The Amazon Pink Dolphin’s Voice: The environmental consequences of Chevron & BP.

Ecuadorians Hit Chevron With $18 Billion Enforcement Action In Canada, says Amazon Defense Coalition

TORONTO, May 30, 2012 /PRNewswire-USNewswire/ — Villagers from Ecuador’s rainforest today filed a lawsuit in Canada as the first step in forcing the company to comply with an $18 billion court judgment rendered in Ecuador and imposed to permit the clean-up of what experts believe is the largest oil disaster on the planet.

The lawsuit, filed in the Superior Court of Justice in Ontario, (see here) targets Chevron and various subsidiaries that together hold significant assets in the country — including Canada’s largest offshore drilling project and new investments in oil sands in the province of Alberta, said Alan Lenczner, the noted Canadian litigator representing the Amazon communities. Canada also has a law that allows interest to run on a foreign judgment during the enforcement process, potentially adding a significant amount to the judgment against the oil giant.

The Ecuadorians, who consist of the inhabitants of five indigenous groups and approximately 70 farmer communities, are being forced to file enforcement actions because Chevron refuses to pay the judgment imposed by an Ecuador trial court in February 2011, which was later affirmed by Ecuador’s court of appeals in January.  The oil giant has virtually no assets in Ecuador.

Pablo Fajardo, the lead lawyer for the Ecuadorians and the recipient of the Goldman Environmental Prize and a CNN “Hero” Award, said his clients were intent on collecting the entire judgment.

“The time for delay is over,” he said.  “For decades Chevron refused to address the contamination that has devastated our ancestral lands.  While Chevron might think it can ignore court orders in Ecuador, it will be impossible to ignore a court order inCanada where a court may seize the company’s assets if necessary to secure payment.

“We plan to exercise our legal right to collect every penny of the legitimate judgment from Ecuador, even if we have to drag Chevron kicking and screaming into courts around the world,” said Fajardo, who grew up in poverty working in Ecuador’s oil fields and who put himself through law school specifically to hold Chevron accountable for the environmental disaster.  See this article in Vanity Fair about Fajardo.

The judgment in Ecuador resulted from an eight-year trial that produced more than 64,000 soil and water samples that pointed to extensive contamination at more than 350 Chevron well sites and oil production stations in a large swath of Ecuador’s northern Amazon region, known as the Oriente. This area was considered one of the most bio-diverse areas on earth before Chevron — to lower production costs – deliberately discharged billions of gallons of toxic waste into the environment, decimating local tribesmen and plummeting the region into a tailspin of despair from which it has yet to recover, according to evidence before the court.

(A video that explains Chevron’s substandard operational practices in Ecuador and efforts to corrupt the trial process can be seen here.)

The result of the dumping, according to evidence presented at trial, is a public health crisis and the poisoning of a large swath of pristine rainforest that indigenous communities had relied on for millennia for their sustenance.  Five indigenous groups — the Cofan, Secoya, Siona, Quichua, and Huaroni — are struggling to survive.  Part of the judgment will be used to restore the forest so that the indigenous communities can return to their hunting and gathering traditions, said Fajardo.

Lenczner, the Canadian litigator who is representing the Ecuadorians, is considered by Chambers Global to be one of the top lawyers in Canada, having appeared in courts in all ten provinces and argued numerous cases before the country’s Supreme Court.  He is the founding partner of Lenczner & Slaght, a boutique litigation firm with approximately 50 lawyers that recently was named one of the top ten litigation firms in the country by Canadian Lawyer magazine.

“I am honored to have been asked by the indigenous people of Ecuador to correct a historic injustice visited upon them by Chevron,” said Lenczner, who visited Ecuador and reviewed the extensive trial and appellate records of the case, which exceed 250,000 pages.

“Chevron fought for nine years to move the trial from the United States to Ecuador, and then had a full opportunity for eight years to defend itself in Ecuador,” Lenczner added. “This is a legitimate judgment and I believe Canadian courts will recognize it and enforce it as such.”

