Ecuador Oil Contamination Spawns Turmoil at Chevron Annual Meeting

Wednesday, May 26, 2010

At Chevron's annual shareholder meeting here today Mariana Jimenez, 71, from Ecuador told company officials and board members that oil contamination by Texaco, now a Chevron company, is destroying her community in the Amazon rainforest.

At Chevron's annual shareholder meeting here today Mariana Jimenez, 71, from Ecuador told company officials and board members that oil contamination by Texaco, now a Chevron company, is destroying her community in the Amazon rainforest.

"In 1976, I lost two young children. In 1979, one of my daughters became very sick with an unknown illness on her throat and lost her voice for three months. People are still getting sick every day. There are children born with birth defects," Jimenez said.

She called for Chevron CEO John Watson "to take responsibility for the crime that his company committed in my country."

From 1964 to 1992 Texaco, now owned by Chevron, was part of consortium that built and operated oil exploration and production facilities in the northern region of the Ecuadorian Amazon.

In 1993, a lawsuit was filed by 48 Ecuadorian Indians and farmers representing tens of thousands of people in the region who claim to have suffered illnesses and ecological damage to their land caused by oil contamination. The lawsuit, now underway in Lago Agrio, Ecuador, alleges that from 1964 to 1990, Texaco deliberately dumped more than 18 billion gallons of toxic oil production process waste into unlined pits in the rainforest rather than injecting it underground.

A report by a court-appointed team in 2008 concluded that pollution caused mainly by Texaco's Ecuadoran affiliate, Texaco Petroleum, had led to 1,401 cancer deaths in the region. Team leader, Ecuadoran geologist Richard Cabrera, reported high levels of toxins in soil and water samples near Texaco's production sites and assessed damages at up to $27.3 billion.

At the shareholder meeting today, Chevron's new CEO John Watson replied to Jimenez by saying, "My predecessor [former CEO David O'Reilly] showed great empathy and I will do the same."

"We don't need empathy from Chevron, we need them to accept full responsibility for the pain and suffering they have caused our people and clean up Ecuador now," said Guillermo Grafa, an indigenous leader from Ecuador, who was denied access to Chevron's shareholder meeting after traveling from his rainforest home.

Concerned community leaders from several nations, including Ecuador and Nigeria, traveled from around the world yet were refused entry to Chevron's annual meeting.

Outside the Chevron building on Louisiana Street, demonstrators made speeches and displayed banners with slogans such as, "Chevron Energy Costs Lives. Clean Up Ecuador."

Houston police arrested four shareholders and proxy representatives who refused to leave Chevron property after they were denied access to the meeting.

The people arrested were Han Shan and Mitchell Anderson of Amazon Watch; Juan Parras of Texas Environmental Justice Advocacy Services in Houston; and Reverend Ken Davis from Richmond, California. Shan and Anderson participated in a sit-in demonstration before their arrests.

Antonia Juhasz of the True Cost of Chevron coalition was arrested while trying to make a statement inside the shareholder meeting after being admitted with a valid proxy. None of the arrested has yet been released.

"More than 20,000 proxy shareholders have been barred from the meeting for no valid, legal or legitimate reason, but simply because they come from communities in Ecuador, in Burma, in Nigeria, in Richmond, California, like Reverend Davis here. And they want to deny those people speaking out about their concerns. It's appalling," said Shan.

Shelley Alpern, vice-president at Trillium Asset Management Corporation said, "I attend several shareholder meetings every year and I have never seen a company deny entry to legal proxy holders. This is outrageous and reflects very poorly on our company's respect for the laws that govern our proxy process. The shareholders in attendance today should stand forewarned not to say anything critical or it could be you next year."

Inside the shareholders' meeting, Watson emphasized the company's safety record, saying, "If employees see a situation that could harm people or the environment, they not only have the authority to stop operations, we expect them to stop or trigger a stop to operations."

"As in safety," said Watson, "our efforts to improve our environmental performance will never stop."

Lloyds Register, an independent auditor, validated the integrity of Chevron's health, environmental and safety reporting procedures, said Watson.

"The Carbon Disclosure Project, an independent nonprofit organization, gave us the energy sector's top score in its Leadership Index. The index ranks companies taking "best in class" actions to measure and report carbon emissions," he said. "And for the fifth consecutive year, we're in the Dow Jones Sustainability Index for North America."

In 2009, said Watson, "We earned $10.5 billion. That's a 10.6 percent return on capital employed."

Chevron stockholders voted on nine proposals and none of those regarding the environment received a majority of votes. In the vote that gathered the most shareholder support, 26 percent of the votes cast went to the stockholder proposal regarding the appointment of an independent director with environmental expertise.

Approximately nine percent of the votes cast were voted for the stockholder proposal regarding financial risks from climate change.

And only seven percent of the votes cast were voted for the stockholder proposal regarding a human rights committee.

Several times during his speech, Watson referred to the ongoing BP oil spill in the Gulf of Mexico.

"Following the incident, at Chevron we held safety briefings around the world reviewing drilling processes and procedures along with wellcontrol contingency plans. We sent subsea experts to BP's aid, joined a Coast Guard incident command team, and participated in two industry taskforces examining offshore drilling procedures," Watson said. "Last week, those task forces made draft recommendations to Interior Secretary [Ken] Salazar for improving offshore safety."

"When the investigation into the cause of the Gulf disaster is complete, there will be lessons to learn," said Watson. "Our industry will learn them."