The Coalition to Stop Gun Violence has released a report, Utilizing the “Buyer Power” Strategy to Reform the Gun Industry, that urges municipal officials to utilize their buying power as mass-purchasers of firearms for police forces to pressure gun manufacturers to modify how they make and distribute guns.
Chevron in Ecuador: Corporate Propaganda, New Media Activism and Environmental Health
The lawsuit against U.S. oil giant Chevron brought by indigenous people in Ecuador’s Amazon can tell us a great deal about corporate propaganda, new forms of media activism – both good and bad – and the consequences these have for environmental health. It also offers important lessons for activists seeking changes in other sectors.
First, a little background in case you’re not familiar with the case. Ecuadorean indigenous people said Texaco dumped more than 18 billion gallons (68 billion litres) of toxic materials into the unlined pits and rivers between 1972 and 1992, and that these activities had destroyed large areas of rainforest and also led to an increased risk of cancer among the local population. In 2001, Chevron acquired Texaco. The current trial began in 2003 when a U.S. appeals court ruled that the case should be heard in Ecuador.
A number of studies have attempted to quantify the health impact of the oil giant’s operations in Ecuador. Epidemiological surveys have confirmed what people in the area know from their own experience: rates of cancer, including mouth, stomach and uterine cancer, are elevated in areas where there is oil contamination. A court-appointed independent expert in the trial estimated that Chevron is responsible for 1401 excess cancer deaths.
The latest news in the case is that in February, 2011 a court in Ecuador ordered Chevron to pay more than $8.6 billion in damages ruling in favor of the 30,000 indigenous people represented by the suit. However, Chevron has vowed to appeal the ruling, meaning that the long-running case dating from drilling in the South American nation during the 1970s and 1980s could last for years.
True to its word to fight the judgment at each step, just before the historic judgment lawyers for Chevron convinced a U.S. District Court in New York to stop enforcement of the anticipated order. The judge granted the order preventing enforcement, and the case remains in legal limbo.
Big Money is at Stake
Make no mistake, the judgment in Ecuador means big money is at stake. The lawyer representing the indigenous Ecuadoran people, Steve Donzinger, has won a monumental victory. The judgment against Chevron is on the all-time roster of environmental recoveries. If it were ever collected — which remains uncertain — it would rank second only to BP’s promised $20 billion fund to compensate victims of the 2010 Gulf of Mexico oil spill.
Assuming a scenario in which Chevron is ordered to pay the maximum penalty, the reduction in cash would decrease its equity value and, according to one estimate, drop the stock price from $104 to down about $99.
Multimedia Battle Over “Truth”: Chevron’s vs. Environmental Activists’
With all this money at stake, it means that Chevron is pushing a no-holds-barred, multimedia assault to advance its version of the story. It’s a wide ranging effort across several different platforms. The campaign started, as most things do these days, with Google, moved to TV-news magazine shows and YouTube, touched documentary filmmaking, and circled back around to a very effective counter-attack by some very clever new media activists.
Google Ad Buy
The first line of battle for any activist these days is the Internet. And, originally, environmental activists were winning the battle of Google. If you searched using the words “Chevron in Ecuador” back in 2003, the first result would be a website created by Amazon Watch, an environmental activist group that blames “Chevron’s negligence” for injuries and deaths in the country.
Today, you can still find the sites of environmental activists in Google search returns, but now when people do Google searches for “Chevron” and “Ecuador,” paid links to those sites appear at the top of the screen, like this one for “The Amazon Post”.
Note the tag line for the ad, “Scheme to Defraud U.S. Company Exposed,” makes no overt mention of Chevron. Yet, once you click on the link, you’ll find a site clearly from the perspective of the oil giant, “The Amazon Post: Chevron’s views and opinions on the Ecuador lawsuit.” They also have sponsored ads at the top of each page of results for searches using the terms “Chevron” and “Ecuador.” It’s difficult to know exactly how much Chevron has spent on their Google Ad buy, but it’s safe to say that it’s far more than the environmental groups like Amazon Watch can afford.