Fajardo said that the Ecuadorians have a list of countries that are possible targets for  enforcement actions and that additional actions are likely to be filed to ensure the full amount of the judgment can be satisfied.  A significant portion of Chevron’s assets are located around the world in over 70 wholly-owned subsidiaries and 75% of the company’s annual profits are derived outside of the U.S., according to an analysis by the plaintiffs.

Almost all countries have specific laws governing the recognition and enforcement of foreign judgments.  Most of the laws favor enforcement, subject to specific exceptions such as lack of jurisdiction or fraud.  Chevron has stated it will try to block enforcement by alleging fraud, but the Ecuadorian trial and appellate courts directly addressed the allegations and rejected them. See the lower court judgment and the appellate court judgment.

Representatives of the affected population, who meet every two months in the rainforest in a body called the Assembly of the Affected Ones (Asamblea de Afectados), were thrilled that the first enforcement action was filed.  The local population has suffered from high rates of cancer, spontaneous miscarriages, and oil-related diseases. See here, here, and here.

“This is a historic day for us,” said Luis Yanza, the coordinator of the Assembly.  “We might be impoverished materially but we are rich in spirit.  The time has now come to use the force of law to make Chevron clean up its pollution.  No company, even one as rich and powerful as Chevron, is above the law.”

In Canada, Chevron’s biggest assets are a 20% interest in the Athabasca Oil Sands Project, which yields a capacity of 255,000 barrels per day and supplies 10% of Canada’s oil needs; the Hibernia project, which is Canada’s largest offshore drilling project; and the Ells River concession, which covers 75,000 acres and contains up to an estimated 7.5 billion barrels of oil.

Chevron also is the largest gasoline convenience store marketer in British Columbia through a network of 162 service stations, 134 Town Pantry convenience stores, and 21 White Spot Triple O quick-serve restaurants.  Chevron also owns the Burnabyrefinery, which processes over 50,000 barrels of oil per day.

Total daily production for Chevron in Canada in 2011 averaged 29,000 barrels of crude oil, 4 million cubic feet of natural gas, and 40,000 barrels of synthetic oil from oil sands, according to public disclosures of the company.   Canada is one of the top ten markets in the world for Chevron’s capital spending in 2012, according to the company’s filings with the U.S. Securities and Exchange Commission.

The filing of the enforcement action comes on the heels of a major challenge by Chevron shareholders over the Ecuadormatter.

Today, Chevron CEO John Watson suffered a stunning reprimand during a tense annual meeting when investors holding over 38% of the company’s shares (representing $73 billion worth of stock) voted for a resolution that directly challenged his authority because of the Ecuador case.  Last week, 40 institutional shareholders representing $570 billion under management – including the New York state pension fund — urged the company to settle the Ecuador litigation.

Chevron also has suffered a series of legal setbacks in recent months related to the Ecuador issue.

In January, a U.S. appellate court reversed a preliminary injunction barring enforcement that had been Chevron’s main line of defense in the case.  An Ecuadorian court this year also rejected Chevron’s attempt to suspend the environmental case before enforcement could commence.  Earlier this month, a U.S. judge tossed out several fraud claims the company had filed against the Ecuadorian plaintiffs and their U.S. counsel, and cast doubt on Chevron’s likelihood of success on racketeering charges.

Background On Lawsuit
The environmental case has a long history that does not appear to favor Chevron’s prospects, given that the company fought hard to have the trial held in Ecuador.

After the case was filed in 1993 in U.S. federal court in New York City, Chevron agreed to accept jurisdiction in Ecuador and pay any adverse judgment as a condition of the case being transferred to the South American nation.  At the time, Chevron filed 14 sworn affidavits praising the fairness of Ecuador’s court system.

Once the scientific evidence in the subsequent trial in Ecuador quickly pointed to Chevron’s guilt, the oil giant got “buyer’s remorse” and charged that the Ecuador court system it previously praised had become corrupt and that the trial was a fraud — a charge vigorously rejected by the plaintiffs.   In 2007 Chevron’s General Counsel, Charles James, famously promised the Ecuadorian communities “a lifetime of litigation” and said that Chevron was prepared to fight the case “until hell freezes over and then skate it out on the ice.”

Chevron is using the “fraud” charge as a ruse to try to block enforcement of the judgment and to distract attention from the overwhelming evidence of its historic misconduct.

