The document discusses significant environmental cases since the introduction of new sentencing guidelines for environmental offenses in 2014. It summarizes several cases where large companies received substantial fines for environmental offenses, with fines now reaching into the hundreds of thousands or millions for large corporations. It notes that the new guidelines are intended to ensure fines have a real economic impact and provide stronger deterrence. The document advises businesses to take environmental responsibilities seriously, audit procedures, and expect higher standards and potential for larger fines.
Mangairial Economic ; Solutions to solve the negative externality that is ind...Apsara Kaduruwana
In the event that the steel firm induces pollution to the fishery farm that is situated downstream; Solutions to solve the negative externality that is induced by the steel firm
An externality is a cost or a benefit imposed upon someone by actions taken by others.
The cost or benefit is thus generated externally to that somebody.
Negative externalities ; Air pollution, water pollution, Traffic congestion, second hand smoking etc.(www.economicsonline.co.uk,2015)
Positive externalities ; Improved driving habits that reduce accident risks, A well-maintained property next door that raises the market value of your property, A pleasant cologne or scent worn by the person seated next to you.
Flood liability and public authorities
Will Thomas 2 – 4
An employer’s right to snoop?
Sarah Hooton 5 - 8
European Single Procurement Document
Jennifer Grigg and Lynne Rathbone 9 - 10
Just the starting point…
Angela Konteas 11 - 12
New penalty clause test
Lynne Rathbone 13 – 16
CASTA
Angelica Hymers 17 - 18
The Clean Energy Regulator (CER) is the Government body responsible for administering legislation that will reduce carbon emissions and increase the use of clean energy in Australia. The CER was established on 2 April 2012 as an independent statutory authority by the CER Act 2011 and operates as part of the Department of Industry, Science, Energy, and Resources portfolio. The role of the CER is determined by climate change law. The schemes it administers work together to reduce emissions while encouraging business competitiveness. Its purpose is to accelerate carbon abatement for Australia
Mangairial Economic ; Solutions to solve the negative externality that is ind...Apsara Kaduruwana
In the event that the steel firm induces pollution to the fishery farm that is situated downstream; Solutions to solve the negative externality that is induced by the steel firm
An externality is a cost or a benefit imposed upon someone by actions taken by others.
The cost or benefit is thus generated externally to that somebody.
Negative externalities ; Air pollution, water pollution, Traffic congestion, second hand smoking etc.(www.economicsonline.co.uk,2015)
Positive externalities ; Improved driving habits that reduce accident risks, A well-maintained property next door that raises the market value of your property, A pleasant cologne or scent worn by the person seated next to you.
Flood liability and public authorities
Will Thomas 2 – 4
An employer’s right to snoop?
Sarah Hooton 5 - 8
European Single Procurement Document
Jennifer Grigg and Lynne Rathbone 9 - 10
Just the starting point…
Angela Konteas 11 - 12
New penalty clause test
Lynne Rathbone 13 – 16
CASTA
Angelica Hymers 17 - 18
The Clean Energy Regulator (CER) is the Government body responsible for administering legislation that will reduce carbon emissions and increase the use of clean energy in Australia. The CER was established on 2 April 2012 as an independent statutory authority by the CER Act 2011 and operates as part of the Department of Industry, Science, Energy, and Resources portfolio. The role of the CER is determined by climate change law. The schemes it administers work together to reduce emissions while encouraging business competitiveness. Its purpose is to accelerate carbon abatement for Australia
1
NAME OF REGISTRANT: Chevron (CVX)
Sisters of St. Francis of Philadelphia:
609 South Convent Road, Aston, PA 19014
Written materials are submitted pursuant to Rule 14a-6(g)(1) promulgated under the Securities Exchange Act
of 1934. Submission is not required of this filer under the terms of the Rule, but is made voluntarily in the
interest of public disclosure and consideration of these important issues.
The Sisters of St. Francis of Philadelphia and fourteen other co-filers urge you to vote FOR Proposal # 10 at the
Chevron Annual Meeting on May 25
th
.
Proposal # 10 on Chevron’s 2016 Proxy Statement:
Argument in Favor
Hydraulic fracturing operations pose significant environmental and social impacts and risks, leading to financial
risks for companies due to increased community opposition and regulatory scrutiny. Shareholder proposals
requesting enhanced reporting on this issue continue to earn support from 25-33% of shareholders, indicating
sustained concern from shareholders about the inadequacy of existing company risk management disclosures.
