Chevron in Ecuador

The archive of the Clean Up Ecuador campaign website

Chevron "Cover-Up" Exposed on the Eve of its Earnings Release

In Letter to Company, Amazon Watch Says Chevron Hiding Massive Liability in Ecuador

Contact: Karen Hinton at +1.703.798.3109

San Francisco, CA - Chevron was accused today of failing to disclose a potential multi-billion dollar liability in a growing scandal that raises major issues of corporate governance at the California-based oil giant.

For the first time, the corporation was publicly charged with misleading shareholders over its battle in a landmark court case in the Ecuadorian Amazon brought by 30,000 local people whose lives have been devastated by massive environmental pollution caused by Texaco's dumping of billions of gallons of toxic waste when it operated there from 1972-1992.

The issue was raised in a letter sent to Edward B. Scott, Chevron General Counsel from environmental group Amazon Watch (view full text), just as Chevron's quarterly results were due to be announced. Amazon Watch charged:

  • Ignoring extensive evidence at trial in Ecuador that points to Chevron's liability. Amazon Watch states that of the 18 sites inspected by the Ecuadorian court, 100 percent show levels of toxins that violate Ecuador law. Yet the company claims in public press releases that the evidence is favorable to its case.
  • Hiding the potential liability from shareholders. Amazon Watch asserts that Chevron has yet to disclose to the SEC the existence of the potential liability, even though it is clearly "material" to company performance.
  • Covering up an improper remediation by Texaco in the mid-1990s. Chevron was warned: "Evidence adduced at trial has severely damaged Chevron's primary defense - that Texaco engaged in an adequate remediation."

"Ultimately, we fear your position represents Chevron's own brand of doublespeak - a clear case of corporate cover-up," wrote Amazon Watch Executive Director Atossa Soltani and the group's lawyer, Sarah C. Aird.

The letter was copied to several public pension funds, Amnesty International, and the Sierra Club.

Ecuadorian plaintiffs from 80 communities and five indigenous tribes are suing Chevron for clean-up costs for what is possibly the worst oil-related contamination in the world. Texaco admits to dumping 18.5 billion gallons of toxic water, but claims the practice adhered to industry standards.

The only comprehensive damage assessment, completed in 2003 by Global Environmental Operations, said it would take at least $6 billion to clean up most of the damage.