// editor's note //
Winter 2006
Throwing CU's Money the Right Way
Alejandro Ponce has had his house broken into, his computer and all of his files stolen. His wife has been threatened. He has seen his colleagues beaten and intimidated. The client who has caused Mr. Ponce this trouble is Maria Aguinda, a Quichua Indian from Ecuador. She suffers from body growths due to oil contamination, and she cannot drink water from the rivers, springs, and wetlands near her house. When she leaves her home her feet are coated with crude oil in the winter, and in the summer she inhales dust particles covered with oil. She is just one victim of the 'rainforest Chernobyl' perpetrated by Texaco in the Orienterainforest region of Ecuador.
Since 1964 when oil was discovered in Ponce's native Ecuador, Texaco (bought by Chevron, later called ChevronTexaco, and now just Chevron) has extracted billions of dollars worth of crude oil and waste products each year. In this period, Chevron admits to dumping eighteen billion gallons of toxic waste into swamps in the rainforests that are home to six different indigenous communities. Chevron acknowledges creating 600 open-air toxic waste pits, leaving pollution, including toxins like benzene, mercury, and lead. Three quarters of Ecuadorians living in these regions have lost cropland, and 95% have lost animals. Cancer rates among those living near drilling sites are three to five times higher than rates of other indigenous peoples in the region. The destruction of croplands and work animals, as well as the severe illnesses of the people, has caused significant reductions in the number of people living in the Oriente region and the disappearance of an entire native tribe.
In his many trials, Ponce has successfully argued that because of the wide ranging health consequences of environmental pollution, environmental rights are the collective human rights of Ecuadorian citizens. Unlike in the US, where a plaintiff has to show specific monetary damages from pollution, according to the Ecuadorian constitution (article three, line three) any Ecuadorian may sue based on his or her constitutional right to a clean environment. A final verdict on theAquinda v Texaco case will be issued in 2007, and it is expected that Chevron will have to spend many billions of dollars on remediation for its deadly environmental destruction.
This multinational tale of environmental exploitation and abuse of constitutional and human rights is relevant to us because Columbia has 3.02 million dollars invested in Chevron.
This investment in Chevron is fundamentally opposed to Columbia's stated beliefs on basic ethics and environmental sustainability. As an institution attempting to, in President Lee Bollinger's words, "preserve and enhance the environment of our campus, our community, and our planet," it is clear that Chevron's unsustainable destruction of the rainforest does not accord with Columbia's environmental ideals. Further, the destruction of people's habitat and the threatening of people's culture and way of life certainly does not accord with the University's general support of human rights. In 2000, University President George Rupp, with the approval of the University trustees, created the Advisory Committee on Socially Responsible Investing (ACSRI). This committee advises the university trustees, and seeks to ensure ethical financial management of Columbia's five billion dollar endowment. In the past five years, the University has accepted an increasing percentage of ACSRI recommendations, including last year's divestment from companies supporting the Khartoum regime in Sudan because of the regime's responsibility for the ongoing genocide in Darfur.
The Committee can advise two courses of action when it is faced with a Columbia investment it finds unethical. It can recommend shareholder activism, or divestment. Shareholders in a company have the right to present shareholder resolutions at board meetings, an act that stirs up media attention, presents ethical issues to a company's directors, and provides an opportunity for people to vent grievances. At the last Chevron shareholder's meeting, indigenous Ecuadorians stood up before the board of directors and accused them of destroying their homes and health. This type of personal testimony publicizes issues and may inspire corporate change. Shareholder activism, a tactic frequently used by human rights organizations like Amnesty International, empowers individuals abused by Chevron to present their cases.
Since Columbia has not been specifically hurt by Chevron, divestment is a more appropriate action for the University to take than shareholder activism. According to ACSRI, divestment is "the strongest action an institution can take as a socially responsible investor." The selling of a company's stock attempts "to affect corporate behavior through the symbolic act of ceasing all connection with the company in question"(ACSRI Statement December 2002). Divestment can be a financial threat when a shareholder owns a significant percentage of the company and can threaten to depress the stock price by selling many shares. Since Columbia owns only about .00002% of Chevron's publicly traded stock, divestment would mainly be a symbolic act. Though symbolic, a public statement by our University would undoubtedly increase awareness of the issue and encourage others to follow, causing Chevron negative publicity, and thus pressuring the company to alter its practices.
