Canadian court rules in Ecuadorian legal battle involving oil giant Chevron

The Chevron oil refinery in Burnaby, B.C., Canada. (Photo by Kyle Pearce/Flickr)

Both sides found positives in a Canadian court ruling issued Friday in a David and Goliath legal battle between oil giant Chevron and a group of Ecuadorian villagers.

The villagers are using the Canadian courts to try to collect on a US$9.5-billion Ecuadorian court judgement for environmental damage.

Chevron issued a news release Friday saying Ontario’s superior court has ruled the oil company’s Canadian arm isn’t a party to the Ecuadorian court decision.

Chevron said the Ontario judgement concluded that Chevron Canada is a separate entity and says it’s confident any jurisdiction that examines the facts of the case will find the Ecuadorian judgment unenforceable.

A spokeswoman for the villagers issued a counter statement saying the ruling gave the green light for the villagers to continue legal action against Chevron Corp. in a bid to seize billions in assets to enforce the court judgement. The villagers are now seeking roughly US$12-billion, factoring in interest.

Karen Hinton’s statement minimized the setback with regards to Chevron’s Canadian subsidiary, predicting it would be “swiftly reversed” by an appeal court.

“Ultimately, we are confident that Canada’s courts will hold Chevron fully accountable for its outrageous and criminal conduct in Ecuador,” said Hinton, who is based in the U.S.

Some 30,000 villagers first turned to Ecuador’s justice system in 1993 alleging that Texaco, which is now owned by Chevron, dumped billions of litres of toxic oil-drilling waters into hundreds of open-air pits.

Activists have contended the affected area sees, among other problems, the highest rates of childhood leukemia in the country—130 per cent more frequent cancer deaths than elsewhere, and 150 per cent higher rates of miscarriages.

Chevron has no assets in the South American country, so the villagers have turned to courts in several other countries in an effort to have the judgment enforced.

Alan Lenczner argued in court previously that the notion that Chevron Corp. is separate from its Canadian arm was nonsense, saying Chevron Canada is a “cash cow” that sends billions to its controlling parent.

Chevron has also derided the Ecuador court judgement contending it was the product of fraud, witness tampering and obstruction of justice. It said a U.S. court has already prohibited the Ecuadorian judgment from being enforced in the United States.

Hinton’s statement countered Chevron’s fraud claims were debunked by Ecuador’s courts.