Wednesday, March 26, 2008

SEC Urged To Impose 'Substantial' Sanction on Chevron Over Possible $10 Million Liability

Taken from the PR Newswire:

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.