SEC Complaint Lodged Against Chevron for Hiding $10 Billion Liability in Ecuador
Posted on: Wednesday, 26 March 2008, 09:00 CDT
SAN FRANCISCO, March 26 /PRNewswire/ -- The Securities and Exchange Commission (SEC) has been urged to impose a "substantial" sanction on Chevron for misrepresentations to shareholders over a potential $10 billion liability resulting from a class-action environmental lawsuit in the Ecuadorian Amazon.
In a letter to SEC Chairman Christopher Cox, environmental group Amazon Watch said Chevron had told shareholders a "series of falsifications, exaggerations, omissions, and misleading public statements" to downplay its liability in a lawsuit brought by thousands of rainforest residents over what experts say is the worst oil-related disaster on the planet. The full text of the letter can be seen on http://www.chevrontoxico.org/.
A court-appointed expert is preparing a damages assessment, which the plaintiffs expect to be more than $10 billion.
"Chevron created an environmental catastrophe in Ecuador and as a result thousands of vulnerable rainforest residents are suffering from dangerous toxic pollution," said Luis Yanza, a representative of the 80 communities and five indigenous groups that brought the lawsuit.
Last month, Chevron conceded to the office of the U.S. Trade Representative that it expects "a near-term unfavorable finding from the Ecuadorian court and potentially enormous ... financial liability," according to a copy of the submission obtained by Amazon Watch. Chevron also said it was the victim of an "unfair" trial, an assertion that the plaintiffs dispute.
Yet Chevron for years has refused to mention this potential liability in its public filings as required by securities law, the group said in the letter. Chevron also placed information on its corporate website that suggests it faces no risk in Ecuador, according to the organization.
"Chevron misleads its shareholders by claiming in public that it has no liability in Ecuador, while in private it claims to face an enormous liability," said Atossa Soltani, Amazon Watch executive director. "Which is it? The SEC must ensure that Chevron tells the truth about its liabilities in public as well as in private discussions."
Expected to conclude this year, the Ecuador lawsuit accuses Chevron of digging close to 1,000 open-air waste pits in the rainforest and filling them with toxic-laden oil sludge that has leeched into the soil and groundwater. The company is also accused of dumping 18 billion gallons of toxic wastewater into rainforest waterways from 1964 to 1990, the years it operated a lucrative oil concession in Ecuador.
Chevron's sub-standard operational practices in Ecuador "threaten the survival of rainforest indigenous groups and can be linked to hundreds of deaths from cancer and other oil-related diseases," said the letter.
Amazon Watch
CONTACT: Ben Brofman, of The Weiser Group for Amazon Watch,+1-646-254-6000 x15, bbrofman@weisergroup.com
Web site: http://www.chevrontoxico.org/
Source: PRNewswire
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