Chevron Texaco/Ecuador
Bilateral Investment Treaty
Campaign Proposal
Prepared for TradeJustice NY Metro by
Adam Weissman of Global Justice for Animals and the Environment
Issue Background
According to Amazon Watch:
"For over three decades, Chevron chose profit over people.
While drilling in the Ecuadorian Amazon from 1964 to 1990, Texaco – which merged with Chevron in 2001 – deliberately dumped more than
18 billion gallons of toxic wastewater, spilled roughly 17 million gallons of crude oil, and left hazardous waste in hundreds of open pits dug out
of the forest floor. To save money, Texaco chose to use environmental practices that were obsolete, did not meet industry standards, and were
illegal in Ecuador and the United States.
The result was, and continues to be, one of the worst environmental disasters on the planet. Contamination of soil, groundwater, and surface
streams has caused local indigenous and campesino people to suffer a wave of mouth, stomach and uterine cancer, birth defects, and
spontaneous miscarriages. Chevron has never cleaned up the mess it inherited, and its oil wastes continue to poison the rainforest ecosystem.
Today, 30,000 Ecuadorians are demanding justice in a landmark class action lawsuit. Despite Chevron's repeated efforts to sabotage the trial,
an independent court-appointed expert recently deemed Chevron responsible for up to $27 billion in damage."i
A verdict in the case is expected in 2011.ii Chevron has already expressed its intention to appeal.
There are two aspects of this issue that relate to trade policy.
Andean Trade Preferences - Chevron has made five attempts to press the United States Trade Representative to recommend to Congress that
Ecuador's trade preferences be dropped, most recently in July 2010. Their lobbyist? Mickey Kantor.iii
Kantor was Clinton's US Trade Representative from 1993-1997.
According to Wikipedia, "An advocate of free trade, Kantor, as Trade Representative, led U.S. negotiations that created the World Trade
Organization (WTO), such as the Uruguay Round, and North American Free Trade Agreement (NAFTA). He also engaged in organizating the
Miami Summit of the Americas and three meetings of the Asia-Pacific Economic Cooperation, including the U.S.-hosted First Leaders'
Meeting."
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US-Ecuador Bilateral Investment Treaty
In 1993, the US and Ecuador signed a bilateral investment treaty. The treaty went into force in 1997iv
“BITs: Bilateral Investment Treaties are bilateral agreements typically between a rich and poor country, which establish rights and protections
for investors and a system to enforce those rights. There are currently more than 1,000 BITs in effect or under negotiation. Some of these BITS
contain NAFTA-style investment provisions, such as the right for corporations to sue government directly if they feel their profits are being
undermined. For example, a U.S. - based company Bechtel Corporation (which is also incorporated in Holland) is currently using a BIT
between Holland and Bolivia to demand $25 million in compensation from Bolivia over alleged “future lost profits.” The company claims that
when residents of a Bolivian city demanded that their water system be returned to public control (after Bechtel’s World Bank-facilitated
privatization of the Cochabamba water system resulted in prices increase up to 300%), Bolivia violated Bechtel’s investor rights under the
Bolivia-Holland BIT.”v
Bechtel eventually agreed to settle as a direct result of a grassroots pressure campaign.vi
“In December 2006, and again in September 2009, Chevron filed an international arbitration claim before the Permanent Court of Arbitration at
the Hague, alleging that the Government of Ecuador violated an US-Ecuador bilateral investment treaty. Chevron alleges that the Government
of Ecuador has violated international law by unduly influencing the judiciary and thereby compromising the judiciary's independence. In
March 2010 the arbitration panel ruled that Ecuador's government had violated the bilateral investment treaty and international law by delaying
rulings on the commercial dispute currently pending in Ecuador's courts.” vii
Ecuador was found liable for $700 million dollars to Chevron in the December 2006 case. This is a separate case from the indigenous rights
case (the September 2009 case) which is ongoing.viii In June, Ecuador asked the tribunal to nullify the $700 million dollar ruling.ix
To learn more about how extractive industries are using bilateral investment treaties in Latin America, read the Institue for Policy Studies'
April 2010 report “Mining for Profits in International Tribunals: How Transnational Corporations Use Trade and Investment Treaties as
Powerful Tools in Disputes Over Oil, Mining, and Gas” at http://snipurl.com/ipsbit.
