New Questions Relating to Chevron's Lack of Financial Disclosure of $27 Billion Liability
Amazon Defense Coalition
26 May 2009 - FOR IMMEDIATE RELEASE
Contact: Karen Hinton at +1.703.798.3109
Two Rainforest Residents to Confront CEO
San Francisco, CA – A growing number of shareholders are challenging Chevron CEO and Board Chairman David O'Reilly's management and oversight of the environmental and human rights policies of the nation's third largest company at a Chevron shareholders' meeting this week.
At the meeting, shareholders will vote on a resolution that requires Chevron to report on its environmental and human rights policies in the company's host countries, including Ecuador. Introduced by the New York pension funds – the state's Common Retirement Fund and the Employees Retirement System of New York City – the resolution has gained support in recent days from CalPERS, the nation's largest pension fund, and other groups. The New York and California pension funds control more than $1 billion of Chevron stock. Other public pension funds that have announced their support of the resolution include those of Connecticut, Pennsylvania, Maryland, and the pension funds of firefighters and police in Detroit and other large cities. Funds from three large unions – the AFL-CIO, Teamsters, and AFSCME – have announced their support of the resolution along with several smaller private funds, such as the Trillium Asset Management in Boston and 36 institutional investors affiliated with the Interfaith Center on Corporate Responsibility, led by the Wisconsin Province of the Society of Jesus.
This type of resolution is not likely to be approved given the control of company management over a significant amount of the voting shares. However, the growing support for the resolution among large institutional shareholders is considered a major victory for shareholders interested in raising awareness about environmental and human rights issues.
Shareholders, along with several financial analysts, also have questioned Chevron's lack of financial disclosure, prompting New York Attorney General Andrew Cuomo to launch a fraud investigation into whether Chevron has provided accurate information and/or withheld material information from shareholders. Financial analysts from Risk Metrics, Proxy Governance, Potomac Research, and Oppenheimer also have raised concerns about disclosure and the potential liability. See here and here for additional information.
The Ecuador liability, featured earlier this month on 60 Minutes in an unflattering report for Chevron, stems from the dumping by Texaco (now Chevron) of billions of gallons of toxic waste in the rainforest when it operated an oil concession from 1964 to 1990. Thousands of rainforest residents have been fighting a legal battle against the company for clean-up since 1993.