ChevronToxico

Investors Call on SEC to Probe Chevron over Ecuador Statements

Shareholders Intensify Pressure on Oil Major Ahead of Annual Meeting

By Daniel Brooksbank, Responsible Investor
24 May 2011

Trillium Asset Management, the Boston-based sustainable and responsible investment specialist, has written to the Securities and Exchange Commission calling for the regulator to investigate Chevron Corp.'s disclosures about the recent $18bn (€12.8bn) Ecuador judgment.

Trillium wants the SEC to review whether the oil major has appropriately disclosed the "scope and magnitude" of the financial and operational risks of the case to shareholders.

The issue surrounds a judgement against the company handed down by an Ecuadorian court in last February. The lawsuit was filed in 2003 by 30,000 Ecuadorian aboriginal people over the company's alleged pollution of the Amazonian rainforest through oil drilling and waste products.

A separate letter from investors calling on Chevron to settle the almost two-decade old lawsuit is also expected to be released this week.

Trillium has told the SEC the issues raised may have "the potential to rise to the level of materiality". The firm has pin-pointed what it termed disparities between Chevron's recent statements to shareholders and those made in sworn testimony as part of the case.

The Trillium letter also questions whether some of Chevron's statements to shareholders have been "misleading". It told the SEC that, taken in aggregate, the company's statements "could create the misleading perception that the Ecuadorian lawsuit is fraudulent and without legal merit". The letter was signed by Trillium's Deputy Director for ESG Research and Shareholder Advocacy Jonas Kron and Sanford Lewis, a corporate accountability attorney who co-wrote a recent analysis of the issues.

For its part, Chevron has a section on its website devoted to the Ecuador case.

The development comes ahead of Chevron's annual shareholder meeting tomorrow (May 25) – at which Trillium and the New York State Comptroller have tabled a proposal calling for the company to nominate an independent director with environmental expertise. A similar resolution last year received some 27% of the vote; Chevron is advising shareholders to vote against it.

Meanwhile, Chevron has been deleted from the NASDAQ OMX CRD Global Sustainability Index following a re-ranking.