Reaction to Chevron/Ecuador Decision, US GHG Emissions Fall, Japanese Whale Hunt Ends Abruptly, House Rages Against the Environment (by Bob Percival)

An Ecuadoran court’s $8.6 billion judgment against Chevron for polluting the Oriente region of the Amazon received considerable press attention last week. I was interviewed by reporters from several publications including the Christian Science Monitor (from both Quito and Boston, see http://www.csmonitor.com/Environment/2011/0218/In-Ecuador-s-landmark-9-billion-judgment-against-Chevron-all-sides-unhappy), Bloomberg Business News (from San Francisco, see http://www.bloomberg.com/news/2011-02-14/chevron-to-appeal-adverse-judgment-in-ecuador-pollution-case.html), Greenwire (from D.C., see http://www.nytimes.com/gwire/2011/02/16/16greenwire-despite-86b-ruling-long-road-remains-for-chevr-74410.html), BBC World News Mundo (from London see http://www.bbc.co.uk/mundo/noticias/2011/02/110218_ecuador_chevron_financiamiento_rg.shtml), and the San Francisco Chronicle (see http://articles.sfgate.com/2011-02-16/business/28538735_1_small-ecuadoran-town-luis-yanza-pablo-fajardo/3). Protests were held at Chevron’s headquarters in San Ramon, California, while the plaintiffs in Lago Agrio appealed the judgment as too low and Chevron filed a 31-page request for clarification of the judgment.

Considerable press attention focused on the hedge funds providing financial assistance to the plaintiffs. This was the focus of an interview I gave to Scott Tong on American Public Radio’s “Marketplace” program (see http://marketplace.publicradio.org/display/web/2011/02/15/pm-a-long-long-legal-bet/). The hedge funds stepped in to provide the plaintiffs with funding to continue their litigation after the defendants opened up several new forums, making the case more expensive to litigate. I noted that if this is a case of David against Goliath, the hedge funds are providing David with a lot of additional stones, helping to level the playing field between the two sides.

Perhaps the most astonishing press “spin” on the case came from the editorial page of the Wall Street Journal, which on Feb. 15 declared in an editorial entitled “Shakedown in Ecuador” (see http://online.wsj.com/article/SB10001424052748703652104576121941625806096.html?mod=googlenews_wsj) that “The Ecuador suit is a form of global forum shopping, with U.S. trial lawyers and NGOs trying to hold American companies hostage in the world's least accountable and transparent legal systems.” The Journal editors have thrice before denounced the lawsuit, but what is astonishingly false about their “forum-shopping” claim is that the plaintiffs originally filed suit in New York federal court in 1993 and the case was dismissed in favor of the Ecuadoran forum at Chevron’s behest in 2002. I was disturbed enough by this falsehood that I wrote a letter to the Journal editors which will be published in tomorrow’s edition (see http://online.wsj.com/article/SB10001424052748704900004576152370171056008.html).

Last week the U.S. Environmental Protection Agency (EPA) reported that emissions of greenhouse gases (GHGs) declined in 2009 for the second year in a row. EPA estimated that they declined by 6 percent in 2009 due to reduced economic activity caused by the global financial downturn and a shift from coal to natural gas in electricity generation. Total U.S. emissions of GHGs were estimated to be 5.5 billion metric tons in 2009, below the 5.92 billion tons emitted in 2008 and the 6.12 billion tons in 2007. John M. Broder, Emissions Fell in 2009, Showing Impact of Recession, N.Y. Times, Feb. 21, 2011. However, U.S. GHG emissions were still 7.4% above their level in 1990, the Kyoto Protocol baseline.

Last week the Japanese whaling fleet cut short its annual whale hunt in the Antarctic in part out of frustration that an environmental group had been so successful in obstructing its whaling activities. Sea Shepherd Conservation Society disrupted the whale hunt, reportedly because it has acquired vessels that are faster than those used by the Japanese whalers. The United Kingdom last week launched prosecutions against criminal gangs that have been shipping toxic waste to developing countries in the guise of recycling. Most of the 30 prosecutions involve electrical waste sent to West Africa, while others involve used tires and household waste sent to Asia. UK Takes Action Against Toxic Waste Gangs, Financial Times, Feb. 19, 2011.

While many brave people in the Middle East and Northern Africa are holding “days of rage” to protest their authoritarian governments, last week the new Republican majority in the U.S. House of Representatives held its own “Week of Rage” directed against the Environment. By week’s end the U.S. House of Representatives passed an appropriations bill that cuts EPA’s budget by 30% while barring any use of funds for nearly all the agency’s most significant current initiatives. The funding cuts clearly are directed more at crippling protection of the environment than at saving money. Amendments added during the week bar EPA from using funds to implement regulation of GHG emissions, disposal of coal ash and wastes from mountaintop removal mining, mercury emissions from powerplants, and enforcement of the Chesapeake Bay cleanup. They also defunded NOAA’s proposed Climate Service, barred U.S. contributions to the Intergovernmental Panel on Climate Change, and suspended payments under the Equal Access to Justice Act that allows successful plaintiffs to recover attorney’s fees against government agencies who take positions that are not “substantially justified” in fighting citizen suits. The House also barred the use of funds to implement certain energy efficiency measures, including the phaseout of incandescent lightbulbs. A big battle is likely in the Senate and a possible government shutdown looms if no compromise is reached between the two houses of Congress. Consider whether some of these measures, if enacted, could open the U.S. to charges that it is not carrying out commitments made in trade agreements to implement and enforce its environmental laws.

BP’S $20 billion settlement fund, far larger than the magnitude of the House’s environmental budget cuts, was the subject of controversy last week. In comments filed last week BP criticized fund administrator Kenneth Feinberg for providing settlements that it claims are too generous in calculating future losses. The fund has paid out $3.5 billion to settle interim claims and 100,000 people are now seeking final settlements. Final payments can commence after a two-week comment period on Feinberg’s proposed settlement criteria ends on March 2. BP’s comments can be viewed online at: www.gulfcoastclimsfacility.com