There may be major corporations with poorer corporate governance records than Chevron, but it is unlikely that many have been as tied to systemic human rights and environmental abuses as the U.S.-based oil and gas giant.
SocialFunds.com recently reported on Chevron's complicity with human rights abuses by the military regime in Burma. As shareowner activist Simon Billenness explained, "The payments that Chevron makes to the military regime are booked under the regime's exchange rate of six kyat to a dollar, when in reality in the marketplace it's several hundred to a dollar. What that means is that it helps the regime launder the money."
In addition, Chevron is part of a consortium building the Yadana Gas Project, which, according to EarthRights International, "has been marred by serious and widespread human rights abuses committed by pipeline security forces on behalf of the companies, including forced labor, land confiscation, forced relocation, rape, torture, murder."
Furthermore, as Larry Dohrs of Newground Social Investment said in reference to a shareowner resolution requesting that the company's board give holders of 10 percent of outstanding common stock the power to call a special shareowners meeting: "An issue highlighted in the resolution is the Doe v. Unocal lawsuit, which was settled just weeks prior to Chevron acquiring Unocal in 2005. There were 13 Burmese plaintiffs who won an out-of-court settlement that used the word compensation. The amount was never made public, but it was published in Business Week as $30 million and I haven't seen anyone challenge that. It pencils out to about $2.5 million per plaintiff."
"People who worked in the area where the pipeline was told me that about 5,000 people have similar claims against the consortium," Dohrs continued. "Were a class action suit to be brought together, and were a settlement to be reached with similar compensation, only on a much larger scale, we're talking about the possibility of billions of dollars."
Even the potential amount of that claim pales in significance compared to Chevron's liability in Ecuador, where an Ecuadorian court earlier this year awarded plaintiffs damages totaling $18 billion in a lawsuit charging that Texaco dumped billions of gallons of waste byproduct from oil drilling in the rainforest, and burned hundreds of millions of cubic feet of gas and waste oil into the atmosphere. Chevron purchased Texaco in 2001, eight years after the lawsuit was originally filed.
A resolution co-filed by Newground, requesting that Chevron recommend a candidate with environmental expertise for its board, specifically references the lawsuit in Ecuador.
"To continue to say there is no merit and we're not going to end up paying anything is a completely unrealistic approach for management," Dohrs said. "But that continues to be the story they tell shareholders. We're very worried that that's not accurate."
"In our resolution we quote one of their own in a sworn legal statement saying that the company is at risk of irreparable damage to its reputational and business relationships," he continued. "Well, it is important to note that's not what they're telling shareholders."
The statement to which Dohrs referred was made by Chevron's Deputy Comptroller Rex Mitchell, who said that a seizure of the company's assets as payment of its liabilities in the lawsuit "would disrupt Chevron's supply chain and operations," and "damage Chevron's business reputation as a reliable supplier."
