May, 20 2016, 04:30pm EDT
Chevron CEO Faces Pressure Cooker Over Ecuador, Climate Change at Shareholder Meeting
OAKLAND, Calif.
Chevron's unprecedented $11 billion pollution liability in Ecuador and its refusal to address climate change are set to dominate the company's annual meeting as CEO John Watson faces increasing pressure from his own shareholders, court rulings, and environmental groups who are accusing the company of trying to intimidate critics and evade its legacy contamination problems.
A renowned indigenous leader, Humberto Piaguaje of the Secoya nationality, is traveling from his jungle home in the Ecuadorian Amazon to confront Watson over Chevron's refusal to pay the historic court judgment requiring that the company remediate billions of gallons of toxic waste dumped into the rainforest. The court judgment is considered one of the greatest triumphs in the corporate accountability movement in history and prompted a U.S. congresswoman to demand an SEC investigation of company management for hiding the risk from shareholders.
(Here is a summary of the evidence against Chevron. Here is a 60 Minutes segment documenting the company's toxic dumping in Ecuador. Here is a recent podcast interview about the case conducted by Alec Baldwin.)
"John Watson and Chevron's Board are facing a perfect storm of burgeoning problems stemming from the company's poor environmental record and primitive governance structure," said Paul Paz y Mino, Associate Director at Amazon Watch, an Oakland-based environmental group that works with Chevron's victims. "Watson's refusal to clean up his toxic waste in Ecuador and his evasive approach to climate change might explain why the company is now seen as the poster child for corporate greed.
"These issues will come to the fore in a big way both inside and outside the shareholder meeting, where protestors will gather to urge responsible action from Chevron's narrow-minded management team," Paz y Mino said.
Chevron operated in Ecuador under the Texaco brand from 1964 to 1992, leaving behind an environmental and public health catastrophe called the "Amazon Chernobyl" by locals. The pollution has devastated dozens of indigenous and farmer communities, driven up cancer rates, and cost Chevron an estimated $2 billion in legal and other fees while the company's reputation has been pounded by journalists and good government groups.
A top Chevron official has said the company would fight the indigenous groups "until hell freezes over" and "then fight it out on the ice." Although Chevron insisted for years that the environmental claims be heard in Ecuador and had accepted jurisdiction there, the company later sold all of its assets in the country and now refuses to pay the judgment.
The indigenous groups last year won a resounding victory before Canada's Supreme Court in their effort to force Watson to comply with the judgment by seizing the company's assets. In Canada, Chevron has an estimated $15 billion worth of oil fields, bank accounts, and refineries - or more than enough to pay the entirety of the Ecuador judgment. Watson and his chief lawyer, R. Hewitt Pate, have tried to argue that company assets in Canada should be off limits to the Ecuadorians because they are held by a wholly-owned subsidiary.
Chevron also faces mounting pressure from a growing international movement of communities from Europe and Latin America who have banded together to oppose the company's sub-standard environmental practices. This year's action, called the "Anti-Chevron Day", will take place from May 20-21 and will include online and live activities in several countries that will denounce Chevron's environmental and human rights violations. (See here for background.)
Apart from pressure from the Amazonian communities, some of Chevron's own shareholders are also demanding that Watson - who in 2015 personally earned $22 million despite a 75% drop in company revenue - comply immediately with the Ecuador court judgment and clean up the estimated 1,000 toxic waste pits and other pollution it left behind when it departed the South American nation in 1992.
Seattle-based Newground Social Investment this year filed a shareholder resolution (see p. 80 of Chevron's 2016 proxy) that sharply rebukes Watson for his mishandling of the Ecuador litigation. Chevron has used dozens of law firms and up to 2,000 lawyers to fight the indigenous groups, but it continues to suffer courtroom setbacks.
Eighteen consecutive appellate judges in Ecuador and Canada have now ruled against Chevron in a case that is fast becoming a potential "litigation catastrophe" for the company. The Supreme Courts of both Ecuador and Canada have unanimously ruled against Chevron; another U.S. appellate court unanimously ruled against the company when it tried to use a U.S. trial judge to block enforcement of the Ecuador judgment anywhere in the world.
The Newground resolution calls for Chevron to make it easier to hold special meetings given that Watson's management team "has mishandled a number of issues in ways that significantly increase both risks and costs to shareholders. The most pressing of these issues is the ongoing legal effort by communities in Ecuador to enforce a $9.5 billion Ecuadorian judgment for oil pollution." (The judgment is now roughly $11 billion because of statutory interest.)
