Alternate Annual Report on Chevron’s Human Rights Problem Around the World

Apparently we're not the only ones paying attention to Chevron's human rights problems. An "alternate annual report" has been posted about the impact of Chevron's operations on communities worldwide. We linked to it in an earlier post, but wanted to make it more easily availabe to you. Take a look after the jump: True Cost of Chevron.

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Democracy NOW! Interviews Antonia Juhasz on the "True Cost of Chevron"

Watch this very informative (if somewhat long) interview on the True Cost of Chevron report prepared by concerned NGOs about the report:

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Thin Green Line: “What’s Not In Chevron’s Annual Report”

Great blog by Cameron Scott looking at another way to look at Chevron's annual report today at the "Thin Green Line" blog on SF Gate today: http://www.sfgate.com/cgi-bin/blogs/green/detail?&entry_id=40674

Reprinting here:

What's not in Chevron's annual report

People with strong ideological perspectives are often outraged by media coverage of their pet issues. When both sides are mad, you know you're doing something right. But how often do you hear corporations furious about they way they are covered in the business section? The section seems to lend itself to favor-currying and soft-shoeing.

In the lead-up to Chevron's annual shareholders meeting tomorrow in San Ramon, the company landed a puff piece on KGO focusing on its efforts to decrease its water usage. No mention of the Amazon controversy, and no mention of outside pressure on Chevron, EBMUD's largest water user.

I'm disappointed to say that a Chronicle
interview with the company's top lawyer also softballs the issues, while giving Chevron the opportunity to present its side of the story with no opportunity for response from the company's many critics. [Update: Chron editors tell me there will be more coverage of Chevron later in the week.]

Well, Chevron's opponents, including San Francisco's Amazon Watch, have taken matters into their own hands, releasing an alternate annual report that presents the externalities not listed in the company's balance sheet, which shows a record profit of $24 billion, making the company the second most profitable in the United States.

Did you know that Chevron's Richmond refinery was built in 1902 and emitted 100,000 pounds of toxic waste in 2007, consisting of no less than 38 toxic substances? The EPA ranks it as one of the worst refineries in the nation. With 17,000 people living within 3 miles from the plant, you'd think the San Ramon-based company would take local heat from more than just a couple dozen activists.

Chevron has sought to brand itself an "energy" company, one eagerly pursuing alternatives to petroleum. Its aggressive "Will You Join Us?" ad campaign asked regular folks to reduce their energy consumption, suggesting that Chevron was doing the same. In actuality, the company spent less than 3 percent of its whopping capital and exploratory expenditures on alternative energy. And it has refused to offer better reporting on its greenhouse gas emissions, despite strong shareholder support for it. (The aggressive, and misleading, ad campaign seems to have ired the report's researchers as well: The report is decorated by numerous parodies, and some have been wheat-pasted around town.)

It's a very well researched report, written by the scholar Antonia Juhasz, clearly divided into regional issues, and it's a much needed counterbalance to the friendly coverage Chevron is otherwise getting. (Juhasz was interviewed on Democracy Now this morning.)

For information on protesting the shareholder meeting early tomorrow morning, click here.

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“Chevron Botching Ecuador Case”

The Amazon Defense Coalition put out a press release today calling attention to an oil industry publication reporting about Chevron's Ecuador problem. Take a look:

Chevron Botching Ecuador Case, Says Influential Report

$27 Billion Liability in Ecuador "Poorly Handled" By Chevron's Top Management, Analyst Tells Leading Trade Publication

New York, NY (May 27, 2009) – Platt's Oilgram News, the leading trade publication for the oil industry, is reporting that "momentum seems to be growing against Chevron" in the long-running environmental case brought by Amazon communities in Ecuador that could lead to a $27 billion judgment later this year.

The article, published on Tuesday under the headline "Concerns Grow in Chevron-Ecuador Suit", quotes a leading oil industry analyst, Fadel Gheit, as saying the Ecuador case "is a mess in the ground and in public opinion" and has been "very poorly handled" by Chevron. The $27 billion liability is expected to be a major topic today at Chevron's annual meeting, with attention focused on how Chevron's Board of Directors had not independently vetted management's handling of the matter.

