Three Resolutions Filed For 2006 Shareholder Meeting Highlighting Chevron's "Rainforest Chernobyl"
5 December 2005 - FOR IMMEDIATE RELEASE
Contact: Karen Hinton at +1.703.798.3109
San Francisco (Dec. 5, 2005) - Chevron's Ecuador environmental disaster, considered by experts to be the worst oil-related ecological problem on the planet and currently the subject of a high-stakes law suit estimated to cost the company upwards of $6 billion, will be high on the agenda of the company's 2006 annual shareholder meeting with the filing of three new resolutions asking Chevron's management to take various steps to protect human rights, the environment and shareholder interests.
The resolutions were filed by institutional and socially responsible investors, including the New York State Common Retirement Fund, Trillium Asset Management, Amnesty International USA and members of the Interfaith Center on Corporate Responsibility (ICCR), which together own more than $1 billion in Chevron shares. The resolutions increase the pressure on the California-based oil major to address the widespread toxic contamination left by Texaco (now Chevron) in the Ecuadorian Amazon during a 20-year period that began in the early 1970s.
A class-action lawsuit currently on trial in Ecuador accuses Chevron of having deliberately dumped 18 billion gallons of toxic waste - or 30 times the amount of oil spilled in the Exxon Valdez disaster -- directly into the rainforest to save money. The lawsuit alleges that two indigenous groups are on the verge of extinction because of the pollution, and that cancer rates in the area have skyrocketed. The company operated a concession in Ecuador's rainforest from 1964 to 1990, and withdrew from Ecuador in 1992.
The first resolution, filed by Trillium Asset Management and co-filed by the New York State Common Retirement Fund, Amnesty International USA, Boston Common Asset Management on behalf of its client Brethren Benefit Trust and ICCR members, accuses Chevron of being more concerned about its image than the grave human suffering it caused in Ecuador, and questions the logic of the corporation's costly rearguard battle to evade responsibility. It notes that:
- "Numerous types of infection and cancers" have been caused in Ecuador by Texaco's contamination of the water table;
- Eight different types of cancer have now been recorded in a single village near Texaco's wells;
- Children aged 14 and under are three times more likely to develop leukemia in Texaco's former concessions than elsewhere in the Amazon.
The resolution calls on Chevron to provide an itemized report by October 2006 with details of the corporation's legal bills, lobbyists' fees and public relations costs from 1993 to 2005 that resulted from Chevron's willful refusal to accept responsibility for the Ecuador disaster. Chevron currently employs two large corporate law firms in the United States (Jones Day, and King & Spaulding) and a team of eight Ecuadorian lawyers to defend itself, costing several million dollars per year, according to estimates from the plaintiffs.
In addition, on the Ecuador matter, Chevron employs the New York-based public relations firm of Hill & Knowlton, known worldwide for manufacturing false testimony before the U.S. Congress prior to the first Gulf War, where they claimed that Iraqi troops had ripped babies in Kuwait out of their incubators. Chevron also employs a team of lobbyists in Washington who press Congress and other government agencies on the Ecuador issue.
The resolution concludes: "Chevron is addressing these issues as a public relations problem rather than a serious health and environmental problem. We believe this damages Chevron's reputation and credibility as an environmentally responsible corporate citizen, jeopardizes our ability to compete in the global marketplace, and may lead to significant financial costs."
The second resolution, filed by the Domestic and Foreign Missionary Society of the Episcopal Church and co-filed by Catholic Health Care Partners and Bon Secours Health Care Systems, accuses Chevron of environmental negligence in developing nations, specifically naming Ecuador, Angola and Nigeria. It also notes that Chevron's Corporate Policy 530 "commits Chevron to comply with the spirit and letter of all environmental, health and safety laws and regulations, regardless of the degree of enforcement", a commitment that Chevron has woefully failed to live up to in Ecuador.
The resolution urges the corporation to implement around the world "environmental standards no less stringent than those established under the laws and regulations of California, the state where Chevron is headquartered and where (among all states and foreign countries) it has its greatest crude oil production and largest refinery capacity".
Filed by the Society of Jesus-Wisconsin Province and co-filed by 16 ICCR members, the third resolution deals with human rights and also accuses Chevron of failing to live up to its own heavily-touted claims of corporate responsibility. It calls on Chevron to implement a "comprehensive, transparent, verifiable human rights policy" by October 2006.
Citing a June, 2004 Supreme Court ruling upholding the 1789 Alien Torts Act, the resolution also warns Chevron executives that, in "a post-Enron environment", they could be found personally liable in a U.S. court for human rights abuses committed abroad, such as those in the Ecuadorian rainforest.
The resolution adds: "We believe significant commercial advantages may accrue to our company by adopting a comprehensive human rights policy based on the ... Universal Declaration of Human Rights and the International Labor Organization's Core Labor Standards which would serve to enhance corporate reputation, improve employee recruitment and retention, improve community and stakeholder relations, and reduce the risk of adverse publicity, consumer boycotts, divestment campaigns and law suits."
The escalating shareholder concern comes as Chevron's defense faces significant hurdles in the lawsuit in Ecuador. Water and soil samples submitted to the court by both the plaintiffs and Chevron from all 18 well sites inspected by the court overwhelmingly have shown illegal levels of toxic contamination, often by orders of magnitude.
The legal case is the first time a transnational oil company has been subjected to legal jurisdiction in the courts of a developing nation for massive environmental damage. A New York court has already confirmed the Ecuadorian ruling will be enforceable in the United States, where Chevron's operations are based.
The environmental disaster came about because the company deliberately dumped 18 billion gallons of "formation waters", a toxic byproduct of oil drilling, into the Ecuadorian Amazon over a period of two decades. In the United States, the standard practice of the time was to re-inject the formation waters into the ground-an environmentally less damaging but more expensive option. However, in Ecuador, Texaco executives chose to save $3 a barrel by dumping the formation waters in the rainforest, even though the grave environmental and human health impacts this could create were well understood at the time.
To view the full texts of the resolutions, click the links below: