Houston – A face-off Wednesday between activists angered by pollution of the Ecuadorian rainforest and the top executives of San Ramon-based Chevron Corp. moved from deliberate politeness to vaguely disguised frustration.
“Chevron must be responsible and clean up the contaminants,” said Emergildo Criollo, a member of the Cofan tribe who traveled from Ecuador to address the company’s annual meeting of shareholders.
Chevron Chief Executive Dave O’Reilly acknowledged that there is “an issue” in the former concession where Texaco, a company that Chevron acquired in 2001, formerly operated an oil field in partnership with the Ecuadorian government.
But Chevron is not responsible, O’Reilly insisted: “Your complaints have to be taken to your government and your national oil company, who are operating in a reprehensible manner.”
Chevron and the residents of the problem-plagued area where the company once operated and other interests continue to produce oil are also facing each other in an Ecuadorian court. The plaintiffs say that Chevron faces billions of dollars in potential damages and cleanup costs. Chevron, which handed over its interest in the field in the early 1990s, says it later cleaned up pollution and has no further responsibility in the area.
Increasingly testy exchanges between the two sides prompted one shareholder not apparently involved in the dispute to “do something really wonderful” and address the concerns of the Ecuadorians regardless of whether the company is legally liable.
But O’Reilly responded by pointing to the “collateral benefits” from Chevron’s global investments in poor and undeveloped areas. Sometimes “it is hard to put a number on” those benefits, he added.
Some at the meeting had concerns closer to home, including the threat of another heavy hurricane season to the company, which still loses 100,000 barrels of oil output daily due to the aftermath of last year’s storms. The company has set up backup communications systems and taken other measures, O’Reilly said: “I think we’re about as ready as we can be.”
Another shareholder urged O’Reilly to clearly explain current high fuel prices. O’Reilly responded that it is an emotional issue but pointed to high crude oil prices, taxes, barriers to competition due to geographical variations in fuel formulas and additional expense associated with the use of ethanol.
The annual meeting came two days after Chevron released its annual corporate responsibility report that attempts to do just that: quantify the social and environmental costs and, more extensively, benefits of its worldwide quest to find and sell oil and fuel.
That 32-page document (www.chevron.com/cr_report/2005/) cites the resolutions presented at the annual meetings as evidence of the company’s commitment to listen to and engage shareholders. It says the company’s leaders and employees “respect the law, support universal human rights, protect the environment and benefit the communities where we work.” It also spells out the company’s views and efforts on AIDS treatments, employee health and safety, pollution prevention, greenhouse gas emissions and climate change.
While the report anticipated many of the issues raised in Wednesday’s resolutions and comments, some speakers sharply disagreed with the company’s view. Oronto Douglas, a Nigerian lawyer involved in suits charging Chevron with complicity in human rights abuses by that government, urged the company to specifically address how it would stop such violations and pollution.
O’Reilly acknowledged serious problems in the impoverished areas of Nigeria where Chevron produces oil but said that the government must take the lead in laying the groundwork for solutions. Chevron “can play a contributing role,” he said. “First, we need peace and security.”
A preliminary count showed the six shareholder resolutions opposed by management far short of majorities, including calls for the company to adopt a formal human rights policy (25 percent support) and fuller disclosure of political contributions (14 percent). Resolutions that targeted Chevron’s support for oil drilling in sensitive areas including the Alaska National Wildlife Refuge, its use of animals in chemical testing and its actions in the Ecuadorian lawsuit all got 10 percent or less.
But shareholders seemed to have some appetite for more debate in the future. About 34 percent supported a suggestion that Chevron pick up the tab for sponsors of resolutions that win despite active opposition by management.
