press release

Chevron Cites New Instances of Misconduct Marring Trial in Ecuador

Court Provided With Evidence That Author of $27 Billion Damage Assessment Has Violated Ecuadorian Law and Irrevocably Tainted the Current Proceeding

SAN RAMON, Calif., Feb. 12, 2009 - Chevron Corporation (NYSE: CVX) has asked an Ecuador judge to discard a court-requested assessment of current environmental conditions in Ecuador's Amazon, as a result of fraud, gross errors and conflict of interest. In its filing with the court, Chevron documents a litany of fundamental flaws within the assessment demonstrating that the objectivity and independence of the report's author have been fully compromised, rendering the report inadmissible.

The report, filed in November 2008 with the Provincial Court of Sucumbios, recommends that the judge presiding in the ongoing environmental lawsuit assess damages of more than $27 billion, augmenting an earlier report in which $8 to $16 billion in damages was suggested. Prepared by a court appointee, Richard Cabrera, the report was intended to respond to the parties' criticism of his earlier report. Instead, Cabrera's updated filing presents no new facts or data; rather, he simply adopts the demands of plaintiffs' counsel — in some instances, word for word — to substantiate more than $11 billion in newly alleged damages.

"Judging by Mr. Cabrera's undeniable disdain for science, transparency and Ecuadorian law, he cannot be seen as an unbiased adviser to the judge," said Charles James, Chevron's general counsel. "Through his ongoing collaboration with parties who stand to benefit from this lawsuit, we believe that Mr. Cabrera has knowingly abandoned his obligations to the court and assumed the role of advocate for plaintiffs' counsel."

Chevron has shown Cabrera's first report contains fabricated evidence, indefensible theories and, in some instances, even gross mathematical errors. Despite an awareness of these fundamental defects, Cabrera's amended assessment makes no effort to correct any prior mistakes and introduces a new series of egregious errors, such as:

  • Recommending more than $9 billion in damages associated with "excess cancer deaths" without identifying a single victim, let alone providing any corroborating documentation such as a death certificate or a medical diagnosis.
  • Recommending more than $3 billion in damages associated with groundwater contamination even though his own data clearly indicate no such contamination exists, and Cabrera acknowledges that he has no basis for devising a remediation plan or developing a cost estimate. Rather, Cabrera simply adopts plaintiffs' counsel's demands to assess damages and repackages them as fact.
  • Conceding that his work was conducted in such a fashion as to assign blame to Chevron instead of performing an objective and unbiased scientific analysis of current environmental conditions, as the court had ordered.

"An extraordinarily disturbing pattern has emerged with respect to Mr. Cabrera. The court appointee's work and plaintiffs' counsel's demands read like two parts of the same script," added James. "It is clear that Mr. Cabrera's reports are produced for an ulterior purpose by persons interested in exploiting this lawsuit for an unwarranted and utterly disproportionate financial windfall. If for no other reason than to preserve its own credibility, the court must intervene before this farce proceeds further."

The rationale Cabrera uses to justify his "independently" developed damage recommendation comes directly from the plaintiffs' counsel. In many instances, Cabrera simply cuts and pastes portions of a plaintiffs' filing and presents them as his own. For instance:

  • On September 16, 2008, plaintiffs' counsel wrote:

    "Therefore the cost analysis to remediate to 1000 ppm of TPH as stated in Attachment N calculates a cost that is lower than the actual one in order to achieve this level of cleanliness (even though it should be taken into account that 1000 ppm of TPH is not adequate level of cleanliness, as previously mentioned). The real cost to remediate the soils to 1000 ppm of TPH is approximately $2,034,000,000."(emphasis added)

  • On November 26, 2008, Cabrera wrote:

    "Therefore my analysis to remediate to 1000 ppm of TPH as stated in Attachment N calculates a cost that is lower than the actual one in order to achieve this level of cleanliness (even though it should be taken into account that 1000 ppm of TPH is not adequate level of cleanliness, as previously mentioned). Using my revised calculations the real cost to remediate the soils to 1000 ppm of TPH is approximately $2,034,000,000." (emphasis added)

In addition, Cabrera also declines to explain or deny his apparent connection to representatives of the Amazon Defense Coalition, the financial beneficiary of the lawsuit. Photographs and video demonstrate that members of the Amazon Defense Coalition directly participated in Cabrera's "independent" data collection, and the organization exclusively funded his work.

Moreover, Chevron has provided the court with evidence suggesting that the social survey that provides the evidentiary foundation of one-third of Mr. Cabrera's total damage assessment was produced at the request of and funded by the Amazon Defense Coalition. When asked to testify under oath to explain this relationship, Cabrera refused to show up or to comment, illustrating that the court's "independent" appointee has violated his mandate and is working in collaboration with the plaintiffs' advocates.

In the rebuttal now on record with the court, Chevron provides an exhaustive analysis of the baseless and nonsensical alleged damages and proposed remedies contained within Cabrera's report. Meanwhile, in past submissions, Chevron has sought to have the case dismissed in Ecuador, citing judicial misconduct, interference in the case by the country's executive branch and denial of the constitutionally guaranteed right to fair trial.

An executive summary of Chevron's rebuttal, as well as additional information about the lawsuit can be found at www.chevron.com/ecuador.

Chevron Corporation is one of the world's leading integrated energy companies, with subsidiaries that conduct business worldwide. The company's success is driven by the ingenuity and commitment of approximately 62,000 employees who operate across the energy spectrum. Chevron explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and other energy products; manufactures and sells petrochemical products; generates power and produces geothermal energy; provides energy efficiency solutions; and develops the energy resources of the future, including biofuels and other renewables. Chevron is based in San Ramon, Calif. More information about Chevron is available at www.chevron.com.

Updated: February 2009