Robertson is a Chevron media advisor

Chevron battle is now goliath vs. golaith, company says

David and Goliath always makes for a good plot line, with everyone rooting for the spunky kid with the slingshot against the loathsome giant.

“We are not a sympathetic victim. We get that,” says Kent Robertson, a media advisor for Chevron, in talking about a looming decision from an Ecuadorean judge in a 16-year-old lawsuit, initially filed on behalf of 48 indigenous people in the remote Amazon rain forest.

The potential ruling against Chevron, the United States’ third-largest company with 2008 revenues of $263 billion and profits of almost $24 billion, could be $27 billion, easily dwarfing the previous record of $3.5 billion in the 1989 Exxon Valdez case.

Chevron, for its part, has never drilled for oil in Ecuador.

But, when it acquired Texaco in 2001 for about $30 billion, it sprung a different kind of gusher: a long-standing lawsuit claiming environmental damage and elevated levels of cancer and birth defects that, while having caused image problems for years, is now red hot and the focus of recent adverse publicity in the New York Times, the Washington Post, on National Public Radio and in a special segment on 60 Minutes.

Public-pension funds in New York City, New York, Maryland and Pennsylvania are, according to the Wall Street Journal, nervous and asking the company how it would handle a big setback. In September, a documentary shown at the Sundance Film Festival and endorsed by the musician Sting will be released more broadly. And, in the internet age, there are blogs and a website, ChevronToxico.com, and of course a wikipedia entry for the Lago Argio oilfield where it all began.

It is not, says Robertson during an interview while in Coral Gables to visit with in-house counsel and conduct a series of interviews with media, a David and Goliath plot line. It is “Goliath vs. Goliath.”

(Disclosure: Chevron Latin America’s “downstream” operation, which sells fuel, is a sponsor of a WorldCity event series, Global Affairs Connections.)

Chevron’s current media effort comes ahead of that judgment, in the hopes that, assuming the ruling is not favorable, it can start to adjust public opinion by at least getting a few of its more salient points in the stories.

For starters, it wants the world to understand that the case was initiated by and is being led by a U.S. lawyer, Steven Donziger, with money coming from a Philadelphia law firm, Kohn Swift and Graf, on behalf of the plaintiff, a non-governmental organization called the Amazon Defense Coalition. Lawsuits like this can be “securitized,” with investors anteing up in the hopes of striking it rich, though Robertson said he does not know the source of the law firm’s funding.

In addition, Robertson says, “The sites don’t pose a threat to human health or environment.” The plaintiffs, he said, won a ruling that prevented the evidence from being property vetted and moved right to the damages stage.

In addition, Robertson says, the Ecuadorean government long ago approved Texaco’s $40 million remediation efforts to clean up the environmental damage resulting from its drilling, which began in the area around Lago Agrio in 1972, a few years after the first oil strike.

“The biggest problem with making it go away,” Robertson says of any settlement, “is finality.” In addition, Chevron, he says, fears that a settlement “would be blood in the water” for sharks looking to strike again and again. “For multinationals, how do you hold governments accountable for agreements it has made.”

Another point: Petroecuador is still drilling there and was a partner in a consortium with Texaco during the period covered in the lawsuit.

And now, Robertson laments, Ecuador’s president, Rafael Correa, has entered the fray, praising the people of the region as heroes and further politicizing the case.

Needless to say a $27 billion judgment or anything approximating it, would be a serious blow. Assuming the ruling is not favorable, and Chevron seems relatively assured of that, it has two levels of appeals and one potential constitutional challenge remaining, Robertson says. It assumes the plaintiffs will then try to collect in U.S. courts since Chevron has virtually no assets in Ecuador. At that point, the oil company hopes to fend off the challenge and eventually get to international arbitration.

To be sure, it is an expensive fight trying to fend off a lawsuit seeking damages that have grown from $1.5 billon in 2003 to $6 billion in 2006 to $16 billion earlier last year and to $27 billion last fall. “We don’t speak publicly about litigation costs,” Robertson says.

But the company has hired several law firms, public relations firms in Ecuador and the United States, including Newlink in Miami, a wide range of scientists and consultants, is spending money to make sure that the search for “Chevron Ecuador” among other things on google puts its paid listing right up top, and even hired two former U.S. trade representatives to urge President Obama to reject automatically renewing Ecuador’s preferential import-export trade treatment, a tactic tried previously under President Bush, when it also failed.

At that time, Donziger, the attorney working the case on behalf of the plaintiffs all these years, had urged a junior U.S. senator and former Harvard law school acquaintance of his, to write to then-President Bush arguing against his involvement. The senator from Illinois wrote to Bush that the U.S. government should stand clear. The senator was, of course, the current U.S. president, Barrack Obama.

“We’re like any business,” Robertson says. “We’re pragmatic. If there was a way to settle, we’d do it.” Unfortunately, he says, the plaintiffs have “taken Chevron’s reputation hostage and (are trying to) ransom it back to us.”

But, he says, the plaintiff’s attorneys, with their eye on a multi-billion settlement, should not be eyeing that Lear Jet quite yet. They will “need to wait for a couple more catalogs before they can pick one out.”