by Deep Green Resistance News Service | May 18, 2012 | Lobbying, Toxification
By Amazon Defense Coalition
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; and
- 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.
From Chevron Toxico: http://chevrontoxico.com/news-and-multimedia/2012/0517-chevron-faces-irreparable-damage-from-18-billion-judgment.html
by Deep Green Resistance News Service | May 16, 2012 | Biodiversity & Habitat Destruction, Colonialism & Conquest, Mining & Drilling, Worker Exploitation
By Jeremy Hance / Mongabay
According to a new report by Greenpeace, top U.S. car companies such as Ford, General Motors, and Nissan are sourcing pig iron that has resulted in the destruction of Amazon rainforests, slave labor, and land conflict with indigenous tribes. Spending two years documenting the pig iron trade between northeastern Brazil and the U.S., Greenpeace has discovered that rainforests are cut and burned to power blast furnaces that produce pig iron, which is then shipped to the U.S. for steel production.
“Despite attention to the problem over the years, little has been done and household consumer products in the U.S. can still be traced back to illegalities and forest destruction in the Amazon,” the Greenpeace report reads.
Brazil’s Carajás region is home to 43 blast furnaces used by 18 different companies, of which Viena is the largest. The blast furnaces depend largely on illegal camps that cut and burn rainforest for charcoal.
“These camps are built in a matter of days, located in difficult to access areas and, if shut down by authorities, frequently spring up again in another location. They are built next to wood sources, including illegally in protected areas and indigenous lands,” the report reads, noting that labor conditions in the area are often similar to slavery. Often forced to work seven-days-a-week in hazardous and toxic conditions, workers are fleeced of salaries by imaginary debts.
The massive pig iron production in the region has been actively promoted by the Brazilian government and financed in the past by the World Bank, the European Economic Community, and the Japanese government. However, such promotion has not kept the industry clean as Greenpeace documented several types of fraud, from running an operation without a license to creating fake companies to keep timber sources hidden. Not surprisingly, much of the fuel comes from illegal logging.
Greenpeace linked two of the largest pig iron companies, Viena and Sidepar, to a steel mill in the U.S. run by Severstal and from there to major car manufacturers like Ford, General Motors, BMW, Nissan, and Mercedes. Viena also exports its pig iron to Cargill, Environmental Materials Corporation, and National Material Trading, which in turn sells the steel to John Deere.
“Greenpeace’s research found Viena and Sidepar fueling their foundries with illegal charcoal connected to the region’s pandemic illegalities including slavery, illegal logging and deforestation, and invasions into indigenous lands,” reads the report.
Around 70-80 percent of the region’s forests have been lost already, with the bulk of it since pig iron production began in the mid-1980s. With forest running out in the region, loggers are now entering indigenous lands and conservation areas. Some indigenous tribes, such as the Awá and the Alto Rio Guamá, have lost over 30 percent of their land to the illegal loggers.
“Loggers flagrantly violate the law and bring in multiple trucks for hauling away timber and often enter indigenous lands well armed,” reads the Greenpeace report.
Despite this issue being in the media since 2006, companies have taken little action or responsibility according to Greenpeace.
by Deep Green Resistance News Service | May 15, 2012 | Biodiversity & Habitat Destruction, Mining & Drilling, Prostitution, Toxification, Worker Exploitation
By Paulina Abramovich / Agence France-Presse
A new gold rush is sweeping through Latin America with devastating consequences, ravaging tropical forests and dumping toxic chemicals as illegal miners fight against big international projects.
With international market prices for metals high, informal “wildcat” mining has been on the rise in recent years in countries like Bolivia, Colombia and Peru, itself one of the largest producers of silver, copper and gold.
Mining investments in those countries are expected to reach some $300 billion in 2020, according to the Inter-American Mining Society.
But over 160 mining conflicts have erupted across the region amid growing opposition from locals against projects they consider a threat to the environment, the Observatory of Mining Conflicts in Latin America says.
During the past decade, the price of gold went from $270 to between $1,600-1,800 per ounce, as people rushed to convert their cash into the precious metal seen as a safe investment during the global economic crisis.
And the price of copper is at an all-time high thanks to China’s insatiable appetite for it.
Unlicensed mining, especially for gold, has already killed hundreds of people and devastated thousands of hectares (acres) in the Amazon forest, where miners have set up camps that destroy everything in their path.
