Chevron Annual Meeting Heats Up Over Ecuador Suit
By Jordan Robertson, Associated Press
27 May 2009
In a combative and sometimes colorful annual meeting, Chevron's CEO and chairman exchanged barbs with activists over pollution in the Amazon rain forest and the company's human rights record, twice scolding speakers who addressed executives.
Chief executive David O'Reilly told one group that its report on Chevron's policies "deserves the trash can."
The nation's second-largest oil company is awaiting a verdict from a judge in Ecuador that could come with a $27 billion price tag, though any such decision would certainly draw an appeal.
Hundreds of protesters rallied outside, at one point blocking the entrance.
Confrontations outside and inside the company headquarters did not change the outcome of three key shareholder proposals, though they did garner more support than they've received in the past.
At the core of the protests was the suit in Ecuador. It claims that Texaco, which Chevron bought in 2001, poisoned large swaths of the rain forest by dumping billions of gallons of oil waste, causing cancers and birth defects.
Chevron says Texaco spent $40 million on environmental cleanup there and had been cleared of liability by the Ecuadorean government in power at the time. Chevron said the state oil company PetroEcuador continued to pollute the region after Texaco had left.
A proposal seeking a more detailed human rights policy from Chevron got 28 percent of the vote. A separate proposal for a report on Chevron's criteria for investing or operating in countries with questionable human rights records took 26 percent of the vote. Another measure focused on how Chevron assesses the environmental laws in other countries got less than 7 percent.
Similar proposals in the past have never received more than 10 percent of the vote.
When one speaker took the microphone to talk about a report by environmental organizations titled "The True Cost of Chevron," O'Reilly called it "insulting to our employees and I think it deserves the trash can."
The report cites Chevron for the destruction of communities, environmental damage and political oppression.
Chevron's overall finances have taken a hit in recent months as the price of oil and natural gas plunged. Chevron's net income in the first quarter fell 64 percent to $1.84 billion, while sales fell 45 percent to $36.1 billion.
Like many other major corporations, a say-on-pay proposal was also brought up for a vote. The nonbinding advisory proposal was rejected with 42 percent of the vote.
A proposal seeking more clarity on Chevron's plans to help curb climate change and lower its own greenhouse gases was withdrawn at the last minute. The burning of fossil fuels is cited by researchers as a reason for climate change.
Patricia Daly at Sisters of St. Dominic of Caldwell, N.J., a faith-based institutional investor that supported the measure, called greenhouse gases the "profound moral challenge for the day."
The group withdrew its proposal after meeting with Chevron's management, Daly said.
"There was enough in the works so that we, in good faith, had to withdraw our resolution," she said. "In the end, this is really good, good business for the company."
Hundreds of miles away in Dallas, Exxon Mobil's annual shareholder's meeting was much less acrimonious. Executives were also questioned about environmental issues and executive pay, but shareholders ultimately stood by management and voted down all 11 resolutions presented there.
AP Business Writer Ernest Scheyder contributed to this story from New York.