The lawsuit, being held in Ecuador at Chevron's request, will determine if Chevron will be forced to pay for a clean-up of the more than 18 billion gallons of toxic waste dumped by Texaco (now Chevron) when it operated an oil concession in the Amazon from 1964 to 1990. A team of court-appointed experts has assessed damages at up to $27.3 billion and a decision is expected later this year.

Several scientific experts consider the disaster to be the worst oil-related contamination on the planet. A team of U.S.-based reviewers found that the damages number is consistent with the cost of other large environmental clean-ups around the world.

Gheit, who works for Oppenheimer, was quoted in reference to Chevron's Ecuador liability as saying: "I think the longer it lingers the more it will cost. I would settle and cut my losses. Time is not on their side. The sooner they resolve it the better off shareholders are. I don't think it will cost $27 billion, but [it] will certainly cost a hell of a lot more than $1.8 billion" that Chevron has set aside for liabilities.


The article also quoted Barclay's Capital analyst Paul Cheng as saying, in reference to the Chevron liability, that "we would expect that any negative ruling [in Ecuador] would be damaging to the stock's near-term performance, and we would be an aggressive buyer to take advantage of any weakness."

Platts Oilgram News is widely recognized as the standard publication chronicling the oil and gas energy sector and its published rates are used as a benchmark within the industry. The article reported on concerns about Chevron being raised by the New York attorney general and public and private funds.

The article quotes a letter sent to Chevron by New York Attorney General Andrew Cuomo saying "this office has broad authority to investigate and pursue allegations of financial fraud and material misstatements in connection with publicly traded companies." Cuomo said he was looking into "Chevron's characterization of available legal defenses" and asked Chevron to estimate "possible damages if found liable … [and] what if any reserves have been established in contemplation of such damages being assessed against Chevron."

The Cuomo investigation is being brought under New York's Martin Act, which allows for both civil and criminal liability for fraud. Several New York shareholders had requested the probe to determine if Chevron is complying with securities laws.

Leaders from Ecuador's Amazon region are expected to attend the shareholder's meeting today and confront Chevron CEO David O'Reilly over the company's allegedly misleading assertions about Ecuador.

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Chevron Facing Potential Shareholder Revolt Over Ecuador

This press release was online today about Chevron's liability and how pissed some shareholders are about it. Take a look:

Chevron Management Dealt Major Blow with CalPERS Announcement on Ecuador

California Pension Fund Voting for Resolution Stemming from Chevron's $27 Billion Ecuador Liability in Rainforest

Pressure Grows as Funds from Connecticut, Philadelphia, Detroit Defy Recommendation of Chevron Management

SAN FRANCISCO--(BUSINESS WIRE)--Chevron is facing a shareholder rebuke at its annual meeting next week over the company's $27 billion Ecuador liability with the announcement that the nation's largest public pension fund in California is defying the recommendation of company management and voting for a resolution on the issue.

CalPERS, which owns an estimated $600 million of Chevron stock and controls $170 billion in assets, announced on its website today that it will vote for a resolution calling on Chevron to examine whether it complies with host country laws and environmental regulations. Chevron has been heavily criticized for violating such laws in Ecuador, leading to a humanitarian crisis among indigenous and farmer communities in an area of rainforest where Texaco admitted to dumping billions of gallons of toxic waste from the mid-1960s to the early 1990s.

New York State Attorney General Andrew Cuomo has also opened an investigation of Chevron to determine if it is misleading shareholders about the financial risks the company faces in Ecuador.

"The CalPERS vote is a significant announcement that puts enormous pressure on Chevron's management in the investor community," said Dan Orlow, a private American investor who is advising the Amazonian communities. "It demonstrates that important pension funds are now lining up against Chevron on Ecuador."

CalPERS and the two New York funds – the state's Common Retirement Fund and the Employees Retirement System of New York City -- are three of the largest public pension funds in the U.S. and together 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 Trillium Asset Management in Boston.

