WEBVTT - The Secret Tribunal: Chevron vs. Ecuador 0:00:11.400 --> 0:00:16.160 Welcome back to Drilled Season five l Lucha Longla. When 0:00:16.160 --> 0:00:19.720 we left off, Chevron was strategizing some new ways to 0:00:19.760 --> 0:00:23.240 deal with the case in Ecuador. In September two thousand 0:00:23.239 --> 0:00:27.640 and nine, the company filed another international arbitration complaint against 0:00:27.680 --> 0:00:31.880 the government of Ecuador. This time, the Lago Agriolle case 0:00:32.000 --> 0:00:36.320 was named directly. Chevron claimed that by virtue of letting 0:00:36.320 --> 0:00:39.760 the case continue in its courts, Ecuador was violating its 0:00:39.840 --> 0:00:44.640 bilateral investment treaty with the United States. Specifically, it argued 0:00:44.680 --> 0:00:48.599 that the case violated various contracts between Texaco and the government, 0:00:48.840 --> 0:00:51.720 like that nineteen ninety eight contract that we keep hearing 0:00:51.760 --> 0:00:55.880 about where the government signed off on Texaco's remediation work. 0:00:56.640 --> 0:00:59.920 That complaint and the tribunals response has gone on to 0:01:00.160 --> 0:01:02.960 become a major part of Chevron's story about this case. 0:01:03.280 --> 0:01:05.480 So we're going to do something a little different today 0:01:05.800 --> 0:01:10.640 and do a bit of an explainer about international investment arbitration. 0:01:11.800 --> 0:01:16.160 Don't go this stuff sounds so boring, but I swear 0:01:16.200 --> 0:01:20.840 it's really really interesting and beyond that is just important 0:01:20.840 --> 0:01:23.440 to know, especially if you care about environmental issues or 0:01:23.520 --> 0:01:27.360 climate change. In broad strokes, this system gives companies a 0:01:27.400 --> 0:01:31.000 certain amount of legal cover that they claim enables them 0:01:31.040 --> 0:01:34.920 to confidently invest in foreign countries. There are currently more 0:01:34.959 --> 0:01:38.800 than twenty six hundred preferential trade agreements. Those can be 0:01:38.840 --> 0:01:42.760 free trade agreements, bilateral investment treaties, all kinds of different things. 0:01:43.520 --> 0:01:47.760 Most of them provide access to the investment arbitration system. 0:01:48.360 --> 0:01:52.440 Here's how it works when a so called investor state 0:01:52.680 --> 0:01:56.440 dispute arises. When a company wants to take government to 0:01:56.480 --> 0:02:01.440 task for something, companies can file formal complaints with international tribunals. 0:02:02.040 --> 0:02:04.640 There are a handful of these tribunals in the world, 0:02:05.000 --> 0:02:08.360 and a few different sets of guidelines for how they work. 0:02:09.040 --> 0:02:12.320 Important to note here companies can choose which tribunal to 0:02:12.360 --> 0:02:16.560 file with and which guidelines will govern the dispute. The 0:02:16.639 --> 0:02:21.760 tribunals pull together arbitral panels, generally consisting of three international 0:02:21.800 --> 0:02:25.280 law experts. These people are not judges, and the company 0:02:25.280 --> 0:02:28.760 that's complaining gets to pick one of them. The panels 0:02:28.760 --> 0:02:31.720 hear arguments and then decide whether the state in question 0:02:31.800 --> 0:02:35.320 has breached either a trade agreement or its own laws, and, 0:02:35.600 --> 0:02:39.799 if so, the monetary value of that breach. In some cases, 0:02:40.120 --> 0:02:43.919 the proceedings and relevant documents are made public, but in others, 0:02:44.120 --> 0:02:47.520 as in the Chevron Aquador case, they're kept completely secret. 0:02:47.720 --> 0:02:50.480 This system has been getting used more and more by 0:02:50.520 --> 0:02:54.520 companies that want to punish countries for passing environmental regulation. 0:02:55.200 --> 0:02:57.960 Just this month, a report from the International Institute for 0:02:58.080 --> 0:03:01.720 Environment and Development highlight how these investment treaties and the 0:03:01.840 --> 0:03:05.760 arbitration system might make climate action that much harder around 0:03:05.760 --> 0:03:08.400 the globe. Just think about it. Most of the world's 0:03:08.400 --> 0:03:11.560 coal plants and drilling sites are in countries that have 0:03:11.680 --> 0:03:14.440 signed on to agreements like these, which would enable fossil 0:03:14.440 --> 0:03:19.119 fuel companies to file complaints against governments whose emissions regulations 0:03:19.200 --> 0:03:24.079 interfere with their profits. Because so much of arbitral proceedings. 