Campaign Proposal
Amazon Watch's objectives:
“The campaign's three principal demands of Chevron are that the company:
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Fund and implement a major environmental clean-up
Compensate local communities for health and environmental impacts
Provide affected communities with real access to health care and potable water”x
TradeJustice could work for all these goals while simultaneously working to create discussion on Bilateral Investment Treaties and NAFTA
style free trade agreements that contain BIT-style investment rules. As part of its broader campaign disentangle itself from the exploitative
neoliberal system, Ecuador, in addition to defaulting on $10 billion dollars in odious debtxi, has expressed its intent to pull out of the World
Bank's International Center for the Settlement of Investment Disputes (ICSID)xii, the forum where the El Salvador-Pacific Rim case is
currently being heard.xiii All of this could be included in educational efforts to discuss how institutions advancing the neoliberal agenda (World
Bank/IMF/WTO/IDB) create suffering in the developing world and the campaign of resistance in Latin America to neoliberal policies.
Strategic Model
The Bechtel-Bolivia case presents an excellent model for victory in this case:
According to Food and Water Watch
“In Bolivia, South America’s poorest country, angry residents in Cochabamba kicked out Bechtel in 2000 after eight months of highly
problematic service and severe rate increases which left people unable to pay for water. Licking its wounds, Bechtel filed a $50 million lawsuit
(for claims of lost future profits) against the government of Bolivia in the World Bank court called ICSID (International Centre for the
Settlement of Investment Disputes). Bechtel had made investments for less than $1 million. The case was settled in 2005 giving a significant
breakthrough in a court where the corporations usually win. Faced with protests, barrages of e-mails, visits to their homes, and years of
damaging press, Bechtel executives finally decided to surrender, walking away with a token payment equal to thirty cents. This retreat sets a
very important global precedent. The international support from activists like you has helped to make this victory possible!”xiv
Constituents and Allies
Constituents
Several thousand people who signed cards at Crude screenings
Primary Allies:
US
Amazon Watch www.chevrontoxico.org
UNICEF http://www.unicef.org/infobycountry/ecuador_49994.html
Amazon Defense Coalition / Hinton Communications http://texacotoxico.org/eng/
Rainforest Action Network http://changechevron.org
Sierra Club http://sierraclub.org/
True Cost of Chevron http://truecostofchevron.com/
Local
Amnesty International http://www.amnestyusa.org/business-and-human-rights/chevron-corp/chevron-in-ecuador/page.do?id=1101670
Rainforest Relief http://rainforestrelief.org
Rainforest Foundation US http://www.rainforestfoundation.org/
First Voices Indigenous Radio http://www.firstvoicesindigenousradio.org/
Joe Berlinger and Associates (producers of Crude) http://www.crudethemovie.com/
Donizinger and Associates (lawyers in case) http://thechevronpit.blogspot.com/
Priya Ghosh (former Amazon Watch intern)
Han Shan (Amazon Watch campaigner on issue)
Judith Kimmerling (author of book Amazon Crude) http://www.sourcewatch.org/index.php?title=Judith_Kimerling
Woman who sells bracelets made by women in affected communities
Sierra Club NYC http://nyc.sierraclub.org/
Allies in Ecuador
Six Indigenous Communities
Pablo Fajardo (lawyer) http://www.mofilms.org/justicianow/index.html,
Amazon Defense Front http://www.texacotoxico.org/
Additional Allies
Activists working on issues around Chevron's misdeeds Australia, Burma, Iraq, Kazakstan, Nigeria, and the US.xv
True Cost of Chevron Participant Organizations:
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Amazon Watch
Asian Pacific Environmental Network
Black Warrior River Keeper
Burmease American Democratic Alliance
Coalition for a Safe Environment
Communities for a Better Environment
Cook Inletkeeper
CorpWatch
