Case studies

🔎 Chevron and Texaco in Ecuador

The ongoing struggle by Indigenous communities of the Ecuadorian Amazon to hold Chevron accountable for decades of environmental devastation and human rights abuses provides a profoundly emblematic case highlighting the need for binding international law that prevents corporate impunity and holds polluters liable. Despite numerous legal attempts spanning decades and several international jurisdictions, Chevron continues to successfully avoid being held liable for the corporation’s irreparable harm that continues to plague the Amazon.

Indigenous communities and small farmers within the Amazon have been experiencing problems for decades, after Texaco (now Chevron) began drilling for oil on the homelands of Indigenous communities in Ecuador in the mid-1960s.[1] In an effort to maximize profit, the corporation knowingly disregarded standard environmental protections and waste regulations, dumping billions of gallons of toxic wastewater into rivers -- polluting groundwater and destroying farmlands.[2][3][4]

The corporation’s operations and pollution over the course of two decades caused direct and irreparable harm to the health and lives of more than 30,000 people in multiple communities.[5] Multiple peer-reviewed studies have even found an increased risk of cancer in the area.[6] In response to the abuses, those affected formed the Unión de Afectados y Afectadas por las Operaciones Petroleras de Texaco, or Union of the People Affected by Texaco (UDAPT), to mount a sustained legal challenge to hold the corporation liable for its impacts on these communities.[7] UDAPT affirms that the company disposed of nearly 650,000 barrels of crude oil and more than 16 billion gallons of wastewater in the rivers and soils of the Amazonian jungle, exacting long-term health impacts such as high rates of cancers, birth defects, miscarriages, and respiratory ailments, among other chronic health conditions.[8][9][10] And according to Pablo Fajardo, a lead attorney for UDAPT, at least “2,000 people have died from cancer due to toxins and polluted water and air."[11]

In 1993, UDAPT filed a lawsuit against the corporation in the United States as a key legal strategy to hold the corporation accountable for its actions, seeking environmental remediation and reparations for the damages caused. The corporation (then Texaco) requested that the legal proceedings be moved to a provincial court in Ecuador, which in 2011(after nearly two decades of litigation) ruled in favour of UDAPT and sentenced Chevron-Texaco to ultimately pay US $9.5 billion to those affected communities.[12] And despite enormous legal challenges and appeals by the corporation, the judgement was upheld against Chevron by the highest judicial authorities in the country. Despite the judgment retaining the status of one of the largest imposed on an oil corporation, no financial damages have been paid to the plaintiffs.[13]

During the UDAPT trial, Chevron also sued the country in international courts with the aim of undermining the legal proceedings and judgement in Ecuador while seeking financial compensation.[14] In the midst of the corporation’s aggressive legal tactics, Chevron began to withdraw all of its assets from Ecuador and fled the country to avoid paying for damages.

The corporation even resorted to utilizing arbitration under a bilateral investment treaty between Ecuador and the U.S. to receive favourable decisions in an attempt to avoid paying the fine levied in Ecuador.[15][16] During these proceedings, the corporation argued that the government of Ecuador should have stopped the trial of Indigenous communities and peoples, known as Lago Agrio. The corporation asserted that it had been released from its environmental remediation obligations by an agreement signed with the government and implemented in 1996.[17] As part of its legal strategy, and in a move that has been called “judicial harassment” by 29 Nobel laureates,[18] the corporation launched charges of corruption, bribery, and fraud during the Ecuadorian trials to both successfully get the original judgement annulled and be awarded hundreds of millions of dollars in costs to be paid by the Ecuadorian government.[19][20][21]

As part of the ongoing legal saga, the affected communities turned to foreign courts to enforce the Ecuadorian verdict and counteract Chevron’s attempts to utilize favorable international jurisdictions to escape accountability. Requests for international solidarity were made through courts in Brazil, Argentina, and Canada.[22]

Considering past attempts for accountability along with Chevron’s recent legal victory ordering Ecuador to potentially pay millions in legal costs, Pablo Fajardo states: “So, what legal guarantee, if any, do the victims of corporate crimes have? None whatsoever. Economic power is being imposed and companies are buying impunity.”[23]

At every turn, the people most directly impacted by Chevron’s devastation in the Ecuadorian Amazon have been denied access to any form of justice or compensation. The Chevron case illustrates how transnational corporations can escape liability and continue to act with impunity despite grave violations of international law. Chevron’s aggressive legal tactics across several international jurisdictions, use of trade agreements, efforts to pre-empt further liability, and attempts to shield the corporation with complex corporate structures show how far corporations will go to evade responsibility for their actions, even in the face of overwhelming evidence. The case reinforces the need for an international instrument that obligates corporations to respect human rights while offering communities remedy, reparation, and justice.[24]

One promising approach is the current development of a legally binding international instrument to do just that. In 2014, Ecuador endorsed and has been supporting the process of a binding treaty at the United Nations,[25] chairing the open-ended intergovernmental working group on transnational corporations (TNCs) and other business enterprises with respect to human rights (OEIWG).[26] This process follows a resolution adopted by the U.N. Human Rights Council, and advances a mandate to elaborate a legally binding instrument to regulate the activities of transnational corporations and other companies in International Human Rights Law.[27] Read more about this legally binding instrument and how to advance it here.