Chevron’s $18 billion culpability in Ecuador is justifiable in comparison to BP’s disaster in the Mexican Gulf in 2010. BP estimated the accidental leak of 4.9 million barrels of crude oil would cost the oil major $37.3 billion. By comparison, Chevronintentionally dumped 16 billion gallons of toxic produced water in Ecuador containing far more crude oil that was spilled in the Gulf (as well as heavy metals and other drilling chemicals) and faces less than half of BP’s costs to clean it up.

Source: PR. Newswire

40 Institutional Investors Demand Chevron Settle Ecuador Environmental Case, Says Amazon Defense Coalition

NEW YORK, May 28, 2012 — /PRNewswire-USNewswire/ — Only days before its annual shareholder meeting, forty Chevron investors with $580 billion in assets under management have demanded the oil giant settle the $18 billion environmental lawsuit brought by impoverished indigenous groups in the Ecuadorian rainforest almost two decades ago.

The letter from the investors, sent last Friday, comes at a time of increasing pressure from shareholders on Chevron CEO John Watson for his mishandling of the Ecuador litigation.  Last week, two prominent investor advisory firms, citing the risk of the Ecuador liability, dealtWatson a huge blow when they recommended shareholders vote for resolutions that directly challenge his authority to remain both as CEO and Chairman of the company, considered a major corporate governance taboo. See here andhere.

In the investor letter, funds from the United States, Canada and Europe also requested a meeting with Chevron executives to discuss what they described as “significant reputational damage” to the company stock resulting from the oil giant’s refusal to pay the judgment and end the case.

The investors include New York State Comptroller Thomas P. DiNapoli, whose fund owns $713 million in Chevron stock.  Also signing on are the International Brotherhood Teamsters,the Unitarian Universalist Association and the United Steelworkers, which represents many ofChevron’s own employees in the United States. A similar letter garnered significant support last year.

Citing a series of legal losses in both Ecuador and the United States, the signees wrote, “Despite management’s continual assertion that it intends to challenge the judgment at every opportunity, its financial exposure has only grown over time and its options to evade the $18 billion judgment have greatly narrowed in recent months.

“Over the course of the nearly 20 years of litigation, Chevron has suffered significant reputational damage from its attempts to defend Texaco’s record in Ecuador. The current attempts to undo the Ecuadorian court’s verdict only keeps the case in the public eye and further damages Chevron’sreputation.”

An Ecuador court last year found Chevron discharged more than 16 billion gallons of toxic waste into Amazon waterways, decimating indigenous groups and causing an outbreak of cancer. The verdict was upheld on appeal in January and rendered enforceable worldwide when Chevronrefused to post a bond.  See here.

Tim Brennan, the Treasurer and CFO of the Unitarian Universalist Association, expressed concern in a separate statement that Chevron’s public filings to investors reveal “serious inconsistencies” with statements by Chevron management in a U.S. court.  The UUA has joined other shareholders in formally asking the Securities and Exchange Commission to determine whether Chevron has violated securities laws because of evidence it has made material misrepresentations to investors.

“Recent reports (see here and here) document serious inconsistencies between statements byChevron management and their public filings. That’s why we’ve asked the SEC to investigate. Shareholders have the right to know what contingencies are in place to protect shareholder value and key strategic investments from enforcement,” said Brennan.

Chevron CEO Watson – who at the 2010 Chevron annual meeting had five activists arrested after they challenged him on the Ecuador liability – is facing a major shareholder challenge at the meeting on Wednesday at company headquarters in San Ramon, CA.  Last week, Watson took the rare step of sending a letter directly to all Chevron shareholders asking them to vote against the resolutions that cited the Ecuador case.

Shareholders will vote on three resolutions tied to the Ecuador litigation. One would strip Watsonof either the CEO or Chairman titles; another would require the company to appoint an independent director with environmental expertise; and a third allows shareholders to more easily call special meetings.

Two rainforest leaders from Ecuador who have suffered from decades of Chevron’s contamination also plan to confront Watson at the meeting. They will be joined by a delegation of oil workers fromBrazil, where Chevron faces a separate $22 billion lawsuit related to a recent offshore spill.

