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Lago Agrio Case Pits International Human Rights Against International Commercial Law

The Lago Agrio plaintiffs’ increasingly complex struggle for justice against Chevron, and for a cleanup of their rainforest home, has taken a new turn. Last Thursday, the plaintiffs submitted a request to the Inter-American Commission on Human Rights, requesting precautionary measures to ensure that Ecuador enforces the multi-billion dollar judgment that its courts have rendered against Chevron. The plaintiffs argue that their rights to life, physical integrity, health, fair trial, and judicial protection are being placed in imminent danger as a dispute between Chevron and Ecuador  before a private investor-state arbitration panel—in which the plaintiffs themselves are not permitted to participate—threatens to impede the enforcement of that judgment. 

Why are the plaintiffs, who have won in the Ecuadorian courts, now going after the Ecuadorian government in the Inter-American Commission? The answer lies in the structure of international law, and the steps that Chevron has taken to abuse its processes and its principles.  

Since 2009, Chevron has sought to avoid paying for a cleanup by attacking the Ecuadorian judicial process outside of Ecuador. In addition to asking the U.S. courts to prevent enforcement of the judgment (which a U.S. appeals court recently refused to do), Chevron also appealed to a forum that was likely to be more hospitable to corporations: an international arbitration panel. A treaty between Ecuador and the U.S., known as a Bilateral Investment Treaty (BIT), allows U.S. investors in Ecuador to bring a dispute with the government to a panel of three private arbitrators, who are typically commercial lawyers who serve as arbitrators in a (very well-compensated) side business.  

Urging that the Ecuadorian judicial process was interfering with its rights as an investor corporation, Chevron has sought an order from the BIT panel requiring that Ecuador interfere in the judicial process, or indemnify Chevron for any amount the plaintiffs might be awarded at trial. It is notable that the Lago Agrio plaintiffs, the very individuals whose rights are in jeopardy, are not permitted to participate in these proceedings.  

Not surprisingly, Chevron has been successful in getting the BIT panel on its side. On January 25, 2012, the panel issued an “Interim Award on Interim Measures” in Chevron’s favor, asking that Ecuador “take all measures at its disposal to suspend or cause to be suspended the enforcement or recognition within and without Ecuador of any judgment against [Chevron Corporation] in the Lago Agrio Case.”

This past weekend, the arbitration panel heard Chevron’s arguments at a closed hearing in Washington D.C.; Chevron is asking for even stricter and more intrusive injunctive relief to prevent the judgment from being enforced. 

Now, the Lago Agrio plaintiffs have asked the Inter-American Commission to ensure that their fundamental human rights don’t become a casualty of the arbitration process between Chevron and Ecuador. This makes sense. Under the American Convention, it is the responsibility of signatory states to protect the fundamental rights of their citizens, including their right to life, integrity, health, and judicial process. These same rights of the 30,000 Lago Agrio plaintiffs are placed in jeopardy every day that they continue to live in, and grow sick from, the contamination to their environment they claim Chevron occasioned. It is the duty of the Ecuadorian state to protect them, and to ensure that they have a remedy against those who have caused them harm. Unless and until their judgment against Chevron is enforced, and their environment remediated, their lives and health remain at risk. Yet Chevron and the BIT panel are explicitly asking the state of Ecuador not to enforce the judgment.  

This is not the first time that corporations like Chevron have sought to abuse the investor-state arbitration process to undermine the human rights of individuals adversely affected by their operations. And it likely won’t be the last.  

But, while corporations like Chevron hope that appealing to arbitral panels will allow investor law to trump their human rights obligations, they do so in error. The “international law” to which they appeal is international commercial law created to help facilitate the resolution of private business disputes. This simply does not have the same status or weight as the extensive body of international human rights law created to protect the fundamental rights to life and judicial process. The Lago Agrio plaintiffs are asking the Commission to remind Ecuador of this undeniable fact. The arbitration panel should also be mindful of this body of law—although their job is to ensure fair treatment of investors, they need to do so in the context of international human rights law obligations.