Group Claims Chevron Hasn't Owned Up to Ecuador Liability

10 February 2006

As its pollution trial in Ecuador creeps along, the oil giant Chevron is being accused by a U.S. environmental group of failing to inform shareholders adequately of its potential legal liability for contamination of the Ecuadorian Amazon.

Chevron has been on trial in the Superior Court of Nueva Loja, capital of Ecuador's Sucumbíos province, since 2003.Amazon Indians have filed a class-action suit charging that Texaco, which was purchased by Chevron in 2001, released over 18 billion gallons of toxic drilling wastes into rivers, wetlands and the soil during the period 1964 to 1992.

On Feb. 1, the U.S.-based green group Amazon Watch called on the U.S. Securities and Exchange Commission (SEC) to investigate Chevron, charging that the oil giant broke federal law and SEC rules by neglecting to notify its shareholders of its potential exposure in Ecuador.

"By failing to disclose this massive and growing liability in its filings,we believe Chevron management has misrepresented the financial health of the company to shareholders and thereby distorted the value of Chevron shares in the financial markets,"Amazon Watch Executive Director Atossa Soltani and Sarah Aird, the group's attorney, said in the Feb. 1 letter to SEC Chairman Christopher Cox."The logical conclusion is that all shareholders who have purchased Chevron stock since the case was accepted by the Ecuadorian Court in 2003 may well have a legitimate claim of fraud against the company."

Amazon Watch's complaint came less than two weeks after Judge Germán Yanez took over the Chevron case, becoming the third magistrate to handle
the litigation.The trial remains in the evidentiary stage, and apparently has a long way to go. Just 35 of a total of 122 site visits requested by the two
sides have been completed so far. Evidence from these visits must be evaluated by arbiters.