Environmental advocates from Amazon Watch and Rainforest Action Network plan to ask Watsonto show shareholders a video that documents the company’s horrific contamination in Ecuadorand its impact on public health and reviews serious fraudulent misconduct committed by Chevronduring the Ecuador trial. The Ecuadorians have long accused Chevron of lying to shareholders about the extensive fraud it committed to cover up its contamination, as documented in the sworn affidavit of Juan Pablo Saenz and the report of Graham Erion, a well-known securities lawyer.

Source: PR Newswire

BP Oil Spill Emails Reveal High-Level Discord Over Flow Estimates

Bp Oil Spill

Ships work near the site of the BP Deepwater Horizon oil spill on August 3, 2010, in the Gulf of Mexico off the coast of Louisiana.

A BP engineering executive warned senior BP management early on in the 2010 Gulf of Mexico oil spill that internal models did not support estimates of the size of the undersea leak being provided to government officials and the public, according to company emails.

On May 15, 2010, Mike Mason, a vice president in BP’s exploration and production technology division, wrote to Andy Inglis, chief executive of global exploration and production, warning him that the company’s “data and knowledge” did not support the 5,000 barrel per day figure touted by executives as their best estimate of the size of the leak.

“We should be very cautious standing behind a 5,000 [barrel per day] figure as our modeling shows that this well could be making anything up to 100,000 [barrels per day],” Mason wrote in one of the emails, obtained by The Huffington Post.

The next day, Jack Lynch, BP’s general counsel in the U.S., forwarded Mason’s message to two BP executives leading the company’s oil spill response: Doug Suttles, chief operating officer for BP’s global exploration and production business, and David Rainey, a former BP vice president in charge of exploration in the Gulf of Mexico.

The emails suggest an internal struggle at the highest levels of BP over the issue of the well’s flow rate, which became intensely controversial during the course of the spill. At the outset of the disaster, BP estimated the flow at just 1,000 barrels per day. By the end of the three-month spill, a government-led scientific team estimated that the well released an average of more than 50,000 barrels per day.

“It sounds to me like someone who’s conscious that the email might not be private, but writes it anyway because he know the risks of being silent,” said Jamison Colburn, an environmental law professor at Penn State University and former enforcement litigator for the Environmental Protection Agency. “It implies the existence of a lot more internal communication on this subject.”

Scott Dean, a BP spokesman, declined to comment on the emails, and Mason did not respond to several voice mail messages. An attempt to reach Rainey, who now works for BHP Billiton’s petroleum exploration division in Houston, was unsuccessful. An attorney for Suttles did not respond to a request for comment.

BP’s handling of the flow rate estimates has emerged as a major focus of the Justice Department’s two-year criminal investigation into the spill, according to legal experts and attorneys involved with litigation over the disaster. The first and only criminal charges yet to be filed over the spill were brought this April against Kurt Mix, a BP engineer, for allegedly destroying text messages and emails discussing far higher flow estimates than BP revealed publicly at the time. Mix pleaded not guilty to the charges.

Internal emails and organization charts obtained by The Huffington Post show that Rainey, the former BP vice president, took part in the early development of the company’s flow rate estimates and reported directly to Suttles, who led the company’s response.

Both Rainey and Dave Nagel, executive vice president of BP America, the company’s U.S. subsidiary, are being probed by the Justice Department for potentially lying to Congress about the leak estimates, according to a report by the Wall Street Journal this week.

Rainey and Nagel discussed the spill in a May 4, 2010, closed-door briefing with the House Energy and Commerce Committee, and told lawmakers that BP stood by a 5,000 barrel per day estimate for the size of the leak, according to a congressional staffer who attended the briefing.

“They were sticking with 5,000 barrels a day,” said the staffer, who spoke on condition of anonymity because the briefing was not open to the press.

The two executives also said that in a worst-case scenario, the size of the leak could rise to as much as 60,000 barrels per day, but that was only a possibility if the condition of the well deteriorated significantly, the staffer said.

Lying to Congress is a felony punishable by up to five years in prison.


Editorial: SELVA-Vida Sin Fronteras

~ by FSVSF Admin on 4 June, 2012.

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