Chevron Faces 'Irreparable Damage' from Possible $18 Billion Ecuador Judgment
A new financial analysis has found that Chevron's $18 billion Ecuador environmental liability poses a threat of “irreparable damage” to the oil major's global operations if the plaintiffs make good on their promise to launch legal actions to enforce the judgment in countries where Chevron has billions of dollars in assets.
The report, by social investment analyst Simon Billenness, notes that the long-running case (Aguinda v. ChevronTexaco) “is reaching its most risky phase” for Chevron after an appeals court in Ecuador upheld the judgment in January and rendered it immediately enforceable. The report notes that Chevron's defenses have been “severely compromised” because of a separate ruling by a New York federal appellate court that vacated a preliminary injunction purporting to bar worldwide enforcement of the judgment.
The Billenness Report also notes that Chevron has yet to disclose in its public filings that its own comptroller, Rex Mitchell, quietly submitted a sworn affidavit to U.S. federal court that concluded any enforcement of the judgment will cause “irreparable damage” to the company. Chevron has been trying to downplay the risk posed by the judgment in its public filings and press releases, concluded Billenness in the report, titled An Analysis of the Financial and Operational Risks to the Chevron Corporation from Aguinda v. ChevronTexaco.
“In sworn legal statements, Chevron has admitted that the company faces ‘irreparable injury' to [its] business relationships’ [from any enforcement of the Ecuador case] yet has consistently refused to fully characterize these risks to its shareholders,” he wrote in the report. “Shareholders are rightly questioning whether the board and management are fulfilling their fiduciary duties to properly manage the significant risks to the company's business and value.”
The report also concluded “the enormous breadth of Chevron’s global business operations makes the company particularly vulnerable to enforcement. There are many jurisdictions around the world in which the plaintiffs could seek court recognition and enforcement of the judgment, including many where Chevron has substantial reserves and that are of strategic importance.”
Key findings of the Billenness report include:
- The Ecuador judgment poses serious risks to Chevron's worldwide operations, with the possibility of asset attachments and loss of social license to operate in new areas and markets
- Chevron's principal legal defenses against enforcement have either been severely compromised or have failed. These include the reversal of a preliminary injunction barring enforcement and the rejection by Ecuador's government of a private investment arbitration that tried to halt the litigation
- Chevron’s shareholders are stepping up calls for more transparent disclosure of the Ecuador liability, leading to increased pressure on management
- Chevron risks violating securities laws for withholding material information from shareholders
Shareholders have been speaking out against Chevron management on the Ecuador issue for some time.
Last year, New York Comptroller Thomas DiNapoli blasted the company for “doing grave reputational damage” to itself by pursuing more legal proceedings “that only delay the inevitable…it's time to face reality...[t]he entire case is looming like a hammer over shareholders' heads.” And in a letter last May, several prominent institutional investors called on Chevron “to fully disclose ... the risks to its operations and business from the potential enforcement” of the Ecuador judgment.
Chevron refused to even acknowledge or answer either the investor letter, according to the shareholders.
The plaintiffs have said they plan to enforce the judgment in various countries, but they have not announced any specifics other than to say Venezuela and Panama are being considered. Chevron has billions of dollars of assets in Australia, Kazakhstan, Singapore, Brazil and Venezuela and operates in dozens of countries around the world, said Karen Hinton, the spokesperson for the Ecuadorians.
Billenness specializes in analyzing how environmental, social and governance factors pose risks to shareholders. He has worked as an analyst and advisor to Trillium Asset Management and the Office of Investment of the AFL-CIO. He is a member of the U.S. Social Investment Forum and consults with entities that focus on social investing.
EcoWatch Daily Newsletter
The Washington Redskins will retire their controversial name and logo, the National Football League (NFL) team announced Monday.
By Alyssa Murdoch, Chrystal Mantyka-Pringle and Sapna Sharma
Summer has finally arrived in the northern reaches of Canada and Alaska, liberating hundreds of thousands of northern stream fish from their wintering habitats.
