Chevron in Ecuador

The archive of the Clean Up Ecuador campaign website

Group Asks SEC to Probe Chevron's Handling of Ecuador Case

By Terence Murray, Oil Daily
9 February 2006

Amazon Watch has asked the US Securities and Exchange Commission (SEC) to investigate Chevron for violating its regulations by failing to inform shareholders about the environmental liabilities involved in a decade long class action lawsuit in Ecuador.

The suit, originally filed in New York in 1993, is made up of 80 communities and five indigenous tribes, all living in the oil-rich Sucumbios and Orellana provinces of Ecuador. The plaintiffs argue that Texaco, now part of Chevron, did not adequately clean up pollution in an area the size of Rhode Island caused by its drilling operations.

In 2004 a US judge ordered the case transferred to Ecuador, where it is now being tried in a court in the town of Lago Agrio.

In a letter to SEC Chairman Christopher Cox, Amazon Watch says the ongoing litigation poses "grave threat to the environmental and ethical reputation of the Chevron brand." The letter adds: "Chevron has not mentioned the Ecuador litigation in any of its filings with the SEC."

San Francisco-based Amazon Watch is not part of the litigation but has been actively lobbying on behalf of the Ecuador-based plaintiffs.

The possibility of an SEC investigation marks a new turn in the longstanding litigation. "We find it outrageous that Chevron does not find the case important enough to notify its shareholders, while at the same time it is spending millions of dollars to lobby the US government to squash the case," said Atossa Soltani, executive director of Amazon Watch.

Chevron spokesman Chris Gidez said the case "does not come close to requiring us to notify shareholders. The suit does not mention dollar damages. There are no numbers in the suit."

On Chevron's lobbying efforts, the Amazon Defense Coalition that is representing the Ecuadorian villages involved in the suit claims the company is "inappropriately lobbying members of Congress" to keep Ecuador from
signing the US-backed Andean Free Trade Agreement until the case is resolved.

Last week Democratic Senators Barack Obama and Patrick Leahy, in a letter to US Trade Representative Rob Portman, sought "assurance that the US Trade Representative will not allow negotiations over the Andean Free Trade Agreement to interfere" with the Chevron case.

"Chevron is trying to hijack US foreign policy to stop a court process in Ecuador to get rid of a $6 billion liability," said a lawyer for the plaintiffs.
Clean up costs are estimated at between $1 billion and $6 billion. Gidez said Chevron lobbies the US government on many issues, "not just Ecuador."

Last week, Chevron said experts appointed by the Superior Court in Lago Agrio concluded the areas of the Sacha-53 well site by Texaco posed no significant risk to human health threat. But Luis Yanza, a spokesman for the Amazon Defense Coalition, claims the Chevron announcement was inaccurate. The official report, he said, "found the company had left massive
amounts of life-threatening contaminants in a site that it claimed to have remediated."

Before it merged with Chevron in 1998, Texaco spent $40 million on cleaning up the site.