Indigenous

Chevron needs no costs protection from 'poor' Ecuadorians, court hears

Notion Chevron needs to be protected from legal costs absurd, says lawyer

Calgary 6155 Chevron oil gas downtown office

An Ontario judge has ordered a group of Ecuadorian tribes to put up $943,000 as a security deposit to cover Chevron's legal costs in case they lose. (David Bell/CBC)

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TORONTO -- Forcing a group of Ecuadorian villagers to come up with almost $1 million before they can pursue their claim against oil behemoth Chevron would deprive them of access to justice, Ontario's top court heard Wednesday.

The notion that Chevron, which makes about $1 billion every business day, needs to be protected from legal costs if the Indigenous Ecuadorians lose their fight is absurd, their lawyer said.

The villagers are asking the Canadian courts to make Chevron Canada pay a hard-fought US$9.5-billion award they won in Ecuador in 2013 over environmental devastation and the health problems caused. The Supreme Court has said the group's case can be heard here.

However, an Ontario judge has ruled Chevron Canada is a separate entity from its U.S.-based parent, and can't be held liable for the judgment. The Ecuadorians are appealing that ruling, but a judge has ordered them to first put up $943,000 as a security deposit to cover Chevron's legal costs in case they lose.

Alan Lenczner, who speaks for 37 of the 47 representative plaintiffs, told the Ontario Court of Appeal that the "prohibitive" costs order should be set aside so the appeal can proceed on its merits.

"How can it be just that these plaintiffs are denied an appeal?" Lenczner said. "An order for security for costs is an ultimate barrier preventing justice."

The villagers sued after Texaco, later bought by Chevron, polluted about 1,500 square kilometres of rain forest, fouling streams, drinking water and garden plots.

Both Ontario's Court of Appeal and the Supreme Court of Canada have recognized the region in which the "poor and vulnerable" Ecuadorians live has suffered extensive environmental pollution that seriously disrupted their lives.

Legal tactic

Chevron's request for a security deposit is a strategic legal tactic, said Lenczner, who recounted the "epic struggle" the Ecuadorians went through starting in 1993 to win their award in Ecuador.

The money, Lenczner said, would not go to the plaintiffs but instead would be put in trust and used to remediate the lands and water, and improve their health conditions.

"These people have nothing personally to gain other than good health," he said.

Chevron, Lenczner said, with 1,500 subsidiaries and $225 billion annual revenues, does not need the $943,000 security deposit from Ecuadorians, whose average income is about $20 a day.

Lenczner noted the initial court action was launched on behalf of 30,000 Ecuadorians in the United States. However, Chevron successfully argued for the case to be heard in Ecuador, and promised to abide by the ruling there. It is now reneging on that promise, Lenczner said.

Chevron argues the award was obtained fraudulently, citing rulings in the U.S. it says supports that contention. However, the American decisions did not invalidate the Ecuadorian judgment, Lenczner told the Appeal Court panel.

The Canadian action, begun in 2012, aims to have Chevron Canada pay the US$9.5-billion award on the basis that it has a "significant" relationship with its parent.

"I can show complete dominion and control," Lenczner said.

It cannot be the case that a company can hide behind a subsidiary to avoid its creditors, he said.

In ordering the costs security payment, the lower court judge had said the Ecuadorians provided no evidence that they couldn't come up with the cash. But Lenczner, who said he has taken the case on a contingency basis, said no one will fund the legal fight because they are afraid Chevron will sue them.

"What you've got to look at is justice, access to justice," Lenczner said.

Rock legend Roger Waters, who spoke in favour of the Ecuadorians outside court on Tuesday, took in part of the proceedings Wednesday wearing a jacket with "Resist." emblazoned on the back.

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