Crude Accountability
Direct Action to Stop the War
Director of the Organización Wayúu Munsurat
Dooda Desert Rock
EarthRights International
Environment California
Environment Texas
Environmental Rights Action
Filipino-American Coalition for Environmental Solidarity
Friends of the Earth Indonesia (WALHI)
Global Exchange
Gulf Coast Sierra Club
Iraq Veterans Against the War
Justice in Nigeria Now http://www.chevwrong.org/
Kebetkache Women Resource and Development Centre
Mpalabanda
Open Society Initiative for Southern Africa
Powder River Basin Sierra Club
Project for Ecological Awareness Building
Rainforest Action Network
Richmond Progressive Alliance
Surfrider Foundation
Texas Environmental Justice Advocacy Services
The Wilderness Society of Western Australia
Trustees for Alaska
Turtle Island Restoration Network
US Labor Against the War
West County Toxics Coalitionxvi
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Local Groups & Activists Concerned with Other Chevron Issues
NY Burma Roundtable http://nyburma.blogspot.com/
Omoyele Sowore, Sahara Reporters http://saharareporters.com/rs
Opponents
Pro-Chevron Bloggers, Chevron Lawyers and PR Flacks http://theamazonpost.com
Targets
Primary Targets
Chevron CEO and Board Members
2nd Level Targets
Chevron Investors and Business Associates
Tactics
- Research potential targets in NYC area, including Chevron investors and companies with business ties, using model of Stop Huntingdon
Animal Cruelty econo-activism approach
Organize Crude house parties: http://chevrontoxico.com/take-action/crude-house-party.html
- Organize Press Conferences and Rallies at Court Dates on Case
- Petition at Crude Screenings
- Organize educational forums with lawyers on case, Crude filmmakers, indigenous reps, etc.
- Protest any speaking appearances or other events in NY by board members or CEO
- Protest Chevron sponsored events (e.g. Uribe and Bachelet's talks last year)
- Collaborate with Institute for Policy Studies and Alliance for Responsible Trade to develop a broader campaign on extractive industries and
BIT Reform, possibly resulting in a TRADE Act stye bill for BITs
i “ChevronToxico.com: About the Campaign” http://chevrontoxico.com/about
ii “Chevron-Ecuador verdict unlikely until 2011 -judge” http://uk.reuters.com/article/idUKN3019553120100730
iii “Mickey Kantor Has An Ethics Problem” The Chevron Pit http://thechevronpit.blogspot.com/2009/04/mickey-kantorhas-ethics-problem.html
iv Ecuador Bilateral Investment Treaty http://www.state.gov/documents/organization/43558.pdf
v Public Citizen's Pocket Trade Lawyer: The Alphabet Soup of Globalization”, Lori Wallach, 2005.
http://www.citizen.org/documents/Pocket_Trade_Lawyer_January_2006_Final.pdf
vi “Bechtel” http://www.foodandwaterwatch.org/water/private-vs-public/corporations/bechtel/
vii “Business and Human Rights Resource Center: Case profile: Texaco/Chevron lawsuits (re Ecuador)”
http://www.businesshumanrights.org/Categories/Lawlawsuits/Lawsuitsregulatoryaction/LawsuitsSelectedcases/TexacoChevronlawsuitsreEcuad
or
viii “UPDATE 3-Chevron wins an Ecuador claim, awaits major ruling”
http://www.reuters.com/article/idUSN3015829020100331?type=marketsNews
ix “Ecuador Seeks To Nullify Ruling In Chevron Case”
http://www.nasdaq.com/aspx/company-news-story.aspx?
storyid=201007091912dowjonesdjonline000532&title=ecuador-seeks-to-nullify-ruling-in-chevron-case
x “Amazon Watch Campaign” http://chevrontoxico.com/about/amazon-watch-campaign/
xi “Ecuador defaults on foreign debt”, BBC, December 13, 2008 http://news.bbc.co.uk/2/hi/business/7780984.stm
xii “Impact of Ecuador ICSID Exit”, LATIN AMERICA ADVISOR Inter-American Dialogue, Latin Business Chronicle
June 30, 2009 http://www.latinbusinesschronicle.com/app/article.aspx?id=3502
xiii “Pacific Rim Mining Corp.: ICSID Tribunal Rejects Government of El Salvador's Preliminary Objection” Wall
Street Journal Marketwatch, Aug. 3, 2010
xiv “Bechtel” http://www.foodandwaterwatch.org/water/private-vs-public/corporations/bechtel/
xv http://truecostofchevron.com/report.html
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