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Environmental Protection and Corporate Social Responsibility
CASE STUDY Chevron v. Ecuador
What can we learn from the Texaco’s operations in Amazonia?
TEXACO
Founded: Texas 1901 Revenues: $ 46 billion (1997)
Total Assets: $ 29 billion (1997)
Net Production of Crude Oil: 833 000 barrels a day
CHEVRON CORPORATION
Founded: California 1879 Revenues: $ 200 billion (2014)
Total Assets: $ 266 billion (2014)
Net Production of Crude Oil: 1 744 000 barrels a day
Rainforest
TexacoCofànSionaSecoya
Napo Lowland Quichua Waorani
Los Afectados
1937 Royal Dutch Shell First Seismic Prospecting
1964 Texaco-Gulf Consortium
First Extraction Site
1967 First Oil Spill
1971 Trans-Ecuadorian
Pipeline
1972 20 years
Concession Agreement
1992 End of the
Concession and Texaco’s operations
- 339 wells - 18 central production stations - 1.5 billion barrels - 1000 km of secondary pipelines - 600 km of unpaved roads
Cancer of the larynx: 30 times higher
Bile duct cancer: 18 times higherLiver cancer and melanoma: 15 times higher
Stomach cancer: 4,6 times higher
Leukemia: 2,6 times higher
Leukemia for children under age 14 : 2,6 times higher
2003 Ecuador
Los Afectados v. Chevron $9.51 Billion
2009 The Hague
Investor-State Arbitration
Chevron v. Ecuador
2012 Argentina Recognition and enforcement of the judgment
2012 Brazil Recognition and enforcement of the judgment
2012 Canada Recognition and enforcement of the judgment
2012 Washington Inter-American Commission on Human Rights
2013 New York Chevron v. Donzinger (Los Afectados’ Lawyer) Corruption
1993 New York Aguinda v. Texaco Dismissal
2014 The Hague International Criminal Court / Inadmissible
“To adopt suitable measures to protect the flora, fauna, and other natural resources and to prevent contamination of water, air and soil under the control of pertinent organs of the state”
Concession Agreement (1972)
“Adopt necessary measures to protect flora, fauna and other natural resources [...] and prevent contamination of water, air, and soil.”
Ecuador’s Law of Hydrocarbons (1971)
Reglamento General para la Aplicación de la Ley de Aguas 1972
Ley de Pesca y Desarrollo Pesquero 1974
Ley para la Prevencion y Control de la Contaminacion Ambiental R.O. No. 204 (1976)
National Law
“…indigenous peoples have been, and are still being, discriminated against and deprived of their human rights and fundamental freedoms and in particular that
they have lost their land and resources to colonists, commercial companies and State enterprises …”
Business and Rights of Indigenous Peoples (Soft Law)
U.N. Comm. on the Elimination of Racial Discrimination “General Recommendation XXII: Indigenous Peoples” (1997)
“…the traditional lands of indigenous peoples have been reduced or occupied, without their consent, by timber, mining and oil companies, at the expense of the
exercise of their culture and the equilibrium of the ecosystem…”
U.N. Comm. on Economic, Social and Cultural Rights “Concluding observations of the Committee on Colombia” (2001)
“… urgent need to respect and promote the inherent rights of indigenous peoples which derive from their political, economic and social structures and from their cultures,
spiritual traditions histories and philosophies, especially their rights to their lands, territories and resources …”
United Nations Declaration on the Rights of Indigenous Peoples (2007)
Report of the United Nations High Commissioner for Human Rights “Human rights and the extractive industry” (2005)
“… extractive industry can also add stress to human rights, particularly in the context of certain risk situations, including the presence of indigenous communities…”
International Law (State Obligations)
American Convention on Human Rights (1969): Art. 4. Right to Life: “Every person has the right to have his life respected. This right shall be protected by law and, in general, from the moment of conception. No one shall be arbitrarily deprived of his life.”
Art. 5. Right to Humane Treatment: “Every person has the right to have his physical, mental, and moral integrity respected.”
Art. 21. Right to Property: “Everyone has the right to the use and enjoyment of his property. The law may subordinate such use and enjoyment to the interest of society.”
Inter-American Commission of Human Rights (2001):
“… Indigenous groups, by the fact of their very existence, have the right to live freely in their own territory; the close ties of indigenous people with the land must be recognized and understood as the fundamental basis of their cultures, their spiritual life, their integrity, and their economic survival. For indigenous communities, relations to the land are not merely a matter of possession and production but a material and spiritual element which they must fully enjoy, even to preserve their cultural legacy and transmit it to future generations….”
Art. 3: “Indigenous and tribal peoples shall enjoy the full measure of human rights and fundamental freedoms…”
Indigenous and Tribal Peoples Convention, 1989 (No. 169)
Art. 13: “… governments shall respect the special importance for the cultures and spiritual values of the peoples concerned of their relationship with the lands or territories, or both as applicable, which they occupy or otherwise use, and in particular the collective aspects of this relationship…”
Art. 4: “Special measures shall be adopted as appropriate for safeguarding the persons, institutions, property, labour, cultures and environment of the peoples concerned.…”
Art. 14: “…The rights of ownership and possession of the peoples concerned over the lands which they traditionally occupy shall be recognised…”
Is it worth it?
$3 saved per barrel of oil produced
X1.5 billion barrels in 28 years
Tot. $4.5 billion
$ 2 Billion for legal fees
+
+
$ 40 Million for remediation
Reputational damage $$$ ?
Tot. ???
The importance of corporate social responsibility for business
Media interest and good reputation
Saving money on energy and
operating cost
Differentiating yourself from the competitors
Access to funding opportunities
Enhanced Relationship with
stakeholders
Winning new businesses
Enhancing your influence in the
industry
What did Chevron learn?
TEXACO ANNUALREPORT
Texaco Annual Report
2015 corporate responsibility
report highlights
getting results the right way for complete reporting, visit chevron.com/reporting
In Rakhine State, Myanmar, Kayala Oo of Unocal
Myanmar Offshore Co., Ltd. (a Chevron subsidiary)
leads a social impact assessment meeting with
local community members and other stakeholders.
although governments have the
primary duty to protect and ensure fulfillment
of human rights, chevron believes that
we have a responsibility to respect human
rights and that we can play a positive
role in the communities where we operate
respecting human rights
integrity
learn more!!chevron.com/humanrights
protecting people and the environment
chevron is committed to preventing serious incidents and fatalities, which requires operational discipline among our more than 58,000 employees and our full-time-equivalent contractor workforce of 214,000
preventing serious
incidents
Kelly Gray, Chevron Australia production technician, monitors operating units in the Gorgon Operations central control room on Barrow Island, Western Australia.
learn more!!chevron.com/healthsafety
chevron.com/cr10
protecting people and the environment
advancing environmental
stewardshipprotecting people and the environment
is a chevron way value that guides our actions so that we get
results the right way, every time
Great hornbills (Buceros bicornis), a large bird species from the hornbill family, found near Chevron’s Dumai Camp, Sumatra, Indonesia.
learn more!!chevron.com/environment
chevron.com/cr14