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.

The case is in Ecuador at Chevron's request after it was initially filed by the communities in U.S. federal court. The company agreed to be subject to jurisdiction and be bound by any ruling in Ecuador as a condition of the case being transferred out of U.S. court, which makes the enforceability of a judgment out of Ecuador likely despite what the company is saying to shareholders, said Steven R. Donziger, an American legal advisor to the Amazonian communities.

The liability appears to be the largest ever faced by an oil company for environmental damage, and almost surpasses the $31 billion price tag paid by Chevron to purchase Texaco in 2001. Chevron's management has announced it expects an adverse judgment in the case but has said it would appeal, while the plaintiffs have announced they plan to ask the court to hold the amount of any judgment in escrow pending appeals – a move that could severely hinder the company's cash position in a time of relatively low oil prices, according to analysts.

Previously, the Securities and Exchange Commission denied an attempt by Chevron management to prevent the Ecuador resolution from coming to a vote.

The announcement by CalPERS comes the same week that Chevron's management filed with the SEC an open letter to shareholders urging them to vote against the Ecuador resolution. That letter – signed by Chevron Corporate Secretary Lydia I. Beebe – contains incorrect and misleading information and appeared to backfire, said Donziger.

"Each assertion in the Beebe letter is either false, materially misleading, or incomplete except for the part where the company admits it might lose the legal case," said Donziger.

"Our team is being contacted repeatedly by shareholders and analysts who are concerned that Chevron management is not fully and honestly disclosing the company's exposure in Ecuador," said Orlow. "There is a real concern that Chevron is not playing it straight and that it might have overpaid for Texaco."

The Cuomo investigation is being brought under New York's Martin Act, which allows for both civil and criminal liability for fraud. Several New York-based shareholders, including Amnesty International, had requested the probe to determine if the company's public disclosures complied with securities regulations.

The annual meeting is scheduled for May 27 at Chevron headquarters in San Ramon, CA. Indigenous leaders from Ecuador's Amazon are expected to attend and confront Chevron's management about Ecuador.

In past annual meetings, Chevron CEO David O'Reilly occasionally has treated the Ecuadorian visitors with a discourteous tone and shut down the microphone when they attempted to speak, said Donziger.

About the Amazon Defense Coalition

The Amazon Defense Coalition represents dozens of rainforest communities and five indigenous groups that inhabit Ecuador's Northern Amazon region. The mission of the Coalition is to protect the environment and secure social justice through grass roots organizing, political advocacy, and litigation.

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Hatchet job for Chevron in this week’s Economist…

An article in the Economist this week totally misses the mark about Chevron's liability in Ecuador. Not only did the reporter fail Journalism 101 by failing to talk to ANYONE from the plaintiffs, he or she (Economist articles have no byline) repeated word for word Chevrons story. This is the response by one of the lawyers working on the case – it gives some perspective on what was missing from the Economist fable:

This article buys into almost all of Chevron's misleading talking points and does your readers a huge disservice. Further, the article has numerous factual inaccuracies that hide the fact Chevron believes no court, government, or law has a right to hold it accountable for creating a humanitarian crisis in the rainforest. Perhaps the most important fact is the obvious one – the article repeats Chevron talking points, while a Chevron advertisement intermittently sits above the article on the Economist website.

This is some of what you got wrong or was taken out of context, from the perspective of a lawyer working on the case:

It is indisputable that Texaco used the Amazon as a trash bin for the 26 years that it operated a large oil field in Ecuador. The company admits to dumping more than 16 billion gallons of toxic "water of formation" into Amazon waterways and leaving over 900 toxic waste pits that leach toxins into soils and groundwater to this day. Several independent, peer-reviewed studies (as opposed to Chevron's financed studies) show a strong elevation in cancer rates in the oil-producing region that are correlated to hydrocarbon contamination. There is indisputable evidence that the practices Texaco used in Ecuador had been outlawed for decades in the U.S. Texaco's practices violated Ecuadorian law, U.S. law, industry custom, the company's contract with Ecuador's government, and basic human decency. More than 1,400 people have died of cancer, according to empirical data based on a court survey. Several indigenous groups have had their cultures decimated. The lawsuit, filed in U.S. court in 1993, is about seeking compensation from the company for these damages.

