The pressure on ChevronTexaco over its historic $6 billion Ecuador rainforest trial escalated significantly yesterday when leaders representing the three largest U.S. public pension funds called on the company to take action to resolve the dispute. In a direct rebuke to company management, California Controller Steve Westly requested that the Board of Directors conduct an independent review of how CEO David O’Reilly is managing the litigation. The lawsuit on behalf of five indigenous tribes and 80 communities alleges Texaco dumped more than 18 billion gallons of toxic wastewater into Ecuador’s rainforest during its two decades of operations in Ecuador’s Amazon region, from 1970 to 1992. The amount of crude dumped amounts to roughly 30 times the size of the Exxon Valdez disaster.
Alan Hevesi, comptroller of New York who represents the second largest public pension fund in the country, released a statement that said: “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.”
Westly, who sits on the board of both CALPERS and CALSTERS (respectively the largest and third-largest public pension funds in the country), released a statement calling on the ChevronTexaco Board “to undertake an independent review of the situation [in Ecuador].”
The three public pension funds hold more than $2 billion dollars worth of ChevronTexaco stock. The funds have voted for a shareholder resolution seeking a management report on the litigation.
The trial is the first time that rainforest dwellers have forced a multinational oil company to be subjected to jurisdiction in their national courts. It is expected to conclude next year.
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