To extract each ounce of gold, it takes two or three ounces of mercury, which fouls waterways after being poured into rivers from the mining sites. In their search for water, the miners raze tropical forestsusing bulldozers.
The phenomenon has also sown disaster among the local population, with thousands of men, women and children exploited and living in squalid camps with no schools or health centers.
In Peru, an estimated 110,000 to 150,000 people work in illegal mines, while a thousand children are sexually exploited in brothels known locally as “prostibars” in the southeastern province of Madre de Dios, according to Save The Children.
The practice is particularly widespread in the improvised mining camps, where fortune-hunter try to make a living from the illegal exploitation of precious metals.
“There are dozens of prostibars, filled with hundreds of girls who were told they would make a lot of money,” said Teresa Carpio, director of Save the Children in Peru.
“It’s total exploitation of a human being. Living conditions are appalling and all human values are perverted.”
Indigenous and black communities have long used child workers for gold mining. And an estimated 200,000 to 400,000 children currently work in small-scale mining in Colombia, according to Alliance for Responsible Mining (ARM) data.
In Madre de Dios, one of the poorest regions of Peru, about 18 tonnes of gold are produced per year, while some 20,000 hectares (49,400 acres) of tropical forest are destroyed.
Thousands of people in Colombia have started exploiting abandoned mines in the northwestern department of Antioquia and Choco. In Bolivia, about 10,000 people make a living off the illegal mining of gold in extreme conditions, ARM says.
The growing thirst for mineral resources makes Latin America one of the most attractive regions for investment, set to dominate world production of precious metals by 2020.
Today, Latin America accounts for 45 percent of global copper production, 50 percent of silver and 20 percent of gold.
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by Deep Green Resistance News Service | May 11, 2012 | Colonialism & Conquest, Indigenous Autonomy, Lobbying, Mining & Drilling, Toxification
By Fawzia Sheikh / Inter Press Service
An indigenous group in the Amazon rain forest took its anti-oil message to Canada in a case rife with accusations of social and environmental damage that highlights the issue of securing consent prior to commencing exploration operations.
Peas Peas Ayui, president of the National Achuar Federation of Peru (FENAP), told IPS through an interpreter that Calgary-based Talisman Energy Inc. is operating within its ancestral territory, covering one million hectares, without first seeking approval. The Achuar people live on both sides of the Peru- Ecuador border in the rain forest.
“The communities affiliated with FENAP reject the presence of the company” and have no interest in the “additional help or benefits” that Talisman can offer at the risk of environmental contamination, Ayui said.
During three previous visits to Canada, the indigenous leader has issued this message, in some cases meeting directly with Talisman management. The most recent trip featured discussions with government opposition leaders and members who expressed “solidarity” with FENAP’s aim to shut down the Calgary firm’s venture into its homeland, noted Ayui, buoyed by legislators’ resistance to the activities in the Amazon.
The delegation was accompanied by Amazon Watch, a San Francisco-based non-profit organisation that supports indigenous people and aims to protect the rain forest. Discussions with key stakeholders and interested parties in Canada took place from April 21 to May 8.
Talisman, however, shot back at Ayui’s trespassing claim and pointed to the Peruvian government’s permission to engage in oil exploration in certain regions.
Moreover, FENAP lands are based 25 kilometres east of the oil company’s activity area known as Block 64, said media relations adviser Berta Gomez, adding that her employer has used about 115 hectares for exploration activities representing .015 percent of the total area. The oil giant started working in the block in 2004.
“We respect that some communities are opposed to oil development and we will not work there,” Gomez emphasised.
Obtaining consent
While Amazon Watch purports to represent the voice of the Achuar in Peru, it actually speaks only for the FENAP, an Achuar federation comprised of a number of communities opposed to Talisman’s activities, she argued.
Within Block 64, the energy interest has won the support and approval of the FASAM and OSHAM Achuar federations, added Gomez, referring to two new offshoot organisations. Overall, she said, Talisman has agreements with eleven organisations representing 66 directly and indirectly affected communities, more than 1,800 families and five different ethnic groups.
“We are committed to early and ongoing engagement with all stakeholders to share plans and address concerns,” including key authorities, the ombudsman and third-party representatives who act as observers, she said.
Ayui, the FENAP leader, said he has asked that Talisman President and CEO John Manzoni attend a meeting in the Amazon where his company is exploring, but the company has requested discussions be held in a nearby town, requiring the indigenous group to travel for three days.
