Ecuadoreans Win Asset Seizure Against Chevron

(CN) - Indigenous Ecuadoreans say they won a $200 million asset-seizure order against Chevron, satisfying 0.01 percent of a $19 billion environmental judgment.

Though a provincial court in Lago Agrio, Ecuador, entered the multibillion-dollar judgment against Chevron over a year ago, resolution of the dispute is still a far way off.

Chevron's ongoing denial of liability has matched a promise it made in 2009. "We're going to fight this until hell freezes over," then-company spokesman Donald Campbell said. "And then we'll fight it out on the ice."

By that point, the dispute had already marked its 15th anniversary. A group of Ecuadorean aborigines first sued Chevron's predecessor Texaco in Manhattan federal court in 1993, claiming that Texaco's drilling since 1964 had ravaged rainforest lands, polluted the groundwater and sparked cancer clusters in a region home to 30,000 people.

Texaco attacked the New York venue choice and pushed to dismiss the case in favor of Lago Agrio. Chevron acquired Texaco during this rocky period in 2001.

Shortly before entry of an $18.2 billion judgment, which has since been recalculated to $19 billion, Chevron condemned the Ecuadorean court system as politicized and corrupt. Returning the dispute to Manhattan, Chevron sued the Ecuadorean plaintiffs, their lawyers and their consultants for extortion.

That case fell onto the docket of U.S. District Judge Lewis Kaplan, who quickly ordered the Ecuadoreans' attorneys to turn over their case files, granted a temporary worldwide injunction on collection of the award, and fast-tracked a trial to make the injunction permanent.

The 2nd Circuit later struck down the injunction and halted the trial, and the Supreme Court refused to take up Chevron's appeal last week.

On Monday, the Ecuadoreans finally hit pay dirt with a seizure order in Sucumbios Provincial Court.

Claiming that the judgment covers $200 million worth of Chevron assets in Ecuador, representatives for the plaintiffs said it represents the "first significant collection victory against Chevron's assets."

They say $200 million is "a significant sum given that the oil giant tried to strip all of its assets from the country in anticipation of losing the litigation."

Taking this cue, Chevron downplayed the award by noting that it has only "minimal subsidiary assets in Ecuador."

"In short, this latest order from the Lago Agrio court is no more valid than the fraudulent judgment on which it is based," Chevron spokesman Kent Robertson said in a statement.

He would not estimate what amount could be generated by seized subsidiary assets.

The Ecuadoreans say that $96.3 million of their figure represents a judgment Chevron won against Ecuador in arbitration.

Chevron counters, however, that this arbitration award "exists outside of Ecuador."

"There's nothing to stop the government of Ecuador from handing out money to the plaintiffs' lawyers, but that will not satisfy the republic's obligations under the arbitration award," Robertson said. "The republic's decision to do so would be a further violation of international law."

The Ecuadoreans characterized the remaining assets as "monies in various bank accounts held in Ecuador by Chevron and its subsidiaries, and licensing fees generated by the use of Chevron trademarks in the country."

Judge Wilfrido Erazo signed the seizure order, a Spanish document that identifies Chevron's intellectual property assets at issue as "Texaco, Ursa, Havoline, Doro, geotextiles, Meropa, Motex, Multigear, Regal, Taro, Texatherm, [and] Thuban."

The Amazon Defense Coalition says that Chevron uses these marks "in Ecuador under licensing arrangements with local distributors."

Efforts to seize Chevron assets in countries around the world are ongoing, the Ecuadoreans' representatives say.

"Indigenous people and farmers in Ecuador continue to suffer disease and death because of Chevron's refusal to respect the rule of law in Ecuador," Pablo Fajardo, lead attorney for the Ecuadoreans, said in a statement. "This is the first example of how Chevron is losing assets as courts force it to comply with its obligations."

Key Chevron targets are located in Latin America, Africa and Asia, Fajardo added.

Chevron echoed its position that the Ecuadoreans are manipulating an unjust national court system.

"The court's order is not surprising, since the plaintiffs' have shown that they are able to get any order they wish granted by the Lago Agrio court," Robertson said in a statement.

He added that "Lago Agrio court's action puts Ecuador in further breach of international law. Chevron intends to challenge the Lago Agrio court's unlawful action through all available remedies - inside and outside of Ecuador."

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