0:03:23.560 --> 0:03:26.280 Are kept secret, it wouldn't be a huge surprise if 0:03:26.280 --> 0:03:29.200 you've never heard of this, let alone how it works, 0:03:29.360 --> 0:03:32.480 or how much influenced the system has on global politics. 0:03:33.080 --> 0:03:35.880 So we called up Marcos Oriana, the expert we heard 0:03:35.880 --> 0:03:39.640 from last week, to guide us through the details. That 0:03:39.720 --> 0:03:42.600 conversation coming up right after this quick break. 0:04:00.200 --> 0:04:02.160 I'd love to have you start with sort of a 0:04:02.280 --> 0:04:06.880 general kind of what is international arbitration and how is 0:04:06.920 --> 0:04:11.000 it used by American companies sure. 0:04:10.840 --> 0:04:14.920 Sure At its core, international investment arbitration is a system 0:04:15.000 --> 0:04:19.960 that allows corporations to sue states for damages before panels 0:04:19.960 --> 0:04:26.480 of arbitraders. These days, most arbitration cases are brought under 0:04:27.200 --> 0:04:34.400 international treaties on investment protection. These instruments typically grant corporations 0:04:34.560 --> 0:04:39.040 the right to claim compensation in cases where the government 0:04:39.080 --> 0:04:43.279 takes a measure that breaches the standards of protection in 0:04:43.400 --> 0:04:48.200 the treaty and that results in economic laws for the investor. 0:04:50.040 --> 0:04:55.080 Arbitual tribunals are typically composed by three panelists. One of 0:04:55.120 --> 0:05:00.760 the panelists is pointed by the corporation and the claimant 0:05:01.800 --> 0:05:07.000 the in theory, as the World Bank and capital exporting 0:05:07.080 --> 0:05:15.599 countries often argue international investment arbitration helps foster economic development 0:05:15.800 --> 0:05:20.200 in developing countries, and they it does so by building 0:05:20.320 --> 0:05:24.640 confidence in foreign investors. It's argued that it is a 0:05:24.680 --> 0:05:29.279 tool to build confidence because foreign investors may be more 0:05:29.320 --> 0:05:33.680 inclined to do business in countries that may be unstable 0:05:33.880 --> 0:05:38.640 or risky if they have legal security in case something 0:05:38.760 --> 0:05:43.520 goes wrong. It is argued that these international financial flows 0:05:43.920 --> 0:05:49.240 capital investments does contribute to development because otherwise these countries 0:05:49.279 --> 0:05:54.640 would not receive this capital and would not benefit from 0:05:55.200 --> 0:05:59.320 the concessions the works, the infrastructure, or the business form 0:05:59.360 --> 0:05:59.960 foreign investor. 0:06:00.880 --> 0:06:01.640 That's the theory. 0:06:02.320 --> 0:06:07.719 In practice, however, corporations are using the arbitration system to 0:06:07.880 --> 0:06:12.360 discipline governments for their own interests, and this is often 0:06:12.400 --> 0:06:16.160 done at the expense of the public interest. How does 0:06:16.200 --> 0:06:18.560 it work or how does this happen? 0:06:19.200 --> 0:06:19.360 Well? 0:06:19.400 --> 0:06:24.400 In the arbitrations, corporations often argue that their expectations for 0:06:24.600 --> 0:06:29.560 profit have been frustrated, that they have been frustrated by 0:06:29.600 --> 0:06:33.600 the government that adopts a law or a decision or regulation, 0:06:34.360 --> 0:06:38.479 and they corporations demand to be compensated for the profits 0:06:38.600 --> 0:06:40.120 they expected to make. 0:06:41.480 --> 0:06:43.240 Since arbitral awards. 0:06:43.000 --> 0:06:47.280 Can run up to tens or hundreds of millions of dollars, 0:06:47.440 --> 0:06:52.320 and since even the legal fees involved the council and 0:06:52.400 --> 0:06:55.800 the costs of the arbitration it can run into the 0:06:55.920 --> 0:06:59.479 millions of dollars, this puts a lot of pressure on 0:06:59.600 --> 0:07:05.200 government officials to pass, to adopt, or even maintain public 0:07:05.240 --> 0:07:11.520 interest measures. Let's recall that many of the respondents states 0:07:11.560 --> 0:07:13.160 in these cases. 0:07:13.280 --> 0:07:14.520 They have limited budgets. 