You totally missed Chevron's bad faith in the litigation. Chevron fought for nine years to move the trial to Ecuador from U.S. courts. It submitted 14 expert affidavits praising Ecuador's courts as fair and adequate. It agreed to submit to jurisdiction in Ecuador and be bound by any ruling there as a condition of the case being transferred. Only when the trial evidence in Ecuador began to point to Chevrons' culpability did those same courts suddenly become unfit for Chevron. The company tries to delay, attack, and distract because the evidence shows 100% of the former Texaco sites are highly contaminated with cancer-causing carcinogens. Chevron also has launched lobbying campaigns in Washington and Quito to help it accomplish in the political arena what it cannot accomplish under the rule of law – namely, engineer a victory via political pressure. What bothers Chevron about Ecuador's President is that he won't do its bidding, he won't interfere in the litigation, and he won't cut a side deal with the company unlike other Presidents from years past that allowed Texaco to run roughshod over the country's citizens.

Chevron's remediation, the basis of its "defense" at trial, was a total sham. At 100% of the so-called "remediated" sites inspected during the trial, high levels of toxins in soil and water have been confirmed by independent laboratories. Chevron created bogus laboratory results to "certify" the pits as cleaned, leading to a criminal indictment of two former Texaco lawyers. The "release" received by Chevron for the so-called remediation excludes the private claims of the type being litigated in the lawsuit. Chevron is lying to shareholders and journalists when it claims it was "released" – no court in the world has ever accepted Chevron's argument on this point, despite being presented countless times over the last 13 years.

Finally, the court-appointed expert maligned in your article is one of the most respected environmental consultants in Ecuador. He is so good that Chevron paid him as its expert in an earlier phase of the case. He worked with a team of 14 independent scientists to come up with a damages assessment. More than 25 scientists have reviewed the assessment and found its conclusions reasonable and the damages figure consistent with other large environmental clean-ups. Your claim that Texaco made less than $500 million profit is preposterous and illustrates your shoddy research. That amount was made by Texpet, Texaco's fourth-tier subsidiary in Ecuador. Texaco itself made an estimated $25 to $30 billion in profit in Ecuador.

Let's be clear – the Economist approached this story with a bias, and never contacted a representative of the communities. Chevron is a leading advertiser for the Economist. You owe your readers an explanation.

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Chevron caught manipulating media…

By the New York Times no less…the paper today picked up how Chevron has tried to manipulate the media: When Chevron Hires Ex-Reporter to Investigate Pollution, Chevron Looks Good.

But the times missed the real story and lets Chevron off the hook about how the company totally and completely fails to disclose that they paid for the piece in any aspect of the "report" put out by local Chevron pet reporter Gene Randall. Take a look at this press release describing the real story here:

Chevron Produces Phony Online News Coverage to Spread Misinformation about Ecuador Disaster

Oil Giant Fails to Disclose That It Paid for "News" Video Narrated by Former CNN Correspondent Gene Randall

Amazon Defense Coalition
3 May 2009 - FOR IMMEDIATE RELEASE
Contact: Karen Hinton at 703-798-3109 or karen [at] hintoncommunications.com

To obtain additional background about Chevron's oil contamination in Ecuador, click here to download a press kit

Washington, D.C. (May 3, 2009) –To promote a misinformation campaign about its role in the oil contamination of a pristine area of the rainforest in Ecuador, Chevron recently produced a video that copies the format and style of television news shows and portrays Texaco, now owned by Chevron, as completely blameless in the dumping of billions of gallons of toxic waste into the Amazon jungle.