Newground asserts that under Watson's leadership, Chevron "has yet to properly report these risks in either public filings or statements to shareholders. As a result, investors requested on several occasions that the U.S. Securities and Exchange Commission investigate whether Chevron had violated securities laws by misrepresenting or materially omitting information" relevant to the Ecuador liability.
Chevron also faces several other shareholder resolutions - one sponsored by the Union of Concerned Scientists - that suggest the company has fallen well behind its industry peers in reducing its greenhouse gas emissions and adapting to the challenges of climate change. One such resolution calls on the company to produce reports establishing company-wide goals for the reduction of greenhouse gas emissions. Another asks for a change in dividend policy given that the global shift away from fossil fuels will likely lead to billions of dollars of stranded assets in the form of oil reserves. Watson and Chevron's Board oppose all of the climate change resolutions.
Piaguaje's trip, being made on behalf of dozens of indigenous and farmer communities devastated by Chevron's pollution, will culminate in an expected face-to-face showdown with Watson on May 25 at company headquarters near San Francisco. Piaguaje will confront Watson with the extensive evidence of the company's toxic dumping relied on by Ecuador's Supreme Court to unanimously affirm the judgment.
Chevron continues to get hit hard on the Ecuador issue. Several months ago, Chevron's star witness admitted lying under oath after being paid more than $2 million by the company, moved to the United States, and coached for 53 consecutive days by Chevron lawyers before being allowed to testify. Separately, Amazon Watch recently disclosed a Chevron whistleblower video showing company scientists trying to fraudulently hide extensive evidence of oil pollution from the Ecuador court. The video has been seen millions of times on the internet.
Piaguaje and other Ecuadorian rainforest leaders - including Goldman Environmental Prize winners Luis Yanza and Pablo Fajardo - have been pressuring Watson for years to pay the pollution liability so their ancestral lands can be remediated. Disease rates have skyrocketed in the affected area, groundwater has been contaminated, and there is virtually no clean water for tens of thousands of people. Piaguaje's Secoya community has seen its culture decimated because of a lack of fresh water and clean food, according to evidence in the case.
"Our leaders plan to confront Mr. Watson with judgments from multiple courts mandating the company pay its pollution bill to the people of Ecuador," said Piaguaje. "Mr. Watson needs to accept responsibility for Chevron's environmental crimes in Ecuador, apologize to the company's victims, and abide by court orders that compensation be paid.
"Until he abides by the rule of law, Mr. Watson and Chevron's Board members will be considered by us to be fugitives from justice subject to arrest for crimes against humanity under principles of universal jurisdiction," he added.
In previous shareholder meetings, Chevron's management has suffered a series of sharp rebukes over its Ecuador liability. One resolution calling on Watson to separate the positions of Chairman and CEO - widely considered a corporate governance anachronism - received a whopping 38% support from all company shareholders. Normally, any shareholder resolution that receives more than 10% support is considered successful.
In addition, in 2011 several of Chevron's institutional shareholders with more than $580 billion in assets under management sent Watson a letter urging the company to settle the Ecuador case. Amazon Watch also organized a letter signed by 43 non-profit human rights and corporate accountability groups blasting the company for trying to silence its critics over the Ecuador issue.
"In failing to negotiate a reasonable settlement prior to the Ecuadorian court's ruling against the company, we believe that Chevron's Board of Directors and management displayed poor judgment that has exposed the Corporation to a substantial financial liability and risk to its operations," said the investor letter.
U.S. Congressman James McGovern (D-MA), who visited the affected area in 2008, also sent a letter to President-elect Obama describing the horrid living conditions caused by Chevron's dumping practices. The company has also been criticized for trying to silence an anti-Chevron activist in Canada, for trying to intimidate lawyers and scientists for the villagers by suing them privately under racketeering laws, and for trying to shut down dissent by issuing subpoenas to more than 100 journalists, bloggers, and even some of its own shareholders who have questioned management. In 2010, his first year as CEO, Watson lost his cool at the shareholder meeting and had five people arrested who had challenged him over Ecuador.
Deepak Gupta, a prominent U.S. appellate lawyer who represents U.S. attorney Steven Donziger (the main target of Chevron's retaliation campaign), recent called Chevron's litigation strategy an "intimidation model" in an interview with Rolling Stone.
Chevron faces a critical court hearing in Canada in September that could knock out most of the company's case that it plans to use to evade enforcement of the judgment.
"The damage is so extensive that it is unclear whether the full amount of the judgment would be sufficient for a comprehensive clean-up," Piaguaje said. "The humanitarian crisis in our communities due to Chevron's pollution is dire and getting worse."