Columbia does not need to invest in socially and environmentally irresponsible companies to make money. For example, the largest wind energy producer in America, Florida Power and Light, and the largest wind turbine developer in the world, Vestas, have each produced a greater return on investment over the last year than Chevron (29% and 26% instead of 19%). Florida Power and Light and Vestas are old, stable companies that have outperformed Chevron over the last five years, and harvest a resource available from shorelines and on hills in any nation. Growth in the wind energy sector is not unique to these two companies, as the US wind energy industry in general has grown 29% over the last five years and 35% in the last year. Investing in these companies is an economically viable alternative to Chevron.
Investing in green companies also gives Columbia an opportunity to support the reduction of greenhouse gas emissions that lead to climate change. Columbia demonstrates its commitment to decreasing greenhouse gas emissions here on campus by spending money on energy efficiency in buses, lights, washers, dryers, and windows. Yet Chevron's business plan is based on the emission of carbon dioxide, a greenhouse gas that causes global climate change, and is dramatically remaking our environment. Shareholder activism for appropriate organizations like Amnesty and divestment for American universities like Columbia, could encourage Chevron to follow BP's lead and begin major initiatives to redesign their business to become a smaller cause of global carbon emissions and climate change.
Taking symbolic action on Chevron's stock will guarantee Columbia a moral high ground. A statement of principle, it asserts that Columbia will not blindly invest its money in corporations committed incidentally to human rights abuses, and by their nature to destruction of the environment. Symbolic actions like divestment can serve to awaken people to issues they were unaware of. There is power in trusting what Nobel Prize winning writer Orhan Pamuk calls "an instinct of truth," and the "fury and anger [that] makes us who we are."
Symbolic actions can inspire other parties to follow, creating an aggregate result with a significant effect. From Czech dissident Vaclav Havel to contrarian intellectual Stanley Fish, examples of symbolic dissent fill this issue of The Current. Some of the dissenters discussed in this issue have spoken against governments; some speak against prevailing academic ideas, or social norms. What they all have in common is the desire for change. Chevron is an instance where Columbia, without having to sacrifice economic profit, has an opportunity to act for change and be a moral leader.
-Eliav Bitan
Since 1964 when oil was discovered in Ponce's native Ecuador, Texaco (bought by Chevron, later called ChevronTexaco, and now just Chevron) has extracted billions of dollars worth of crude oil and waste products each year. In this period, Chevron admits to dumping eighteen billion gallons of toxic waste into swamps in the rainforests that are home to six different indigenous communities. Chevron acknowledges creating 600 open-air toxic waste pits, leaving pollution, including toxins like benzene, mercury, and lead. Three quarters of Ecuadorians living in these regions have lost cropland, and 95% have lost animals. Cancer rates among those living near drilling sites are three to five times higher than rates of other indigenous peoples in the region. The destruction of croplands and work animals, as well as the severe illnesses of the people, has caused significant reductions in the number of people living in the Oriente region and the disappearance of an entire native tribe.
In his many trials, Ponce has successfully argued that because of the wide ranging health consequences of environmental pollution, environmental rights are the collective human rights of Ecuadorian citizens. Unlike in the US, where a plaintiff has to show specific monetary damages from pollution, according to the Ecuadorian constitution (article three, line three) any Ecuadorian may sue based on his or her constitutional right to a clean environment. A final verdict on theAquinda v Texaco case will be issued in 2007, and it is expected that Chevron will have to spend many billions of dollars on remediation for its deadly environmental destruction.
This multinational tale of environmental exploitation and abuse of constitutional and human rights is relevant to us because Columbia has 3.02 million dollars invested in Chevron.
