The Giant International Pickpocket War

BusinessWire, a Berkshire Hathaway Company run by the famed Warren Buffet and Charles Munger has republished a press release from the Amazon Defense Coalition prepared and pushed out by Karen Hinton of Hinton Communications, a PR firm. The Hinton press release is a seriously skewed update on the Chevron side of the old Texaco pollution issue in Ecuador.

There is a lot of money at stake.  Reports vary but about $27 billion seems to be a popular quote.  Just what amount the Ecuador judge comes in with is yet to be announced, but in a world of weak incomes for most, picking pockets of large corporations is picking the pockets of governments’ taxes, employees’ salaries, vendors and contractors’ contracts, and shareholders’ dividends plus everyone they do business with.  It might seem like a $27 billion boon to Ecuador, but the multiplier effect in the U.S. and the other countries where Chevron operates would make the impact way more than $100 billion.  Legal tort actions have dire, if often hard to follow, consequences.

Ms. Hinton does a fairly good job of assassinating everyone over on the Chevron side. While I can’t speak about the opposing PR firms she faces with any authority nor is it worthwhile to review the entire history, she does factually lie about the role of bloggers.  For which I take offense.

I too was asked to take a few days away and visit Ecuador.  No money was offered. Nor has any oil company ever offered cash for their information tours.  Actually they are done well, with good accommodations and cheap airline seats, good food and intense schedules.  They are not “junkets” by any description, rather the tours are short as possible, packed with information and paced to minimize the expenses and intrusion into the business’ regular activities.  Having a bunch of “know nearly nothing” folks at working facilities snapping pictures, soaking up supervisors time and just wandering around the moving or hot or both equipment and flammable products must be nerve wracking.  I wonder what the insurance binders must cost to have events.  Risk must make it unlikely that outsiders will ever see some of the most interesting things.

Hinton says, “Chevron has taken several internet journalists and bloggers on all-expense paid trips to Ecuador in return for favorable coverage on their sites, without disclosing the fact they are paid. The company’s lawyers then cite information on the blogs as “evidence” in their court papers. The practice of paying seemingly independent journalists is considered highly unethical.”

This is false, a lie, I know of no one having been paid, the all expense trip notwithstanding, as if I or any other blogger or journalist is going to pay for such a trip on their own.  Chevron can quote me!

All this leads to a fight out in the open now.  It’s PR vs. PR and Hinton is fielded across from such as Edelman, Hill & Knowlton, and Sard Verbinnen.  Now really Ms Hinton, you’re being funded by the tort lawyers who stand to get 33.33% of the take plus whatever else they have in their deal so they have nearly $10 billion on the line as well.  Maybe Ms. Hinton is alarmed she will have to take a “fourth” seat to some much higher-powered firms paid by her lawyer clients.  That would be a blow to one’s ego.

On the ground though there are people, real ones who have to cope with the development and the changes made to the landscape.  Rather than follow up with requirements for site cleanup, if any existed, the Ecuadorians have chosen to follow the lead of some U.S. based trial lawyers. That obviously closed the door to negotiations to bring the land back to such a desired condition as done in the U.S. or Canada.  It closed the door to working out assistance for health concerns be they real or imagined, it closed the door to continued development and local economic participation.  The trial lawyer move closed every other door.  Dumb move.  Chevron is a pretty high quality corporate citizen; better a friend than made an enemy by an aggressive third party.

I admit I haven’t seen the work done by the Chevron PR army.  Nor do I plan to bother doing so.  I will offer a couple suggestions to the Chevron people.  Assuming Hinton is truthful about the people the suit represents, which is dubious, but worth consideration in theory is, address them directly. After the lawyers get their cut, the government theirs, and corruption players their due, the local folks will be lucky to get anything at all.  Point one.

Point two. Against that, Chevron has a much more powerful position.  It could to chose to address the people the plaintiffs represent directly offering the people of Ecuador the opportunity to cleanup the sites that say would need attention as in the U.S. or Canada.  That way the multiplier effect takes place there.  If a budget of $5 billion over ten years was spent with Ecuadorian firms the multiplier effect could turn that into $25 to $50 billion, with education, jobs, businesses, a fresh environmental regime, and a new reputation for other investments.  Maybe $50 billion is low.  It could kick start a little economic foundation into some very worthwhile action.

The infection of tort lawyers is dug in deep.  The people of Ecuador have little idea who has resources to bring for development.  Realizing that Chevron treated properly could be a great resource to build out from problems of the past is a difficult thing to explain.  And it all falls on Chevron to lead.  This is not the usual role of stockholder owned companies.

Yet the folks in San Ramon California aren’t your typical corporate types. They take the traits of humanity seriously as their neighbors are down the road in ultra creative Silicon Valley.  One can’t blame them for the route they’ve taken so far, and staying course makes eminent sense.

But I can’t help but wonder, if staying in character might be the best long term route for Chevron to chose, if only to try and see if the people of Ecuador can catch on before its completely too late. Remember one’s enemy’s enemy is your friend, and poverty and corruption in Ecuador could be Chevron’s best resource to solve the old Texaco problem and for both sides to come out with good reputations and new friends as well.


The original post is created by: New Energy and Fuel

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