After Fraud Complaint to SEC, Chevron Tries to "Spin" Shareholders with Misleading Press Bulletin
Amazon Defense Coalition
5 February 2006 - FOR IMMEDIATE RELEASE
Contact: Paul Paz y Miño: +1 510.281.9020 x302, email@example.com
Quito - Chevron has issued a press release misrepresenting the results of a court report in a historic trial that found life-threatening levels of toxic contamination at one of the company's well sites, say technical advisors to the Amazon Defense Coalition, the group representing 30,000 people suing the oil giant.
Chevron's misleading press release, posted on the company's website on Feb. 2, ignores the report's critical findings and falsely claims that it "validated" Chevron's position that there was no threat to public health. It was posted hours after the environmental group Amazon Watch filed a complaint with the SEC that accused the company of not disclosing the Ecuador liability in its public filings.
In fact, none of the court-appointed experts - Johnny Zambrano, Jorge Jurado, Galo Albán, Luis Albuja and Gerardo Barros - ever validated Chevron's claims in the report and actually came to conclusions that directly contradict Chevron's position.
Chevron, which now owns Texaco, is defending itself against charges it is responsible for dumping into the rainforest 30 times more crude than the Exxon Valdez spill. The impact includes the near-extinction of two indigenous tribes, elevated rates of cancer and miscarriages, and hundreds of open-air toxic waste pits that dot an area the size of Rhode Island.
The area will cost at least $6 billion to clean up and total compensation could rise to $20 billion, according to a remediation assessment by the affected communities. This could be the largest pay-out ever by an energy company, according to independent experts.
Contrary to Chevron's press release, the court report found extensive toxic contamination at a well site called Sacha-53, one of hundreds being examined by the court. The court report concluded:
- The site has three unlined toxic waste pits carved out of the jungle floor that contain sulfate, cadmium, lead, and phenols at levels that violate Ecuadorian law in 1989, several years before an attempted "remediation" that local residents claim was fraudulent and that Chevron is trying to use as a defense at trial;
- Cadmium, a known human carcinogen, was found at levels ten to twenty times higher than Ecuadorian norms;
- Concentrations of barium, TPHs, benzopyrene (a known human carcinogen) and copper exceeded by several times maximum allowable limits permitted by Ecuadorian law;
- TPH samples exceeded Ecuadorian standards by more than 1,000 times.
The report also rejected Chevron's much-ridiculed theory that high rates of cancer in the region are caused by bacteria associated with feces. During the trial, Chevron's scientists have refused to test water samples for hydrocarbon contamination, apparently out of fear of what the company will find, but they do test for bacteria unrelated to oil pollution.
Bill Powers, a petroleum engineer with environmental and engineering consultancy E-Tech, who has visited the sites and reviewed the court report, said: "Chevron's press release clearly misrepresents the Ecuadorian court experts' report. There are multiple examples in this court report of large quantities of toxins at this site, but Chevron ignores this and draws flawed conclusions about what the report actually says."
Separately, both Chevron's scientists and technical experts for the plaintiffs have submitted their own reports to the court that found extensive contamination covering 100% of 22 sites. Although its lab reports show levels of toxins in its site that exceed Ecuadorian norms, Chevron has tried to argue the levels of are not harmful by inventing its own clean-up standards using industry-preferred risk-based formulas.
For example, Chevron has told the court that the toxicant barium is permissible at 40,000 mg/kg, or 52 times higher than Ecuadorian norms. Naftaleno, another carcinogen, is allowed in Ecuador at 0.1 ppm but Chevron has claimed this toxicant should be allowed at 3,100 ppm, or a level 31,000 times higher than that in Ecuadorian law. The court has refused to adopt Chevron's own arbitrarily set standards, and has ordered the company to start comparing its lab results with Ecuadorian law.
"These tactics by Chevron should be called what they are - a deliberate campaign by senior management to mislead shareholders and the public about the environmental catastrophe the company created in our territory," said Luis Yanza, a leader of the historic class-action lawsuit brought on behalf of 80 villages and five indigenous groups.