It’s also fairly easy to avoid these kinds of attempts at corporate propaganda, at least for most relatively savvy web users. Chevron’s next attempt at influencing public opinion is more difficult to discern.
Dueling TV News Magazine Segments
In May, 2009 the CBS news magazine show “60 Minutes,” produced a segment called “Amazon Crude” about the Chevron case, it seemed the tide of public opinion might be turning against the third largest corporation in the U.S. The report detailed the environmental damage done to the Amazon region and the devastating health consequences for the people living there.
Chevron fought back in a rather remarkable media move. It hired a former CNN journalist, Gene Randall, to produce a similar, but favorable to Chevron, news-magazine-style-story, which the company then posted to YouTube and advertised heavily via Google. The video “report” for Chevron may be unprecedented for how it blurs the line between public relations and journalism. At least one analyst wondered whether this propagandist counter-news-production raises the specter of whether of a surge of newly out-of-work journalists who might be tempted to go “over to the dark side” and further muddy the line between news and corporate advocacy.
Digital video released over the Internet has continued to be a site of political battles over the environmental justice issue of the Amazon region. Activists from the group Amazon Defense Coalition have continued to release videos documenting Chevron’s toxic legacy in the Ecuadoran rainforest, as in this video which reportedly offers “devastating proof of Chevron toxic pits in Ecuador.” While the video is compelling, it’s hard to imagine what would be considered sufficient “proof” in the face of Chevron’s aggressive campaign of corporate disinformation about the environmental damage in Ecuador.
Following the “60 Minutes” segment and the faux-reporting corporate piece and counter volleys of online digital video, media activism against Chevron’s toxic practices shifted to documentary filmmaking. Predictably, Chevron was once again on the assault.
Chevron vs. Joe Berlinger, Documentary Filmmaker
The well-received documentary “Crude,” released in 2009, helped renew the public outcry over oil pollution in the Amazon. The filmmaker Joe Berlinger spent several years following key players in the multibillion-dollar class-action lawsuit filed in Ecuador against Chevron. Ultimately, Berlinger was forced to fight his own battle against Chevron’s lawyers.
Berlinger obtained astonishing access to the private strategy sessions of the lawyers suing Chevron, and Chevron used that access against Berlinger. Attorneys for the oil company filed a lawsuit against Berlinger, demanding access to all of his unedited footage that he shot for the documentary. U.S. Judge Lewis Kaplan ruled in favor of Chevron and ordered Berlinger to turn over all 600 hours of footage he shot for the film. Chevron’s lawyers argued that they needed the tape to help stop the Ecuadorian lawsuit and related criminal prosecutions. Berlinger, along with many others, says the ruling is deep blow to the long-recognized journalistic privileges of documentary filmmakers. The ruling came in May, 2010 and has been largelyupheld by a court of appeals over the following months. It can be seen as a cautionary tale for lawyers who invite in documentary filmmakers to tell the story of their legal fights.
Chevron vs. YesMen: Astroturf vs. “Identity Correction”
In late-in-the-game PR move that some might regard as signaling a recognition of defeat, Chevron launched their “We Agree” campaign.
The campaign featured a Facebook “Like” button in the top, right-hand corner. The people photographed are uniformly attractive and lightly demographically diverse, with earnest expressions near polished, graphically designed signs that say things that are vaguely liberal, like “Oil Companies Should Put their Profits to Good Use,” “Oil Companies Need to Get Real,” and “Fighting AIDS Should be Corporate Policy.” These sentiments are all displayed under a Chevron corporate-branded website with the heading, “We Agree.” So, we’re good right? We can put that whole messy business in the Amazon is behind us, can’t we?
While some people might have been persuaded by Chevron’s “We Agree” campaign (they had 146 Facebook “Likes” at last count) not everyone was so moved.
