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Chevron skillfully wiggled out of paying US$9.5 billion in environmental damages

Dec 03, 2023 ExxonMobil, News, Oil & Gas

A lesson for Guyana on new Stabroek Block beneficiary

– got lawyer thrown in jail and disbarred

Kaieteur News – American attorney Steven Donziger, known for his groundbreaking environmental litigation against oil company Chevron, ended up being disbarred and thrown behind bars. Donziger’s story is a sobering warning sign for Guyana, as the powerful supermajor finalizes its acquisition of Hess Corporation and establishes itself in Guyana’s ultra-lucrative petroleum industry.

Donziger gained prominence for his role in Aguinda v. Texaco, Inc., where he represented over 30,000 Ecuadorian farmers and Indigenous people against Chevron for environmental damages in Ecuador’s Lago Agrio oil field. Texaco, which merged with Chevron in 2001, was accused of spilling millions of gallons of crude oil and polluted wastewater over the course of nearly three decades, contaminating the ground and waterways of the Amazon Rainforest. The case concluded with an Ecuadorian court awarding a staggering US$9.5 billion to the plaintiffs. However, this victory was short-lived as Chevron withdrew its assets from Ecuador and initiated a countersuit against Donziger in the United States under the Racketeer Influenced and Corrupted Organizations (RICO) Act, accusing him of fraud, bribery, and racketeering

Controversially, U.S. District Judge Lewis A. Kaplan ruled that the Ecuadorian judgment was obtained through corrupt means and could not be enforced in the U.S. This ruling led to Donziger’s disbarment in New York in 2018, and in the District of Columbia in 2022. Kaplan’s judgment was primarily based on the testimony of Alberto Guerra, a former Ecuadorian judge, who alleged that Donziger bribed him to ghost-write the judgment against Chevron. However, Guerra later admitted to lying and changing his story multiple times during the trial.

Donziger’s legal woes intensified when he was placed under house arrest in August 2019 while awaiting trial on charges of criminal contempt of court. This charge stemmed from his refusal to surrender electronic devices during his appeal against Kaplan’s RICO decision. In July 2021, he was found guilty by U.S. District Judge Loretta Preska and sentenced to six months in jail in October 2021, a sentence he served beginning in October 2021.

The case against Donziger and his subsequent imprisonment have sparked widespread condemnation and concern. Twenty-nine Nobel laureates described Chevron’s actions as “judicial harassment.” Human rights campaigners echoed this sentiment, labeling Chevron’s legal strategy as a SLAPP (Strategic Lawsuit Against Public Participation).

The late Harvard Law School professor Charles Nesson had criticized the bribery and corruption charges as a means to protect Chevron from environmental accountability. Moreover, The Nation publication said documentation revealed extensive collaboration between Chevron, its law firm, and a private prosecutor in conducting the criminal contempt case against Donziger.

Despite an appellate court upholding parts of Kaplan’s ruling against Donziger, it vacated Chevron’s request for millions in damages and sanctions against Donziger. After spending 45 days in prison and a combined total of 993 days under house arrest, Donziger was released on April 25, 2022.

Chevron announced in October that it entered into a definitive agreement to acquire Hess, in an all-stock transaction valued at US$53 billion. Hess’ 30% interest in the Stabroek Block was a principal driver for Chevron, in this deal. The transaction is expected to close in the first half of 2024.

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