0:07:14.560 --> 0:07:17.960 There might be small developing countries that are that are 0:07:18.000 --> 0:07:23.360 facing a set of priorities, competing priorities, and they have 0:07:23.440 --> 0:07:30.400 to struggle to satisfy health and education, and times, food 0:07:30.520 --> 0:07:35.520 and water and environmental protection, and so talking about tens 0:07:35.920 --> 0:07:40.120 of millions of dollars of costs can really put a 0:07:40.240 --> 0:07:46.400 dent into the budget of a state. So those are 0:07:46.480 --> 0:07:51.200 the basic contours. The international investment arbitration can be described 0:07:51.760 --> 0:07:56.120 as a private system of adjudication that decides on the 0:07:56.160 --> 0:08:01.760 propriety of governmental measures, but it lacks the safeguards for 0:08:01.880 --> 0:08:08.960 accountability and transparency that characterized constitutional democracies governed by the 0:08:09.040 --> 0:08:12.960 rule of law. If we look back in time. In 0:08:13.000 --> 0:08:19.480 its origins, international investment arbitration came to replace colonial systems, 0:08:20.000 --> 0:08:26.040 colonial systems of extraction of domination when the former colonies 0:08:26.120 --> 0:08:32.080 acquired independence in the advent of decolonization, largely after the 0:08:32.200 --> 0:08:35.680 Second World War and the advent of the United Nations. 0:08:36.320 --> 0:08:40.679 The former imperial powers needed a legal system to protect 0:08:40.720 --> 0:08:46.280 the economic interests of their corporations, and international investment arbitration 0:08:46.640 --> 0:08:51.839 offered such an alternative. Today, in this current day of age, 0:08:51.960 --> 0:08:58.480 many in civil societies see the arbitration regime as yet 0:08:58.480 --> 0:09:03.319 another tool of corporate globalization. And this is because when 0:09:03.360 --> 0:09:07.520 governments regulate in the public interest, they become the targets 0:09:07.520 --> 0:09:12.520 of corporations that utilize the arbitration system to challenge those 0:09:12.600 --> 0:09:19.559 acts of authority. I would comment that this is particularly 0:09:19.640 --> 0:09:24.679 problematic in the age of climate change, because governments must 0:09:24.720 --> 0:09:30.520 reduce the emissions of greenhouse gases to face the climate emergency, 0:09:30.679 --> 0:09:36.240 the existential risks that flow from climate change, and of 0:09:36.280 --> 0:09:40.000 course this change in direction affects the expectations and the 0:09:40.040 --> 0:09:42.880 interests of the oil and gas of the oil and 0:09:42.880 --> 0:09:47.560 gas industry. One last thing at comment on is is 0:09:47.600 --> 0:09:54.440 the tension that in practice arises between international investment arbitration 0:09:55.120 --> 0:09:59.280 and international human rights. And this is because international law 0:09:59.640 --> 0:10:03.400 has to recognize how a clean and healthy environment is 0:10:03.480 --> 0:10:09.720 indispensable for the enjoyment of human rights. The investment arbitration system, however, 0:10:10.040 --> 0:10:14.280 puts an obstacle to the abilities of governments to take 0:10:14.400 --> 0:10:20.040 measures to transition to towards sustainable development and to secure 0:10:20.160 --> 0:10:24.280 respect and protection of the fundamental right to live in 0:10:24.320 --> 0:10:25.240 a healthy environment. 0:10:26.000 --> 0:10:28.680 I'd love to have you maybe give an example of 0:10:28.760 --> 0:10:31.560 how you know how a company might use this to, 0:10:32.600 --> 0:10:37.600 for example, take a country to court over an environmental 0:10:37.679 --> 0:10:41.000 law that they don't like. I don't know if you 0:10:41.040 --> 0:10:44.280 have like a good case example that you could share. 0:10:45.040 --> 0:10:50.160 Yeah, there are many examples of a state's passing environmental 0:10:50.240 --> 0:10:54.800 laws and then being taken to court by by corporations 0:10:54.800 --> 0:11:00.640 that are dissatisfied by those laws. One ext sample comes 0:11:00.640 --> 0:11:06.440 to mind concerns hazardous wastes in Mexico, so called the 0:11:06.480 --> 0:11:12.520 tech med case exemplifies the issues that arise in these arbitrations. 0:11:13.080 --> 0:11:18.040 And in that case, the hazardous waste confinement was located 0:11:18.760 --> 0:11:24.440 in the downtown rmo Ceo in Mexico, and the government 0:11:25.280 --> 0:11:31.080 was concerned and the people around the confinement were concerned. 