Currently, Chevron is not providing investors with a set of metrics sufficient to assess the risks and impacts
associated with the company’s hydraulic fracturing operations. This memo contextualizes the issues of concern
and outlines specific key areas of inadequate disclosure by Chevron.
Chevron is among the top 10 natural gas producers in the United States, yet fails to comprehensively disclose
the impacts of its hydraulic fracturing operations on air, water, land, and communities to shareholders. In
comparison with its peers, Chevron provides very little data on its website and 10-K on key environmental and
social indicators. Absent quantitative disclosure from the company regarding its environmental and community
impacts, shareholders are unable to rigorously assess the risks that may be associated with those impacts.
Consequently, the resolved clause of the Proposal asks Chevron’s board to report-- via quantitative indicators--
on the results of company policies and practices, above and beyond regulatory requirements, to minimize
potential adverse impacts on local communities and water resources. The supporting statement suggests this
CHEVRON SHAREHOLDER PROPOSAL #10
Chevron Fails to Disclose Quantitative Risk Metrics Associated with Hydraulic Fracturing
2
reporting be done by relevant geographic region – such as per ‘shale play’, because so many impacts, especially
those related to water quantity and quality, are regional in nature, addressing at a minimum:
• Quantity of fresh water used for shale operations by region, including source
• Percentage of recycled water used by region;
• Systematic post-drilling groundwater quality assessments;
• Percentage of drilling residuals managed in closed-loop systems;
• Goals to eliminate the use of open pits for storage of drilling fluid and flowback water, wi ...
A letter from Dan Fitzsimmons, president of the Joint Landowners Coalition of New York (JLCNY) to NY Gov. Andrew Cuomo expressing profound disappointment that Cuomo intends to let the Nov. 29 date slip by without releasing new drilling rules to allow shale gas drilling in the state.
Impact of climate change on London's economy - summary slidesLondon Assembly
The London Assembly Economy Committee has investigated the impact of climate change on London’s economy and has published a summary of views and information that assesses whether the Mayor and the London Enterprise Panel (LEP) are doing enough to support London’s businesses face the challenges and opportunities ahead.
This presentation by Professor Caron Beaton-Wells (Director of Studies, Competition and Consumer Law, University of Melbourne) was made during the discussion on “Academic Perspectives” held at the Workshop on Australian Pecuniary Penalties for Competition Law Infringements on 26 March 2018 in Sydney, Australia. More papers and presentations on the topic can be found out at oe.cd/2cw.
If an industry or organization engages in an activity that is intrinsically risky yet creates a financial profit, officials in the industry are accountable for paying the affected parties. If the activity has the potential to cause catastrophic damage.
The European Union Environmental Liability DirectiveGraeme Cross
The Environmental Liability Directive (2004/35/EC) is
a legislative act of the European Union creating new
and significant potential liabilities for costs, damages
and losses for operators and companies regulated
by the ELD. All EU members have now adopted the
ELD into their national laws, making compliance
unavoidable for companies operating in EU member
states regardless of where they are headquartered.
1
NAME OF REGISTRANT: Chevron (CVX)
Sisters of St. Francis of Philadelphia:
609 South Convent Road, Aston, PA 19014
Written materials are submitted pursuant to Rule 14a-6(g)(1) promulgated under the Securities Exchange Act
of 1934. Submission is not required of this filer under the terms of the Rule, but is made voluntarily in the
interest of public disclosure and consideration of these important issues.
The Sisters of St. Francis of Philadelphia and fourteen other co-filers urge you to vote FOR Proposal # 10 at the
Chevron Annual Meeting on May 25
th
.
Proposal # 10 on Chevron’s 2016 Proxy Statement:
Argument in Favor
Hydraulic fracturing operations pose significant environmental and social impacts and risks, leading to financial
risks for companies due to increased community opposition and regulatory scrutiny. Shareholder proposals
requesting enhanced reporting on this issue continue to earn support from 25-33% of shareholders, indicating
sustained concern from shareholders about the inadequacy of existing company risk management disclosures.
