Major "No Confidence" Vote By Large Pension Funds
Amazon Defense Coalition
8 June 2009 - FOR IMMEDIATE RELEASE
Contact: Paul Paz y Miño: +1 510.281.9020 x302, email@example.com
San Francisco, CA – A new analysis of shareholder votes at Chevron's annual meeting in late May indicates the company's management suffered a far more serious rebuke over its growing human rights problems in Ecuador and elsewhere than originally had been reported, representatives of the Amazon Defense Coalition said today.
It turns out that one of the resolutions asking for the company to adopt a "verifiable" human rights policy garnered a whopping $37 billion in voting shares out of $133 billion outstanding. A second resolution received $33 billion in voting shares, while a third received $9 billion.
Company management, led by CEO David O'Reilly, had lobbied fiercely against all three resolutions. Chevron's public relations department had touted the results as a triumph for company management.
"It is now clear that O'Reilly suffered a major no confidence vote from a large number of his own shareholders over human rights," said Mitch Anderson, who monitors Chevron's human rights record for Amazon Watch, an environmental group in San Francisco. "These votes are an embarrassing defeat for Chevron and reinforce the notion the company is falling behind its peers when it comes to human rights issues."
"Given the massive number of shares controlled by management, it is extremely rare to see human rights resolutions opposed by management garner this level of support," added Dan Orlow, a private American investor who is advising the Amazonian communities.
The resolutions stemmed primarily from concern over three human rights problems – the company's $27 billion potential environmental liability in Ecuador, its partnership with the repressive Burmese military government in a pipeline project, and fallout from the killings of Nigerian villagers who had been protesting environmental damage caused by Chevron to their homeland.
At a time when it has launched a major "green" advertising campaign, Chevron has been battered by negative publicity on human rights issues – particularly in the Ecuador case, where the matter was featured in May on 60 Minutes. Texaco, bought by Chevron in 2001, is accused of abandoning more than 900 unlined waste pits and dumping more than 18 billion gallons of toxic waste into Amazon waterways, according to indigenous and farmer communities.
Because shareholder resolutions not supported by management rarely pass – the recommendation of company management traditionally informs the voting of a majority of shares – their success is judged on the level of support, which in this case reached extremely high levels. The resolutions, and their final votes, are as follows:
- One resolution, sponsored by all Jesuit provinces in the U.S., requested that Chevron adopt a comprehensive and verifiable human rights policy. It was supported by 28% of the votes cast, or approximately $37 billion worth of Chevron stock.
- A second resolution requested that Chevron prepare a report on the company's criteria for investment in specific countries. It was supported by 25% of the votes cast, or approximately $33 billion worth of Chevron stock.
- A third resolution requested that Chevron prepare a report on whether it complies with host country laws and environmental regulations. This resolution, against which Chevron engaged in an intensive lobbying campaign, was supported by 7% of the vote, or approximately $9 billion worth of stock.
All told, more than $79 billion in votes were cast which defied company management in supporting at least one of the three resolutions. Backing one or more of the resolutions were several of the nation's largest public pension funds, including CalPERS. located in Chevron's home state of California.
The Ecuador case, which is being heard in Ecuador at Chevron's request, is expected to be decided by the end of the year. Lawyers for the affected communities have asserted they will attempt to enforce any favorable judgment immediately in U.S. courts because Chevron has publicly stated that it will refuse to satisfy any judgment from Ecuador's judiciary.