This investment in Chevron is fundamentally opposed to Columbia's stated beliefs on basic ethics and environmental sustainability. As an institution attempting to, in President Lee Bollinger's words, "preserve and enhance the environment of our campus, our community, and our planet," it is clear that Chevron's unsustainable destruction of the rainforest does not accord with Columbia's environmental ideals. Further, the destruction of people's habitat and the threatening of people's culture and way of life certainly does not accord with the University's general support of human rights. In 2000, University President George Rupp, with the approval of the University trustees, created the Advisory Committee on Socially Responsible Investing (ACSRI). This committee advises the university trustees, and seeks to ensure ethical financial management of Columbia's five billion dollar endowment. In the past five years, the University has accepted an increasing percentage of ACSRI recommendations, including last year's divestment from companies supporting the Khartoum regime in Sudan because of the regime's responsibility for the ongoing genocide in Darfur.
The Committee can advise two courses of action when it is faced with a Columbia investment it finds unethical. It can recommend shareholder activism, or divestment. Shareholders in a company have the right to present shareholder resolutions at board meetings, an act that stirs up media attention, presents ethical issues to a company's directors, and provides an opportunity for people to vent grievances. At the last Chevron shareholder's meeting, indigenous Ecuadorians stood up before the board of directors and accused them of destroying their homes and health. This type of personal testimony publicizes issues and may inspire corporate change. Shareholder activism, a tactic frequently used by human rights organizations like Amnesty International, empowers individuals abused by Chevron to present their cases.
Since Columbia has not been specifically hurt by Chevron, divestment is a more appropriate action for the University to take than shareholder activism. According to ACSRI, divestment is "the strongest action an institution can take as a socially responsible investor." The selling of a company's stock attempts "to affect corporate behavior through the symbolic act of ceasing all connection with the company in question"(ACSRI Statement December 2002). Divestment can be a financial threat when a shareholder owns a significant percentage of the company and can threaten to depress the stock price by selling many shares. Since Columbia owns only about .00002% of Chevron's publicly traded stock, divestment would mainly be a symbolic act. Though symbolic, a public statement by our University would undoubtedly increase awareness of the issue and encourage others to follow, causing Chevron negative publicity, and thus pressuring the company to alter its practices.
Columbia does not need to invest in socially and environmentally irresponsible companies to make money. For example, the largest wind energy producer in America, Florida Power and Light, and the largest wind turbine developer in the world, Vestas, have each produced a greater return on investment over the last year than Chevron (29% and 26% instead of 19%). Florida Power and Light and Vestas are old, stable companies that have outperformed Chevron over the last five years, and harvest a resource available from shorelines and on hills in any nation. Growth in the wind energy sector is not unique to these two companies, as the US wind energy industry in general has grown 29% over the last five years and 35% in the last year. Investing in these companies is an economically viable alternative to Chevron.
Investing in green companies also gives Columbia an opportunity to support the reduction of greenhouse gas emissions that lead to climate change. Columbia demonstrates its commitment to decreasing greenhouse gas emissions here on campus by spending money on energy efficiency in buses, lights, washers, dryers, and windows. Yet Chevron's business plan is based on the emission of carbon dioxide, a greenhouse gas that causes global climate change, and is dramatically remaking our environment. Shareholder activism for appropriate organizations like Amnesty and divestment for American universities like Columbia, could encourage Chevron to follow BP's lead and begin major initiatives to redesign their business to become a smaller cause of global carbon emissions and climate change.
Taking symbolic action on Chevron's stock will guarantee Columbia a moral high ground. A statement of principle, it asserts that Columbia will not blindly invest its money in corporations committed incidentally to human rights abuses, and by their nature to destruction of the environment. Symbolic actions like divestment can serve to awaken people to issues they were unaware of. There is power in trusting what Nobel Prize winning writer Orhan Pamuk calls "an instinct of truth," and the "fury and anger [that] makes us who we are."
Symbolic actions can inspire other parties to follow, creating an aggregate result with a significant effect. From Czech dissident Vaclav Havel to contrarian intellectual Stanley Fish, examples of symbolic dissent fill this issue of The Current. Some of the dissenters discussed in this issue have spoken against governments; some speak against prevailing academic ideas, or social norms. What they all have in common is the desire for change. Chevron is an instance where Columbia, without having to sacrifice economic profit, has an opportunity to act for change and be a moral leader.
-Eliav Bitan