Amazon Watch Seeks Independent Board Review of Handling Of $6 Billion Litigation
26 April 2006 - FOR IMMEDIATE RELEASE
Contact: Karen Hinton at +1.703.798.3109
Houston - Two rainforest leaders sparked a dramatic showdown with Chevron CEO David O'Reilly today over the oil major's devastating $6 billion toxic contamination of their ancestral lands in Ecuador's Amazon region.
Emergildo Criollo, a chief of the near-extinct Cofán people in the Ecuadorian Amazon, spoke at Chevron's annual general meeting in Houston, as Chevron (formerly ChevronTexaco) continued to fend off a multi-billion dollar environmental lawsuit in which the corporation is accused of dumping 18 billion gallons of toxic waste directly into the rainforest. The lawsuit asserts local communities are suffering a wave of cancers, birth defects, miscarriages and other health problems.
Mr. Criollo, who had spent several days traveling from his rainforest home by foot, canoe, bus and plane to be at the shareholder meeting, told Mr O'Reilly: "The activities of Chevron have put the survival of our culture, our language, and our people at grave risk. Do you want our tribe to die off? I am here to ask you to live up to your ethical responsibilities and clean up the contamination that is destroying my people."
Another Ecuadorian from an area where Texaco operated, Rita Maldonado, also spoke at the meeting, telling Chevron shareholders and executives: "Texaco left us toxic waste pits that have contaminated our water and our soil." Mr O'Reilly did not respond directly to either Mr. Criollo or Ms. Maldonado.
The dramatic confrontation ratchets up the pressure on Mr O'Reilly and the Chevron management. The landmark Ecuadorian lawsuit is expected to reach a conclusion in the next 18 months with the 30,000 plaintiffs demanding environmental remediation of an area the size of Rhode Island. Cleaning up the mess has been estimated to cost at least $6 billion, not including personal damages to thousands of victims. So far, scientific evidence submitted to the Ecuadorian court by both Chevron and the plaintiffs has revealed an overwhelming pattern of toxic contamination at every rainforest site inspected. All the sites are within the former Texaco concession.
Today's meeting also saw growing unrest among shareholders over Chevron's handling of the litigation and, more broadly, the corporation's disturbing disregard for human rights and environmental safeguards in its global operations. In total, two shareholder resolutions relating to Ecuador were voted on at the meeting, with surprisingly good results for their sponsors.
One resolution demanded itemized accounts of Chevron's spending on lawyers, lobbyists and PR experts from 1993 to 2005 as a result of Chevron's willful refusal to accept responsibility for the Ecuador disaster. Submitted by Trillium Asset Management and co-filed by the New York State Common Retirement Fund, Amnesty International USA and Boston Common Asset Management, preliminary results showed the resolution received over nine percent support. This is considered a strong rebuke to management, given the Chevron board's control of most shares and much of the information about the Ecuador matter sent to shareholders.
A second resolution, calling on Chevron to adopt a comprehensive, transparent, verifiable human rights policy by October 2006 and specifically citing the Ecuador disaster, received 25 percent support, a near-record level a resolution on environmental and human rights policy at a Chevron meeting. The resolution was filed by Society of Jesus, Wisconsin Province and co-filed by 16 members of the Interfaith-Center on Corporate Responsibility (ICCR).
Atossa Soltani, Executive Director, of Amazon Watch, a San Francisco-based environmental and human rights organization, also spoke at the meeting and called for an independent review of Chevron management's handling of the Ecuador case. The Securities and Exchange Commission is currently examining a complaint filed by Amazon Watch alleging that Chevron has breached SEC regulations by failing to disclose details of the Ecuadorian trial, and its potential multi-billion liability, in its financial filings.
Ms. Soltani also warned the Chevron board that Mr O'Reilly's position as both CEO and Chairman of Chevron was a potential conflict of interest that meant shareholders could not rely on him to accurately disclose the truth about the Ecuador disaster and trial. "O'Reilly is in total denial, claiming Chevron cleaned up when it left Ecuador," Ms. Soltani said after the meeting. "He is either being lied to by his local counsel or he chooses to be blind to the mountain of evidence being produced at trial."
Meanwhile, geologist Mark Quarles, of independent environmental engineering consultancy E-Tech International, warned O'Reilly that Chevron's waste management practices in the Amazon would never have been permitted in the United States. Mr. Quarles, a former Texaco consultant now working for the affected communities, said: "If this area were in the U.S., you would have an area the size of Rhode Island that would be deemed not fit for habitation. Its size dwarfs the largest Superfund site in the U.S."
The dumping occurred from 1964 to 1990 as Texaco drilled for oil in the Ecuadorian Amazon. The standard industry practice of the time was to re-inject formation waters, a toxic by-product of the drilling process, deep into the ground. That practice had been long stipulated by law in various U.S. states where oil extraction was taking place precisely to prevent the kind of environmental and public health impacts that have taken place in Ecuador.
In Texas, the state where Texaco was founded, re-injection has been required by law since 1919. However, in Ecuador, Texaco executives knowingly decided to save $1 to $3 per barrel of oil by dumping the formation waters directly into unlined pits and streams, thus contaminating the region's entire water table, on which local people depend for potable water. During its three decades, Texaco made $30 billion in profits from its Ecuador operation.
Today's meeting in Houston coincided with a national day of action, seeing protests organized by Amazon Watch and Amnesty International at Chevron's headquarters in San Ramon, California, the Bay Area and Houston.