May 24, 2012 (TSR/PRNewswire via COMTEX) – There is an epic showdown between angry Chevron shareholders and notoriously short-tempered CEO John Watson over the company’s $18 billion USD Ecuador liability is brewing just days before the company’s annual meeting next week. Watson is facing a potential shareholder rebellion after two leading proxy advisory firms urged support for resolutions directly challenging Watson’s authority, citing his poor handling of the Ecuador lawsuit. Separately, several large investors have signed a letter to be sent to Chevron, citing Watson’s “poor judgment” and calling on the company to reach an “equitable” settlement of the Ecuador case.
Chevron really guilty: Robert F. Kennedy Jr. essay is part of evidence
In 1990, noted environmental lawyer Robert F. Kennedy Jr. was one of the first outsiders to travel to a remote area of Ecuador’s Amazon to assess what at the time was considered one of the worst oil disasters on the planet — one created deliberately by Chevron that is now the subject of an $18 billion judgment against the oil giant.
Writing a powerful and compelling introduction for the long-forgotten 1991 book Amazon Crude, Kennedy said the environmental destruction he saw in Ecuador was “reminiscent of war.” He blasted Texaco, now owned by Chevron, for “not bringing American values” to the South American nation when it built hundreds of wells and production stations across an area of rainforest the size of Rhode Island.
Kennedy’s essay largely confirmed the horror experienced by indigenous groups in the area that resulted in the landmark $18 billion judgment against Chevron, thought to be the largest civil liability ever stemming from a trial. That judgment has become a major point of contention for numerous Chevron shareholders, has raised numerous questions about whether the oil giant is misleading investors and has prompted calls for a SEC investigation to determine if the company is complying with its disclosure obligations.
Amazon Crude was published in 1991 by the Natural Resources Defense Council, one of the leading environmental groups in the United States. It was authored by Judith Kimerling, a former environmental lawyer with the New York Attorney General’s office and now a law professor.
The book, now out of print, meticulously documented Chevron’s sub-standard operational practices in Ecuador.
In the early 1990s — well before the celebrated legal battle between indigenous groups and Chevron made global headlines in news outlets — Kennedy wrote in reference to Chevron’s operations that “nothing in my experience prepared me for the scenes I saw in the Ecuadorian Amazon…. Like most U.S. citizens, I like to believe that when American companies go abroad, American values go with them. That hasn’t happened in Ecuador.”
Kennedy said he witnessed “antiquated equipment, rusting pipelines, and uncounted toxic waste sites.” In reference to the hundreds of open-air toxic waste pits left by Chevron and other oil companies in Ecuador, he said the jungle “was broken by landscapes reminiscent of war.”
Kennedy wrote: “Past the petroleum camp, a large river, recently burned, still ran black, its banks charred… Oil wastes streamed from the broken berm of a nearby production pit.”
After meeting with several members of indigenous groups, Kennedy said that “each of them told the same story. Sick and deformed children, adults and children affected with skin rashes, headaches, dysentery and respiratory ailments, cattle dead with their stomachs rotted out, crops destroyed, animals gone from the forest and fish from the rivers and streams.”
Kennedy was well aware that what Chevron executives were doing in Ecuador would never be allowed where he lived. “They’d go to jail for that in New York,” he wrote.
He continued: “For almost twenty years, American oil companies, led by Texaco (now Chevron), have pumped oil from the Ecuadorian jungle. They have created an infrastructure that includes over 400 drill sites, hundreds of miles of roads and pipelines, and a primary pipeline that stretches 280 miles across the Andes….
“The industry’s practice [in Ecuador] of burying highly toxic drilling muds virtually assures the destruction of … groundwater aquifers, while the region’s surface water is being destroyed by pipeline spills and … pit discharges. By far the most disturbing impacts are to the quarter million forest people, including members of eight indigenous tribes who rely on the natural resources … for their survival….”
Kennedy noted that when oil exploration began in Ecuador’s Amazon most observers thought the “real threat” would be the “speculators and colonists following oil company roads to occupy tribal lands,” but Kimerling’s book made it clear Chevron’s practices have been ‘the greater threat.”
In closing, he wrote, “I reflected that the only way the Amazon will be saved is if the people who live there choose to save it.”
Not long after — in 1993 — indigenous groups and farmer communities in the area filed the class-action lawsuit against Chevron in New York, which resulted in the judgment. The trial took place in Ecuador at Chevron’s request after the company repeatedly praised the country’s court system, although now Chevron claims those courts were biased against it.
The Ecuador court found that Chevron discharged billions of gallons of toxic “water of formation” directly into the waterways used by the local inhabitants for drinking water and caused an outbreak of cancer and other oil-related diseases. See here and here. The judgment is far less than BP’s total liability for the comparatively smaller Deepwater Horizon spill in the Gulf of Mexico.
The court also found that Chevron built and abandoned more than 900 unlined waste pits that continue to leech toxins into the soils and waterways of the region. The company’s operational practices in Ecuador violated industry standards and had been outlawed in most U.S. states in the 1930s and 1940s, according to evidence before the Ecuador court.
CONTACT: Karen Hinton, Karen@hintoncommunications.com, +1-703-798-3109, for the Amazon Defense Coalition
SOURCE Amazon Defense Coalition