Narrator Repeated False Statements in Cynical Bid to Blunt SEC Probe & Investor Outrage
Amazon Defense Coalition
1 June 2011 - FOR IMMEDIATE RELEASE
Contact: Karen Hinton at +1.703.798.3109
New York, NY – A corporate video shown by Chevron CEO John Watson at last week's annual meeting was an attempt to mislead shareholders about the company's $18 billion Ecuador liability in the wake of a potential SEC probe, representatives of Ecuadorian indigenous and farmer communities said Tuesday.
"Any objective analysis can easily show that the video used by Watson was misleading on a number of counts," said Karen Hinton, the U.S. spokesperson for the Ecuadorian indigenous communities suing Chevron for dumping 16 billion gallons of toxic "water of formation" into the streams and rivers of the rainforest when it operated an oil concession from 1964 to 1992.
Watson showed the video at the shareholder's meeting on May 25 after more than 20 influential shareholders, including the New York Comptroller and Oxfam America, signed a letter urging Chevron to rethink its legal approach to the Ecuador case. The letter said Watson, in failing to resolve the Ecuador matter, likely "displayed poor judgment that has led investors to question whether our company's leadership can properly manage the array of environmental challenges and risks it faces."
One signer of the letter, Trillium Asset Management, also asked the Securities and Exchange Commission to investigate Chevron to determine if the company has adequately disclosed the risks the Ecuador judgment poses to the company's finances and reputation. An Ecuador court ruled on February that Chevron is liable for roughly $18 billion to cleanup what experts consider to be one the world's worst oil disasters.
In an attempt to blunt criticism he clearly anticipated, Watson showed a five-minute video that repeated Chevron's misleading talking points about Ecuador, said Hinton.
Hinton said the misrepresentations in Chevron's corporate video include:
- Ignoring the overwhelming and unassailable scientific evidence against Chevron. During the eight-year trial, the Ecuador court received more than 220,000 pages of evidence and more than 64,000 scientific sampling results – most presented by Chevron itself – that overwhelmingly demonstrate that Chevron left illegal levels of contamination in Ecuador's rainforest. The evidence also shows the pollution decimated indigenous groups and created an outbreak of cancer and other oil-related diseases.
- Using irrelevant outtakes from the film "Crude" to distract attention from the scientific proof. One of the out-of-context outtakes quotes a lawyer for the plaintiffs saying the Ecuador case is all "smoke and mirrors and b.s." Had Chevron shown the outtake in its entirety, it would have been clear that the "b.s." cited by the lawyer actually referred to Chevron's use of "junk science" and other legal tricks to try to sabotage a trial it expected to lose. The full outtakes and the film clearly show that the lawyers for the plaintiffs believe their case against Chevron is strong because of the overwhelming scientific evidence.
- Lying about Chevron's fraudulent remediation in Ecuador. The narrator of the video claims that Chevron is not responsible for the contamination in Ecuador because Texaco (which operated in Ecuador and was purchased by Chevron in 2001) "remediated its share" of any contamination left behind. Actually, the scientific evidence presented at trial proves the remediation was a fraud designed to mislead the indigenous communities, Ecuador's government, and courts. Of 916 waste pits it gouged out of the jungle floor while operating in Ecuador, Chevron "remediated" only 130 of them and did so in cosmetic fashion only. The company simply bulldozed dirt over the pits to hide their existence, leaving the toxins underground to continue migrating into soils and groundwater. Two Chevron officials are under criminal indictment in Ecuador for lying about the results of the company's sham remediation.
- Trying to shift blame to Petroecuador, Ecuador's state-owned oil company. The video tries to blame Petroecuador for the pollution because the state-owned oil company took over the oil fields after Texaco abandoned Ecuador in 1992. But the video ignores the critical fact that Texaco exclusively designed, engineered, built and operated the fields for almost three decades. Chevron created an elaborate system of oil extraction that was designed to pollute – and pollute it did, dumping 16 billion gallons of toxic "water of formation" into streams and rivers instead of re-injecting the water into the ground, as was the industry norm at the time. The magnitude of Chevron's Ecuador disaster dwarfs that of BP's Gulf spill – but Chevron's video is silent on the issue.
- The video fails to note Chevron has been afforded a fair opportunity to litigate in Ecuador. Given that the Ecuador provincial court of Sucumbios issued a thoughtful 188-page decision against Chevron, the video predictably tries to paint Ecuador's entire judicial system as corrupt and biased. Yet Chevron chose to have the case heard in Ecuador, repeatedly praised Ecuador's judicial system to convince a U.S. judge to send the case to Ecuador, and submitted more than 150,000 pages of evidence advancing its litigation position. The reality is that the Ecuador court bent over backwards to accommodate Chevron's due process rights, allowing the company eight years to present evidence. Further, Chevron has won a number of cases in Ecuador's judicial system in recent years, including one in 2007 against Petroecuador. The company's corporate video is predictably silent on this critical fact.
- The video fails to mention the gross misconduct of Chevron's lawyers and the company's attempts to sabotage a trial it knew it was losing based on the evidence. Chevron's lawyers did all they could to delay and sabotage the Ecuador trial so the company could evade responsibility for a catastrophe of its own making. Chevron's lawyers attacked judges with frivolous motions, threatened court personnel with jail time, tried to ensnare a judge in a bribery scandal, fabricated security threats to delay field inspections, and were fined repeatedly by the Ecuador court for their bullying tactics. In fact, half of the $18 billion award was for punitive damages owing to Chevron's misconduct during the Ecuador trial. These chilling acts are meticulously documented in the affidavit of Ecuadorian attorney Juan Pablo Saenz.
- The Chevron video is an attempt to silence the company's growing chorus of critics. The video insinuates that efforts to publicize the plight of the victims of Chevron's outrageous acts in Ecuador are fraudulent. Publicizing the truth about Chevron's misconduct in Ecuador is a legitimate and ethical way to hold the company accountable for violating the law, destroying the precious rainforest environment, and harming the lives of tens of thousands of people. Chevron's charge in this regard is ironic given that Chevron employs six public relations firms to spread to the media its distorted version of the facts underlying the Ecuador litigation.