Gomez confirmed that a March 30 meeting took place for the first time among Talisman’s country manager and corporate affairs manager and indigenous leaders against oil and gas development in San Lorenzo, Peru, with a promise to attend a local indigenous assembly, probably in May, to establish a final agreement regarding land boundaries.
The case spurs important questions about the nature of free, prior and informed consent, which is rooted in the United Nations (U.N.) Declaration on the Rights of Indigenous Peoples, according to a 2011 report by Sustainalytics, a sustainability research and analysis company headquartered in Amsterdam.
The report questions what exactly constitutes the consent of affected indigenous communities – a band council resolution, a referendum, the agreement of community leaders or the approval of all constituents?
Complicating matters is the fact that the Peruvian government awarded concessions and blocks to oil companies without consulting or informing the Amazonian communities, which it has traditionally regarded as “second-class citizens”, states a report published last year by the Ottawa-based think tank, the North-South Institute.
Fostering strife among communities
Among the FENAP’s objections, moreover, is a claim that Talisman triggered social problems within the Amazon’s indigenous population.
FENAP leaders raised grievances with the Peruvian courts about Talisman’s creation of “conflicts and divisions” in connection to a May 2009 confrontation among Amazon groups that “almost ended in violence,” Ayui recalled, but there has been no response. Demands that the Peruvian Congress force the company to vacate the rain forest have also been unanswered.
In his view, the energy firm’s exploration operations have torn apart communities, as eight have opted to sign agreements granting permission to work on their land in exchange for development assistance, while 44 have not.
Based on the needs of federation leaders, Talisman offered “social contribution programs” to improve living standards, Gomez, the spokeswoman, said. Last November, she noted, Talisman signed social community agreements with 11 federations, providing $3 million in resources to fund education, health care, access to electricity, capacity building and local job-generation initiatives in 2012.
Despite the oil firm’s investment in communities, Gregor MacLennan, Amazon Watch’s Peru program coordinator, questioned its interpretation of gaining the free, prior and informed consent of indigenous peoples. He accused the company of winning approval in any way it can – even after indigenous groups initially say no – by presenting more money and resources.
For its part, Talisman has always engaged with all stakeholders in a direct and peaceful manner in full adherence to human rights principles, Gomez stated. However, she said, the oil firm also asks that “the rights of the people to choose to work with us, in an open and transparent fashion, also be respected”.
Talisman plans to maintain dialogue efforts with federations and communities opposing its activities.
Damaging the environment
Rounding out indigenous allegations against Talisman is environmental contamination. The Calgary firm touted new technologies with no risk of repeating the damage done by oil industry players operating in the Amazon in the 1970s and 1980s, but Ayui refuted the claim.
The exploratory wells have affected his community’s hunting and fishing grounds by producing waste which leaks into streams during the rainy season, he charged, and poisons birds and other animals. His people’s ancestors also died on the lands Talisman is now exploring, he added.
MacLennan told IPS that he addressed the drilling fluids issue during a February meeting with Talisman, which acknowledged the problem but explained it will take “several months” for the arrival of a subcontractor and the adequate equipment to undertake the clean-up to a specific standard, a task that includes correcting the poor waste-disposal job carried out by another oil company in the past.
Talisman meets, and in many cases surpasses, environmental regulations outlined by the Peruvian government, Gomez insisted. Waste products, or cuttings, are normally generated during drilling activities and have been “properly managed and stored according to environmental regulations and protection measurements” dictated under the oil firm’s environmental impact assessment, she said.
During the drilling of oil wells, the waste is stored in a “cuttings pit” complete with a roof to shield against rain water and a pit bottom protected with a “geomembrane” to prevent the direct contact of soil and waste, she noted, adding that the whole drilling pad is surrounded by an external ditch collecting fluid, mainly rain water, before it is released into the environment.
During Talisman’s drilling activities, known as SC3X and SN4X, there were no environmental incidents or claims from communities in the area of influence of its operations, Gomez said.
Talisman incorporates an indigenous environmental monitor from the local communities during the drilling projects. The monitor performs daily environmental inspections, immediately communicates problems, participates in monthly environmental monitoring and field environmental audits by regulatory agencies, helps to supervise the handling and shipping of waste and takes part in the abandonment activities and reclamation works, she added.
The company’s abandonment plan for the SC3X project, which details techniques for the treatment and final disposal of cuttings and an outline for re-vegetation and reclamation of the area, is awaiting Peruvian government approval, Gomez said.
