Amazon Watch: Chevron Charged with Engaging in Intense Lobbying Battle to Defeat Shareholder Resolution, But Results Mixed for Company

$9B in Chevron Shares Ended Up Defying Company Management
SAN RAMON, Calif.--(Business Wire)--
In the days ahead of its annual meeting, Chevron`s management engaged in a
fierce and unconventional lobbying campaign to convince shareholders to defeat a
shareholder resolution over the company`s potential $27 billion liability in
Ecuador but investors holding $9 billion in Chevron shares voted for it anyway,
officials with the environmental group Amazon Watch said today.

The lobbying campaign apparently worked on one level, as the oil company
reported today the resolution received less than 10% support. But it failed on
another level, in that the resolution galvanized a record number of public
pension funds and investors that control more than $9 billion of Chevron stock
to challenge Chevron CEO David O`Reilly.

"Chevron`s intense lobbying effort to defeat the resolution actually played into
the hands of shareholders in that it raised the profile of the resolution," said
Mitch Anderson, who works on corporate accountability issues for Amazon Watch, a
San Francisco-based environmental group.

Anderson also said the result - 7% support - is a "victory" for backers of the
resolution given the "millions of dollars of resources" spent by Chevron on its
lobbying campaign and that the fact $9 billion in Chevron shares voted for it
because of the Ecuador liability. It was also clear that Chevron was calling
funds that had announced their support for the resolution to try to convince
them to change their stance.

"Chevron has been working on this intensively for the last several days, which
is a sort of a sad commentary on the extent to which Chevron management is
threatened by shareholders," he said, noting that the SEC turned down an attempt
by Chevron to keep the resolution from even coming to a vote.

The shareholder resolution relating to Ecuador, which called on Chevron to
examine whether it complies with host country laws and environmental
regulations, notes the Ecuadorian litigation in its recital section and was
filed by shareholders concerned about the outstanding liability. One other
resolution relating to Chevron`s human rights problems that mentioned the
Ecuador problem garnered more than 28% support, but Chevron`s management did not
actively lobby against it.

Chevron faces a potential litigation liability of $27 billion in connection to a
landmark environmental lawsuit alleging that Texaco, which Chevron purchased in
2001, used substandard oil-extraction practices in Ecuador from 1964-1990. The
case, which is being heard in Ecuador at Chevron`s request, is expected to be
decided by the end of the year.

Chevron has publicly stated that the company expects a significant adverse
judgment in the near future.

Over recent days, Chevron issued a three page letter to shareholders denouncing
shareholder concerns as the result of a campaign by trial lawyers, rather than a
genuine concern about management`s handling of the Ecuador issue. Shelley Alpern
of Trillium Asset Management, a firm which co-sponsored the resolution,
responded to Chevron`s allegations by saying that the company is "trying to
shoot the messenger. The way they have handled the problem...has left them with
a black eye."

The resolution was supported by the some of the nation`s largest pension funds,
including CalPERS, New York State, Maryland, Pennsylvania and the cities of New
York, Philadelphia and Detroit. The sovereign fund of the Netherlands also voted
in favor.

"Chevron`s aggressive tactics are exactly the desperate, panicky maneuvers that
you see a company make when they are attempting to cover up a massive
liability," said Anderson.

The company, which was facing five separate shareholder resolutions, had not
made similar lobbying efforts on any other resolution, despite the fact that
other resolutions would likely impose a far greater financial burden on the
company.

About Amazon Watch

Amazon Watch`s mission is to work with indigenous and environmental
organizations in the Amazon Basin to defend the environment and advance
indigenous peoples' rights in the face of large-scale industrial development-oil
and gas pipelines, power lines, roads, and other mega-projects.

Amazon Watch
Kevin Koenig, 415-726-4607
Kevin@amazonwatch.org

Copyright Business Wire 2009