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CBA wades into Chevron’s environmental legal battle

Oil workers clean up a contaminated pool in Taracoa December 10, 2007.

Guillermo Granja/REUTERS

The Canadian Bar Association is under fire from members of the environmental and aboriginal bar over its decision to intervene in a Supreme Court of Canada case in which Ecuadorean aboriginal people are seeking to enforce a $9.5-billion (U.S.) judgment against Chevron Corp. over pollution in the Amazon.

At a hearing Monday, the CBA national board upheld a decision taken this summer to submit a brief to the Supreme Court in the high-profile Chevron case, which has created a legal furor in North America with a U.S. judge declaring the Ecuadorean decision was won by "corrupt means."

In an e-mailed statement The Globe and Mail received Monday, the association said there are "foundational issues of corporate law" at stake, including the enforceability of foreign judgments in Canada and the nature of liability between parent companies and their subsidiaries.

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But some leading lawyers complained the intervention will raise the perception of bias and undermine the credibility of the legal profession in the aboriginal and environmental communities, while adding little to the high court's understanding of the legal issues at play, according to copies of e-mails and letters obtained by The Globe and Mail.

Represented by Toronto litigator Alan Lenczner, a group of villagers from Ecuador's Lago Agrio region want Canadian courts to enforce that Ecuadorean judgment by seizing assets from Chevron and its Canadian subsidiary. The Ontario Court of Appeal reversed a lower court decision which refused to order a hearing on the substance of the case; Chevron has appealed the jurisdictional question to the Supreme Court of Canada.

At issue is not only one of the largest environmental legal battles in the world, but a closely-watched precedent in determining whether Canadian courts have jurisdiction to enforce foreign judgments against the domestic subsidiaries of the foreign parents.

The CBA decided in July that it would intervene in the case, with the matter being handled by Blake, Cassels & Graydon LLP. Blakes has a major presence in the Calgary oil and gas business, and does legal work for Chevron, said one lawyer involved in the dispute, who asked not to be identified.

The heads of the environmental and aboriginal law sections said their groups were not consulted in the decision whether to intervene, contrary to usual CBA practice.

The association informed the critics that the board had decided that it was a matter of business law not aboriginal law, and that the jurisdictional issues involve "important principles to defend for all Canadian companies."

The CBA said its "decision to intervene does not mean we support Chevron or their actions in Ecuador in any way, shape or form," in its statement Monday. "This is about the development of important legal principles in corporate law that will affect the practice of law, and business in this country."

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But objecting lawyers said those issues will be fully covered by Chevron's defence team led by Clarke Hunter, a senior partner at Norton Rose Fulbright LLP in Calgary.

In a letter of complaint sent to the national board last week, the chairman of the aboriginal law section, Winnipeg lawyer Michael Jerch, noted the involvement of Blakes in handling the intervention.

"The decision of the CBA executive to retain Blakes to file the intervention for the CBA did not consider the real or perceived bias for using the same law firm that acts for Chevron in other matters," Mr. Jerch wrote.

"In all likelihood, the intervention of the CBA on this matter will deeply harm the perception of Canada's legal profession among Indigenous groups and civil society here at home and abroad," he added.

Mr. Jerch did not respond Monday to requests for an interview, while a spokesman for Blakes said the firm would not comment on the matter.

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About the Author
Global Energy Reporter

Shawn McCarthy is an Ottawa-based, national business correspondent for The Globe and Mail, covering a global energy beat. He writes on various aspects of the international energy industry, from oil and gas production and refining, to the development of new technologies, to the business implications of climate-change regulations. More


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