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.