0:11:30.440 --> 0:11:33.360 That the trucks. 0:11:34.320 --> 0:11:37.720 Going day and night in and out of the confinement 0:11:37.760 --> 0:11:41.599 with these hazard is wastes were posing a risk to 0:11:42.520 --> 0:11:46.000 the environment and to the health of the population. The 0:11:46.160 --> 0:11:51.360 company in question began to enlarge the confinement without having 0:11:51.600 --> 0:11:57.480 the necessary permits, and as a result, it was it 0:11:57.559 --> 0:12:02.160 was fined it was There were proceedings by the administrative 0:12:03.080 --> 0:12:09.080 agencies in Mexico and and the government began to study 0:12:09.120 --> 0:12:13.719 the possibility of moving this confinement outside of the of 0:12:13.760 --> 0:12:19.439 the of downtown area. Laws were passed that required that 0:12:19.800 --> 0:12:27.880 hazardous waste confinement be located from urban centers and the company. However, 0:12:28.000 --> 0:12:32.120 the negotiations with the company did not progress very far. Eventually, 0:12:32.200 --> 0:12:37.160 the government decided that it would not renew the concession 0:12:37.240 --> 0:12:41.800 for the operation of the hazardous waste confinement, and at 0:12:41.840 --> 0:12:46.360 that time the company took the government to court to 0:12:46.559 --> 0:12:55.240 the arbitral system, and that's when the arbitrators replace the 0:12:55.360 --> 0:13:01.079 role of domestic courts and begin to apply loosely defined 0:13:01.520 --> 0:13:07.120 treaty standards. They eventually considered that the corporation had an 0:13:07.200 --> 0:13:10.240 expectation to make a profit out of its investment it 0:13:10.280 --> 0:13:13.800 was a Spanish corporation, but that that profit had been 0:13:13.840 --> 0:13:17.640 frustrated by the measures that had been taken by the 0:13:17.679 --> 0:13:22.880 government to protect the people around the confinement. So also 0:13:22.920 --> 0:13:28.240 comment that in that specific case, the community mobilized. They 0:13:28.280 --> 0:13:34.280 began to protest the trucks against the illegal expansion and 0:13:34.320 --> 0:13:38.160 so forth, and so the government was also giving expression 0:13:38.720 --> 0:13:43.280 to the concerns and the interests of the people that 0:13:43.960 --> 0:13:49.520 were mobilizing. The tribunal, however, considered that those protests could 0:13:49.520 --> 0:13:53.240 not be foreseen and that they were they did not 0:13:53.840 --> 0:13:58.400 have a scientific basis. There was no evidence that hazardous 0:13:58.400 --> 0:14:03.439 waste had indeed compromised the health of the population and 0:14:03.800 --> 0:14:08.080 so doing. Then they declared that Mexico was liable to 0:14:08.160 --> 0:14:11.280 pay the company millions of dollars for the measures it 0:14:11.400 --> 0:14:15.840 had taken. So this again goes to show how in 0:14:15.880 --> 0:14:20.000 a domestic court, the balancing of the public health, the 0:14:20.080 --> 0:14:24.560 environmental issues, the human rights issues would have received a 0:14:24.640 --> 0:14:29.920 different light than the unidirectional character of the arbitration that 0:14:30.160 --> 0:14:34.960 focuses on the corporation and whether the government's measure has 0:14:35.640 --> 0:14:37.600 frustrated its expectations. 0:14:37.960 --> 0:14:41.760 Okay, so I know that you are not involved in 0:14:41.800 --> 0:14:45.040 this Chevron, Ecuador case, but as someone who knows this 0:14:45.120 --> 0:14:48.720 system well and has seen lots of different types of cases, 0:14:48.960 --> 0:14:52.080 I'm curious just when and if it popped up on 0:14:52.120 --> 0:14:56.280 your radar as an international arbitration kind of expert, and 0:14:56.720 --> 0:15:01.040 what your thoughts are on that case in particular, and 0:15:01.120 --> 0:15:02.640 how it kind of played out. 0:15:03.040 --> 0:15:06.320 This is a massive case. It's a massive case. The 0:15:07.400 --> 0:15:14.440 arbitration is just one of the forums where this case 0:15:14.480 --> 0:15:19.600 has been litigated. The arbitration itself spans thousands of pages, 0:15:20.360 --> 0:15:25.520 numerous awards and procedural decisions. Prior to the arbitration, there 0:15:25.520 --> 0:15:29.480 had been litigation in federal court in New York for 0:15:29.600 --> 0:15:33.320 nine years. There was also litigation in Lago Agree in 0:15:33.600 --> 0:15:40.280 Ecuadorian trial litigation, appellate court litigation, Supreme court litigation in Ecuador. 