Chevron has bought online advertising on Google to promote the 13-minute video ahead of the airing tonight of a 60 Minutes segment, reported by Scott Pelley, that is expected to expose the company's complicity in what is considered the world's worst oil-related contamination. Chevron never reveals it paid for the video, which is designed to look like an "objective" CNN news report and is narrated by former CNN correspondent and current corporate consultant Gene Randall.

Two environmental groups are blasting Chevron and Randall for engaging in the deceptive practice of producing a corporate news video that looks like a news broadcast. They called on Chevron to stop airing the video until the company makes a full disclosure.

"Chevron is using false information in this deceptive video to mislead the public, its own shareholders, and Chevron employees about its responsibility for an environmental disaster of epic proportions," Mitch Anderson, Corporate Accountability Campaigner at Amazon Watch, an environmental advocacy group in San Francisco.

"Randall should be ashamed to lend his credibility built up over years as a legitimate journalist to an oil company trying evade accountability for a disaster that is literally killing off indigenous groups and destroying the rainforest," added Anderson.

"If I were CNN, I would be furious because Randall essentially is getting paid by Chevron to use and dilute CNN's brand without permission."

Click here to view the video.

Chevron faces a potential civil liability of up to $27 billion for the Ecuador contamination in an epic 15-year trial in Ecuador's courts brought by dozens of indigenous groups and farmer communities. The damages assessment was produced by a team of 15 experts and is contained in a 4,000 page court report that analyzed the evidence in the case and places blame squarely on Chevron for the problems.

A final decision on the case is expected later this year.

The trial is taking place in Ecuador at Chevron's request after it was transferred from U.S. federal court in 2002. At the time, Chevron submitted numerous sworn affidavits praising the fairness of Ecuador's courts, although with a decision in the case imminent the company now claims those same courts are treating it unfairly.

The Chevron corporate video uses paid Chevron consultants and employees who cite discredited information consistent with the company's talking points on the case, said Karen Hinton, a U.S.-based spokesperson for the rainforest communities. Randall advertises himself as a producer and narrator of corporate videos with a "news flavor". (For more information about Randall, click here)

The Ecuadorian man who has led the communities in the battle against Chevron said the company should either pull the ad or inform viewers it produced it.

"Telling the truth isn't easy for Chevron because the company has put out much misinformation about the harm Texaco did to my country and its people," said Luis Yanza, President of the Amazon Defense Coalition, an Ecuadorian group that represents the plaintiffs in the lawsuit.

The hiring of Randall is not the first time Chevron has tried to use the veneer of the news media to promote its misinformation campaign. Chevron paid a little-known San Francisco-based online newspaper publisher, Pat Murphy, to write positive news article about Chevron in Ecuador without revealing Murphy was paid. Collaborating with Murphy has been the online blogger Zennie Abraham, known as Zennie 62, who parrots Chevron's talking points in his blogs. (For more information regarding Chevron's use of Pat Murphy and Zennie Abraham as proxies to dissiminate the company's propaganda, click here and here

Chevron has not denied charges that it funnels money to seemingly independent journalists, including Murphy and Abraham, to post what appears to be editorial content that is actually paid advertising.

The Chevron video misleads viewers on several important elements of the lawsuit, as demonstrated by evidence in the 4,000-page report prepared by a team of court experts, said Anderson. Some of the misleading facts are as follows:

• The video quotes Pedro Alvarez, a Chevron consultant, as saying the contamination in Ecuador poses no risk to public health. In fact, several parties – including Chevron – have found dangerous contaminants and carcinogens such as Chromium VI at levels thousands of times higher than allowed by law in Ecuador.
  
• The video falsely claims Texaco earned $490 million in profits from Ecuador. In reality, Texaco earned between $25 billion and $30 billion; Texaco's fourth-tier subsidiary, Texpet, earned $490 million.
  
• The video falsely claims the case was brought under law passed in 1999, after Texaco left Ecuador. In fact, it was brought under a provision of Ecuador's civil code dating to 1861 – a fact Chevron has admitted in court.
  