🔎 Big Tobacco Master Settlement Agreement

Recently, there’s been increasing attention to the parallels between the tactics—like spreading misinformation—of the tobacco industry and fossil fuel industry.[28][29] The tobacco industry was trying to prevent public health protections, while Big Polluters are attempting to delay climate action. Now, as legal action against the fossil fuel industry gains steam, the experience of how the tobacco industry was ultimately held liable in the U.S. sheds some helpful light for those seeking to do the same with the fossil fuel industry and other polluting industries.

The fossil fuel industry has spent vast amounts of money over decades to influence or silence public discussion on the effects of its products, in order to weaken political will for action.[30] This is not the first time that corporations prioritizing profits over people have caused great harm. The tobacco industry spent hundreds of millions of dollars misinforming the public about the health impacts of smoking in order to undermine tobacco control efforts.[31][32]

In the U.S., revelations regarding the tobacco industry’s extensive campaign to deceive the public about the public health risks of tobacco use came to light through the release of internal industry documents. In May 1994, a whistle-blower leaked internal tobacco industry documents to the press, making headlines in major newspapers across the country.[33] The media coverage of these documents—and the public outrage that followed—emboldened industry whistle-blowers to provide further evidence that the industry knew the harms its products caused.

Throughout that year, there was a slow drip of damning documents, which provided fodder for a steady stream of news stories. While the executives of seven tobacco corporations tried to head off action by telling U.S. Congress they didn’t believe nicotine was addictive, days later an internal document was released that revealed they were lying.

This prompted a sharp increase in legal action against the industry. The first class-action lawsuit against the industry was filed, and U.S. state attorneys general began suing the industry. Over the next 18 months, about a dozen states filed suit.

By the time of the Master Settlement Agreement in 1998, 46 states had filed lawsuits against Big Tobacco. The Master Settlement Agreement is the largest civil litigation settlement in U.S. history, and it resulted in the settlement of the state lawsuits, tobacco corporations paying the states billions of dollars in yearly installments, new restrictions on tobacco marketing, and the release of millions of internal industry documents that are publicly accessible.[34]

The impacts of these cases were enormous. As the lawsuits mounted, public opinion continued to shift. The Minnesota lawsuit went to trial and resulted in the release of millions of damning internal documents.[35] These documents—which made crystal clear the industry’s tactics to mislead the public and undermine public health policy—strengthened the resolve of policymakers all over the globe to take action, including delegates of the World Health Organization global tobacco treaty (Framework Convention on Tobacco Control),[36] who were emboldened to fight for strong corporate accountability measures in part because of the release of these documents.[37]

Today, this precedent-setting treaty is saving lives,[38] having paved the way for public health protections in countries all over the world. And in the end, the Master Settlement Agreement forced the tobacco industry to pay billions of dollars in damages in perpetuity. The money served as compensation for taxpayer money that had been spent in connection with tobacco-related diseases and the loss to local economies.

The recent cascade of lawsuits and actions against the fossil fuel industry clearly shows growing momentum to hold polluting industries liable for climate change damages.[39][40] And as the Master Settlement Agreement experience demonstrates, it is advantageous for public officials to advance industry investigations and seek to release internal corporate documents that provide evidence to back legal claims to hold corporations liable. As the U.S. tobacco industry investigations and resulting Master Settlement Agreement illustrate, the public disclosure and release of internal fossil fuel or other polluting corporations' documents would allow for the continued monitoring and exposure of wrongdoing. Applying this lesson would also help prevent corporate abuses from happening in the first place. The compounding visibility and exposure of these actions is ultimately critical in shifting the public climate and building the political will needed to advance climate justice globally.

