25 May 2015 - FOR IMMEDIATE RELEASE
Contact: Karen Hinton at +1.703.798.3109
San Francisco, CA – With evidence mounting that Chevron falsified evidence to evade paying a $9.5 billion pollution liability in Ecuador, Chevron CEO John Watson faces an embarrassing public reprimand this week from an Ecuadorian indigenous leader who has traveled from the rainforest to the company's annual meeting to confront top management with proof that it has gone rogue in the long-running litigation.
Humberto Piaguaje, a leader of Ecuador's Secoya indigenous tribe, will enter the company's annual meeting Wednesday as a shareholder with a proxy. Once in, he plans to raise the issue of a new forensic report that proves Chevron's star witness lied under oath and explosive internal company videos that suggest Chevron scientists tried to defraud Ecuador's courts to evade a court-mandated clean-up of oil contamination that has afflicted Ecuador's rainforest for decades.
(For more background on the videos, see here. For a general summary of the overwhelming evidence against Chevron in Ecuador, see here. For a summary of some of Chevron's recent setbacks in the case, see here.)
Three layers of courts in Chevron's chosen forum of Ecuador, including the nation's Supreme Court, have affirmed that the oil giant is responsible for damage caused by roughly 1,000 toxic waste pits and 400 well sites abandoned when the company (operating as Texaco) left Ecuador in 1992 after 28 years of operations. Chevron refuses to pay to clean up the sites despite promising to comply with the Ecuador judgment as a condition of moving the matter from U.S. federal court in 2001.
"John Watson has now resorted to what appears to be the deliberate falsification of evidence to evade paying what Chevron owes to the people of Ecuador," said Piaguaje, who heads the tribal coalition that recently won the judgment against the company after 11 years of legal proceedings in Ecuador's courts.
Watson, an avid golfer who last year made roughly $25 million in annual compensation, was described by Piagauje as "greedy in the extreme" and "out of touch" with the needs of the communities where Chevron operates.
Among the issues that Piaguaje plans to raise with Watson and the company's Board of Directors at the annual meeting:
- An explosive new forensic report by computer expert J. Christopher Racich that proves Chevron lawyers falsified evidence to try to frame lawyers for the indigenous groups by claiming they wrote the trial court judgment when in fact it was written by the judge.
- Chevron's refusal to pay for the court-mandated clean-up. Residents of the area where Chevron operated suffer from high cancer rates and other oil-related health problems, including a spate of spontaneous miscarriages.
- Chevron's efforts to try to block judgment enforcement actions in Canada and Brazil. Piaguaje and his fellow community leaders have targeted Chevron in both countries to seize company assets to pay for their clean-up – but Chevron now claims for technical reasons that its wholly-owned subsidiaries cannot be sued.
- Secret internal company videos recently released by Vice News and Amazon Watch that show Chevron scientists laughing at pollution and trying to create an elaborate ruse to deceive Ecuador's courts by only finding "clean" soil during judicially-supervised inspections of well sites.
- A letter of support signed by dozens of prominent citizens, including three Nobel Peace Prize winners. Among those signing: Archbishop Desmond Tutu; the musician Roger Waters; the Argentinian Adolfo Perez Esquivel, who in 1980 won the Nobel for his defense of human rights during his country's "dirty war"; and William McKibbon, the founder of the climate change group 350.org.
In addition to losing the underlying case, Chevron's legal prospects in the Ecuador matter have suffered significant setbacks in recent years as the various layers of the company's subterfuge have been exposed in court.
In addition to losing the case in its preferred forum of Ecuador, lawyers for Piaguaje and the affected communities have presented evidence that the company filmed its scientists doctoring evidence to defraud Ecuador's courts; had a policy in Ecuador of destroying documents relating to its oil spills; paid an admittedly corrupt witness to lie to a U.S. federal court; executed a sham remediation; and attempted to bribe the Ecuador trial judge to recant his findings against the company. That's in addition to the State Department cables that show Chevron worked with U.S. embassy officials to undermine the lawsuit by offering money to Ecuador's government in exchange for quashing the valid legal claims of the country's citizens.
Aside from the expected showdown with Piaguaje, Chevron CEO Watson also faces shareholders resolutions stemming from the company's environmental problems in Ecuador and elsewhere, including in the California community of Richmond where a recent fire at a company refinery spewed toxic waste into the air and forced 15,000 people to seek medical attention.
Just two years ago, shareholders led by the New York State Common Retirement Fund garnered a whopping 38% support for a resolution stemming from the company's Ecuador liability. Considered a major rebuke to Watson's handling of the litigation, the resolution called for the positions of CEO and Chairman to be split between two people to ensure greater Board independence over management.
With Watson still holding both positions, Chevron is considered by many governance groups to have an outdated corporate governance structure that puts too much power in the hands of one individual – leading to all sorts of problems when that person has little regard for environmental issues as is the case with Watson, said Paul Paz y Miño, an advocate with the environmental group Amazon Watch.
At a press conference scheduled for Tuesday in San Francisco, Piaguaje will speak with members of a coalition of communities in California and worldwide that have been impacted by Chevron's poor environmental practices. Those participating include Gayle McLaughlin, a city council member in Richmond, CA (site of Chevron's refinery); Andres Soto, a community leader from Richmond; Lipo Chanthanask of the Asian-Pacific Environmental Network; Michelle Chan from Friends of the Earth; and Paz y Miño from Amazon Watch, an environmental group that Chevron has repeatedly attacked in recent years for its efforts to hold the company accountable for its pollution in Ecuador.
Last year, also under fire from shareholders and rainforest villagers over the Ecuador judgment, the notoriously thin-skinned Watson moved the company's annual meeting to the remote Texas town of Midland in an apparent attempt to avoid his critics. In 2010, he had five dissident shareholders forcibly removed and arrested at an annual meeting when they tried to confront him on the Ecuador issue.
Watson also has been called out for failing to adequately disclose the Ecuador liability to shareholders and the financial markets. Several reports (see here and here) by a Canadian securities lawyer about the disclosure problems led to calls by shareholders and a U.S. Congresswoman for an SEC investigation of the company.
Background on Ecuador Litigation
The indigenous and farmer communities in Ecuador originally filed their claims in a New York federal court in 1993, but Chevron successfully fought to have the matter shifted to Ecuador where it promised to abide by any adverse judgment. Chevron at the time filed 14 sworn affidavits praising Ecuador's court system.
Once the Ecuador trial began in 2003 and evidence against Chevron mounted, the company began to attack Ecuador's courts and the lawyers who represented the villagers. Two Ecuadorian appellate courts – including Ecuador's highest court, the National Court of Justice – have unanimously affirmed the trial court decision against the company. The trial court decision was based on eight years of litigation, 220,000 pages of evidence, and 105 technical reports. The trial court also imposed a punitive penalty after Chevron lawyers threatened judges with jail time and tried to sabotage the proceedings by filing duplicative motions, including 39 in one 50-minute period.
For more background on the evidence against Chevron relied on by the Ecuador court, see this document; this video; and this 60 Minutes segment. For evidence of Chevron's long-term strategy to demonize the Ecuadorian communities and their lawyers, see this internal memo from the company's public relations consultant, Sam Singer. For a letter signed by 43 U.S. civil advocacy groups criticizing Chevron for targeting its critics, see here.