Currently, Chevron is not providing investors with a set of metrics sufficient to assess the risks and impacts
associated with the company’s hydraulic fracturing operations. This memo contextualizes the issues of concern
and outlines specific key areas of inadequate disclosure by Chevron.
Chevron is among the top 10 natural gas producers in the United States, yet fails to comprehensively disclose
the impacts of its hydraulic fracturing operations on air, water, land, and communities to shareholders. In
comparison with its peers, Chevron provides very little data on its website and 10-K on key environmental and
social indicators. Absent quantitative disclosure from the company regarding its environmental and community
impacts, shareholders are unable to rigorously assess the risks that may be associated with those impacts.
Consequently, the resolved clause of the Proposal asks Chevron’s board to report-- via quantitative indicators--
on the results of company policies and practices, above and beyond regulatory requirements, to minimize
potential adverse impacts on local communities and water resources. The supporting statement suggests this
CHEVRON SHAREHOLDER PROPOSAL #10
Chevron Fails to Disclose Quantitative Risk Metrics Associated with Hydraulic Fracturing
2
reporting be done by relevant geographic region – such as per ‘shale play’, because so many impacts, especially
those related to water quantity and quality, are regional in nature, addressing at a minimum:
• Quantity of fresh water used for shale operations by region, including source
• Percentage of recycled water used by region;
• Systematic post-drilling groundwater quality assessments;
• Percentage of drilling residuals managed in closed-loop systems;
• Goals to eliminate the use of open pits for storage of drilling fluid and flowback water, wi ...
A letter from Dan Fitzsimmons, president of the Joint Landowners Coalition of New York (JLCNY) to NY Gov. Andrew Cuomo expressing profound disappointment that Cuomo intends to let the Nov. 29 date slip by without releasing new drilling rules to allow shale gas drilling in the state.
Impact of climate change on London's economy - summary slidesLondon Assembly
The London Assembly Economy Committee has investigated the impact of climate change on London’s economy and has published a summary of views and information that assesses whether the Mayor and the London Enterprise Panel (LEP) are doing enough to support London’s businesses face the challenges and opportunities ahead.
This presentation by Professor Caron Beaton-Wells (Director of Studies, Competition and Consumer Law, University of Melbourne) was made during the discussion on “Academic Perspectives” held at the Workshop on Australian Pecuniary Penalties for Competition Law Infringements on 26 March 2018 in Sydney, Australia. More papers and presentations on the topic can be found out at oe.cd/2cw.
If an industry or organization engages in an activity that is intrinsically risky yet creates a financial profit, officials in the industry are accountable for paying the affected parties. If the activity has the potential to cause catastrophic damage.
The European Union Environmental Liability DirectiveGraeme Cross
The Environmental Liability Directive (2004/35/EC) is
a legislative act of the European Union creating new
and significant potential liabilities for costs, damages
and losses for operators and companies regulated
by the ELD. All EU members have now adopted the
ELD into their national laws, making compliance
unavoidable for companies operating in EU member
states regardless of where they are headquartered.
1. 1
Reviewing environmental crime and offences
17/12/2015
Corporate Crime analysis: Helen Mitcheson, environmental consultant at GHD Environment, alongside Simon
Colvin, head of the environment team, and Sarah Ashworth, paralegal at Weightmans, look over the most
significant cases since the introduction of the new definitive guideline for environmental offences.
What have been, in your opinion, the most significant cases in terms of fines, legal costs and
personal liability?
On 1 July 2014 the new definitive guideline for environmental offences (the guideline) came into effect (LNB News
01/07/2014 152). The guideline was developed by the Sentencing Council with the objective of improving consistency in
sentencing. The guideline comes in two parts. One deals with organisations and the other with individual offenders. This
article focuses on the guideline for organisations such as corporate offenders.
The guideline sets out a twelve-step approach to the sentencing for two key offences and other related offences:
o the unauthorised or harmful deposit, treatment or disposal of waste under section 33 of the Environmental
Protection Act 1990
o illegal discharges to air, land and water under regulations 12 and 38 of the Environmental Permitting
(England and Wales) Regulations 2010, SI 2010/675--it is recognised that the guideline will be used more
widely by the courts for other environmental offences
Fines will be calculated based on the harm caused by the offence, the degree of culpability and the size of the
organisation, by reference to its turnover. Taking this step-by-step approach, the guideline should enable the
determination of the appropriate sentence for the offence committed.
