EMBAJADA DEL ECUADOR WASHINGTON D.C.
Ambassador Nathalie Cely Embassy of Ecuador in Washington, DC Washington, DC, May 28th 2014 Dear Shareholder: As you may know, Chevron has been accused by indigenous communities in Ecuador of having contaminated the Ecuadorian Amazon while it operated in my country as TexPet and as Texaco between 1964 and 1992, several years before it was acquired by Chevron in 2001. Legal battles over this issue have been long, hard-fought, and fraught with misinformation and rhetoric designed to distract the public, the courts, and other interested parties from the real issue of what took place in Ecuador and the moral and legal responsibility of Chevron. In that regard, I would like to draw your attention to new information, recently made public, that you likely are unaware of. As part of the pending international arbitration proceedings commenced by Chevron against the Republic of Ecuador, experts with the internationally recognized, U.S.-based environmental consulting firm the Louis Berger Group reviewed Chevron’s own data—and conducted its own testing—to get to the truth. This includes examining Chevron’s own environmental testing, as reflected in documents that Chevron sought to keep secret but was ordered to produce by several U.S. courts in support of the arbitral proceedings. In our view, the results of that testing leave no room for doubt of three facts: 1. Texaco knowingly engaged in practices that by design predictably led to widespread contamination, notwithstanding the availability of better technologies that Texaco used elsewhere; 2. Substantial contamination in the rainforest caused by Texaco remains today; 3. That contamination has caused, is causing and is likely to continue to cause significant
health and environmental impacts in the region. In the accompanying document, we present to you a comprehensive summary of this evidence for you to review yourself. I do not write this letter with joy. I instead write with a measure of reluctance. I am a diplomat, and it is generally not my practice to criticize any person or company. At the same time, I do believe it is my duty as the representative of Ecuador to this country that we bring this evidence of the Company’s liability to your attention—and into the public domain.
Dirección: 2535 15th. Street N.W. Washington D.C. 20009 Teléfono: (202) 234-7200 www.ecuador.org
EMBAJADA DEL ECUADOR WASHINGTON D.C.
I encourage you to review the evidence yourself, to ask appropriate questions, to perform due diligence, and to retain truly independent experts. As it stands, Chevron appears intent to continue its practice of spending tens of millions of dollars annually on attorneys to support its many litigations, and still many more millions of dollars on its related public relations and lobbying campaigns. I nonetheless am an optimist at heart and will therefore continue to hope that the Company will reexamine the path it has charted and that it will choose to act, going forward, in a manner more befitting the eco-friendly image that it seeks to project to the world. Sincerely,
Nathalie Cely Ambassador of Ecuador to the United States
Direcci贸n: 2535 15th. Street N.W. Washington D.C. 20009 Tel茅fono: (202) 234-7200 www.ecuador.org
EMBAJADA DEL ECUADOR WASHINGTON D.C.
