Villagers lose fight to have Chevron Canada pay US $9.5B

TORONTO • The Canadian subsidiary of U.s.-based Chevron Corp. cannot be held liable for a Us$9.5-billion award a court in Ecuador ordered against the parent firm in favour of Ecuadorean villagers, Ontario’s top court ruled Wednesday.

Even though the Court of Appeal expressed sympathy for the Indigenous villagers, it found ordering Chevron Canada to pay them in what it called a “tragic case” would amount to twisting laws.

“There can be no denying that, through no fault of their own, the appellants have suffered lasting damages to their lands, their health, and their way of life,” the Appeal Court said in its ruling. “Their frustration in obtaining justice is understandable.”

At the same time, the Appeal Court said, Canadian courts must decide cases based on the laws and jurisprudence in place in Canada.

“What is really driving the appellants’ appearance in our courts is their inability to enforce their judgment in the United States,” Justice William Hourigan wrote for the court. “(But) the appellants are asking us to radically alter our law.”

The legal struggle began in 1993 when 47 plaintiffs representing about 30,000 villagers sued Texaco, later bought by Chevron, for polluting 1,500 square kilometres of rainforest, fouling streams, drinking water and garden plots, and causing lasting and ongoing serious health effects.

The villagers won their Us$9.5-billion judgment in Ecuador in 2013 — an award Chevron insists was obtained fraudulent ly. However, becausechevron no longer had assets in the country, the villagers turned to courts in other countries, including the U.s. and canada.

The Canadian action, which began in 2012, aimed to have chevron canada pay even though the villagers alleged no wrongdoing against the company. Essentially, they argued Chevron Corp. should not be able to hide behind a subsidiary.

In an earlier ruling, Superior Court Justice Glenn Hainey found the parent and subsidiary were two distinct entities and the latter could not be held liable for the debts of the former. The Appeal Court agreed.

Chevron had no immediate comment but the villagers called the ruling “profoundly unjust.” In a statement, they said they would seek to appeal to the Supreme Court of Canada.

“We will continue to fight — not only because of the need to realize environmental justice in Ecuador, but because this decision allows wealthy corporations with creative lawyers to achieve absolute immunity by placing assets in shell companies,” Patricio Salazar, the plaintiffs’ lead Ecuadorean lawyer, said in a statement.