Wednesday, May 28, 2014

"Who's Bribin' Who?"

Donny Rico (and Chevron) explain how to pollute the Amazon and get away wit' it.

Reposted from the Eye on the Amazon

Do people give people backpacks full of cold hard cash in exchange for legal testimony? People do. Chevron should know. They did exactly that.

Chevron's effort to avoid responsibility for one of the world's largest oil disasters and sink the $9 billion guilty verdict against it delivered by Ecuadorian courts – and upheld on three occasions – comes down to one man: Alberto Guerra. A corrupt ex-judge, he became Chevron's star witness in the company's RICO lawsuit against the Ecuador rainforest communities and their council. In testimony in U.S. Federal Court in New York, he testified that he had received a backpack full of cash in exchange for his testimony, along with a monthly stipend of $12,000 USD, a home, a car, and a crack legal team to get himself – and his family – political asylum in the United States. Pretty good deal for a guy who admitted to accepting bribes as low as $200.

The tale is eloquently told by corporate thug Donny Rico in his latest episode.

But of course you won't be hearing John Watson mention that today as shareholders gather for the company's annual general meeting in Midland, Texas. Watson will be touting the recent decision from Judge Kaplan's kangaroo court in New York against the Ecuadorians as the silver bullet that saved Chevron from liability for one of the world's most egregious environmental and human rights crimes. But Kaplan's decision – based almost entirely on Guerra's testimony – is on appeal before the Second Circuit in New York that overruled Kaplan before on the Ecuador issue.

But does the decision do what Watson claims it will? Does it insulate shareholders from risk? As has been written, Chevron is not out of the woods yet, and the Ecuadorians are not out of options. Chevron's problems under Watson go beyond the courtroom – to the court of public opinion.

Another liability that will likely be unmentioned by Watson is last week's global #AntiChevron day. In a sign that the fallout from the company's poor environmental and human rights record worldwide is spiraling out of control, some 20 actions occurred on five continents. Importantly, many of these were in communities where Chevron has existing operations, seeks to expand, or plans new exploration – critical to adding new reserves and increasing shareholder value. And while he can throw millions at lawyers and PR firms to continue to run from the Ecuador issue, the liability continues to rear its head in Canada, Brazil, and beyond.

Another major problem that Watson will surely sidestep is the increasing campaign of the Ecuadorian government to pressure Chevron to do the right thing. While the company has consistently dismissed it, there's a certain geopolitical reality that isn't good for Chevron. It can't be good for business to have Ecuador's President, Rafael Correa, widely considered the new leader of Latin America's left (who is in the process of changing the constitution to allow indefinite re-election), chumming it up with the presidents of UNASUR and ALBA countries about how Chevron drilled, dumped, and ran. In particular, Venezuela and Argentina represent both the company's largest operations in South America and its biggest new upstream investment, respectively.

Watson thought he would find solace in the wilds of west Texas by moving the meeting and thereby avoiding the protests in the Bay Area which have confronted him year in and year out. But even in oil-friendly, middle-of-nowhere Midland, affected community members found him. Humberto Piaguaje, a Secoya indigenous leader and representative of the network of affected communities said, “Wherever they go, we will be there, because the crime Chevron committed in Ecuador is unforgivable.”

To help shareholders cut through Watson's smokescreen at today's meeting, we turn it over to Chevron crony Donny Rico for a true rendering of how Chevron got an Ecuadorian judge to do its bidding.

Thursday, May 22, 2014

What Happens When an Oil Company Actually Chooses to Be a Sociopath? #AntiChevron Day

Reposted from the Eye on the Amazon

You gotta give Chevron's management credit for bringing people together – across oceans, continents, and borders. Not because the company is a good neighbor; quite the opposite. Communities on five continents who live where Chevron operated, operates, or seeks to operate, came together yesterday in a worldwide day of protest to denounce the oil giant's environmental and human rights practices.

May 21st, the inaugural International #AntiChevron day, marked a new chapter in the company's deteriorating relationship with the communities where it works and a major challenge to its brand as concerned citizens in twenty countries pledged to target Chevron products. Despite what senior management is saying from behind their rose-colored glasses, it was a referendum on the company that seems slated to grow unless Chevron changes course. But time and again, Chevron management has made major strategic miscalculations, whose effects can now be seen literally around the globe. (for a list of organizations and communities in solidarity with these movement, look here).