🔎 Indian fishermen, the World Bank, and the U.S. Supreme Court

Budha Ismail Jam, et al v. International Finance Corporation is a landmark suit led by Indian fisherfolk and farmers residing in Gujarat, India. These fisherfolk and farmers filed civil action against the International Finance Corporation (IFC) for severely damaging the local environment, including the marine ecosystem, and the resulting negative impacts on the traditional way of life caused by the IFC-funded Tata Mundra Ultra Mega 4,150 MW coal-fired power plant. Over 4 million fisherfolk, comprising of over 870,000 families, make up India’s important fisheries sector.[41] Along the Gujarat coast, generations of fishing communities and farmers rely on and look after Gujarat’s natural resources—including fishing, farming, salt-panning, and animal rearing—for sustenance and economic production.

In April 2008, the World Bank Group’s IFC Board approved a US$450 million loan for the Tata Mundra Ultra Mega power plant owned by private firm Coastal Gujarat Power Limited[42]—a “high risk” project that has devastated marine life, water, farmland, and air—resulting in both physical and economic displacement of those who resided at the fishing harbors (known as “bunders”).[43][44] Though the legal battle spearheaded by fisherfolk and farmers to hold the largest global development institute in the world liable for its abuses is still ongoing, this case demonstrates the technical and legal loopholes under the 1945 International Organizations Immunities Act (IOIA). These loopholes allow international institutions, like the World Bank Group, to seek “absolute” immunity for the economic and environmental harms caused by the projects it finances.[43][44][45] Even so, this case is setting a historic precedent that can empower frontline communities harmed by corporate abuse to hold the international institutions that enable (and thus are complicit in) these abuses accountable.

The billions of dollars of funding for development projects provided predominantly to countries in the Global south by international financial institutions (IFI) through structural adjustment programs (SAPs)[46] come at a high social and environmental cost for frontline communities, maintaining and perpetuating environmental degradation, inequality, poverty, and dependency.[47][48][49][50][51] These SAPs are pushed on countries with lenient regulations that allow for higher foreign direct investments (FDI), with various regulations and standards often reduced or removed.[52] This case is important because it challenges the IFIs that continue to target Global South countries in the pursuit of maintaining the interests of corporations and the capitalist system.

After the Tata Mundra plant began its operations, Indian fisherfolk residing along the Gujarat coast experienced significant threats to vital marine resources, including fish stocks. Bunders located closest to the plant were most affected, with mass quantities of thermal pollution damaging the local marine ecosystem and the transportation of coal from the port to the plant causing substantial coat dust and fly ash to harm the health and wellbeing of both the environment and the local people.[53][54] Local fisherfolks reported several environmental and physical harms, including worsening respiratory problems that disproportionately affected the elderly and unusually warm weather presumably due to significant thermal plume from the plant’s outfall channel.[55] Despite the IFC’s binding commitments to ensure the project complied with the social and environmental conditions under the loan agreement and the IFC’s own Sustainability Framework,[56] the Tata Mundra plant caused unprecedented environmental and social damages to the ecosystems that once thrived in Gujarat.[57]

Though the IFC repeatedly reiterated that “the importance of electricity in ending poverty and building prosperity cannot be understated [and the] lack of electricity impairs opportunities for education, healthcare, clean water, freedom of movement, and jobs,”[58] the IFC’s loan caused significantly more harm than good. The IFC’s loan that financed the Tata Mundra plant’s construction caused direct and irreparable harms, including threats to health, destruction of property, loss of livelihoods, environmental destruction, and economic and physical displacement.[59][60] In response to these abuses, in 2011, Machimar Adhikar Sangharsh Sangathan (Association for the Struggle for Fisherworkers’ Rights, or MASS) filed a formal complaint to the IFC’s Compliance Advisor Ombudsman (CAO). The CAO published findings concluding that the IFC failed to take the necessary steps to ensure the applications of the loan agreement, as well as its failure to uphold its commitments to the local community.[61][62] In 2013, the CAO released an audit report and criticized the IFC’s role in the significant environmental and social harms surrounding the Gujarat coast. Despite these evidenced claims, the IFC ultimately rejected or ignored most of the CAO’s findings.[63][64]

In April 2015, on behalf of a group of local fisherfolk and farmers, EarthRights International (ERI) filed suit against the IFC in federal court in Washington, D.C., where the IFC is headquartered.[65] ERI represented the fishermen’s organization, MASS, and the Navinal Panchayat (village), a local government entity.[66] However, the IFC filed a motion to dismiss the complaint citing “absolute” immunity from suit in U.S. courts under the IOIA,[67] and the District Court judge upheld this notion. When the plaintiffs’ appealed,[68] the U.S. Court of Appeals for the District of Columbia Circuit affirmed the D.C. Circuit decision, upholding the IFC’s “absolute immunity” claim.[69]

