Trillium Asset Management & Amnesty International
30 November 2005 - FOR IMMEDIATE RELEASE
Contact: Karen Hinton at +1.703.798.3109
For the third year in a row, Chevron Corporation shareholders have submitted a resolution on Texaco's toxic legacy in Ecuador. This year, the resolution calls on the company to report the total costs relating in any way to the health and environmental consequences of hydrocarbon exposures and Chevron's remediation of Texaco drilling sites in Ecuador.
The shareholder proposal was filed by Trillium Asset Management, a Boston-based socially responsible investment firm that manages more than $900 million in assets for individual and institutional clients. In a sign of increasing awareness of the financial implications for investors of the Ecuadorian situation, the New York State Common Retirement Fund, holding 10.2 million shares in Chevron currently worth more than $603 million, has also joined the filing. Amnesty International USA, the American section of the world's largest membership-based human rights organization, and Boston Common Asset Management, LLC, on behalf of its client Brethren Benefit Trust, Inc. co-filed the proposal.
The resolution expresses concern by shareholders that Chevron is addressing issues in the Amazon as a public relations problem rather than a serious health and environmental problem. They believe this damages Chevron's reputation and credibility as an environmentally responsible corporate citizen, jeopardizes the ability of the company to compete in the global marketplace, and may lead to significant financial costs.
The problem is rooted in a Texaco-Petroecuador joint venture that extracted more than 1.4 billion barrels of oil from the Ecuadorian Amazon between 1972 and 1992. As operator, Texaco designed, built and managed all exploration, extraction and transportation facilities. During this time, the trans-Ecuadorian pipeline spilled an estimated 19 million gallons of oil, and disposed of an estimated 18.5 billion gallons of toxic wastewaters into open, unlined pits, waterways and wetlands.
In 1998, Texaco completed a cleanup of 156 of the 627 unlined toxic waste pits pursuant to a controversial agreement with the Ecuadorian government. Groundwater contamination, however, was not remediated, and the adequacy of the cleanup is being challenged in a third-party, class-action lawsuit in Ecuador representing 30,000 plaintiffs seeking billions of dollars of additional remediation. Evidence gathered by both sides is showing total hydrocarbon soil contamination that greatly exceeds thresholds set by Ecuador and the United States. A final ruling is not expected for at least two years.
"We're not convinced that Chevron's mitigation activities have been sufficient to insulate the company from further liability that could damage share value. Nearly twice as much oil was spilled in the Ecuadorian rainforest by Chevron and its partner than the amount that flowed from the Exxon Valdez," said Shelley Alpern, Director of Social Research and Advocacy at Trillium.
Independent studies of the contamination's health impacts on neighboring communities have found that exposure to and consumption of the contaminated waters has led to numerous types of infections and cancers, far exceeding historical incidence rates, and that children under 15 are three times more likely to contract leukemia in the area where Texaco operated than in other Amazonian provinces. In the Spring edition of the International Journal of Occupational and Environmental Health, 61 physicians and public health researchers from around the world signed a statement excoriating Chevron for buying full-page ads in Ecuador's major newspapers, in which paid scientific consultants cast doubts on studies linking oil development to adverse health effects in the Amazon.
"Amnesty International is deeply concerned about ongoing abuses in Ecuador. Oil development in the Amazon rainforest has posed a serious danger to human rights, including people's right to life, health, livelihood, and a safe environment," said Mila Rosenthal, Director of the Business and Human Rights Program for Amnesty International USA. "We are mobilizing Amnesty International members across the United States to support this resolution through the shares owned in their own investments, by their employers, their state and local funds, and their universities to ensure the affected communities get the attention they deserve from Chevron's management."
A similar resolution received 9% of votes cast by shareholders in 2004 and 2005. Since last year's vote, articles about the contamination in Ecuador, and the pending lawsuit, have appeared in prominent papers such as the New York Times and the Wall Street Journal. Yet in numerous press releases, Chevron has categorically denied that the contamination that remains from Texaco's drilling poses any risk to human health or the environment.
"Chevron Corporation's reputation continues to be questioned because of the ongoing environmental problems in the Amazon. This is a company that depends on the hospitality of and good faith business arrangements with the international community. Each day this environmental and health crisis continues, Chevron risks its ability to be welcomed by other countries for future business opportunities. After more than a decade of being entangled in this controversy, Chevron should to re-examine how it has been handling the situation," said Alan Hevesi, Comptroller of New York State and sole trustee of the second largest public pension fund in the United States. A representative from Mr. Hevesi's office toured the affected areas last year as part of an investor delegation arranged by the indigenous advocacy group Amazon Watch.