Chevron CEO Shows Rewards Of Standing Up To Green Bullies

CEOs often opt to settle suits brought by environmentalists and other third parties against companies all around the world. Chevron CEO John Watson just demonstrated the potential rewards of sticking things out and fighting for ultimate justice rather than kowtowing to the rabid complaints of extreme progressives wanting to stick it to “big oil.”

New York District Court Judge Lewis Kaplan recently handed down a decision overturning a $9.5-billion judgment against Chevron for its handling of the byproducts of its drilling for and production of oil in the Amazon rainforest. Amazon Watch and other environmental groups had accused the oil giant of creating a “toxic legacy” by dumping wastewater into the forest and then doing a poor job of cleaning it up after agreeing to do so.

Judge Kaplan ruled that the pollution judgment issued in Ecuador on behalf of rainforest dwellers in the country’s Lago Agrio area was procured by fraud, including bribing a judge and ghostwriting court documents. Environmental activists from around the world, especially the United States, were involved in the nefarious activities.

“The decision in the Lago Agrio case was obtained by corrupt means,” Kaplan said in an opinion that gave Chevron a sweeping victory. “The defendants here may not be allowed to benefit from that in any way.”

Chevron had been ordered to pay $19 billion to a group of farmers and fishermen by the Ecuadorean court. According to Bloomberg, the award was reduced to $9.5 billion on Nov. 12 by the Ecuadorean National Court of Justice, the nation’s highest tribunal. That amount is equal to about half of Chevron’s 2013 profits.

Orchestrated by American activist environmental attorney Steven Donziger, the villagers had said Texaco, later acquired by Chevron, contaminated an oil field in northeastern Ecuador between 1964 and 1992.

But regardless of whether there is pollution at the site, Kaplan said, Donziger cannot use a “Robin Hood” defense to justify illegal behavior, Reuters said. Kaplan’s decision bars Donziger and the villagers from enforcing the Ecuadorean ruling in the United States. It may also give Chevron legal ammunition in other countries where the plaintiffs could try to go after Chevron’s assets.

And make no doubt about it: The environmental “watch-dog” interests behind this attack on Chevron intend to continue their fight against the company in other jurisdictions outside the United States. But at least they’ve run into an opponent, in Chevron, that won’t be rolling over for them.






  • Get the CEO Briefing

    Sign up today to get weekly access to the latest issues affecting CEOs in every industry
  • upcoming events