Still, Amazon Watch and the FENAP are dissatisfied with Talisman’s environmental precautions and explanations. They dismissed oil companies’ tendencies to blame damage on subcontractors or on the challenges of working in the rain forest.
As the Canadian energy firm heads into a production phase within the next year, there are concerns that a potential spill due to human error would render the area “virtually irrecoverable”, MacLennan warned, spawning “an environmental disaster” destroying the livelihoods of thousands of people in the rain forest.
From Inter Press Service: http://ipsnews.net/news.asp?idnews=107718
by Deep Green Resistance News Service | May 10, 2012 | Mining & Drilling
By Amazon Watch
Grassroots opposition is mounting as ConocoPhillips’ plans to drill for oil within the fresh-water source for Peru’s largest rainforest city, Amazon Watch said today on the occasion of the company’s annual shareholder meeting in Houston, Texas. Conoco is currently advancing plans to drill exploratory oil wells in Blocks 129 and 123, found within one of the most ecologically sensitive regions in the world.
According to a May 2012 map produced by PROCREL, the Loreto regional environmental authority, ConocoPhillips is planning a total of 16 oil platforms and 48 wells between Block 129 and the adjacent Block 123. Thirteen of these platforms are found within the Upper Nanay-Pintuyacu-Chambira Regional Conservation Area.
“Conoco’s shareholders need to understand that the company’s plans in northern Peru are being met with increasing popular opposition across the region,” said Robert Collier, Corporate Campaigns Director at Amazon Watch. “The reputational risks for Conoco grow by the day.”
“The oil company’s installation and Block 129 in the Nanay watershed has alarmed us because we all know the consequences of oil extraction in other Amazonian watershed,” said José Manuyana, president of the social organization Colectivo Amazonía in today’s local paper La Región. “We know the devastating results and are worried this will happen in the Nanay headwaters which provide drinking water to all of Iquitos’ 500,000 citizens.”
In March of this year citizens of Peru’s Loreto region organized themselves into the Iquitos Water Defense Committee, specifically in response to Conoco’s plans. Today the Committee demanded that the regional government hold a public hearing to explain why they are allowing ConocoPhillips to advance with the exploration. They have also asked that information about Conoco’s plans be made public and that the Regional Government respect prior decisions to exclude mining activities from ecologically sensitive areas.
According to the Iquitos Declaration, issued by the Iquitos Water Defense Committee on April 24th of this year, “The situation is currently getting worse. ConocoPhillips has an oil concession in the headwaters of the Nanay River, even though the first article of the Regional Order No. 020-2009-GRL-CR of October 15th 2009 declared of regional public interest the conservation and protection of the headwaters of watersheds found in the Loreto Region. For us, this river is the primary source of water supply for the city and source of other resources like fish, bush meat, and wood for our house construction.”
International scientific experts are also expressing concern about the probable impacts of oil activities on this ecologically sensitive area. According to Bob Stallard, a bio geochemist who has sampled and analyzed waters from throughout the Amazon and Orinoco river basins since 1976, “Great cities try to protect their water supplies, and Iquitos has one of the best. Based on hundreds of published analyses of dissolved salts in rivers, the Nanay is among the purest rivers in Amazonia. Spills of formation waters and wastes associated with drilling could damage the Nanay as a drinking-water supply.”
The Iquitos Declaration cites information that seismic testing has carved 778 kilometers of lines through the jungle, clearing over 180 hectares of forest cover and detonating more than 15,500 seismic explosives. The statement continues, “now they are trying to get the approval to drill 18 exploratory wells that would function from six platforms within Block 129.”
“Biodiversity in the Nanay basin is spectacular. In three weeks we recorded more than 1,800 species of plants and animals. Because the Nanay River begins in the Peruvian lowlands – not in the Colombian or Ecuadorian Andes like many other rivers in Loreto – it created a singular opportunity to conserve almost the entire watershed,” said Corine Vriesendorp, Ph.D., Director of the Andes-Amazon Program at The Field Museum in Chicago. “Clean water and robust fisheries were the rallying cries for creating the regional conservation area. Now oil activities threaten to negatively impact both water quality and fish stocks, critical for forest dwellers in the Nanay basin and urban residents in Iquitos.”
From Amazon Watch: http://amazonwatch.org/news/2012/0509-conoco-drilling-threatens-water-source-for-half-million-in-peru