0:15:40.680 --> 0:15:45.120 The Ecuadorian Constitutional Court was also seized. There has been 0:15:45.160 --> 0:15:50.960 litigation in Argentina, Brazil, Canada, the Netherlands. The International Criminal 0:15:51.040 --> 0:15:55.680 Court received a letter as well, and they're still ongoing 0:15:55.720 --> 0:16:00.360 litigation by Chevron against the Plaintiff's Council in the United States. 0:16:00.360 --> 0:16:05.280 So that's perhaps one first observation about how broad and 0:16:05.400 --> 0:16:09.240 how complex the massive and it goes to show how 0:16:09.280 --> 0:16:13.600 difficult it is to hold a big oil company accountable 0:16:13.800 --> 0:16:17.840 for environmental harm. Chevron has spent hundreds of millions of 0:16:17.840 --> 0:16:20.680 dollars in legal fees. Those moneys could have been used 0:16:20.680 --> 0:16:24.520 to prevent environmental harm or to clean up the pollution. 0:16:25.040 --> 0:16:28.200 How does it compare to other cases, Well, one thing 0:16:28.240 --> 0:16:35.360 I would notice that the arbitral system is opaque. It is 0:16:35.520 --> 0:16:39.080 known for its lack of transparency. This is a big 0:16:39.160 --> 0:16:44.280 problem because the arbitrations, as we were discussing, they involve 0:16:44.360 --> 0:16:49.680 the public interest, They involve the scrutiny of public law measures, 0:16:49.880 --> 0:16:53.880 and so they should be heard under the safeguards of transparency. 0:16:53.920 --> 0:16:58.480 And accountability that characterize due process and the rule of law. 0:16:59.000 --> 0:17:05.159 But these arbitrations often are conducted behind closed doors, without 0:17:05.280 --> 0:17:10.919 the public having access to the proceedings. That being said, however, 0:17:11.320 --> 0:17:17.440 in some cases, high profile cases involving environmental protection measures, 0:17:17.920 --> 0:17:22.359 the arbitrations have opened up and they have allowed for 0:17:22.480 --> 0:17:26.960 public hearings and they have allowed for the public to 0:17:27.080 --> 0:17:31.600 present so called amicus courier briefs. This is the Latin 0:17:31.720 --> 0:17:36.280 term for a written brief that presents a perspective that 0:17:36.359 --> 0:17:39.520 may not have been developed by the disputing parties and 0:17:39.560 --> 0:17:42.960 that is helpful for the tribunal to receive. 0:17:44.000 --> 0:17:44.680 In this case. 0:17:44.720 --> 0:17:48.959 However, in the Chevron, Ecuador case, hearings were held behind 0:17:49.000 --> 0:17:52.480 closed doors. Civil society was not allowed to intervene as 0:17:52.520 --> 0:17:56.880 sami ki, and from that angle, the outcome in favor 0:17:57.200 --> 0:18:01.600 of Chevron is not surprising. But all that said, however, 0:18:01.800 --> 0:18:07.399 the outcome is surprising in some aspects. And one of 0:18:07.440 --> 0:18:11.240 the aspects that I think is has to some degree 0:18:11.320 --> 0:18:15.360 startled a number of observers is the far reaching. 0:18:15.760 --> 0:18:19.400 Character of the awards, and this. 0:18:19.359 --> 0:18:24.040 Is because the the arbitration system is often sold to 0:18:24.400 --> 0:18:29.919 policy makers and to the public as one of simple 0:18:30.000 --> 0:18:33.960 compensation for laws. The bottom line, it is argued, is 0:18:34.040 --> 0:18:39.119 that if a foreign investor suffers economic harm because of 0:18:39.440 --> 0:18:43.440 something that the government did, then it should be compensated. 0:18:43.560 --> 0:18:47.800 And the example of the caricature even that's often presented 0:18:47.920 --> 0:18:53.440 is a corporation owns a mind that is expropriated by 0:18:53.480 --> 0:18:57.840 a military junta that gives the property to the to 0:18:57.920 --> 0:18:59.760 the nephew. 0:18:59.480 --> 0:19:00.960 Of the general and power. 0:19:01.440 --> 0:19:06.000 Then of course the company should receive compensation. But that's 0:19:06.240 --> 0:19:09.520 not what's going on. That's not what went on in 0:19:09.560 --> 0:19:13.720 this case, and not generally what's going on in the field. 