Critics' annual report blasts Chevron
David R. Baker, Chronicle Staff Writer
Thursday, May 20, 2010
The corporate annual report - that glossy, seldom-read staple of the business world - usually features upbeat words and images showcasing a company's stellar year.
The "True Cost of Chevron" alternative annual report, in contrast, features a cover photo of an oil spill.
Released Wednesday by a coalition of Chevron Corp.'s fiercest critics, the report pillories the San Ramon oil company for pollution and alleged human rights abuses around the globe, in places as disparate as Ecuador, Burma, Texas and Richmond.
The report represents an effort by separate groups that have fought Chevron in the past to form a united front against the nation's second largest oil company. It comes a week before Chevron holds its annual shareholders' meeting in Houston, a meeting that many of the people involved in the "True Cost" report plan to crash.
The report also arrives one month after explosions on an offshore drilling rig working for BP triggered a huge oil spill in the Gulf of Mexico. That isn't the spill featured on the cover, which instead shows an 18,000-gallon spill from a Chevron-operated pipeline in Louisiana in early April. But the report's authors hope the disaster in the gulf will help draw public attention.
"Chevron's operations are mired in human rights, environmental, and social damages and harm," said lead author Antonia Juhasz, who also wrote the 2008 book "The Tyranny of Oil."
"These things happen every day, across the United States and around the world," she said. "But they almost always happen out of the public eye. It takes a big spill in the gulf for people to notice."
This is the alternative report's second year. During the 2009 shareholder meeting, Chevron's then-CEO David O'Reilly called the report's first edition an insult to his employees and said it should be thrown in the trash.
This year, the company merely issued a terse statement, saying, "The only report that accurately represents the true value of Chevron around the world is our Corporate Responsibility Report." The responsibility report, issued this month, discusses the human rights policy that Chevron adopted last year as well as the $144 million the company says it invested in communities around the world to promote education, business development and provision of basic human needs.
The "True Cost" report summarizes Chevron-related controversies in eight states and 16 foreign countries. Many of them were covered in the original report, while others were added this year. Most of the summaries were written or co-written by environmental or social justice groups fighting Chevron in the disputes being described.
Examples of the controversies include:
-- The high-profile, $27 billion lawsuit against Chevron in Ecuador. The suit, originally filed against Texaco before Chevron bought Texaco in 2001, tries to hold the company accountable for oil-field pollution in a swath of the Ecuadoran Amazon, whose residents blame contaminated soil and water for a wave of illnesses. Chevron says that Texaco, which no long operates in Ecuador, already cleaned up all the wells and waste pits that were its responsibility under an agreement with the government.
-- Chevron's stalled effort to upgrade its refinery in Richmond. Local environmentalists say the upgrade would create more air pollution by allowing the refinery to process heavier grades of crude oil. The company says the refinery would still use the same grades as it does today, although it would be able to process larger amounts of the heavier grades it already uses.
-- Court cases in Texas that accuse the company of exposing refinery workers there to deadly levels of asbestos and benzene.
-- Investment in a natural gas project in Burma that provides the country's ruling junta a major source of cash.
To read "The True Cost of Chevron: An Alternative 2009 Annual Report," go to: www.truecostofchevron.com
To read Chevron's 2009 corporate responsibility report, "The Value of Partnership," go to www.chevron.com/corporateresponsibility
E-mail David R. Baker at email@example.com.
This article appeared on page D - 1 of the San Francisco Chronicle
Not sooner did this blogger complete his first post on the Global Exchange Report called The True Cost of Chevron, did an email pop up from Chevron containing its response to the report.
To recap, the True Cost of Chevron is Global Exchange's comprehensive report that really presents one side of the complex oil business that Chevron's involved in and no balanced country information to give the reader a complete picture of what any American oil company faces.
This space holds that Global Exchange could have produced a more effective report if it were based on a comprehensive System Dynamics Global Model of Chevron, which in turn calls for a comprehensive understanding of its business. Such an approach would have been more able to address Chevron's future in a way that's harder to argue with than Global Exchange's current approach. An approach Chevron takes issue with; this is what the email read:
As has been the case in the past, the report is riddled with false assumptions and conclusions. The only report that accurately represents the true value of Chevron is our Corporate Responsibility Report.
In 2009, Chevron invested $144 million in communities around the world to promote basic human needs, provide education and training, and stimulate local business development. Over the last five years, Chevron has invested $500 million in communities around the world. Through Chevron Humankind, the company's U.S. employee community involvement program, employees volunteered more than 40,000 hours in their communities and participant contributions and company matches resulted in more than $25 million to support the work of nonprofits.
Chevron is a significant supporter of small and minority-owned businesses. Chevron purchased approximately $40 billion in goods and services from suppliers and contractors, including $2.7 billion with small and medium-size businesses in the United States in 2009. Chevron also spent an additional $319 million with minority-owned business and $433 million with women-owned businesses in the United States.
Last year, Chevron adopted a human rights policy to further the company's commitment to respecting human rights in the countries and communities where it operates. The policy addresses four human rights areas relevant to the company's business: employees, security providers, community engagement and suppliers.
In 2009, Chevron reduced its greenhouse gas (GHG) emissions by approximately 2.2 million metric tons of CO2 equivalent. From 2008 to 2009, Chevron reduced GHG emissions from flaring by eight percent and advanced significant projects that will continue to reduce GHG emissions from flaring in Angola, Kazakhstan and Nigeria.
The Richmond Refinery invested over $3.4 million in community programs in 2009 ($5.65 million over the last 3 years), in: public safety - focusing on at - risk youth; improving the quality of K-12 education; and economic development with a focus on job creation.
Flaring at the Richmond Refinery was reduced by 97% between 2007 and 2008.
For the eighth consecutive year, Chevron has improved its safety performance. In 2009, the company posted its safest year on record.
The Global Exchange Report would have been more valuable with a business-related approach rather than the set of anecdotal stories it contains. Not to devalue the accounts at all as they're important to read and discuss and act on. But as is obvious by Chevron's response, the Global Exchange report has holes in it that needs to be addressed.
Read more: http://www.sfgate.com/cgi-bin/blogs/abraham/detail?entry_id=64068#ixzz0oiz23ccN