Statement of Trillium Asset Management Corporation
Lead proponent of Chevron Proxy Item No. 9, A Proposal Addressing the Adequacy of Chevron’s Global Environmental Policies
This proposal is co-sponsored by the New York City Employees Retirement System, Amnesty International, and Catholic Healthcare Partners. The proponents collectively hold nearly $3 billion in Chevron stock.
Trillium Asset Management and its co-sponsors have filed this proposal because in the hope that it will encourage Chevron to do the internal work necessary to avoid future environmental liability scenarios of the type that it is facing in Nigeria, Ecuador, Angola and Burma.
Our proposal asks the Board to prepare a report on the policies and procedures that guide Chevron’s assessment of the adequacy of host country laws and regulations, with respect to their adequacy to protect human health, the environment and Chevron’s reputation.
Residents and in some cases, the governments, of the communities in which Chevron operates, have accused Chevron of harming the health and welfare of local communities.
In Nigeria, Chevron is accused of polluting land and water resources in its ongoing operations in the Niger Delta. This has fueled protests against our company and contributed to civil unrest.
In 2002, Chevron was fined $2 million by the Angolan government for oil spills from a pipeline that polluted beaches and damaged fishing in the Cabinda region. In Ecuador, Texaco is on trial Ecuador for widespread contamination of Amazonian land and water resourcesin the 1970s. Ecuador’s President RafaelCorrea has taken a highly public stand against Chevron. This case has drawn widespread international attention and is currently profiled in this month’s Vanity Fair.
Chevron has also acquired the risk of the former Unocal’s continued operations in Burma, which is ruled by a repressive and illegitimate military junta. Chevron is telling its shareholders that this proposal is really about Ecuador. In fact, we have followed all of these situations closely as they have developed over a number of years. Trillium Asset Management’s interactions with Chevron regarding Nigeria go back to 1999, and our dialogue with Unocal goes back 15 years. Prior to the Ecuador resolutions we filed, Trillium Asset Management was the lead proponent of the human rights proposal that is still on this year’s ballot, filed by the United Methodist Church.
The combined weight of Chevron’s foreign predicaments have caused us to question whether the company has either a serious or strategic approach to addressing the environmental challenges of operating in a global environment where standards vary greatly. Oil and gas extraction has become an increasingly challenging task as much of the world’s remaining reserves are located in harsh geological environments, unfriendly political environments, or controlled more tightly by foreign governments. Just this Saturday, the New York Times observed that “there are few safe places left for oil companies in the Niger Delta.”
In this hyper-competitive environment, it matters a great deal that potential partners be convinced that Chevron will operate with integrity and apply the highest environmental standards, regardless of where it operates.
Chevron’s opposition statement in the proxy falsely implies that the lead proponent of this resolution has filed it to further the agenda of the plaintiffs lawyers in the Ecuador litigation. The sponsors of this resolution have indeed received briefings from multiple sources concerning Chevron’s activities in Ecuador, including a number of meetings with Chevron management as well as advocates for the people in other affected countries. The proponents have taken extraordinary measures to research Chevron’s policies and behaviors. This has become a necessity due to Chevron’s failures to disclose sufficient information to shareholders on the ongoing and new risks described in this resolution. We have concluded that all shareholders with concern for the long term value of our investment in Chevron should support the aims of this proposal.
Contact: Shelley Alpern, Trillium Asset Management Corporation, (617) 970-8944