Amazon Watch is a nonprofit organization founded in 1996 to protect the rainforest and advance the rights of indigenous peoples in the Amazon Basin. We partner with indigenous and environmental organizations in campaigns for human rights, corporate accountability and the preservation of the Amazon's ecological systems.
LATEST NEWS
House Dems Unveil Sweeping Bill to Protect Worker Rights and Safety
"This bill will help level the playing field and, once again, restore the balance of power between workers and their employers," said Rep. Bobby Scott.
Jul 26, 2024
A group of Democratic U.S. House members on Friday unveiled legislation "aimed at bolstering protections for America's workers and ensuring accountability for employers who flout labor and employment laws."
The Labor Enforcement to Securely (LET'S) Protect Workers Act was introduced by Rep. Bobby Scott (D-Va.)—the ranking member of the House Committee on Education and the Workforce—and House Labor Caucus Co-Chairs Mark Pocan (D-Wis.), Debbie Dingell (D-Mich.), Donald Norcross (D-N.J.), and Steven Horsford (D-Nev.).
The bill's sponsors said their legislation is based on the premise that "employment laws are a promise to our nation's workers" meant to "secure the most basic rights of work."
"That promise is broken," they contended. "Recent shocking revelations about massive increases in the number of children illegally overworked and trafficked into dangerous jobs—just over 85 years since the passage of the Fair Labor Standards Act, which was enacted to eliminate that very problem—is the latest example of the ways that this promise to America's workers is broken."
Across the U.S., Republican state lawmakers have been advancing legislation to remove restrictions on child labor, despite several high-profile workplace deaths of minors. At the federal level, Sen. James Risch (R-Idaho) and Rep. Jared Golden (D-Maine) last year introduced a bill that would allow 16- and 17-year-olds to work in the logging industry.
The LET'S Protect Workers Act sponsors highlighted rampant wage theft and overtime violations, workplace injuries, and union-busting by employers who "know that even if a resource-starved Department of Labor catches a violation, the penalties are a mere slap on the wrist."
"People should be able to come home at the end of the day—alive, well, in one piece, and with all the wages they worked hard to earn," the lawmakers asserted. "Children should be in schools, not dangerous workplaces, and workers should be able to organize a union without interference or the threat of retaliation from their employers."
According to House Education and Workforce Committee Democrats, if passed, the LET'S Protect Workers Act would:
- Increase civil monetary penalties for violations of child labor, minimum wage and overtime, worker health and safety, and farmworker protection standards;
- Improve mine safety and reliable funding of black lung benefits through new and increased civil monetary penalties and the option to shut down scofflaw operators;
- Set new penalties for retaliation against workers who exercise their family and medical leave rights;
- Strengthen enforcement of mental health parity requirements for employer-sponsored health plans;
- Close a loophole that allows employers to escape penalties for failing to keep records of workplace injuries if [the Occupational Safety and Health Administration] does not detect the violation within six months; and
- Create new penalties for violations of the National Labor Relations Act, consistent with the Richard L. Trumka Protecting the Right to Organize (PRO) Act.
"Every American should be fairly compensated and be able to return home safely at the end of the day," Scott said in a statement Friday. "Unfortunately, shortcomings in our labor laws enable unethical employers to exploit workers, endanger children, and suppress the right to organize—with little accountability."
"That's why I'm proud to introduce the LET'S Protect Workers Act, which will hold bad actors accountable and strengthen penalties for labor law violations," he added. "This bill will help level the playing field and, once again, restore the balance of power between workers and their employers."
In a joint statement, Dingell, Horsford, Norcross, and Pocan said that "the lack of meaningful enforcement makes it all too easy for bad faith actors to get away with illegally violating workers' rights—from firing workers for organizing a union, to allowing children to work overnight shifts, or jeopardizing workers' safety by ignoring workplace regulations."
"We're proud to join Ranking Member Scott in introducing this bill to crack down on unscrupulous employers and to ensure that workers receive the protections they deserve," the lawmakers added.
Earlier this month, nearly 50 labor organizations led by the AFL-CIO and representing a wide range of U.S. workers urged congressional Democrats to resist Republican efforts to roll back rules enacted by the Biden administration to protect worker rights amid relentless attacks by abusive employers.
Specifically, the labor groups warned that Republicans are trying to use the Congressional Review Act—which was enacted to strengthen oversight of federal rulemaking—to overturn pro-worker rules enacted by the Department of Labor and other government bodies.
Meanwhile, Republicans including former President Donald Trump—the 2024 GOP nominee—have been trying to woo U.S. workers with proposals including a tax exemption for tipped employees panned as a "
hollow promise" by experts and by inviting Teamsters president Sean O'Brien to speak at the Republican National Convention last week.
