Statement on Recent Developments in Aguinda v. Texaco
Trillium Asset Management Corporation Statement on
Recent Developments in Aguinda v. Texaco
December 4, 2008
Contact: Shelley Alpern
(617) 292-8026, x 248
On November 26, 2008, the court-appointed expert charged with assessing Chevron’s liability for damages in connection with Aguinda v. Texaco raised that figure by two-thirds, from $16.3 billion assessed in April to $27 billion. Richard Cabrera had concluded in a 4,000 page report to the court last spring that 100% of Chevron’s former sites are extensively contaminated with cancer-causing toxins, and that an earlier clean-up Texaco claimed it had completed was ineffective. Texaco, which dumped more than 18 billion gallons of toxic waste into large sections of the Amazon rainforest in the 1970s and ‘80s, was acquired by Chevron in 2001. A judgment will be announced next year.
This announcement is the latest in a series of setbacks for Chevron related to the litigation. In October, the U.S. Court of Appeals for the Second Circuit denied an attempt by Chevron to force the Ecuadorian government into binding arbitration to determine who should be responsible for the liability. The three-judge panel unanimously found Chevron’s claim to be without merit. In September, two Chevron lawyers and seven former Ecuadorian government officials were indicted in Ecuador on fraud charges relating to Texaco’s 1990s remediation of the contaminated sites. Also this fall, Ecuador’s renewal of trade benefits was renewed despite a concerted lobbying effort by Chevron to persuade Congress to use them as leverage to influence the outcome of the trial in Ecuador.
For the past several years, Trillium Asset Management Corporation has monitored Aguinda v. Texaco closely and filed several shareholder resolutions related to the case, both independently and in coordination with the New York City pension funds. Our director of advocacy visited contaminated areas of the rainforest in 2004. Long before damage estimates rose into 8-digit figures, through resolutions and dialogue with management, we urged Chevron to come clean with its shareholders about the high risks posed by its litigation strategy. We believe Chevron’s management thought it could keep this case hidden from investors, a strategy that has backfired miserably because it failed to recognize the magnitude of public interest in the case worldwide. The Ecuadorian courts have proved to be no pushover, and Chevron’s ability to outlast the plaintiffs lawyers is now open to serious question. It is time for Chevron to rethink what can be gained by continuing to fight what seems to be an increasingly inevitable and embarrassing judgment of enormous financial magnitude. We call upon Chevron to negotiate a settlement and bring this case to an end.
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