Chevron has truly become the poster child for crimes against the environment and human rights. The bizarre thing is that their management chose that mantle and they appear to be sticking with it.

When Chevron (operating as Texaco) made the choice to save $3 per barrel by designing oil extraction systems which deliberately dumped billions of gallons of toxic waste into the pristine Ecuadorian rainforest, they never imagined that they'd one day be found guilty and ordered to pay $9.5 BILLION for it. A very bad calculation. Not too long after that initial choice, they doubled down and rejected pleas to safely line the growing number of waste pits, stating that $4 million was too high a price to avoid poisoning local communities.

Later, Chevron calculated they could delay and eventually derail the decades-long legal battle in New York and then Ecuador. They blew that calculation, too. Not once did they listen to the math lessons given to them by concerned shareholders, government officials, indigenous communities, the environmental and human rights community – it's more costly in the long run for everyone if you refuse to do the right thing and clean up your messes.

The current Chevron CEO, John Watson, is by no means solely responsible, but his math skills may be worst of all. After helping to orchestrate the Chevron-Texaco merger (despite full knowledge of its massive liability in Ecuador), Watson has led the company down the path to its current status as an international pariah. He did this by insisting that rather than accept its clear responsibility for environmental destruction in Ecuador and elsewhere, the company should attack, overwhelm and crush its critics wherever they are. And, tellingly, it then spent millions on ad campaigns telling the world that Chevron cares, because Chevron knows that is where it's most vulnerable.

On May 21, 2014, it became clearer than ever that Chevron's choices are going to come back to haunt them – with financial consequences (the only kind they actually care about). You see, yesterday people were outraged in Argentina, where Chevron has considerable assets – and is investing more. They were protesting in Romania, a key location for Chevron's plans to expand its fracking operations. They were in the streets in Bulgaria, Brazil, and Bolivia, too. And pretty much throughout Europe: the UK, Spain, France, Germany, Austria, Switzerland, Belgium, Sweden. And lets not forget Australia and the Philippines; yes protests took place there, too.

These actions took place because communities living with Chevron's deliberate environmental destruction and human rights crimes in Ecuador, Nigeria, Argentina, Romania and Richmond, California ASKED for them. Because it's obvious to anyone paying attention that Chevron's actions wherever it operates are a growing threat to human rights and the environment everywhere. That Chevron has as little regard for democratic principles in Romania as it does in Richmond. That Chevron's abuse of the rule of law in Ecuador is a dangerous threat to workers in Australia. They all see that Chevron is not just an irresponsible oil company and poor “global citizen” – its behavior is akin to a sociopath's: antisocial, often criminal, and that lacks a sense of moral responsibility or social conscience with no signs of remorse or reform.

Chevron smugly announced that it has no assets in Ecuador and so it will never pay what it owes to the 30,000 Amazonian inhabitants it poisoned. But it does hold quite a lot of assets in Canada. And yes, protests took place there, too. Indeed, Chevron's strategy in the Canadian judicial system may be the next example of poor calculating as the Ecuadorian's efforts to seize assets progress there.

Next week, Watson will sit in front of shareholders, take their questions and face four separate resolutions challenging his authority on these issues. Last year, one of the resolutions challenging Watson's authority related to the Ecuador liability garnered a whopping 37% shareholder support, representing $73 billion in company assets. This year will they begin to do the real math?

The take-home for shareholders is that while Watson can talk and tout his company's scorched earth legal tactics and attacks on victims of its own contamination until he's blue in the face at this year's AGM (and he most certainly will), yesterday's actions underscore that none of its bad boy tactics appear to be insulating it from risk, and in fact they are escalating it. There's a sea change needed, starting at the top, of corporate culture that understands that doing the right thing can also be good for business.

Looking out the window in Midland, TX, Watson won't see the hundreds of protesters he would have had he not decided to move the shareholder meeting from Chevron's San Ramon headquarters, but he won't escape the voices chanting for justice from Chevron because they now emanate from every corner of the planet.

Friday, May 9, 2014

Chevron's Ecuador Plan B

Cleaning up Chevron's contamination - with no help from the company

Reposted from the Huffington Post

The big news this week in the Chevron-Ecuador saga is the Patton Boggs settlement with the oil giant, which should not be shocking to anyone following the financial troubles of the law firm.

Patton Boggs' money problems began before the Ecuadorians fighting Chevron retained its lawyers to represent them in their legal battles with the oil company in the U.S.

