ChevronTexaco CEO Closes Investor's Meeting To Silence Enviro

(ENS) -- ChevronTexaco CEO David O'Reilly today reported record oil profits to stockholders at the company's annual general meeting and then abruptly shut off the microphone and adjourned the meeting in the middle of a presentation. He cut off a speech by Atossa Soltani, the executive director of Amazon Watch, a nonprofit group that works with Ecuadorian communities who claim their lands and health were damaged by Texaco oil operations.

Soltani was reading a letter sent by Amazon Watch to O'Reilly earlier this week accusing company employees of making false and misleading public statements about the evidence at a trial brought by five Native tribes and 80 communities. The plaintiffs allege that Texaco dumped toxic wastewater into Ecuador's rainforest from 1970 to 1992 while extracting 1.4 billion barrels of oil.

Soltani was attempting to cite ChevronTexaco's own soil and water tests from a well called Sacha-53 that found 22 samples over the maximum allowable legal limits for toxins.

The trial is the first time in history that rainforest dwellers have forced a multinational oil company to be subjected to jurisdiction in their national courts. They are seeking $6 billion in damages. The Ecuador phase of the trial began in 2003 in the rainforest town of Lago Agrio and is expected to conclude next year. Litigation was first filed in U.S. courts in 1993, but claims brought by the Ecuadorians were dismissed in 2002. The courts ruled the proper jurisdiction for the trial was Ecuador.

O'Reilly today told stockholders that 2004 was a year of great accomplishment and that the execution of sound corporate strategies was driving the company in the right direction.

"We have the right strategies, the right people, a strong queue of projects and great momentum," O'Reilly said.

Peter Robertson, vice chairman of the board, told stockholders that 2004 was both financially and operationally the strongest year in the company's 125 year history.

Referring to record net income of $13.3 billion for the year and a return on capital employed of nearly 26 percent, Robertson pointed to strong commodity prices and sound operating practices as leading factors in this outstanding performance.

ChevronTexaco declared a dividend of 45 cents per share, up five cents per share over last quarter.

"Clearly, we benefited from high oil and natural gas prices, as well as from improved refining margins," Robertson said. "But we also benefited from our strong operating performance, and we ran our base business well."

The three proposals on environmental issues put to ChevronTexaco stockholders were all defeated.

The proposal that the "Board of Directors prepare a report on new initiatives by management to address the specific health and environmental concerns of communities affected by unremediated waste and other sources of oil-related contamination in the area where Texaco operated in Ecuador" was defeated. Approximately 91 percent of the votes cast were against the proposal, the company said.

The stockholder proposal to report on oil and gas drilling in protected and sensitive areas was defeated. Some 91 percent of the votes cast were against the proposal. And a stockholder proposal to replace animal testing with use of non-animal methods was defeated by 96 percent of the votes cast.

Among those voting in favor of having the Board report on health and environmental initiatives in Ecuador were three public pension funds that collectively hold more than $2 billion dollars of ChevronTexaco stock.

New York Comptroller Alan Hevesi, $120 billion New York Common Retirement Fund is the second largest public pension fund in the country, said in a statement, "I find it troubling that ChevronTexaco's reputation continues to suffer because it has not been able to resolve its issues in Ecuador. Each day that this environmental and health crisis continues, ChevronTexaco's future business opportunities abroad are more at risk. As an institutional investor, I hope that the company will resolve its issues in Ecuador as soon as possible."

California Controller Steve Westly, who sits on the board of CALPERS, the largest public pension fund in the country, and CALSTERS, the third-largest, called on the ChevronTexaco Board "to undertake an independent review" of the situation in Ecuador.

Westly said, "ChevronTexaco is a California company that has based its reputation on going the extra mile to be a good neighbor in the California community. I am concerned that actions taken by Texaco prior to its merger with Chevron in 2001 may be tarnishing that hard-earned reputation."

Amnesty International said in a statement today that it had co-filed this shareholder proposal as a concerned shareholder and also as the world's largest human rights organization, representing 1.8 million members globally.

"As stated in the Universal Declaration of Human Rights, Ôevery organ of society' has a responsibility to promote respect for human rights, and this includes powerful multinational corporations like ChevronTexaco. The claims of the Ecuadorian Amazon communities deserve to be addressed, and the company needs to demonstrate with actions that they are serious about being a socially responsible leader in their industry," Amnesty said.

Carmen Perez, a mother of six from Ecuador's Amazon region, had traveled for three days to the Bay Area to attend ChevronTexaco's annual meeting at the invitation of shareholders and Amnesty International. But she was not permitted to speak.

"I was very sad that I traveled for three days to come to this meeting, only not to be heard by the Chairman of the company," said Perez, who is a health care worker in the community of La Primavera, in Ecuador's Sucumbios province at the center of the oil contamination.

Humberto Piaguaje a Secoya Native leader who also traveled from Ecuador, was able to speak briefly during the meeting and told O'Reilly and the shareholders, "I may be foreign to you but I am human. The jungle was once a great university, market, and hospital to us. Since ChevronTexaco came our university market and hospital has been vanishing. I am not here to tarnish your image but to find a solution to this crisis."

Also unable to speak was Rabbi Dan Goldblatt, the leader of Beth Chaim Congregation in the Tri-Valley area of California, where San Ramon is located, who earlier had visited Ecuador at the invitation of the affected communities. Emerging from the meeting, Goldblatt called O'Reilly's attitude "shameful."

"I didn't come to talk about the lawsuit, I came to talk about the moral issues facing this company for its responsibility in Ecuador, where its legacy continues squeezing human life to this day," Goldblatt said.

The Texaco Petroleum Company (TexPet), a Texaco subsidiary, operated in Ecuador from 1964 to 1990 in partnership with PetroEcuador, the state oil company of Ecuador. PetroEcuador was the majority partner, holding a 62.5 percent interest. TexPet held the 37.5 percent minority interest.

At the conclusion of its involvement in the consortium, the company states, TexPet sponsored two environmental audits and subsequently undertook a $40 million remediation to ensure that there would be no lasting environmental impact. That remediation program was completed in 1998 and certified by the Ecuadorean government.