A Good News Story?<p>On the surface, the <a href="https://doi.org/10.1111/fwb.13569" target="_blank">results from our study</a> appear to provide a "good news" story. Warming temperatures were linked to higher numbers of fish, more species overall and, therefore, potentially more fishing opportunities for northerners.</p><p>Initially, we were surprised to learn that warming was increasing the distribution of cold-adapted fish. We reasoned that modest amounts of warming could lead to benefits such as increased food and winter habitat availability without reaching stressful levels for many species.</p>
Photo of Arctic grayling (left) and Dolly Varden trout (right). Alyssa Murdoch / Lilian Tran / Nunavik Research Centre and Tracey Loewen / Fisheries and Oceans Canada<p>Yet, not all fish species fared equally well. Ecologically unique northern species — those that have evolved in colder, more nutrient-poor environments, such as Arctic grayling and Dolly Varden trout — were showing declines with warming.</p>
Fish Strandings and Buried Eggs<p>Recent news headlines run the gamut for Pacific salmon — from their increased escapades <a href="https://nunatsiaq.com/stories/article/more-pacific-salmon-showing-up-in-western-arctic-waters/" target="_blank">into the Arctic</a> to <a href="https://www.juneauempire.com/news/warm-waters-across-alaska-cause-salmon-die-offs/" target="_blank">massive pre-spawning die-offs</a> in central Alaska. Similarly, results from our study revealed different outcomes for fish depending on local climatic conditions, including Pacific salmon.</p><p>We found that warmer spring and fall temperatures may be helping juvenile salmon by providing a longer and more plentiful growing season, and by supporting early egg development in northern regions that were previously too cold for survival.</p><p>In contrast, salmon declined in regions that were experiencing wetter fall conditions, pointing to an increased risk of flooding and sedimentation that could bury or dislodge incubating eggs.</p>
Headwaters of the Wind River within the largely intact Peel River watershed in northern Canada. Don Reid / Wildlife Conservation Society Canada / Author provided<p>Interestingly, we found that certain climatic combinations, such as warmer summer water temperatures with decreased summer rainfall, were important in determining where Pacific salmon could survive. Summer warming in drier watersheds led to declines, suggesting that lowered streamflows may have increased the risk of fish becoming stranded in subpar habitats that were too warm and crowded.</p>
The Fate of Northern Fisheries<p>The promise of a warmer and more accessible Arctic has attracted mounting interest in new economic opportunities, <a href="https://doi.org/10.1016/j.marpol.2019.103637" target="_blank">including fisheries</a>. As warming rates at higher latitudes are already <a href="https://www.ipcc.ch/sr15/" target="_blank">two to three times global levels</a>, it seems probable that northern biodiversity will experience dramatic shifts in the coming decades.</p><p>Despite the many unknowns surrounding the future of Pacific salmon, many fisheries are currently <a href="https://doi.org/10.1080/03632415.2017.1374251" target="_blank">thriving following warmer and more productive northern oceans</a>, and some <a href="https://doi.org/10.14430/arctic68876" target="_blank">Arctic Indigenous communities are developing new salmon fisheries</a>.</p><p>As warming continues, the commercial salmon fishing industry is poised to expand northwards, but its success will largely depend on extenuating factors such as <a href="https://www.eenews.net/stories/1060023067" target="_blank">changes to marine habitat and food sources</a> and <a href="https://www.yukon-news.com/news/promising-chinook-salmon-run-failed-to-materialize-in-the-yukon-river-panel-hears/" target="_blank">how many fish are caught during the freshwater stages of their journey</a>.</p><p>Even with the potential for increased northern biodiversity, it is important to recognize that some northern communities may be unable to adapt or may <a href="https://thenarwhal.ca/searching-for-the-yukon-rivers-missing-chinook/" target="_blank">lose individual species that are associated with important cultural values</a>.</p>
- New England Fishing Communities Being Destroyed by 'Climate ... ›
- Shrimp Fishing Banned in Gulf of Maine Due to Ocean Warming ... ›
- Atlantic Salmon Is All But Extinct as a Genetically Eroded Version of ... ›
A heat wave that set in over the South and Southwest left much of the U.S. blanketed in record-breaking triple digit temperatures over the weekend. The widespread and intense heat wave will last for weeks, making the magnitude and duration of its heat impressive, according to The Washington Post.