• The video claims Ecuador's courts are "unfair" but fails to reveal that the charge was made only after the evidence at trial started to point to Chevron's culpability. It also fails to disclose that Chevron argued as recently as 2007 in another case that Ecuador's courts are an adequate forum.
  
• The video claims that Ecuadorian lawyer Pablo Fajardo, who has won a CNN "Hero" Award for his work on the case, tried to stop Ecuador's state-owned oil company from cleaning Texaco's contaminated sites. In fact, Fajardo tried to get that company to clean the sites properly rather than just cover them with dirt.
  
• Chevron tries to claim the health impacts such as cancers are caused by fecal matter in the water. There is no scientific evidence to support the claim that fecal matter causes cancer.
  
• The video lies when it claims that the billions of gallons of water of formation dumped by Texaco were "treated" before discharge. In fact, Chevron's own environmental audits, in evidence in the case, show the water contained carcinogens and was not treated.
  

Click here for more information:

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And probably worth mentioning…

That Chevron's actions in Ecuador were highlighted in a piece on 60 Minutes Sunday night:

Watch CBS Videos Online

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Interesting Story on NPR

http://www.npr.org/templates/story/story.php?storyId=103233560

While Juan Forero does a nice job of recounting the horrific environmental contamination in Ecuador's Amazon, his reporting of President Rafeal Correa's comments on the humanitarian crisis afflicting the region wrongly imply that President Correa has somehow influenced the trial in Ecuador. This is an inaccurate and misleading construction of Correa's comments, which were taken out of context, and buys directly into Chevron's propaganda about the case.

Politicians comment about trials all the time in countries around the world for a variety of political reasons. It doesn't mean they are "interfering" with the trial which takes in the judicial branch, independent of the executive branch. President George W. Bush's administration commented frequently about ongoing trials, from issuing statements on the lawsuits against insurance companies in the aftermath of the Katrina disaster to commenting on the urgency of intervention in the Terry Schiavo "right to life" cases. President Obama comments all the time about the behavior of banks and insurance companies in the economic crisis, while many of those institutions are targets of litigation. No serious person alleges that public comments of either of these Presidents somehow has biased those legal actions and made the judiciary incompetent. Any suggestion from Chevron that Correa's comments make the courts in Ecuador partial underlies a certain colonial-tinged racism regarding the competence of the Ecuadorian judiciary, despite the fact that U.S. courts have frequently found Ecuadorian courts to be perfectly competent courts to hear these cases. In fact, the exact case against Chevron started in a U.S. court and was only transferred to Ecuador at Chevron's request, over the objection of the plaintiffs, after the U.S. judge found Ecuador's courts to be a competent venue for hearing the case.

Beyond offering a few statements by Correa that express sympathy for the victims of this environmental crime, and outrage at the perpetrators of it, neither Forrero nor Chevron can point to a single instance of executive interference with the court hearing the case. In fact, every piece of evidence points to the opposite: Correa has personally, on several occasions denied any interference in the Aguinda trial, and has continually reasserted that the Ecuadorian courts are free from interference by the Executive or Legislative branches. The Attorney General of Ecuador has repeatedly and publicly defended the independence of the judiciary in Ecuador against attempts to interfere in the lawsuit against Chevron by – surprise – Chevron itself, which has lobbied government officials in Quito and Washington to quash the case via political pressure. Evidence has emerged that the very first day of the trial in Ecuador – October 21, 2003 – Chevron pressured Ecuador's then Attorney General to request that the trial judge illegally dismiss the case. Perhaps most telling, Chevron itself, as recently as 2006 (after Correa came to power) has asked U.S. courts to transfer other, unrelated cases about the health impact of oil contamination to the very same courts in Ecuador that they claim are so biased against them.

A comment by a President expressing sympathy for a group of his constituents suffering from a humanitarian crisis of epic proportions is entirely appropriate. These expressions of support have are entirely appropriate, and have nothing to do with an ongoing litigation that deals with complex factual and legal matters. Don't be fooled by Chevron's propaganda – the company is getting the fair trial they said they would when they argued to have the case transferred out of U.S. federal court and into Ecuador.

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