The anti-corporate activists The Yes Men launched one of their “identity correction” campaigns in direct opposition to Chevron’s “We Agree” campaign. The Yes Men are the activists and performance artists who have spoofed the World Trade Organization among others (and are featured in the documentary “The Yes Men Fix the World“). The Yes Men saw the Chevron “We Agree” campaign as something of a challenge.
At almost the same time, the Yes Men together with Rainforest Action Network and Amazon Watch, put up their own, satirical website, which could easily fool web surfing neophytes.
The satirical site carries much of the same graphic design, logo, branding and imagery – but the language and text of the ads is much more pointed. Instead of “Oil Companies Need to Get Real,” the YesMen site reads, “Oil Companies Should Clean Up their Messes,” clearly implicating Chevron in the environmental disaster in the Amazon.
The YesMen site also includes download-able posters of their graphic arts messaging should anyone decide they wanted to spread the message of Chevron’s corporate environmental irresponsibility to a wider audience. The timing and effectiveness of the satirical site quickly became a PR-disaster for Chevron which reportedly spent $50 million dollars on the fake grassroots “We Agree” campaign. The YesMen followed up the success of this campaign with another soon afterward, the “Chevron Thinks We’re Stupid,” which quickly went viral.
What does this tell us?
There are several lessons to take away from the Chevron case. First, large oil companies routinely put profits over peoples’ health and above concerns about the environment. Furthermore, corporations will go to great lengths to use the media to manipulate the truth about what they’ve done in the service of profits and at the expense of human lives, health and the environment.
The other set of lessons the Chevron case has for health activists is that the site of political activism around environmental health has shifted. The location of struggle and protest is less often in the streets and more often in a battle over URLs, graphic user interface, and Google PageRank. The political battle over whose version of the truth prevails in media forms long considered journalistic, such as documentary filmmaking, are now under assault by large corporations. In the wake of last year’s Supreme Court decision in favor of Citizens United (see Citizens United: A First Anniversary Update) there are likely to be more such corporate victories over independent media in the courts.
In many respects, the lawsuit against Chevron brought by indigenous people in Ecuador’s Amazon is a harbinger of things to come in corporate propaganda. We can expect more use of new forms of media activism, both the nefarious corporate manifestations such as Google ads for “The Amazon Report” and the lawsuit against Joe Berlinger, as well as the more democratic efforts of activists such as TheYesMen. The impact on environmental health depends at least in part on which of these strategies is most effective.
For more information on Jessie Daniels, please visit our Contributing Writers page.
Photo Credits:
1. ChevronToxico: Campaign for Justice in Ecuador
2. Google
3. Chevron
4. The Yes Men
BMSG Reports Explore Food Industry’s Harmful Target Marketing Strategies
The first of two recent reports by the Berkeley Media Studies Group explains how target marketing to communities of color by soda and fast food companies contributes to racial inequality. The report states that the explicit goal of these marketing strategies is to increase consumption of junk food in African-American and Latino communities. The second report builds on the theme of target marketing, detailing how the soda and fast food industries exploit the cultural ties and values of African-American and Latino mothers, ultimately making communities sicker by influencing the food choices of these women.
Should Corporations Serve Shareholders or Society?: The Origins of the Debate
Discussions about corporations’ influence on health often implicitly or explicitly raise the following question: if the law allows corporations to amass money and consequent power, then why doesn’t the law require corporations to protect, and not harm, health? This simple question has been asked, in various forms, for at least a century.
The debate surrounding this question involves two competing versions of the corporation.[1] In the first version, the corporation is viewed as the property of the individuals who purchased its shares—the stockholders or owners. According to this view, “the corporation’s purpose is to advance the purposes of these owners (predominantly to increase their wealth), and the function of its directors, as agents of the owners, is faithfully to advance the financial interests of the owners.”[2] Those who adhere to this view argue that corporate law should govern “little more than the private relations between the shareholders of the corporation and management.”[3] In the second version, the corporation is viewed “as a social institution.”[4] Proponents of this view believe that corporate law should be “deliberately responsive to public interest concerns,”[5] which includes health and safety considerations.