0:19:14.359 --> 0:19:18.199 In this case, the panel, the arbitual panel, crafted a 0:19:18.320 --> 0:19:21.919 range of remedies that go well beyond the issue of 0:19:22.000 --> 0:19:29.560 compensation for laws. Directed Ecuador to preclude enforcement of the 0:19:29.680 --> 0:19:35.520 judgment of its national courts. So preclude enforcement that shows 0:19:35.680 --> 0:19:41.280 how deep this system penetrates the sovereignty of the state. 0:19:42.320 --> 0:19:46.679 The panel also declared that Ecuador would be liable to 0:19:46.920 --> 0:19:51.800 Chevron for any recovery that the plaintiffs in the Lago 0:19:51.840 --> 0:19:57.800 Agrio litigation managed to obtain. So, in other words, if 0:19:59.720 --> 0:20:03.679 if the Lago Agrio plaintiffs are able to enforce the 0:20:03.840 --> 0:20:08.439 judgment rendered by the Ecuadorian courts. In some jurisdiction around 0:20:08.480 --> 0:20:13.600 the world where they can find Chevron's assets, Ecuador would 0:20:13.680 --> 0:20:19.240 be liable to Chevron for any recovery that the plaintiffs make. 0:20:19.920 --> 0:20:20.240 Wow. 0:20:20.600 --> 0:20:24.800 Yeah, it is not just an award that typically that 0:20:24.880 --> 0:20:27.439 the state has adopted Measure X. 0:20:27.560 --> 0:20:29.080 This measure has caused. 0:20:29.400 --> 0:20:35.280 Why harm and we order the tribunal orders the state 0:20:35.400 --> 0:20:39.440 to pay fifty million dollars to the company. That's not 0:20:39.640 --> 0:20:44.159 what's what's happening here. So one of the things that 0:20:44.200 --> 0:20:49.000 this shows is that international investment arbitration is not just 0:20:49.080 --> 0:20:55.160 about money. It is foremost about governance, Who takes decisions 0:20:55.480 --> 0:21:00.360 and for whom, who benefits from those decisions. That sense, 0:21:00.359 --> 0:21:04.720 it is a system that removes the scrutiny of governmental 0:21:04.800 --> 0:21:08.159 measures from courts of law and places it in the 0:21:08.200 --> 0:21:12.560 hands of three arbitrators. In this specific case, one of 0:21:12.600 --> 0:21:17.240 the arbitrators often sits in arbitral panels because he is 0:21:17.280 --> 0:21:22.080 appointed by corporations. Let's recall that typically there are three 0:21:22.200 --> 0:21:26.840 arbitrators and the corporation the foreign investor, gets to appoint 0:21:27.080 --> 0:21:29.840 one of the arbitrators. So in that sense, it was 0:21:29.880 --> 0:21:34.560 no surprise that this person would favor Chevron's interests. 0:21:34.840 --> 0:21:37.200 The other two arbitrators. 0:21:36.640 --> 0:21:40.600 One a commercial lawyer who recently passed away and so 0:21:40.760 --> 0:21:44.919 may he rest in peace, and the other an international 0:21:45.119 --> 0:21:48.920 law professor. So I think it's fair that we can ask, 0:21:49.600 --> 0:21:55.280 can we expect two white males sitting thousands of miles 0:21:55.320 --> 0:22:00.240 away from the lands polluted by Texaco to appreciate the 0:22:00.320 --> 0:22:05.000 significance for the indigenous peoples that lived in those territories 0:22:05.560 --> 0:22:09.880 of the environmental destruction that Texaco cost in the nineteen 0:22:10.000 --> 0:22:13.720 seventies in Ecuador. I think that their decision shows that 0:22:13.840 --> 0:22:17.080 they did not. They did not so appreciate the significance 0:22:18.359 --> 0:22:22.480 that the arbitrator simply focused on Chevron and its narrative 0:22:22.880 --> 0:22:27.040 in disregard of the environmental and human rights calamity caused 0:22:27.040 --> 0:22:31.080 by Texaco, and to be fair Texaco and Petro Ecuador, 0:22:31.400 --> 0:22:35.960 I think that the disregard for this calamity shows the 0:22:36.080 --> 0:22:41.080 unidirectional character of the investment arbitration regime, a regime that 0:22:41.200 --> 0:22:46.440 focuses on the corporation's interests and its narrative and does 0:22:46.520 --> 0:22:52.040 not regard the environment and human rights. Perhaps I could 0:22:52.359 --> 0:22:54.840 elaborate on an example to illustrate this point. 0:22:55.240 --> 0:22:57.000 Yeah, that would be great, And then I do want 0:22:57.040 --> 0:22:59.520 to have you talk about, you know, just how this 0:23:00.160 --> 0:23:05.200 undermines the Ecuadorian constitution and the right to a healthy environment, 0:23:05.280 --> 0:23:09.440 and I mean, like just in general undermines country's sovereignty. 