Chevron in Argentina: Hoping for a breakdown in division of powers?

The Ecuador plaintiffs seeking $19 billion from Chevron Corp. just sent out an interesting little press release, pointing out this article in La Nación in Argentina. I think it’s worth noting. Why? Because most of the pro-corporate types who watch South America point to the breakdown in division of powers between courts and executive as being a bad thing. And here, La Nación says that a big corporation –Chevron– will only move ahead with its new oil plans if judges rule a particular way on a court case. That could set up an interesting situation regarding division of powers, as the executive branch wants Chevron’s investment and so it has an interest in vacating a big judgment in favor of Ecuadorian rain forest residents. Here’s the link, and here’s a bit of a translation.

The YPF deal depends on an end to the Chevron injunction
It was admitted by the manager of the local unit of the US company, whose funds are frozen by judicial decision

A decision of the Appeals Chamber of the civil court could kill the deal with Chevron that the CEO of YPF, Miguel Galuccio, put together in recent months…

A day after the excitement over the agreement between the two companies (in Houston, Galuccio and Ali Moshiri, Chevron’s helmsman for Africa and Latin America, signed a letter of intent to advance negotiations to invest $1 billion in the Vaca Muerta formation), the local heads of the American company returned their attention to the embargo tying up the company, which was imposed by National Civil Trial Judge No. 61, Adrian Elcuj Miranda, who arranged the lien on shares, dividends and 40% of future bank deposits that the local oil company unit might receive.

The magistrate’s decision was in response to a request to the Judicial Branch regarding a long-running Ecuadorian environmental lawsuit against Texaco, a company that Chevron acquired years ago.

Ricardo Aguirre, Chevron’s planning and commercial manager in the country, was in Houston yesterday for the signing of the agreement. After his return home, he replied to La Nación regarding the prospects of the agreement with YPF: “We can not move forward on a trade agreement with a lien on our backs.”

Immediately, the executive stated the company’s position: “If the embargo stays in force, not only would it be impossible to advance with the investment with YPF, but all Chevron activity in Argentina would be affected. There is no future for the company in the country. Clearly, we wouldn’t have the funds,” he added.

So, we shall see. Lately the Fernandez administration hasn’t been doing so well at pressuring the judicial branch, and the decisions in favor of Clarin group have widely been interpreted as a rejection of executive branch interference in judicial affairs.

For my part, I find it interesting that Chevron goes in with this big investment plan right after the court decision. They are too big to sue in Venezuela. They may well want to gain a similar status in Argentina.

7 thoughts on “Chevron in Argentina: Hoping for a breakdown in division of powers?

  1. westslope

    steven bodzin wrote: Because most of the pro-corporate types who watch South America point to the breakdown in division of powers between courts and executive as being a bad thing.


    Young Master Steven, talk to somebody you trust about this kind of stuff and ask them why this is sheer, utter nonsense.

    Chevron behaves somewhat like the Israel of the multinational oil company world. I’d be careful about making really dumb generalizations unless you want to illustrate with sharp honesty and clear integrity information about yourself.

  2. Gustavo coronel

    ChevronTexaco’s Ecuador case is a classic example of a powerful oil company being the object of a fraudulent judicial decision in which the judge (s), the experts named by the judges, the government of Ecuador (including the president) and the lawyers of the plaintiffs are all partners in the attempt to get$19 billion fom the company. This is a case that merits careful, objective analyis but is not getting it, being converted into a struggle betwen the “evil” oil company and the “good” environmentalists. PetroEcuador, the company that has been operating in the area for over 20 years is not even mentioned in the case.
    Now the case is being transplanted ino Argentina, where the Ecuadorian plaintiffs are freezing the company’s assets in the country. There is no question that the separation of powers in that country is a shaky one, but Fernandez is torn between her commercial best interest and her ideological, strategic harassment of foreign capital. Which will win? It remains to be seen.

    1. sapitosetty Post author

      Gustavo, nice analysis. I’d agree with most of it but I think you’re prejudging things by calling this a “fraudulent” decision. The plaintiffs wanted to sue in the USA, but Chevron worked hard to get the case moved to Ecuador. They made their bed, and now they are sleeping in it.

  3. Gustavo coronel

    I have been following this case for more than two years now and am amazed at the extent of the fraud. I started by listening to both sides. Spoke personally with Karen Hinton, spokeswoman for the plaintiffs in the U.S. and with Jim Craig from Chevron. I had no particular sympathy for ChevronTexaco, although as an oilmman I confess to a bias in favor of the oil companies. At the same time I was not prepared to be the company’s fellow traveler.
    I found out quickly that PetroEcuador, the state oil company of Ecuador had been trampling the same area for 20 plus years after ChevronTexaco left with a full government finiquito. This I did not like, since it seemed like a higly intervened scene of the crime. PetroEcuador has not been mentioned in the litigation at all. What I know of the area and of the opretaions of an oil company led me to believe that something was very wrong here.
    My second surprise was the court expert. Not only below standards from all I coul see about him and his education and experience. I read his full report and, frankly, it was very poor, full of unsubstatiated assertions. Later on, however, I found out that the expert’s report had been written by a group coordinated by the plaintiff’s team. There is even a video about it.
    The government got into the act, accusing the previous Ecuadorian who gave texaco a finiquito of traitors and I have Correa quotes talking about the apatridas (Chavista term) that favor the oil company and pressuring the judge. The judge received momny from the plaintiffs and had to lave the case. The Philadelphia law firm that had originally helped the plaintiffs severed their association with them after their [plaintiffs] ethical violations.
    I have written extensively about this case because I dont like the way the company is being extorted. On the other hand I do not endorse the company’s actions in Venezuela or in Argentina and have also written about this, but that is another story.

Comments are closed.