The guideline is based on four categories of environmental harm ranging from category 1 to category 4, with 1 being
major harm and 3 being minor harm. Category 4 is where there is a risk of category 3 harm. Dealing with the risk of harm
involves consideration of both the likelihood of harm occurring and the extent if it does. The culpability factors are
'deliberate', 'reckless', 'negligent' and 'low or no culpability'.
Having considered the evidence the court will decide on the appropriate category of harm and the level of culpability.
Depending on the size of the organisation the court will refer to the guideline to determine the starting points and the
range of fine. There are four classes of organisation--large, medium, small and micro organisations. The guideline
recognises an additional category--very large organisations (VLO)--ie an organisation whose turnover very greatly
exceeds £50m. According to the guideline, when dealing with VLOs it may be necessary for the courts to move outside
the suggested range of fines in order to achieve a proportionate sentence.
The range of fines has been determined in order to reflect an offender's ability to pay. The aim is to ensure fines have a
real economic impact on the offending party and provide a stronger deterrent from re-offending.
The guideline has been applied in several recent cases, including:
o R (Environment Agency) v Anglian Water
o R (Environment Agency) v South West Water
o R v Thames Water Utilities Limited [2015] EWCA Crim 960, [2015] All ER (D) 31 (Jun)
o R (Environment Agency) v Ineos ChlorVinyls
o R(Environment Agency) v Severn Trent
Its use has resulted in the imposition of significant six figure fines for environmental offences. It is important to note that, to
date, the fines have not been as high as many commentators expected. The judgment in the Thames Water case is likely
to change that situation and will undoubtedly lead to the frequent imposition of million pound fines for environmental
offences.
2. 2
R (Environment Agency) v Anglian Water
Anglian Water pleaded guilty to two counts of breaching the conditions of their environmental permit and appeared for
sentencing at Chelmsford Crown Court in June 2014. The EA stated that there was a pattern of failure to respond
appropriately to alarms and telemetry data in the run up to the incident. Anglian Water was fined £50,000 for two offences,
and ordered to pay a contribution towards EA costs of £44,736 and a victim surcharge of £15. This was one of the first
serious environmental cases to be sentenced under the guideline.
R (Environment Agency) v South West Water
South West Water was ordered to pay £153,600 in fines and costs for three offences at a sewage treatment works in
Cornwall. The fine was imposed on South West Water at Truro Crown Court for three charges of breaching its permit to
discharge treated sewage water into the River Par at Luxulyan Sewage Treatment Works.
The judge said that he had the strong impression that the plant operatives had lacked proper vigilance and were 'treating
their responsibilities with a slackness amounting to complacency' and found South West Water guilty of negligence. He
also referenced the Court of Appeal ruling in Sellafield Ltd and Network Rail Ltd that the fine should be fixed at a level to
ensure 'that the message is brought home to the directors and members of the company'. That court heard that in the
year 2012-13 the company had a turnover of £500m with an operating profit of £215m.
The EA stated 'The site wasn't being managed and maintained properly. South West Water took an unreasonably long
time to repair a broken aerator and this meant the works were running at a significantly reduced efficiency. The company
didn't spot problems quickly enough or respond with the speed and urgency required.'
R v Thames Water Utilities Limited
The judgment resulted from an appeal by Thames Water against the level of fine imposed for a water pollution offence--
£250,000. The initial hearing was on 18 July 2014 just after the introduction of the new guideline. The Court of Appeal
ruled against Thames Water Utilities Limited and upheld the £250,000 fine for polluting a nature reserve.
The appeal was the first occasion on which the Court of Appeal had the opportunity to consider, apply and comment on
the new guideline. The judgment is very significant and will have a long lasting impact in relation to sentencing for
environmental offences.
In upholding the fine, the Court of Appeal stated:
'To bring the message home to the directors and shareholders of organisations which have offended negligently more
than once before, a substantial increase in the level of fines, sufficient to have a material impact on the finances of the
company as a whole, will ordinarily be appropriate. This may therefore result in fines measured in millions of pounds.
The court also stated that it would 'have upheld a very substantially higher fine in this case.'