What is shocking is that the Ecuadorians, who have suffered the contamination of their ancestral lands in the Amazon rainforest, have been completely forgotten.

Very few reporters writing about the settlement dealt with the issue of a law firm abandoning clients, who happen to be some of the poorest and most disenfranchised people on the planet, and then ALSO agreeing to turn over case documents so it could save itself from a demise brought on by factors having little, if anything, to do with the Ecuadorians.

(I should note that the Patton Boggs lawyers driving the decision to settle were not the lawyers who actually worked on behalf of the Ecuadorians.)

The legal community in Washington, DC and New York is brattling about this new development with no interest in what the Ecuadorians (and myself for that matter) have urged the American public via its news media to consider before passing judgment on this 20-year-old lawsuit: the vast, overwhelming evidence of culpability by Chevron's predecessor Texaco and Chevron's economic coercion against lawyers and consultants assisting the Ecuadorians.

I believe Chevron's intent is to malign (and financially destroy in some instances) anyone who has spoken out against its alleged environmental crimes or funded or worked on behalf of the contamination lawsuit. This is what the Ecuadorians' supporters here and around the world (myself included) have charged and experienced firsthand.

So when Chevron General Counsel Hew Pate called on all of the Ecuadorians' supporters to disavow their cause, after the Patton Boggs defection, we assumed some PR maven removed the "or else" from his statement.

Some legal columnists concluded that because a bunch of lawyers decided to put their economic interest above their clients' Chevron therefore was innocent.

Well, not so fast.

The Ecuadorians' U.S legal adviser and the focus of Chevron's attacks, Steven Donziger, will never win the Lawyer of the Year award but the evidence against him is either weak, coerced or paid for. (See here and here.)

The real news is not about Patton Boggs, but Chevron's alleged cover-up of the mess Texaco left behind.

Below are soil test results that Chevron doesn't want you or anyone interested in the long-running Ecuador contamination litigation to see.

Chevron submitted these results to the Provincial Court of Justice of Sucumbíos in Lago Agrio, Ecuador, on September 11, 2004. You can view other Chevron test results here.

Chevron contamination test results

These test results suggest the company's guilt and blow up its alternative narrative that it is the victim rather than the indigenous peoples and villagers living in the rainforest Texaco polluted. The Ecuadorians have made this charge in numerous court briefs.

Chevron's own independent experts took the tests during an eight-year trial in Ecuador. These experts, paid by Chevron, found high levels of harmful toxins; some are known human carcinogens. Tens of thousands of test results similar to the ones I describe here are found in the Ecuador court record. They are Chevron's documents. Not the Ecuadorians.

Based largely on Chevron's own evidence, an Ecuador court awarded the Ecuadorian villagers $9.5 billion in damages in 2011, resulting from what it said was the company's deliberate contamination of the rainforest during oil exploration from 1964 to 1992.

An appellate court and the country's Supreme Court upheld the judgment.

The Ecuadorians attempted to submit these test results and others into the record of a U.S. court, where Chevron argued the judgment was a fraud, but Federal Judge Lewis Kaplan refused their request, saying the trial wasn't about the contamination at all.

Exactly how Kaplan can rule the judgment was obtained fraudulently and not allow contamination results, I don't know how to explain.

What I do know is that Chevron's management team has refused to pay the judgment, even though the company fought relentlessly to conduct the trial in Ecuador after the villagers originally filed it in New York federal court in 1993 – yet another example of the company's subterfuge.

Because Chevron stripped most of its remaining assets from Ecuador in anticipation of losing the case, the affected villagers have filed enforcement actions in Brazil, Canada and Argentina. Chevron does have assets in those countries – substantial assets that collectively approach $20 billion in value. The villagers plan to seize enough of them to force Chevron to comply with the Ecuador judgment so they can conduct a long-awaited cleanup of their sacred ancestral lands.

Chevron says these courts do not have jurisdictional authority (the Ecuadorians argue otherwise) but no court that respects the rule of law will let the oil giant off the hook, when it sees these contamination tests.

The vast majority of test results from the Ecuador trial support what the villagers in the former Chevron concession area always have alleged: Chevron contaminated their land, using substandard drilling practices to minimize costs and maximize profit. See this video.

Along with Chevron's independent experts, the technical experts for the affected communities and numerous court-appointed experts found high levels of total petroleum hydrocarbons. TPH is a measurement of toxic and, in some cases, carcinogenic chemicals and metals in soil.