0:23:09.520 --> 0:23:11.400 I mean, you've kind of made that point a few 0:23:11.400 --> 0:23:14.399 different ways already, but I'm curious for your thoughts on 0:23:15.080 --> 0:23:18.000 the Ecuadorian constitution in particular. 0:23:18.320 --> 0:23:22.280 That is exactly one of the issues that the arbitral 0:23:22.400 --> 0:23:28.000 Tribunal addressed. Now, in a democracy, one would expect, by 0:23:28.080 --> 0:23:33.960 design a constitutional question to be addressed by a constitutional court. 0:23:34.600 --> 0:23:39.440 But in this instance, there was an issue concerning contract 0:23:39.920 --> 0:23:44.240 between Texaco and the Ministry of Minds and Representation of 0:23:44.280 --> 0:23:48.719 the Government that raised this issue and the arbitration. So 0:23:48.800 --> 0:23:52.240 perhaps to step back, I think this is a good example. 0:23:52.280 --> 0:23:56.240 In one of their words, the arbitrators set out to 0:23:56.320 --> 0:23:59.399 interpret the right to a healthy environment in the in 0:23:59.480 --> 0:24:05.960 Ecuador's constitution. Chevron argued that it had been released from 0:24:06.080 --> 0:24:09.639 liability for collective claims under the right to a healthy 0:24:09.720 --> 0:24:14.280 environment by virtue of a release contract that had been 0:24:14.800 --> 0:24:19.280 concluded between Ecuador and Texaco. Texaco would carry out some 0:24:19.440 --> 0:24:24.040 remediation work in exchange of release for liability from the 0:24:24.080 --> 0:24:28.720 state and Petro Ecuador. But the scope of work in 0:24:28.760 --> 0:24:35.160 this contract was limited. This left sources areas of contamination unremedied. 0:24:35.680 --> 0:24:40.680 There's evidence that indicates serious shortcomings in the remediation efforts 0:24:40.720 --> 0:24:44.959 that were actually carried out. Despite all this, in nineteen 0:24:45.040 --> 0:24:49.760 ninety eight, Ecuador approved Texaco's works and released it from 0:24:49.840 --> 0:24:55.320 liability related to contamination from the oil operations. So this 0:24:55.480 --> 0:25:00.560 is the contract and the release that Chevron argued was 0:25:00.600 --> 0:25:04.679 an issue in this case and precluded the exercise of 0:25:04.800 --> 0:25:11.960 jurisdiction by Ecuadorian courts of claims concerning the collective dimensions 0:25:12.000 --> 0:25:14.399 of the right to a healthy environment, and so it 0:25:14.520 --> 0:25:20.480 asked the Arbitral Tribunal to declare so and declare that Ecuador, 0:25:20.600 --> 0:25:24.959 by allowing its courts to exercise jurisdiction, was violating the 0:25:25.000 --> 0:25:29.760 contract and the bilateral investment treaty between the United States. 0:25:30.640 --> 0:25:31.240 Ecuador. 0:25:31.680 --> 0:25:37.280 The tribunal approached this and despite the pollution was not 0:25:37.440 --> 0:25:42.000 cleaned up. Despite that environmental problems were not resolved, the 0:25:42.160 --> 0:25:46.440 tribunal concluded that the contract between Ecuador and Texaco meant 0:25:46.800 --> 0:25:50.280 that Chevron could not be sued on the basis of 0:25:50.359 --> 0:25:53.200 the collective dimensions of the right to a healthy environment 0:25:53.280 --> 0:25:58.800 in the Ecuadorian Constitution. The tribunal considered that the government 0:25:59.080 --> 0:26:04.160 could dispose and did in fact dispose of this constitutional 0:26:04.280 --> 0:26:10.760 right by a contract. Now, I would comment that the 0:26:10.800 --> 0:26:16.280 tribunal's decision is not compatible. It doesn't comfort with international 0:26:16.760 --> 0:26:19.679 human rights law, or with constitutional law for that matter. 0:26:20.359 --> 0:26:26.080 This is a largely a commercial frame looking at contract 0:26:26.160 --> 0:26:32.320 law to approach what are public law issues of constitutional 0:26:32.400 --> 0:26:38.840 human rights theory. A state cannot contract human rights away. 0:26:39.359 --> 0:26:44.040 Human rights are inalienable. They belong to humans, They belong 0:26:44.160 --> 0:26:48.679 to the people. The state cannot approgate human rights, least 0:26:48.720 --> 0:26:52.520 of all by contract. The notion that a country and 0:26:52.560 --> 0:26:56.359 a corporation can, in a contract deprive the people of 0:26:56.400 --> 0:26:59.960 a state from a basic human right can only be 0:27:00.160 --> 0:27:05.000 understood by reference to the arbitration as a system for 0:27:05.119 --> 0:27:09.600 advancing corporate interests at the expense of the rights of peoples. 