Tough Week for Chevron: Major Shareholders Condemn CEO Wirth at Annual Meeting for "Mishandling" $12b Ecuador Liability

Sierra Club, Amazon Watch, and Greenpeace USA Among Groups That Confronted Wirth Over Environmental Practices and Climate Change

San Francisco – Institutional shareholders and a large number of environmental groups this week dealt Chevron CEO Michael Wirth a severe rebuke by voting heavily in favor of two resolutions that cited his “mishandling” of the risks related to the historic Ecuador $12 billion pollution judgment won by Indigenous groups and currently being enforced in Canadian courts. 

The results reflect strong support for the Indigenous groups at a time that Wirth and his outside law firm Gibson Dunn face two criminal referral letters to the U.S. Department of Justice citing evidence they used witness bribery and fraud to try to undermine the Ecuador judgment.  (See here and here.) Despite using at least 60 law firms and 2,000 lawyers on the case, Chevron has failed to stop the Ecuadorians from continuing to pursue their claims which have been backed by Canada’s Supreme Court in an enforcement action.

“The main takeaway from the shareholder meeting is that Wirth has put his head in the sand on both Ecuador and climate change,” said Paul Paz y Mino, an official with the environmental group Amazon Watch.  “The new Chevron Way reflects the Trump-Wirth method: when guilty, admit nothing and deny everything and always ground decisions in personal greed.”

Four layers of courts in Ecuador found that Chevron deliberately dumped 16 billion gallons of cancer-causing waste into the rainforest, decimating Indigenous groups and causing an epidemic of cancer.  Canada’s Supreme Court recently backed the right of the plaintiffs to enforce their judgment after Chevron stripped its assets from Ecuador.  (Here is a summary of the evidence against Chevron.) 

Last July, Ecuador’s Constitutional Court dealt Chevron another blow when it ruled unanimously to affirm the judgment, thereby ending the company’s appeals in the country where it insisted the trial be held and where it had accepted jurisdiction.

Wirth was hit from a number of angles at the shareholder meeting (see this blog from Amazon Watch), including:

• A resolution led by Newground Social Investment citing Wirth’s “mishandling” of risk related to the Ecuador judgment received a whopping 35.3 percent of the vote – an astounding figure given that Chevron management vigorously lobbied against the proposal. “This was a major rebuke to Wirth’s leadership given that most shareholder resolutions opposed by management never surpass a 10% threshold,” said Simon Billenness, who assists the Ecuadorians with shareholder outreach.

• A second resolution that also cited the Ecuador risk called on Chevron to update its antiquated governance structure and appoint an independent Chair (Wirth is currently CEO and Chairman of the Board). That resolution received a very high 26% of the vote, said Billenness. 

• Wirth also received sharp criticism from a coalition of 20 civil rights and environmental groups (called Protect the Protest) – including the ACLU and Electronic Frontier Foundation -- for using SLAPP-style bullying tactics against the Ecuadorians and one of their U.S. advocates, Harvard Law graduate Steven Donziger.  (See statement.) For ten years, Chevron has targeted Donziger with an avowed “demonization” campaign to distract attention from its wrongdoing in Ecuador and to try to drive him off the case. “It’s an intimidation model,” Deepak Gupta, who represented Donziger, told Rolling Stone in this feature. (See here to understand SLAPP lawsuits, which are designed by corporations to harass activists.)

• Wirth also faced strong headwinds last year when several shareholders holding $36 billion in assets demanded he explore a settlement of the Ecuador matter. This letter was organized by Newground. There is no sign that Wirth has acted on the recommendation.

Chevron recently obtained an order from a controversial pro-business federal judge that threatens Donziger with record-breaking fines – potentially more than $1 billion -- unless he stops raising funds to pay litigation expenses for his impoverished clients and turns over his computer and phone to the company. Donziger has asked the judge, Lewis A. Kaplan, to hold him in voluntarily contempt so he can appeal the latest orders, which he says violate his Constitutional rights and are part of Chevron’s attempt to silence its critics. 

Chevron has been so desperate to discourage people from supporting the Ecuadorians that it has subpoenaed almost anyone associated with the case – including its own shareholders, funders, environmental groups, bloggers, journalists, Yahoo, and Google. (See here.) Last year, the Protect the Protest Coalition awarded Wirth the Corporate Bully of the Year award for using the scorched-earth tactics to deny free speech.

Chevron is facing additional challenges in the Ecuador litigation.

In Canada, a recent decision by the Supreme Court paves the way for a quick trial where lawyers plan to present evidence that Chevron bribed a former judge in Ecuador with $2 million in exchange for testimony claiming the judgment was “ghostwritten”. The witness, Alberto Guerra, admitted he lied under oath and a separate forensic analysis proved his claim was false. (See here for details.)

Wirth also received criticism at the meeting for refusing to acknowledge the overwhelming scientific and visual evidence of the company’s pollution, which includes over 1,000 unlined waste pits that leak cancer-causing toxins into the soil and groundwater and contains pipes that run overflow into nearby streams relied on by locals for their drinking water. This blog from Amazon Watch contains statements regarding Wirth’s failure to address environmental issues from the Union of Concerned Scientists, Greenpeace USA, Sierra Club, and Stand.Earth. 

The impact of Chevron’s pollution in Ecuador, known as the “Amazon Chernobyl”, has led to numerous cancer deaths and an outbreak of childhood leukemia, according to independent health studies. At the shareholder meeting, Wirth “clearly lied” by denying there was any evidence of the company’s pollution despite the submission of 64,000 chemical sampling results in the Ecuador trial relied on by the court of find the company liable, said Paz.

In a Tweet, Paz also said that Donziger clearly was “spooking” Wirth, who said, “We will pursue Mr. Donziger for as long as it takes.” Chevron sued Donziger for $60 billion in 2011 in a retaliatory SLAPP-style “racketeering” case before dropping all damages claims on the eve of trial to avoid a jury. 

Background 

The preface to both shareholder resolutions citing the Ecuador case say: “Chevron has mishandled risk related to the ongoing legal effort by communities in Ecuador to enforce a $9.5 billion judgment against our Company for oil pollution. When Chevron acquired Texaco in 2001, it inherited significant legal, financial, and reputational liabilities that stemmed from pollution of the water and lands of communities in the Ecuadorian Amazon. In 2018, Ecuador’s Constitutional Court unanimously confirmed a $9.5 billion judgment against Chevron. An attempt to collect on the judgment from Chevron in Canada is ongoing. That effort is now before the Supreme Court of Canada on the issue of whether assets held by Chevron’s Canadian subsidiary can be used to satisfy the Ecuadorian judgment. Chevron has acknowledged the serious risk from enforcement of the $9.5 billion judgment. Deputy Controller Rex Mitchell testified that such seizures of Company assets “would cause significant, irreparable damage to Chevron’s business reputation and business relationships.” However, instead of negotiating an expedient, fair, and comprehensive settlement with the affected communities in Ecuador, management has pursued a costly legal strategy that has lasted more than two decades.”