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February 27, 2012
Investors Write to Chevron on Country Selection
    by Robert Kropp

Following an unproductive meeting with Chevron on its operations in Burma, shareowners make public a letter in which they request transparency in the company's country selection criteria.


A shareowner resolution requesting that Chevron adopt and disclose country selection guidelines for investment was prompted by the oil and gas giant's business operations in Burma. Payments made to the Burmese regime by Chevron and other oil and gas companies have been entered into the nation's budget at a 30-year-old official exchange rate of six kyat to a dollar, and as a result account for less than one percent of budget receipts.

If the payments were entered at the official market rate, they would account for 57% of budget revenues, and largely eliminate Burma's fiscal deficit. The accounting methods of the Burmese regime allows for laundering of almost all the receipts and provide no benefit to the country's citizens.

Chevron is part of a consortium of oil and gas companies that operate the Yadana Gas Pipeline Project, which EarthRights International charges "has been marred by serious and widespread human rights abuses committed by pipeline security forces on behalf of the companies, including forced labor, land confiscation, forced relocation, rape, torture, murder."

In advance of the 2012 proxy season, and for the first time since 2007, Chevron agreed to meet with the co-filers of the resolution. The meeting took place on January 26th. In a letter to Chevron and its board of directors, which was made public today, the investors state that they "found the call to be unproductive."

"We were particularly taken aback by the repeated suggestions by the Chevron representatives that we redirect our questions to the Company’s business partner, Total, or to the US government," the letter states. "We were also unsatisfied by Ms. Silvia Garrigo's response that we should just accept her assurances, when the purpose of our resolution is to obtain greater transparency and accountability to shareholders."

Garrigo is the Manager of Global Issues and Policy at Chevron. Signatories to the letter include representatives from the International Brotherhood of Teamsters, Newground Social Investment, the Unitarian Universalist Association, Newground Social Investment, Mercy Investment Services, Zevin Asset Management, and the Conflict Risk Network.

In their letter, the shareowners ask Chevron to disclose its payments to the Burmese regime since 1992, and implement the Voluntary Principles on Security and Human Rights. It also asks Chevron to engage with Burmese authorities and others on its commitment to the Extractive Industries Transparency Initiative (EITI).

The letter also asks Chevron to take steps to eliminate the practice of gas-flaring in Nigeria and other countries, and disclose whether it has plans to resume operations in the fledgling nation of South Sudan.

Having supplied Chevron with examples of best practice in disclosure by two of its peers, the shareowners asked the company to provide its "stakeholders with a transparent, well-defined set of guidelines that demonstrates the Company's reasons for investment, continued operation and withdrawal from certain countries."

"We feel the opportunity that the conference call presented was unfortunately wasted," the shareowners concluded, and they requested "that Chevron provide a written response to the concerns and questions that we have outlined in this letter."

 

 
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