0:27:10.480 --> 0:27:11.280 Yeah wow. 0:27:11.960 --> 0:27:19.679 A footnote to that analysis is that in the litigation 0:27:20.000 --> 0:27:26.919 in Ecuador, after Chevron was unsuccessful before the Supreme Court, 0:27:27.160 --> 0:27:33.520 it seized the Constitutional Court, the Ecuadorian Constitutional Court, arguing 0:27:33.680 --> 0:27:38.120 a denial of due process and other constitutionally protected rights 0:27:38.240 --> 0:27:41.879 and it was complaining about the exercise of jurisdiction by 0:27:41.960 --> 0:27:48.239 Ecuadorian courts. But the Constitutional Court plainly concluded that in 0:27:48.280 --> 0:27:52.560 a contract, the government cannot dispose of rights it does 0:27:52.640 --> 0:27:53.120 not have. 0:27:54.119 --> 0:27:57.840 The right to a healthy environment is a right of all. 0:27:57.720 --> 0:28:02.520 Persons subject to ecuador jurisdiction, the court recent and the 0:28:02.560 --> 0:28:07.199 government cannot contract it away. What are some of the 0:28:07.240 --> 0:28:12.000 implications of this. One could comment that it was expedient, 0:28:12.080 --> 0:28:16.320 perhaps too for the tribunal to interpret the right to 0:28:16.400 --> 0:28:20.080 a healthy environment in Ecuador's constitution in a manner that 0:28:21.280 --> 0:28:27.320 shielded Chevron from liability, that released it from any claims. Otherwise, 0:28:27.600 --> 0:28:30.399 the tribunal may have had to look at the environmental 0:28:30.400 --> 0:28:35.919 realities in Ecuador, the lack of remediation, the contamination, the 0:28:36.040 --> 0:28:40.560 ongoing contamination, the fact that dirt was moved from pits, 0:28:40.640 --> 0:28:44.360 that certain pits that had been covered up are still leaking, 0:28:44.600 --> 0:28:50.000 that communities, many communities are still without adequate food, without 0:28:50.080 --> 0:28:56.440 adequate water, and so forth. That is something that Chevron 0:28:56.720 --> 0:29:00.720 has worked very hard to avoid in this case. And 0:29:00.760 --> 0:29:03.400 I would say that Chevan has largely succeeded. It has 0:29:03.520 --> 0:29:09.320 largely succeeded in making this case story about the plaintiff's lawyers, 0:29:09.720 --> 0:29:14.240 about Stephen Donziger. But I think it's important not to 0:29:14.320 --> 0:29:18.200 forget what this case is really about. If we recall 0:29:18.320 --> 0:29:23.040 the indigenous peoples in the Amazon, the Warani, the Kofan 0:29:23.200 --> 0:29:27.200 other indigenous peoples, they lived in a pristine rainforest environment 0:29:27.720 --> 0:29:31.920 prior to the arrival of Texaco and the oil boom 0:29:32.440 --> 0:29:36.480 in Ecuador in the nineteen sixties and early nineteen seventies. 0:29:37.800 --> 0:29:43.160 The extraction of oil by tex and Petro Ecuador was 0:29:43.280 --> 0:29:47.160 without regard to the protection of the environment. It was 0:29:47.240 --> 0:29:51.280 without regard to the rights of affected indigenous peoples. First 0:29:51.320 --> 0:29:54.040 operated by Texaco as I mentioned, and then taken over 0:29:54.120 --> 0:29:59.960 by Petrocador, oil operations severely impacted indigenous people's traditional land. 0:30:01.280 --> 0:30:06.920 The oil boom in Ecuador has imposed loss of life, health, territory, 0:30:07.080 --> 0:30:13.320 and culture. Indigenous peoples have not received reparation for the 0:30:13.400 --> 0:30:18.520 violation of their rights. The arbitraal Trade you know, concluded 0:30:18.760 --> 0:30:22.040 this was beyond their mandate and therefore it was not 0:30:22.360 --> 0:30:26.280 their problem. It is not surprising. This is not surprising 0:30:26.920 --> 0:30:33.200 as international investment arbitration focuses on whether the government has 0:30:33.240 --> 0:30:36.560 wronged the corporation, but not on the environmental damage that 0:30:36.680 --> 0:30:40.920 may have been caused by that corporation. This imbalance is 0:30:40.960 --> 0:30:48.480 creating deficiencies in the international legal system, and this award 0:30:48.800 --> 0:30:51.080 is an example of that. 0:30:51.840 --> 0:30:54.560 Can you explain sort of what happens in a case 0:30:54.600 --> 0:31:00.000 like this where the international arbitration panel is basically saying, 0:31:00.560 --> 0:31:04.880