In response to Republicans' dubious courting of U.S. labor, Rep. Greg Casar (D-Texas)—who is a co-sponsor of the LET'S Protect Workers Act—recently called for holding what would be a largely symbolic vote on the PRO Act. The bill was revived last year by Scott and Sen. Bernie Sanders (I-Vt.) and, if passed, would expand labor protections including the right to organize and collectively bargain.
"If Republicans wanna talk like they're pro-worker, then let's have a vote on the PRO Act next week," Casar
said on social media last week. "Let's see which politicians are for unions and which ones are all talk. Dems are ready to vote, how about you guys?"
Keep ReadingShow Less
Amnesty Urges War Crimes Probe of Landmines in Russian-Occupied Ukraine
"In every region in Ukraine that was formerly occupied by Russia, we have seen evidence of civilians killed and injured by antipersonnel mines left behind by Russian forces," said one researcher.
Jul 26, 2024
Amnesty International on Friday demanded a "prompt, thorough, independent, and impartial investigation" into the use of antipersonnel landmines, "which litter territories in Ukraine formerly and currently occupied by Russian forces."
The Landmine and Cluster Munition Monitor says that Ukraine is "severely contaminated" with antipersonnel landmines, which Russia's troops have used since 2014, but particularly since Russian President Vladimir Putin's full-scale invasion in February 2022.
"Landmines have been documented in 11 of Ukraine's 27 regions: Chernihiv, Dnipropetrovsk, Donetsk, Kharkiv, Kherson, Kyiv, Luhansk, Mykolaiv, Odesa, Sumy, and Zaporizhzhia," according to the monitor's latest update, published in November. "Russian forces have used at least 13 types of antipersonnel mines in Ukraine since February 2022."
Ukraine is a state party to the Convention on the Prohibition of the Use, Stockpiling, Production, and Transfer of Antipersonnel Mines and on Their Destruction of 1997 but lacks legislation to enforce its implementation. Human Rights Watch last summer gathered evidence of the Ukrainian military's use of the banned mines. Russia is not a party to the treaty.
Patrick Thompson, a Ukraine researcher at Amnesty, said Friday that "in every region in Ukraine that was formerly occupied by Russia, we have seen evidence of civilians killed and injured by antipersonnel mines left behind by Russian forces."
"They are a daily, deadly threat to civilians. Some have been deliberately placed in civilian homes where they maim and kill," Thompson highlighted. "There must be an effective investigation into all such incidents as possible war crimes."
The group shared just one survivor's story of encountering a mine:
In March 2022, Russian forces evicted Oleksandr* (not his real name) and his mother from their flat in Snihurivka, in the region of Mykolaiv. A Russian military unit took over the entire apartment block until it was forced to withdraw following fierce fighting around Snihurivka in November 2022.
After the Russian retreat, Oleksandr returned to the apartment block to assess how badly it had been damaged. Upon entering the basement, he stepped on a disguised PFM-1 antipersonnel mine that had been placed under wooden planks. The mine exploded, Oleksandr fell, and landed on other disguised mines that had apparently, had been deliberately placed to injure or kill anyone entering the building. He lost both his left leg and arm in the incident.
“The deminers working to clear Ukraine of this threat are carrying out painstaking, dangerous work every day," Thompson noted. "While the scale of the problem is undeniably huge, the biggest obstacle to clearing Ukraine of landmines is Russia's ongoing aggression."
Thompson called on the international community to "commit to sustained financial and technical assistance to help Ukraine get rid of a danger that continues to wreck lives and livelihoods," and to continue fighting for an end to the use of the weapons.
"Countries must uphold the ban on the use, production, stockpiling, and transfer of antipersonnel mines worldwide," he said. "There must be an end to the use of such indiscriminate weapons."
The most recent report from the United Nations Human Rights Monitoring Mission in Ukraine states that the war has killed at least 11,284 civilians there since 2022 and injured another 22,594—though the actual tallies are believed to be "considerably higher."
"The number of civilian casualties is likely particularly undercounted in cities such as Mariupol (Donetsk region), Lysychansk, Popasna, and Sievierodonetsk (Luhansk region), where there was protracted intensive fighting at the start of the armed attack in 2022," according to the report.
While most of the deaths and injuries in Ukraine are attributed to "explosive weapons with wide area effects," the U.N. report accounts for at least 373 deaths and 855 injuries from "mines and explosive remnants of war."
Keep ReadingShow Less
G20 Nations Take 'Important Step' Toward Fair Taxation of Ultra-Rich
"Our proposal for a common minimum tax on billionaires is now on the map. G20 finance ministers have started to engage with it—and there is no going back," said progressive economist Gabriel Zucman.
