Lecture held during the 'ELSA Salerno Summer Law School on International and European Environmental Law' the 5th of July 2016. The case study highlights how Corporate Social Responsibility could be beneficial for Company's profits.

1. Environmental Protection and
Corporate Social Responsibility
CASE STUDY
Chevron v. Ecuador
What can we learn from the
Texaco’s operations in Amazonia?

2. TEXACO
Founded: Texas 1901
Revenues: $ 46 billion (1997)
Total Assets: $ 29 billion (1997)
Net Production of Crude Oil:
833 000 barrels a day
CHEVRON CORPORATION
Founded: California 1879
Revenues: $ 200 billion (2014)
Total Assets: $ 266 billion (2014)
Net Production of Crude Oil:
1 744 000 barrels a day

3. Rainforest
Texaco
Cofàn
Siona
Secoya
Napo Lowland
Quichua
Waorani
Los Afectados

4. 1937
Royal Dutch Shell
First Seismic Prospecting
1964
Texaco-Gulf Consortium
First Extraction Site
1967
First Oil Spill
1971
Trans-Ecuadorian
Pipeline
1972
20 years
Concession
Agreement
1992
End of the
Concession and
Texaco’s operations

5. - 339 wells
- 18 central production stations- 1.5 billion barrels- 1000 km of secondary pipelines- 600 km of unpaved roads
Cancer of the larynx: 30 times higher
Bile duct cancer: 18 times higher
Liver cancer and melanoma: 15 times higher
Stomach cancer: 4,6 times higher
Leukemia: 2,6 times higher
Leukemia for
children under age 14 : 2,6 times higher

6. 2003
Ecuador
Los Afectados v. Chevron
$9.51 Billion
2009
The Hague
Investor-State
Arbitration
Chevron v. Ecuador
2012
Argentina
Recognition and enforcement
of the judgment
2012
Brazil
Recognition and enforcement
of the judgment
2012
Canada
Recognition
and
enforcement of
the judgment
2012
Washington
Inter-American
Commission on
Human Rights
2013 New York
Chevron v. Donzinger (Los
Afectados’ Lawyer) Corruption
1993
New York
Aguinda v.Texaco
Dismissal
2014
The Hague
International Criminal
Court / Inadmissible

7. “To adopt suitable measures to protect the flora, fauna, and other natural resources
and to prevent contamination of water, air and soil under the control of pertinent
organs of the state”
Concession Agreement (1972)
“Adopt necessary measures to protect flora, fauna and other natural resources [...]
and prevent contamination of water, air, and soil.”
Ecuador’s Law of Hydrocarbons (1971)
Reglamento General para la Aplicación de la Ley de Aguas 1972
Ley de Pesca y Desarrollo Pesquero 1974
Ley para la Prevencion y Control de la Contaminacion Ambiental R.O. No. 204
(1976)
National Law

8. “…indigenous peoples have been, and are still being, discriminated against and
deprived of their human rights and fundamental freedoms and in particular that
they have lost their land and resources to colonists, commercial companies and State
enterprises …”
Business and Rights of Indigenous Peoples
(Soft Law)
U.N. Comm. on the Elimination of Racial Discrimination “General
Recommendation XXII: Indigenous Peoples” (1997)
“…the traditional lands of indigenous peoples have been reduced or occupied,
without their consent, by timber, mining and oil companies, at the expense of the
exercise of their culture and the equilibrium of the ecosystem…”
U.N. Comm. on Economic, Social and Cultural Rights “Concluding observations of
the Committee on Colombia” (2001)

9. “… urgent need to respect and promote the inherent rights of indigenous peoples
which derive from their political, economic and social structures and from their cultures,
spiritual traditions histories and philosophies, especially their rights to their lands,
territories and resources …”
United Nations Declaration on the Rights of Indigenous Peoples (2007)
Report of the United Nations High Commissioner for Human Rights “Human
rights and the extractive industry” (2005)
“… extractive industry can also add stress to human rights, particularly in the context
of certain risk situations, including the presence of indigenous communities…”

10. International Law
(State Obligations)
American Convention on Human Rights (1969):
Art. 4. Right to Life: “Every person has the right to have his life respected. This
right shall be protected by law and, in general, from the moment of conception.
No one shall be arbitrarily deprived of his life.”
Art. 5. Right to Humane Treatment: “Every person has the right to have his
physical, mental, and moral integrity respected.”
Art. 21. Right to Property: “Everyone has the right to the use and enjoyment of his
property. The law may subordinate such use and enjoyment to the interest of
society.”

11. Inter-American Commission of Human Rights (2001):
“… Indigenous groups, by the fact of their very existence, have the right to
live freely in their own territory; the close ties of indigenous people with the
land must be recognized and understood as the fundamental basis of their
cultures, their spiritual life, their integrity, and their economic survival. For
indigenous communities, relations to the land are not merely a matter of
possession and production but a material and spiritual element which they
must fully enjoy, even to preserve their cultural legacy and transmit it to
future generations….”

12. Art. 3: “Indigenous and tribal peoples shall enjoy the full measure of human
rights and fundamental freedoms…”
Indigenous and Tribal Peoples Convention, 1989 (No. 169)
Art. 13: “… governments shall respect the special importance for the cultures and
spiritual values of the peoples concerned of their relationship with the lands or
territories, or both as applicable, which they occupy or otherwise use, and in
particular the collective aspects of this relationship…”
Art. 4: “Special measures shall be adopted as appropriate for safeguarding the
persons, institutions, property, labour, cultures and environment of the peoples
concerned.…”
Art. 14: “…The rights of ownership and possession of the peoples concerned over
the lands which they traditionally occupy shall be recognised…”

13. Is it worth it?
$3 saved per barrel of oil produced
X
1.5 billion barrels in 28 years
Tot. $4.5 billion

14. $ 2 Billion for legal fees
+
+
$ 40 Million for remediation
Reputational damage $$$ ?
Tot. ???

16. The importance of corporate social responsibility for business
Media interest and
good reputation
Saving money on
energy and
operating cost
Differentiating yourself
from the competitors
Access to funding
opportunities
Enhanced
Relationship with
stakeholders
Winning new
businesses
Enhancing your
influence in the
industry

17. What did Chevron learn?
TEXACO ANNUAL
REPORT
Texaco Annual Report
2015
corporate responsibility
report highlights
getting results
the right way
for complete reporting, visit
chevron.com/reporting
In Rakhine State, Myanmar, Kayala Oo of Unocal
Myanmar Offshore Co., Ltd. (a Chevron subsidiary)
leads a social impact assessment meeting with
local community members and other stakeholders.
although governments have the
primary duty to protect and ensure fulfillment
of human rights, chevron believes that
we have a responsibility to respect human
rights and that we can play a positive
role in the communities where we operate
respecting
human rights
integrity
learn more chevron.com/humanrights
protecting people and the environment
chevron is committed to preventing
serious incidents and fatalities, which requires
operational discipline among our more than
58,000 employees and our full-time-equivalent
contractor workforce of 214,000
preventing
serious
incidents
Kelly Gray, Chevron Australia production
technician, monitors operating units in the
Gorgon Operations central control room
on Barrow Island, Western Australia.
learn more chevron.com/healthsafety
chevron.com/cr
10
protecting people and the environment
advancing
environmental
stewardship
protecting people and the environment
is a chevron way value that guides
our actions so that we get
results the right way, every time
learn more chevron.com/environment

18. Stefano Baldi
stefano.baldi91@gmail.com