- Hot Weather and COVID-19: Added Threats of Reopening States in ... ›
- 50 Million Americans Are Currently Living Under Some Type of Heat ... ›
- Second Major Heat Wave This Summer Smashes Records Across ... ›
By Joni Sweet
If you get a call from a number you don't recognize, don't hit decline — it might be a contact tracer calling to let you know that someone you've been near has tested positive for the coronavirus.
Interviews With Contact Tracers<p>Contact tracing is a public health strategy that involves identifying everyone who may have been in contact with a person who has the coronavirus. Contact tracers collect information and provide guidance to help contain the transmission of disease.</p><p>It's been used during outbreaks of sexually transmitted infections (STIs), Ebola, measles, and now the coronavirus that causes COVID-19.</p><p>It starts when the local department of health gets a report of a confirmed case of the coronavirus in its community and gives that person a call. The contact tracer usually provides information on how to isolate and when to get treatment, then tries to figure out who else the person may have exposed.</p><p>"We ask who they've been in contact with in the 48 hours prior to symptom onset, or 2 days before the date of their positive test if they don't have symptoms," said <a href="https://case.edu/medicine/healthintegration/people/heidi-gullett" target="_blank">Dr. Heidi Gullett</a>, associate director of the Center for Community Health Integration at the Case Western Reserve University School of Medicine and medical director of the Cuyahoga County Board of Health in Ohio.</p>
“You’ve Been Exposed”<p>After the case interview, contact tracers will get to work calling the folks who may have been exposed to the coronavirus by the person who tested positive.</p><p>"We give them recommendations about quarantining or isolating, getting tested, and what to do if they become sick. If they're not already sick, we still want them to self-quarantine so that they don't spread the disease to anyone else if they were to become sick," said Labus.</p><p>Generally, the contact tracer won't ask for additional contacts unless they happen to call someone who is sick or has a confirmed case of the virus. They will help ensure the contact has the resources they need to isolate themselves, if necessary. The contact tracer may continue to stay in touch with that person over the next 14 days.</p><p>"We follow the percentage of people that were contacts, then converted into being actual cases of the virus. It's an important marker to help us understand what kind of transmission happens in our community and how to control the virus," said Gullett.</p>
Why You Should Participate (and What Happens If You Don’t)<p>A <a href="https://www.thelancet.com/journals/laninf/article/PIIS1473-3099(20)30457-6/fulltext" target="_blank">Lancet study</a> from June 16, which looked at data from more than 40,000 people, found that COVID-19 transmission could be reduced by 64 percent through isolating those who have the coronavirus, quarantining their household, and contacting the people they may have exposed.</p><p>The combination strategy was significantly more effective than mass random testing or just isolating the sick person and members of their household.</p><p>However, contact tracing is only as effective as people's willingness to participate, and a small number of people who've contracted the coronavirus or were potentially exposed are reluctant to talk.</p><p>"Contact tracers have all been hung up on, cussed at, yelled at," said Gullet.</p><p>The hesitation to talk to contact tracers often stems from concerns over privacy — a serious issue in healthcare.</p>
- Anti-Racism Protests Are Not Driving Coronavirus Spikes, Data ... ›
- Cell Phone Tracking Analysis Shows Where Florida Springbreakers ... ›
NASA scientists say that warmer than average surface sea temperatures in the North Atlantic raise the concern for a more active hurricane season, as well as for wildfires in the Amazon thousands of miles away, according to Newsweek.
By Andrea Germanos
Oxfam International warned Thursday that up to 12,000 people could die each day by the end of the year as a result of hunger linked to the coronavirus pandemic—a daily death toll surpassing the daily mortality rate from Covid-19 itself.
- These 6 Men Have as Much Wealth as Half the World's Population ... ›
- Climate Change Forces 20 Million People to Flee Each Year, Oxfam ... ›
By Jun N. Aguirre
An oil spill on July 3 threatens a mangrove forest on the Philippine island of Guimaras, an area only just recovering from the country's largest spill in 2006.
- 15,000 Gallon Oil Spill Threatens River and Drinking Water in Native ... ›
- Mysterious Oil Spill on Massachusetts' Charles River Spurs Major ... ›
- Disastrous Russian Oil Spill Reaches Pristine Arctic Lake - EcoWatch ›