I'll begin by saying, right off, that I don't know the "truly truth" of this story. But it's a great case to consider, especially when dealing with the (allegedly) bad behavior by multinational giants whose size and power is greater than that of many independent nations, and who aren't afraid to use that size and power aggressively.
Today's New York Times carries a long story by Clifford Krauss about a significant victory posted by Chevron in its "Goliath and David" battle against local activists and environmentalists who claimed that the corporation had refused to clean up after (or even accept blame for) polluting Ecuador's rain forests.
The origins of the case (as reported by Simon Romero and Clifford Krauss in 2011, full story, here) "go back to the 1970s, when Texaco, which was later acquired by Chevron, operated as a partner with the Ecuadorean state oil company. The villagers sued in 1993, claiming that Texaco had left an environmental mess that was causing illnesses. Chevron bought Texaco in 2001, before the case was resolved." Note that Chevron claims that Texaco did clean up its mess, and that the pollution found was cuased by the Ecuadorean national oil company.
A key figure in the litigation against Chevron was a New York-based lawyer, Steven R. Donziger, who gained fame in a documentary called "Crude". The 2009 film (see trailer etc., here) deals with a two-year portion of the ongoing battle and presents Mr. Donziger in a highly favorable light as a crusader for the poor and voiceless.
In 2011, Chevron was dealt a significant setback, when an Ecuadorean judge ordered the company to pay $9 billion in damages (and double that if Chevron continued to refuse to apologize publicly). Chevron promptly appealed.
Yesterday, it was Ecuador that was dealt a major setback, when a US federal judge ruled that "a two-decade legal effort to punish the company was marred by fraud and corruption." (The 497-page full ruling -- no, I haven't read it all -- is here, and an 89-page appendix, here)
The judge acknowledges that pollution occurred, and wrote,
On that assumption, Texaco and perhaps even Chevron -- though it never drilled for oil in Ecuador -- might bear some responsibility. In any case, improvement of conditions for the residents of the Oriente' appears to be both desirable and overdue. But the defendants' effort to change the subject to the Oriente', understandable as it is as a tactic, misses the point of this case.
The issue here is not what happened in the Oriente' more than twenty years ago and who, if anyone, now is responsible for any wrongs then done. It instead is whether a court decision was procured by corrupt means, regardless of whether the cause was just. An innocent defendant is no more entitled to submit false evidence, to coopt and pay off a court-appointed expert, or to coerce or bribe a judge or jury than a guilty one. So even if Donziger and his clients had a just cause -- and the Court expresses no opinion on that -- they were not entitled to corrupt the process to achieve their goal.
Chevron's team had acquired outtakes from "Crude" that highlighted what Mr. Krauss of the Times called Mr. Donziger's "unorthodox style." From those outtakes and witness testimony, it became clear, the judge wrote that "fraudulent evidence" was presented, that judges were "coerced", that "half-truths or worse" were told to "prevent exposure of ... wrongdoing." In summation, the judge wrote, "If ever there were a case warranting equitable relief with respect to a judgment procured by fraud, this is it."
The judge's ruling affects only the US -- there are cases pending against Chevron in Canada, Brazil, and Argentina as well.
The judge did acknowledge that Mr. Donziger "began his involvement in this controversy with a desire to improve conditions in the area in which his Ecuadorian clients live." But, he continued,
Justice is not served by inflicting injustice. The ends do not justify the means. There is no "Robin Hood" defense to illegal and wrongful conduct.
What's your ruling?
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Tremendous article Ms. Rose. I believe that in business there is one rule which should be followed by everyone. That rule is - take care of your clients and your business will take care of itself.
ReplyDeleteRegards,
Robert Green
Eton