Among the developments this week at Chevron’s raucous annual shareholder meeting—some surprising, some not so—was the oil company’s continuing refusal to settle an $18 billion lawsuit over oil pollution in Ecuador.
A letter from New York state comptroller Thomas DiNapoli and several investor groups urged Chevron to settle case, which has dragged on in various forms since 1993.
Chevron is on trial in Ecuador for widespread contamination of Amazonian land and water resources in the 1970s by Texaco, which Chevron purchased in 2001. Plaintiffs suing Chevron are challenging the adequacy of a remediation effort that Texaco completed in 1998. A court-appointed expert in the Ecuadorian litigation has recommended that Chevron be held liable for up to $27.3 billion in damages. In February, an Ecuadoran judge fined the San Ramon oil major $9.5 billion over oil-field contamination in a portion of the Amazon rain forest where Texaco used to drill, working as a partner with the government-run Petroecuador. The fine could increase to $18 billion.
“Investors don't derive any benefit from this never-ending courtroom drama,” DiNapoli said in a press release. “The entire case is looming like a hammer over shareholders' heads.” The New York State Common Retirement Fund, which DiNapoli manages, is one of those investors, holding Chevron shares worth a about $780 million.
Chevron considers the lawsuit a scam and a conspiracy to defraud the company. At the San Ramon meeting, CEO John Watson told Atossa Soltani, director of the Amazon Watch nonprofit group, that the company was being "victimized" by the other side's lawyers. Chevron contends Petroecuador bears the main responsibility for the oil spills and other pollution in the jungle. Watson told the shareholders that Texaco cleaned up any contamination it caused.
“Texaco lived up to its obligations,” Watson said. “Petroecuador has not lived up to its responsibilities.”
Activists at the often acrimonious meeting also said Chevron has failed to live up to its responsibilities in various locations in addition to Ecuador. The protesters also cited Chevron’s environmental record in locations such as Angola, the Niger Delta, the Philippines, Myanmar, Kazakhstan and Alberta, Canada.
After the meeting, Ginger Cassady, a campaign director with the Rainforest Action Network, said activists’ have launched a concerted effort to intensify the pressure on Chevron. “Our goal at these meetings is to put the spotlight on Chevron's environmental crimes,” Cassady said.
“We want to be a force for good everywhere we operate,” Watson was quoted saying.
On shareholder proposals, Chevron shareholders voted with the company's recommendations, rejecting proposals to elect a board member with a strong environmental background, link executive pay to environmental sustainability and report on the financial risks of climate change.
A proposal to report on the environmental risks of “fracking” - a controversial process for extracting natural gas from rock with hydraulic drilling - also failed, but garnered nearly 41 percent of shareholder votes, according to preliminary results. That qualifies as a surprise, but maybe not all that major because fracking has generated so much attention in the national press. Also the proposal was for a report, not for substantive action, so the shareholders who voted for it can feel good about demonstrating their concern about the issue.
“The fact that 41 percent of Chevron investors voted in favor of more disclosure, an exceptionally high level of support for a first-year resolution, shows how seriously the company's shareholders are taking this issue,” said Michael Passoff, senior strategist with the advocacy group As You Sow. Maybe someday there will be a fracking report.
Chevron is an expert at spin control, delaying tactics, deflecting opposition and making no concessions because that’s what multinational oil companies that make billions in profit every quarter at the expense of the environment and the average consumer can do with impunity.