Amazon Defense Coalition
5 October 2011 - FOR IMMEDIATE RELEASE
Contact: Karen Hinton at +1.703.798.3109
New York, NY – The Comptroller who runs New York's $146 billion state pension fund has gone public to urge Chevron to "spare the company's battered reputation" by settling an environmental lawsuit spanning two decades in the Ecuadorian rainforest.
New York Comptroller Thomas DiNapoli, who oversees the pension fund that controls Chevron stock worth approximately $800 million, has taken the unusual step of publishing an article urging the oil giant to resolve the case in the interests of shareholders. DiNapoli is the highest-profile shareholder to make such a call, which is happening at a time that Chevron's position in the Ecuador litigation has been weakened by a series of court setbacks in different countries.
The DiNapoli article, published recently in The Huffington Post, described the area of the Amazon where Chevron explored for oil in Ecuador as a "cancer zone," littered with "poisoned farmland and heavily polluted waterways and burdened with elevated rates of disease."
DiNapoli wrote: "Since taking office as New York State Comptroller four years ago, I have asked Chevron's board of Directors to settle this marathon obligation and spare the company's battered reputation any further damage. The board has chosen to ignore the wishes of the many investors and observers who supported my call."
DiNapoli also called on Chevron to appoint an independent board member with expertise in environmental matters to minimize the chance the company will again face the level of risk it has taken on in Ecuador.
Chevron has suffered two major defeats this year in the litigation, which began in 1993 and was shifted to Ecuador in 2002 after the company heaped lavish praise on the South American nation's court system.
In February, after an eight-year trial, an Ecuador court found Chevron liable for dumping billions of gallons of toxic waste into the Amazon and ordered the company to pay $18.2 billion in clean-up costs. In September, a U.S. appeals court blocked Chevron from seeking to enjoin the Ecuadorians and their U.S. counsel from lawfully trying to collect the judgment in the many countries where Chevron operates.
Chevron has refused to pay the judgment and promised the plaintiffs – residents of indigenous and farmer communities – a "lifetime of litigation" unless they drop their claims, which the oil giant claims are baseless. Chevron stripped its assets from Ecuador in anticipation of the adverse judgment.
The appellate court decision likely will force "Chevron to make a massive payout," according to DiNapoli.
DiNapoli also argued that oil companies should have learned from BP's Gulf disaster that "short term profits at the expense of environmental protection and human rights often cost companies more in the long term."
The Ecuador court found evidence that Chevron admitted using sub-standard technology in Ecuador, leading to the systematic dumping of billions of gallons of toxic waste into Amazon waterways that local inhabitants used for drinking, bathing, and fishing. The pollution dramatically increased cancer rates and decimated indigenous groups in the area, according to the court.
Last May at Chevron's annual shareholder meeting, DiNapoli and several other large shareholders called on the company to "face reality" and resolve the lawsuit. Separately, the private fund Trillium Assest Management requested that the Securities and Exchange Commission (SEC) undertake a staff review to determine whether Chevron "has appropriately disclosed to its shareholders the scope and magnitude of financial and operational risk" from the Ecuador judgment.
"Chevron must do what's right for its investors, and its future viability by negotiating a fair settlement that restores the company's reputation. Chevron, its shareholders and the general public have not and will not benefit from a never-ending courtroom drama," DiNapoli wrote at the time.
Although DiNapoli's article was published on Sept. 26, there is no public record of Chevron responding to his concerns.