Everyone back to your stations.

If you happen to read a headline to the effect that “ZOMG Chevron won arbitration ruling against Ecuador!!!” please note that this ruling has nothing to do with the famous pollution case that’s been crawling along for the last 17 years, and is not – not - the related international arbitration claim filed by Chevron against Ecuador late last year. Reuters explains the whole thing very carefully and clearly.

This particular arbitration case dates back to the early 90s, when Texaco (later acquired by Chevron) presented claims against the government of Ecuador over “certain commercial disputes.” Chevron’s claims never received a ruling, so this three-year-old international arbitration case before The Hague came out in Chevron’s favor, to the tune of some US$700 million.

Though the ruling has nothing directly to do with the arbitration request Chevron filed against Ecuador in 2009 regarding the class action pollution lawsuit, it might have an impact in the sense that both arbitrations were brought through the Bilateral Investment Treaty that Ecuador had signed with the U.S.

So if Ecuador can lose one arbitration, I guess it could lose the other. But please. Different arbitrations.

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Correa had threatened to do this when the State Department report on Ecuador was first released. Now I guess Chávez egged him on sufficiently during their recent bilateral meeting that he’s pulling the trigger.

When these reports are thorough and more or less even-handed (like the lengthy one produced by China this year) they can be pretty damn interesting. After all, from its treatment of minor drug offenders, illegal immigrants, and “illegal enemy combatants,” to its invasion of other countries and use of trigger-happy private military contractors unaccountable to domestic courts, the U.S. has a lot to answer for.

So what’s the report going to look like?

I’ve ordered the foreign ministry… to prepare a report on the human rights situation in the United States and denounce the existence of political prisoners, five Cubans who received only a pantomime, a monstrosity of a trial.

The Cuban Five? Really? You have to go and beat that old, worn out drum? The poor, innocent Cubans who were also international spies? Aside from being tenuous, it’s not even Ecuador’s fight, and it completely misses the point of human rights reports, which is that they criticize countries for the way they treat their own citizens. Like, you know, when they jail journalists for insulting government officials.

Color me disappointed.

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Basically, Chevron is complaining that it is not getting due process in Ecuador, even though no ruling has yet been issued. After last week’s ruling, Chevron can take Ecuador to international arbitration at The Hague under the Bilateral Investment Treaty (PDF) it signed with the United States in 1997.

This is somewhat ironic, considering Chevron (then Texaco) fought hard when the lawsuit was first filed to move it to Ecuador, a move that a U.S. court granted. Now that it looks like it might lose in Ecuador (an independent expert has recommended the court reward a $27 billion settlement in the plaintiff’s favor), Chevron is arguing that these backward Latin American courts have no concept of the rule of law.

Guess they didn’t get what they  wanted from those backward Latin American courts.

How will an international arbitration proceeding between Chevron and Ecuador affect a domestic class action lawsuit? It won’t, directly. Indirectly, however, if Chevron is able to win the arbitration, they will have a strong case for arguing in U.S. court against enforcement of any unfavorable ruling in Ecuador. This might be their strategy, according to Roger Alford at Opinio Juris. Also, there’s this:

My sense is that Chevron is bringing this action not only in an attempt to succeed on the merits of its due process claim, but also to send a signal to the Ecuadorian court that any future action that denies Chevron basic due process will be subject to international scrutiny. The Ecuadorian court now faces the unpleasant prospect of knowing that the Ecuadorian government may be on the hook financially for any improper judgment rendered against Chevron.

What I wonder is, in a small, poor, Latin American country, wouldn’t this threat in itself affect due process, in the other direction? I suppose this is the problem small countries face with these kinds of trade and investment treaties: In the end, even when foreign investors have committed gross negligence that has in all likelihood killed people, your whole domestic legal system must defer to the wisdom of three foreigners sitting on an arbitration board half a world away.

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(Image via Diedre Woollard.)

The problem with documentaries – especially issue documentaries – is that they go over the top, often mistaking haranguing for journalism (think Michael Moore). It is possible to be simultaneously an advocate and a journalist, but it is exceedingly difficult. So I was happy to find that Crude – a 2009 documentary on petroleum contamination in the Ecuadorian Amazon – manages to pull it off.

The film follows a legal team bringing a lawsuit against Chevron for environmental contamination in the Amazon dating back to the 1960s. The class-action lawsuit was filed in 1993 on behalf of 30,000 Ecuadoreans, and there has not yet been any ruling. For all the gory details, Vanity Fair published a comprehensive article on the battle in 2007.

Though it’s a pretty shocking case of a corporation hurting people in order to make money, the film does a great job presenting the arguments on both sides. Chevron’s arguments in its defense seems to go like this:

1. We cleaned everything up.
2. Even if we didn’t clean everything up, it’s not increasing cancer rates.
3. Even if it is increasing cancer rates, blame the State oil company that took over operations in 1992.
4. Even if the pollution predates 1992, Chevron (then Texaco) was operating as part of a consortium with the State oil company, so blame them too.

There’s got to be some Latin term to describe this cascading logical fallacy (if you cleaned everything up, why even bother arguing 2, 3, and 4?), but Chevron does have a point about the State oil company – PetroEcuador – and the State in general. Where was the Ecuadorian government when all this was happening?

Not to say that this should let Chevron off the hook. Certainly not. But the majority of the world’s oil is extracted by State-owned oil companies, especially in Latin America (PetroEcuador, PdVSA, Pemex). So much the worse considering that the State and its dependencies are supposed to be serving the people. They should be next to the chopping block.

Anyway, here’s a good “60 Minutes” piece on the Chevron controversy:

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Uprising, take seven.

Now in power for a little more than three years, President Rafael Correa’s administration is getting a little long in the tooth by Ecuadorean standards. In the last 18 years, only one Ecuadorean president has made it all the way through his four year term, and none of the other presidents out of the eight (!) that served during that time period made it through three years.

So it might be significant that the powerful indigenous organization Confederation of Indigenous Nationalities of Ecuador (CONAIE) is breaking off negotiations with the government and calling for a “plurinational uprising.” Reports Dow Jones Newswire:

Delfin Tenesaca, head of the Ecuadorian Confederation of Kichwa Nationalities, or ECUARUNARI, a CONAIE arm, told Dow Jones Newswires that indigenous people “will start to implement a plurinational state with our own rules in each of our communities.”

…

The CONAIE played an important role in the overthrow of former presidents Abdala Bucaram and Jamil Mahuad in the late 1990s and in 2000.

Yikes. According to the statement published on CONAIE’s Web site, they are very, very upset with the government for furthering the kind of hydrocarbon-centric policies that have set off similar national uproars in the past:

The government of the “citizen revolution” and “21st century socialism” has not changed the colonial state and continued to strengthen the neo-liberal capitalist model, betraying the people of Ecuador, the communes, the communities, the villages, the indigenous nationalities, the Afro-Ecuadoreans, and the coastal peoples.

In the end, this is the truest thing anyone’s ever said of the Chávez’-led “socialism” that swept through South America in the 2000s. The “revolution” is all talk, based as it is on the extraction of hydrocarbons, which is the most capitalist thing there is.

I hope Correa is wearing a helmet.

(Note: The Dow Jones article is behind a nasty paywall. Another story on the breaking off of dialogue can be found in the Latin American Herald Tribune.)

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