Ecuador law allows 1,000 parts per million of TPH in residential areas, while, guess what? – Chevron argues that 10,000 TPH should be the limit. That's 100 times more than in the United States where many states allow only 100 TPH.

Why is 10,000 TPH protective enough for Ecuadorians – in Chevron's estimation at least – but not for Americans?

Chevron's tests also reveal that the oil giant has obfuscated to both U.S. and Ecuador courts about its main line of defense: the 1995 remediation agreement with the Government of Ecuador. The Ecuadorians argue the agreement did not release Chevron from liability, but even if it had, Chevron's own test results show that the remediation itself was inadequate at best and, most likely, fraudulent.

For example, Chevron's tests from well sites Sacha 94 and Sacha 57 show illegal contamination, even though Texaco said it cleaned them. Chevron can't blame anyone but Texaco for this environmental damage: Texaco alone built and closed these sites.

At these sites Chevron found up to 8700 TPH levels – almost 9 times greater than permitted under Ecuadorian law and evidence that Texaco did not clean the well sites adequately, if at all. There are many just like these with even greater TPH levels.

Texaco, it seems, simply poured dirt over oil pits to mask their danger. And, if lying about the cleanup wasn't bad enough, many villagers built their homes near or on the sites because they believed they had been cleaned.

Chevron's experts also found illegal amounts of benzene, barium, cadmium, lead and other chemicals in the environment – all toxic and dangerous to human health. For example:

Benzene: 18 mg found at the Sacha Norte 2 well site; Ecuador law allows only 0.05 mg. Benzene is a colorless liquid made mostly from petroleum; it is also a known human carcinogen.

The CDC says this about benzene:

"Long-term exposure to benzene can cause cancer of the blood-forming organs. This condition is called leukemia ... The Department of Health and Human Services (HHS) has determined that benzene is a known carcinogen (can cause cancer)."

Barium: 10,100 mg per kg, found at SSF-25; Ecuador law allows only 750 mg per kg. Barium is a metal used as drilling mud during oil exploration.

The CDC on barium:

"Eating or drinking very large amounts of barium compounds that dissolve in water or in the stomach can cause changes in heart rhythm or paralysis .... Some people who did not seek medical treatment soon after ... have died. (Some who ingest smaller amounts) ... may experience vomiting, abdominal cramps, diarrhea, difficulties in breathing, increased or decreased blood pressure, numbness around the face, and muscle weakness."

Cadmium: 4.1 mg per kg found at Sacha 18 well site; Ecuador law allows only 1 mg. Cadmium is a mineral that enters soil, water and air as a result of oil exploration.

The CDC on cadmium:

"Breathing high levels of cadmium can severely damage the lungs. Eating food or drinking water with very high levels severely irritates the stomach, leading to vomiting and diarrhea. Long-term exposure to lower levels of cadmium in air, food, or water leads to a buildup of cadmium in the kidneys and possible kidney disease. Other long-term effects are lung damage and fragile bones. HHS and the International Agency on Research of Cancer have determined that cadmium and cadmium compounds are human carcinogens."

Lead: 294 mg per kg, found at SSF 25; Ecuador law allows only 80 mg per kg. Lead is a metal that enters soil, water and air through oil exploration.

The CDC on lead:

"The main target for lead toxicity is the nervous system, both in adults and children.... Lead exposure may also cause weakness in fingers, wrists, or ankles. (It) also causes small increases in blood pressure, particularly in middle-aged and older people. Lead exposure may also cause anemia. At high levels of exposure, lead can severely damage the brain and kidneys ... and cause death.... The HHS has determined that lead and lead compounds are reasonably anticipated to be human carcinogens based on limited evidence from studies in humans and sufficient evidence from animal studies, and the EPA has determined that lead is a probable human carcinogen."

Reporters who have been covering the long-running litigation know these tests exist. But they don't write about them. Many say they are simply too difficult for their readers to understand. Others say they are boring.

That is exactly what Chevron is counting on: that the news media, the courts and members of the public interested in the case will never learn of the overwhelming scientific evidence against the company but instead will focus on the sensational and largely baseless allegations of fraud and bribes, backed by tainted and corrupt testimony paid by Chevron or extorted via economic pressure.

It looks like crying "fraud" in the face of the overwhelming evidence against it was Chevron's Plan B from the beginning.