Jul 26, 2024
Despite pushback from the United States delegation, finance ministers at a meeting of the G20 countries in Rio de Janeiro on Thursday agreed on the need to develop a global taxation system in which the richest in the world are taxed at a higher rate—potentially unlocking hundreds of billions of dollars annually to help close the international wealth gap.
Ahead of the G20 Summit scheduled for November, which Brazilian President Luiz Inácio Lula da Silva's government will host, the finance officials met this week to discuss economic issues and ultimately agreed to start a "dialogue on fair and progressive taxation, including of ultra-high-net-worth individuals."
The Lula government pushed for a proposal by progressive economist Gabriel Zucman, who serves as a G20 adviser and is a professor of economics at University of California, Berkeley.
Zucman's proposal calls for a minimum 2% tax on the fortunes of the world's roughly 3,000 wealthiest billionaires, which could raise approximately $250 billion globally per year.
"With full respect to tax sovereignty, we will seek to engage cooperatively to ensure that ultra-high-net-worth individuals are effectively taxed," the ministers wrote in a declaration that was viewed by Politico.
"Finally, the richest people are being told they can't game the tax system or avoid paying their fair share. Governments have for too long been complicit in helping the ultra-rich pay little or zero tax."
The agreement to discuss higher taxes for the rich was reached despite objections from Germany and the U.S., whose treasury secretary, Janet Yellen, said that "tax policy is very difficult to coordinate globally."
"We don't see a need or really think it's desirable to try to negotiate a global agreement on that," Yellen said at a press conference before the ministers met Thursday evening. "We think that all countries should make sure that their taxation systems are fair and progressive."
Although the agreement only states that countries will discuss the need for the wealthy to pay their fair share to help fight poverty and fund public education and other services, the global anti-poverty group Oxfam International said the meeting represented "serious global progress."
"For the first time in history, the world's largest economies have agreed to cooperate to tax the ultra-rich," said Susana Ruiz, tax policy lead for Oxfam. "Finally, the richest people are being told they can't game the tax system or avoid paying their fair share. Governments have for too long been complicit in helping the ultra-rich pay little or zero tax. Massive fortunes afford the world's ultra-rich outsized influence and power, which they wield to shield, stash, and supersize their wealth, undercutting democracy and widening inequality."
An Oxfam study released ahead of this week's meetingfound that the richest 1% of people in the world increased their fortunes by $42 trillion over the past decade, while taxation fell to "historically" low rates.
Ruiz called on G20 heads of state to "go further than their finance ministers" at the G20 Summit in November "and back concrete coordination: agreeing on a new global standard that taxes the ultra-rich at a rate high enough to close the gap between them and the rest of us."
"Brazil has kickstarted a truly global approach to tax the ultra-rich. But the work is just beginning and international cooperation is crucial," said Ruiz, adding that the task of ensuring the wealthiest people in the world are taxed fairly must not be left up to the Organization of Economic Cooperation and Development (OECD)—"the club of mostly rich countries."
Zucman expressed hope that the agreement between the G20 finance ministers marked a "historic" moment, and called it "an important step in the right direction."
"Our proposal for a common minimum tax on billionaires is now on the map. G20 finance ministers have started to engage with it—and there is no going back," said Zucman. "In its declaration, the G20 finance ministers commit to important preliminary steps. They need to do more and commit to a coordinated minimum tax on the super-rich. We know that it is practically doable—we know the solutions exist. And I'm confident, because there is overwhelming popular demand everywhere to get there."
"The status quo, in which the biggest winners from globalization are allowed to enjoy the lowest tax rates, is simply not sustainable," said Zucman.
The findings released this week by Oxfam highlighted polling that "consistently" found people across the world support raising taxes on the richest individuals.
"Eighty percent of Indians, 85% of Brazilians and 69% of people polled across 34 countries in Africa support increasing taxes on the rich," said the group. "Nearly three-quarters of millionaires polled in G20 countries support higher taxes on wealth, and over half think extreme wealth is a 'threat to democracy.'"
The Independent Commission for the Reform of International Corporate Taxation (ICRICT) applauded the agreement and called on the G20 to "go further in [the] fight to tax the rich."
"To take this forward, G20 should support work on this at the Framework Convention on International Tax Cooperation currently being negotiated at the United Nations," said Jayati Ghosh, co-chair of the ICRICT.
A U.N. committee is scheduled to submit "terms of reference" regarding a tax convention framework in August, and a final vote on the framework is expected by the end of 2025.
Keep ReadingShow Less
Most Popular