In discussing the guideline, the court noted that in the worst cases, which cause the highest category of harm and
culpability:
'the objectives of punishment, deterrence and the removal of gain (for example the decision of management not to expend
sufficient resources in modernisation and improvement) must be achieved by the level of penalty imposed. This may well
result in a fine equal to a substantial percentage, up to 100 per cent of the company's pre-tax net profit for the year in
question...even if this results in fines in excess of £100m.'
R (Environment Agency) v Ineos ChlorVinyls
Ineos ChlorVinyls Ltd was fined £166,650 with £28,812 costs for environmental offences after being sentenced at Chester
Crown Court in June 2015.
This incident was only deemed to have caused minor local harm, with no lasting effects and was classified as category 3.
In its judgment, the court stated that Ineos ChlorVinyls 'is not a corner-cutting company intent on maximising profits
without any thought to environmental problems or consequences'. However, it said that the company had not taken
reasonable care and had 'failed to enforce a proper system for avoiding the commission for the offence'. However, the fine
was determined in relation to the size of the company. Ineos ChlorVinyls has a turnover of £1.9bn and therefore qualifies
as a 'very large company'.
3. 3
In light of the fact that Ineos was considered a 'very large company', some commentators were surprised at the relatively
low level of the fine, especially in light of the Thames Water judgment.
R (Environment Agency) v Severn Trent
The most recent case to be decided by reference to the guideline was in September 2015 where Severn Trent Water
received a £480,000 fine after a sewage pipe cracked. The consequences were that raw sewage escaped onto a farmer's
field, into a brook and a private fishery in Yorkshire.
The effect of the spillage on wildlife has been fish kill and damage to the local invertebrate community.
The judge in this case said that the offences were negligent in nature and that although the impact was minor, the impact
to those that were affected was significant.
The judge commented that one reason for the fine being burdensome is that Severn Trent were previously warned twice
by the EA about similar incidents at the same location. This highlights the fact that warnings need to be taken very
seriously.
The case is the third largest fine ever to be given to a water company and it now seems that there will be further examples
of larger fines being given to companies in light of the new guideline.
What do these sentences mean for businesses?
The judgments in the above post-guideline cases show that the courts are making increased use of their extended
sentencing powers under the guidelines and are prepared to impose substantial six figure fines, particularly for large and
very large organisations.
In delivering a sentence, the courts are looking very closely at an organisation's accounts and group structures in order to
ensure that the level of fine will 'bring the message home' about the seriousness of the offences committed to those that
run and own an organisation, and to provide a real incentive to remedy the failures that led to the offence.
In some of the above cases, the court also looked at the management board's response to previous incidents and failures
for evidence of real commitment to learn lessons and improve. If it was found that they had not taken their responsibilities
seriously previously, and acted on any warnings, or to prevent a recurrence, this led to an increase in the sentence.
The judgment by the Court of Appeal in the Thames Water case is the first opportunity where the Court of Appeal has had
to consider the guideline. It affirms that large corporate bodies should expect substantial fines, potentially into the
hundreds of millions of pounds for environmental offences. This was a very significant and landmark judgment that will
have lasting consequences for large companies that commit environmental offences.
The judgments in the above cases point towards a future where organisations must take their environmental
responsibilities very seriously and have in place appropriate environmental management policies and processes.
Organisations should consider their liability for environmental offences in the same way as any other regulatory offences.
Organisations should learn important lessons from the judgments. They should audit their environmental processes and
procedures to ensure that they are sufficiently robust so that in the event of an incident, an organisation is in the best
position to protect its interests. For example:
o do not ignore warning signs--if you do and an environmental incident follows, the courts will take a very dim
view of any inaction
o maintain clear records of discussions concerning such failures and the steps needed to deal with them, the
reasons for the decisions taken and the related timescales
o where you have operations close to sensitive sites (eg SSSIs), you need to ensure that you take additional
steps to prevent any environmental harm to those sites
o immediately undertake your own assessment of the environmental impact caused by an incident. Having
your own evidence could be vital in reaching agreement with the environmental regulators concerning the
correct level of harm
o ensure you have a system that allows the board of directors and the shareholders to be engaged in ensuring
environmental compliance by your organisation--is environmental performance and compliance an item on