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August 16, 2005
Lack of Human Rights Policy Concerns Chevron Shareowners in Light of Unocal Merger
    by William Baue

Part two of this two-part article examines the implications of the delay in adopting a human rights policy given the inheritance of Unocal holdings in Burma and Alien Tort Claims Act cases.


Chevron (ticker: CVX) shareowners and socially responsible investment (SRI) advocates are voicing concern over the company's lack of a human rights policy. The 2002 Chevron Corporate Responsibility Report stated the company had "developed a draft Human Rights Statement" and that it sought to "revise and finalize the statement and begin corporate-wide implementation in 2004."

"As of now, Chevron has not published its human rights statement nor disclosed its timeline for implementing a human rights policy," writes AFL-CIO Secretary-Treasurer Richard Trumka in a July 22, 2005 letter to Chevron CEO and Board Chair David O'Reilly. "How would Chevron implement, monitor, and enforce such a policy?"

In a July 28 response letter, Chevron Board Vice Chair Peter Robertson discloses a timeline, but he does not answer the question.

"While we had originally targeted 2004 to begin deployment of this Statement, we have extended the time to allow for a more thorough internal consultation," Mr. Robertson writes. "Our goal now is to complete consultations and begin corporate-wide deployment of the Statement in 2006."

Mr. Robertson's letter leaves many other of Mr. Trumka's questions and concerns unaddressed. For example, Mr. Trumka expresses concern over Chevron's bid to aquire Unocal (UCL), complete with its stake in the Yadana pipeline in Burma (also known as Myanmar) that links Unocal (and now Chevron) to well documented human rights abuses. Mr. Trumka notes that several other Chevron shareowners, including the California Public Employees' Retirement System (CalPERS--the largest US public pension fund) and the New York State Common Retirement Fund, share the AFL-CIO's concern about this merger.

"In the case of Burma, we believe a human rights policy would not be enforceable," states Mr. Trumka. "Does Chevron intend to divest from Burma?"

Mr. Robertson does not answer this question in his July 28 response letter, noting that the acquisition had not yet taken place then. Even after Unocal shareowners ratified the acquisition last week, however, Chevron spokesperson Jeff Moore maintains the silence.

"We are looking at all of Unocal's assets, but haven't yet made any decisions on the disposition of assets in specific markets," Mr. Moore told SocialFunds.com.

The financial liability of the Yadana investment was established earlier this year when Unocal reportedly paid $30 million to settle an Alien Tort Claims Act (ATCA) lawsuit alleging the company hired Burmese security forces knowing they committed murder, rape, and forced labor. In an August 9 letter to Sam Nunn, the former Democratic Senator from Georgia who now chairs the Public Policy Committee of Chevron's board, Mr. Trumka pointed out that "Unocal may be subject to addiational claims."

"As the first step to establish an enforceable human rights policy, the Public Policy Committee should recommend when Chevron should divest from a country with untenable human rights abuses," Mr. Trumka writes. "It is our view that investment in the Yadana pipeline is an unacceptable legal and political risk, and that Chevron should divest from Burma just as Texaco did in 1997 prior to its merger with Chevron."

Mr. Trumka's July 22 letter cites another ATCA case (based on a 1789 law allowing allowing non-citizens to seek legal recourse in US courts for violations of international law) posing human rights and financial risks to Chevron. Bowoto v. Chevron alleges Chevron's complicity in human rights abuses carried out by Nigerian soldiers in 1998 and 1999, as detailed in part one of this two-part article.

The AFL-CIO is not the only Chevron shareowner concerned about Unocal's Yadana pipeline investment, the Bowoto v. Chevron case, and the company's failure to uphold its promise to produce a human rights statement. The Wisconsin Jesuit Province has been leading a coalition of faith-based investors in dialogue with Chevron for about a year urging implementation of a human rights policy, according to Doris Gormley, the SRI consultant to the National Jesuit Committee on Investor Responsibility (NJCIR).

These issues "all pose both reputation and liability risk to the company and they are topics of discussion and clarification during our dialogues," Sister Gormley told SocialFunds.com. "We continue to work in a focused way to see this policy realized."

This work will continue at least through next year, if Chevron sticks to the timeline presented by Mr. Robertson in his July 28 letter. Of course, Chevron's implementation of a human rights policy would not end the work of holding the company accountable on human rights issues.

"Frankly, from my perspective, it doesn't really matter what their policy is, it matters what happens on the ground--the policy's wonderful if they follow it," said Rick Herz, a lawyer for EarthRights International (ERI) who is trying the Bowoto v. Chevron case.


Part one of this two-part article examines the implications of a new document identified in the discovery phase of the Bowoto v. Chevron case indicating Chevron paid Nigerian soldiers for services on a day several villagers were allegedly killed.

 

 
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