, whether the US took any action in response to this request.

Finally, Chevron sought withdrawal or suspension of Ecuador’s designation as a beneficiary developing country under the GSP program. This petition was already publicly available, but I had never seen it before. 1

Another group of documents come not from Chevron itself, but from industry groups lobbying on its behalf. I had previously covered the USTR’s annual review of Ecuador’s trade preference under the Andean Trade Preference Act. In that proceeding, several groups, such as the US Chamber of Commerce, the National Foreign Trade Council, and others submitted comments. The latest round of FOIA documents shows additional instances of industry lobbying, some apparently connected with formal adminsitrative proceedings, some not. One particularly interesting example: a March 2010 letter from Thomas J. Donohue, president of the US Chamber of Commerce, Calman Cohen, president of the Emergency Committee for American Trade, and John Engler, president of the National Association of Manufacturers, to Miriam Sapiro, the Deputy US Trade Representative, and Robert Hormats, Under Secretary of State for Economic, Energy, and Agricultural Affairs. The letter complains about Ecuador’s attempts to obtain an injunction in the US courts enjoining Chevron from proceeding with the BIT arbitration against Ecuador—a request Judge Sand denied later that month. The letter requests that the United States intervene:

While the Government of Ecuador’s action has no legal merit, we believe that it is vitally important that the United States Government provide its official position, given the far-reaching implications that this decision could have on the U.S. BIT program, U.S. investors, and treaty rights more broadly. In particular, we ask for your support to ensure that the United States Government submits a statement of interest to the U.S. District Court, so that the Court is fully apprised of the domestic and international legal issues involved in this unprecedented request.

The trade groups did not get their wish—as far as I can tell from the docket, the United States didn’t intervene in the case. However, this turned out to be a moot point, as Chevron defeated the request for an injunction anyway.

The National Association of Manufacturers raised additional concerns about Ecuador’s trade preferences under the ATPA in a separate letter to Under Secretary Hormats, noting not just Ecuador’s “intrusion in the domestic legal process” and “interference with the international arbitration process” (presumably references to the Lago Agrio case), but also its withdrawal from ICSID and its threats to renounce the BIT.

I’ll keep you posted as additional documents come in.

Notes:

  1. For those who are particularly interested, the GSP issues led to a public hearing. The US government ended up deferring action on petitions seeking preferential treatment for Ecuadoran roses, broccoli, and artichokes, and accepting Chevron’s petition for review. I’m not sure of the current status of that review.

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 2d ed. 2016), 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.

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