Background Ecuadorian indigenous plaintiffs originally brought their suit against Texaco in 1993 in a federal district court in New York, but Texaco—and later Chevron—asked the New York court to dismiss the case so that it could be resolved in Ecuador. At the time, the Company had repeatedly represented (and offered multiple affidavits in support) that the Ecuadorian courts were fair and capable of adjudicating the dispute. The Company won dismissal of the case from the court in New York in 2002, and the following year the indigenous plaintiffs re-filed the case in Ecuador— as Chevron and Texaco had encouraged. Almost immediately thereafter, in 2004—long before the Company lodged any complaints about “fraud”—Chevron launched the first of successive litigations and arbitrations against the Republic of Ecuador. Five years and substantial resources were wasted on this litigation, which was dismissed by both the U.S. federal district court in New York and the Second Circuit Court of Appeals. International Tribunal The same year after its claims were dismissed from the U.S. court (and still two years prior to any decision by the Ecuadorian courts regarding the rainforest residents’ claims), Chevron commenced the now pending international arbitration against the Republic of Ecuador. In the arbitration proceedings, Chevron has argued that it is not liable for any kind of contamination in the rainforest where Texaco operated for nearly three decades, and that if there were any contamination, it is not harmful to the environment or the inhabitants of the region. I encourage you to examine Chevron’s claims—and all of the evidence—because Chevron’s position is belied by Chevron’s own environmental testing, as reflected in documents that Chevron sought to keep secret but was ordered to produce by several U.S. courts in support of the arbitral proceedings. New Evidence of Significant Texaco-Chevron Pollution Experts with the internationally recognized, U.S.-based environmental consulting firm the Louis Berger Group reviewed Chevron’s own data—and conducted its own testing—to get to the truth. In our view, the results of that testing leave no room for doubt of three facts: 4. Texaco knowingly engaged in practices that by design predictably led to widespread contamination, notwithstanding the availability of better technologies that Texaco used elsewhere; 5. Substantial contamination in the rainforest caused by Texaco remains today; 6. That contamination has caused, is causing and is likely to continue to cause significant
health and environmental impacts in the region. Dirección: 2535 15th. Street N.W. Washington D.C. 20009 Teléfono: (202) 234-7200 www.ecuador.org
EMBAJADA DEL ECUADOR WASHINGTON D.C.
Chevron’s own experts tested soil samples both before and during court-ordered judicial inspections in the rainforest litigation. TPH (Total Petroleum Hydrocarbons, a measure of the amount of oil in a sample) values exceeded the 1000 mg/kg Ecuadorian standard at 91 percent of the sites Chevron had sampled by spring of 2007. Two carcinogenic PAHs (benzo(a)pyrene and benzo(a)anthracene) exceeded Ecuadorian standards at more than half of the sites tested; the PAH pyrene exceeded Ecuadorian standards at 90 percent of the sites; and naphthalene exceeded Ecuadorian standards at 82 percent of the sites. Just as with the soil samples, more than 50 percent of the sediment samples Chevron took showed that TPH values exceeded the maximum allowable 1000 mg/kg standard. These samples also showed that 25 percent of the sites exceeded allowable levels of the carcinogen benzo(a)pyrene and 43 percent exceeded allowable levels of pyrene. That any sites exceeded allowable PAH limits in sediments almost two decades after their release indicates a persistent problem. New Evidence of Chevron’s Misleading Activities While Chevron’s legal strategy in recent years has been to focus attention on the conduct of attorneys for the indigenous plaintiffs, the Company’s own litigation practices have proven less than exemplary as the Company engaged in activities plainly designed to mislead the Ecuadorian court by systematically understating the contamination it caused. As the Louis Berger Group found: 1. Chevron conducted extensive, unauthorized pre-inspection tests at most sites so that it would know exactly where the contamination was and where, more importantly, it was not. Chevron then used this information to systematically avoid finding any pollution during the official judicial inspections. Indeed, its experts—relying on cherry-picked test samples—pronounced the samples “representative” of the whole when the Company knew that they were not. That Chevron still found evidence of contamination reveals the true omnipresence of the contamination. 2. Chevron relied on a test, the TCLP test, which was never intended to assess the existence of petroleum hydrocarbons in the soil, but rather to test levels of contamination in the water coming out of landfills. The fundamental problem with this test is that oil and water don’t mix, so it will yield positive results only if the oil is literally dripping out of the sample. 3. Chevron’s experts used their knowledge of a site’s geography and the natural characteristics of oil to avoid sampling at locations likely to show pollution. For example, Chevron would sample upstream from sources of contamination when it knew that the contamination would migrate downstream. Or Chevron would take only surface samples where pollution was known or expected to be deeper. 4. Chevron used “composite sampling”—a sampling technique designed to find average concentrations—and added known clean soil to make dirty samples look cleaner. Dirección: 2535 15th. Street N.W. Washington D.C. 20009 Teléfono: (202) 234-7200 www.ecuador.org