SEC Rejects Chevron Attempt to Block Shareholder Resolution on Ecuador Environment Case

Amazon Defense Coalition

FOR IMMEDIATE RELEASE

2009-04-08

Karen Hinton
Karen@hintoncommunications.com
703-798-3109

SEC Rejects Chevron Attempt to Block Shareholder Resolution on Ecuador Environment Case

Chevron Fines Have Tripled In Recent Years

Chevron Request for No Action and SEC Response

Washington, D.C. (April 8, 2009) - The Securities and Exchange Commission has rejected an attempt by Chevron management to block a vote by shareholders on a high-profile resolution that threatens to focus attention on the company's record-breaking $27 billion environmental liability in Ecuador, according to a letter made available by the regulatory agency on its website.

The SEC decision comes after months of lobbying by the oil giant to scuttle a resolution sponsored by two large pension funds in New York that together own more than $1 billion of Chevron stock. The resolution calls on Chevron's management -- under fire in Ecuador, Burma, and Nigeria for being linked to human rights problems -- to assess whether the company's operations in host countries comply with environmental regulations.

"We applaud the SEC for rejecting Chevron's attempt to deny shareholder democracy on this extremely significant environmental issue," said Mitch Anderson, who monitors the company for Amazon Watch, a non-profit environmental group in San Francisco.

The resolution was prompted by evidence in the Ecuador litigation that Chevron uses lax environmental standards in developing nations that allow it to pollute with virtual impunity. Chevron's lawyers have proposed that the Ecuador court adopt a soil clean-up standard 100 times more lax than in most U.S. states to avoid liability, according to the plaintiffs.

"We believe that Chevron's record to date demonstrates a gap between its international environmental aspirations and its performance," the resolution noted in a supporting statement, citing the fact that Chevron's fines for environmental and safety problems worldwide more than tripled between 2003 and 2007.

In Ecuador, Chevron is a defendant in a 15-year legal battle over the dumping by Texaco of billions of gallons of toxic waste into Amazon waterways when that company operated an oil concession there from 1964 to 1990. Chevron bought Ecuador in 2001 and will bear any liability in the case, which was transferred to Ecuador from U.S. federal court at Chevron's request.

Two weeks ago, the trial judge in Ecuador completed the last of 102 field inspections of former Texaco oil production sites. Separately, a court-appointed expert who worked with a team of 14 scientists estimated Chevron's damages at up to $27 billion, which would mark a historical record for an environmental case. A decision is expected later this year.

Amazon Watch and shareholders have criticized Chevron for refusing to set aside funds to satisfy the potential Ecuador judgment and for filing misleading information with the SEC to downplay the significance of the Ecuador case. Chevron claims the trial court in Ecuador is biased, but the plaintiffs point out that Texaco had filed 14 expert affidavits praising those same courts as fair to get the case transferred out of U.S. federal court.

"Only when the evidence started to prove its own culpability did Chevron begin to attack the court process in Ecuador," said Anderson in reference to the Ecuador litigation.

Chevron recently took the rare step of filing a supplemental letter with the SEC as part of a last-ditch effort to persuade the agency that the environmental resolution was too similar to another filed by the International Brotherhood of Teamsters. In responding, the SEC ruled that it was "unable to concur" with Chevron's arguments.

The resolution was co-sponsored by the state pension funds of New York City and New York State and supported by a wide variety of Chevron shareholders, including Amnesty International, the Pennsylvania Treasury Department, and Trillium Asset Management.

It will be voted on May 26 at Chevron's annual meeting near San Francisco. At the meeting, several shareholders and Amazon indigenous leaders are expected to ask pointed questions of CEO David O'Reilly.

For copies of the shareholders' resolution, Chevron's no-action letter to the SEC, and the SEC response, visit www.chevrontoxico.com or contact Karen Hinton at the email address and phone number above.

#

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.