Historical News Releases & Statements

April 25, 2005

ChevronTexaco Statement on "SocialFunds.com" Report on Ecuador Environmental Litigation

San Ramon, Calif., April 25 - ChevronTexaco today issued the following statement responding to an article on the socialfunds.com website alleging that Attorney General of Ecuador, Jose Maria Borja, and his assistant told a small group of company shareholders that the remediation agreement negotiated between Texaco Petroleum and the Republic of Ecuador was 'in violation of the Constitution,' because the Controller General did not 'review and accept' the agreement ("Ecuadorian Attorney General Tells ChevronTexaco Shareholders Remediation Agreement May be Invalid," April 12, 2005).

"The fact is that the government's publicly held position, which has been reiterated many times both orally and in writing over the past decade, is that the agreement is valid. The Ecuadorian Congress reviewed the release when it was approved by the Government of Ecuador.

"At an April 11, 2005 hearing at U.S. Federal Court in New York on the matter of ChevronTexaco's arbitration claim against Petroecuador, the attorney retained by Attorney General Borja to represent the Republic of Ecuador and Petroecuador acknowledged that the 1995 remediation agreement was legitimate and binding on the government.

"In February 2004, the Minister of Energy and Mines, Carlos Arboleda, stated, 'Here the State has a very clear position that has been ratified whenever we have been asked on the subject. The State is aware that a total and final release, which was absolutely binding was signed between Texaco and the State.'

"In a January 3, 1996 amicus brief filed by the Government of Ecuador in New York, Edgar Teran, Ecuadorian Ambassador to the U.S. stated under oath, 'The recent agreement between the Republic, Petroecuador and Texaco Petroleum Company, which was reviewed and supported by the Ecuadorian Congress, as well as the Republic's amicus curiae brief filed in this action with the express permission and support of the President of Ecuador, demonstrates the Republic's determination to fulfill this obligation.'

"Regarding the assertion that the Comptroller General was required to sign the agreement, under Ecuadorian law, the Controller General is only responsible for reviewing and accepting government agreements when those agreements involve the expenditure of government funds. In the case of the remediation agreement between Texaco Petroleum, Petroecuador and the Republic of Ecuador, no government funds were spent. Therefore, the Controller General would have no role in the approval of the agreement.

"With respect to the comments attributed to the plaintiffs' attorney regarding a potential conflict of interest on the part of ChevronTexaco's in-house attorney, we believe such assertions are without foundation and logic."

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