In 2008, Chevron may be ordered to pay the largest damages award in environmental law history – possibly more than $10 billion — for Texaco’s deliberate dumping of 18 billion gallons of toxic wastewater into an inhabited area of the Ecuadorian Amazon during three decades.  Despite Chevron’s decade-long attempt to conceal these liabilities from shareholders, regulatory authorities and financial markets, the imminence of a final decision in the lawsuit can no longer be hidden.  A growing group of investors and analysts are increasingly concerned that Chevron’s modus operandi in Ecuador has unnecessarily exposed the company to serious, long-term financial and reputational risks.  

As long-term followers of the lawsuit, Amazon Watch has called on Chevron stockholders to freeze their Chevron shares until the case in Ecuador is resolved, based on the following information:

•    The only comprehensive assessment of the damage to Ecuador’s national territory, performed in 2003 by the international firm Global Environmental Operations, estimated that clean-up of Chevron’s contamination would cost a minimum of $6.14 billion, excluding personal damages to the thousands of victims.  Crucially, that calculation did not factor in contamination to the water-table. Current estimates, which also include health damages, compensation to restore indigenous land, economic damages and unjust enrichment (compensation for the savings made by not re-injecting the formation water in violation of the law) place the damages at more than $10 billion.  

•    Chevron has produced 47,000 soil and water samples for the Lago Case, the vast majority of which are in violation of Ecuadorian and U.S. law.   Each of the 45 inspected sites show serious violations, such as the high presence of toxic and carcinogenic petroleum hydrocarbons like benzene and hexavalent chromium.

•    Thousands of people are considered at risk of developing cancer and four indigenous groups report they are on the verge of extinction in areas of the rainforest where Chevron operated. The number of people already thought to have developed cancer is estimated to be in four figures. More health studies are urgently needed.

•    Chevron continues with major corporate governance and human rights problems.  A fraud complaint before the U.S. Department of Justice made by the Ecuadorian government is still pending. The SEC is still investigating alleged securities violations.  A leading Ecuadorian Congressman has also recently called for another criminal investigation of the company in Ecuador.  

•    Beyond Ecuador, Chevron is under fire for human rights violations in Nigeria and Burma.  A pattern suggesting Chevron’s disregard for human rights has systemic roots that can be traced to decisions made by Chevron’s senior, global management. In Burma, Chevron’s ties to the military junta carrying out a brutal crackdown against peaceful street protests have brought international scorn.  And regarding Nigeria, Chevron is being sued in federal court in San Francisco for deaths and other abuses in two incidents in 1998 and 1999, in which the Nigerian military, paid by Chevron and using Chevron helicopters, tortured and shot protesters.  Chevron’s ability to acquire contracts in an increasingly constrained global energy market has been hindered by its tarnished reputation.