On February 27, 2019, a historic, landmark 7-1 decision ruled that international organizations,[70] including the World Bank Group, can be sued in U.S. courts for its commercial activities.[71][72] Despite the judgement rendering a monumental precedent for accountability, the IFC filed a new motion to dismiss the case.[73] One year later, in February 2020, IFC’s motion to dismiss was granted and the judge ruled that “the suit is not, at its core, based upon activity—commercial or otherwise—carried on or performed in the United States.”[74] With the case continuing through U.S. courts, Budha Ismail Jam stated: “to save our livelihoods and protect our environment for future generations, we do not see any other way. We know we are up against a wealthy and powerful institution, but we are determined to make our voices heard. We will continue to seek justice.”[75]

As part of the ongoing legal battle for justice between fisherfolk and farmers against the IFC, this case fundamentally questions the scope of international institutions’ immunity to legal suits and to what extent international finance institutions such as the IFC may be held legally liable for the environmental, social, and economic harms it causes from projects it finances. If the IFC is held liable, this will set a precedent that will make it harder for international institutions, including the World Bank, to ignore their moral duty and obligation to protect people and the environment before profit. Justice for the fisherfolk and farmers of Gujarat will also prompt other communities to seek accountability and liability from the IFC.

This case is an important step to ensure financiers like IFIs are held accountable for the harms perpetuated by the projects they fund. However, there are significant challenges and shortfalls faced by the fisherfolk and the farming communities because legal recourse takes an extensive amount of time, resources, and energy to undergo. And despite the historic landmark decision by the U.S. Supreme Court, the Tata Mundra plant is still polluting the land and water in Gujarat, worsening the ecosystems as time goes on.

🔎 Primacy of the rights of nature

Ecuador, Bolivia, India, and New Zealand have all taken the initial step to formally recognize the rights of nature and to more firmly concretize the primacy of the rights of nature and human rights above all else. Here’s a snapshot of what this looks like in each country:

• Ecuador: Following a national referendum in 2008 and with respect to the wisdom of Indigenous cultures, Ecuador became the first country to change its constitution to recognize the rights of nature.[78] Now, under the Ecuadorian constitution, Pachamama (Mother Earth) has rights “to exist, persist, maintain, and regenerate its vital cycles, structure, functions, and its processes in evolution.” Through these constitutional changes, a person or community has the right to advocate on nature’s behalf. Pachamama here is not directly personified. Instead, it is the bearer of rights as “nature,” as distinct from “persons, people, communities, and nationalities” and “natural and judicial persons.”
• Bolivia: Though Bolivia was also guided by Indigenous wisdom, contrary to Ecuador the Bolivian legal recognition in 2010 of “Mother Earth” is instead in the nature of a “collective public interest.”[79] Bolivia did not directly grant legal personhood to nature, but instead revokes humans of their dominance over nature and makes them equal. So in this instance, all of nature—which includes humans—have the same “human” rights, and States should take the necessary measures to protect them. This approach takes a more holistic approach to law—protecting nature as a system instead of as individual components such as a river, lake, etc.
• India: After an Indian Supreme Court ruling in 2012, India now grants specific components of nature to be considered or granted rights, rather than protecting nature as a whole.[80] Animal Welfare Board of India v. A. Nagaraja allowed for the Indian constitution’s Article 21 right to life could be extended to non-human animals. Since, India’s Ministry of Environment and Forests declared cetaceans (a family of aquatic mammals such as whales and dolphins) to be “non-human persons” in 2012, allowing them to be protected against harm. And again in March 2017, an Indian court granted the rights of personhood to the Ganga River Basin.

• New Zealand: New Zealand also honored the Indigenous approach of taking a holistic view of the relationship between the humans and the natural world.[81] For example, Indigenous Maori tribes may treat a certain river as an ancestor. Such relationships are not just symbolic. This genealogy—or whakapapa—is central to how this tribe engages with the world. This way of respecting nature as family was reflected in law when the Whanganui River was granted legal personhood in 2014, shortly followed by the forest Te Urewera were granted legal personhood in 2014.

It is essential to note that in all four of these cases, establishing nature’s rights in these countries has not yet led to meaningful implementation that has palpably increased access to justice or advanced liability. In some cases, there are concerns that this measure, when taken in isolation and without implementation supported by additional measures in this roadmap, can give the appearance of championing justice and liability without actually doing so. It is also equally important that all actions taken to protect the rights of nature reinforce and support the rights of people, local communities (including peasants, fisherfolk, nomadic and rural peoples, Indigenous peoples, and collective rights rather than undermining one at the cost of the other. Read more here about how to establish the rights of nature in ways that advance accountability for polluting industries and deliver justice for people.