While federal and state courts have heard many legal challenges over the fundamental nature of a corporation, commentators trace the debate’s formal origin to two articles published in the Harvard Law Reviewin the early 1930s.[6] In 1931, Adolf A. Berle, a professor at Columbia Law School, wrote Corporate Powers as Powers in Trust. In this article, he argued that “all powers granted to a corporation or the management of a corporation . . . are necessarily and at all times exercisable only for the ratable benefit of all the shareholders as their interest appears.”[7] Berle believed that corporations were simply vehicles for advancing and protecting shareholders’ interests and that corporate law should be interpreted to reflect this principle. He suggested that any other account of corporations’ function and purpose would “defeat the very object and nature of the corporation itself.”[8]
One year later, E. Merrick Dodd, a professor at Harvard Law School, challenged Berle’s position in For Whom are Corporate Managers Trustees. Dodd suggested that, “there is in fact a growing feeling not only that business has responsibilities to the community but that our corporate managers who control business should voluntarily and without waiting for legal compulsion manage it in such a way as to fulfill those responsibilities.”[9] He quoted the heads of several major corporations, such as General Electric, to argue that business leaders had come to recognize that corporate managers needed to consider social responsibility when running their companies.
Dodd provided several interpretations of this view relative to the requirements of corporate law. First, he explained that if “social responsibility” meant that corporate managers paid more attention to the needs of their employees and consumers, this would ultimately benefit shareholders. Dodd supported this argument by noting that employee satisfaction leads to greater productivity and ultimately increased profits. By this logic, managers could actually increase profits by focusing on the needs of groups other than shareholders.[10] Next, Dodd argued that courts had provided great latitude to corporate managers, allowing them “a wide range of discretion as to what policies will best promote the interests of the stockholders . . .”[11] For example, Dodd suggested that corporate charitable giving, while not immediately increasing shareholder wealth, could generate good will in the community.[12] Such good will could benefit shareholders, since consumers would be more likely to think favorably of the corporation and buy its products.
For Dodd, these arguments meant that corporations are “affected not only by the laws which regulate business but by the attitude of public and business opinion as to the social obligations of business.”[13] He claimed that society’s view of the corporation as a purely private enterprise was shifting, and that corporate managers should “recognize that the attitude of law and public opinion toward business [was] changing . . .”[14] By arguing that corporate law should reflect shifts in public opinion about the purpose of corporations, Dodd paved the way for those who would later argue that corporations can and should act to benefit constituencies beyond their shareholders.[15] The echoes of Dodd’s argument are often heard among those who champion corporate social responsibility and responsible business practices.
Commentators continue to mention the Berle/Dodd debate, encapsulated by their Harvard Law Review articles, when contemplating how corporations should function within society.[16] Today, variations of this debate surface each time advocates challenge corporate practices that have harmed or may harm the public’s health. The debate arises whenever policy-makers contemplate regulations that would require corporations to engage in behaviors that would protect the public’s health. And, the debate over corporations’ fundamental purpose will continue for years to come, as new corporate practices come to light and new regulations are proposed.
Interestingly, the Berle/Dodd debate did resolve, but with an unexpected twist. In 1954, Berle, who had espoused the view that corporations should be run exclusively to advance their shareholders’ interests, published The 20th Century Capitalist Revolution. In this book, he mentioned his debate with Dodd and stated that “[t]he argument has been settled (at least for the time being) squarely in favor of Professor Dodd’s contention.”[17] Twenty years after articulating his original position, Berle conceded that the law had supported Dodd, in that it did allow directors some discretion to consider stakeholders other than a corporation’s shareholders.
Berle’s book was published one year after the New Jersey Supreme Court decided A.P. Smith Manufacturing Company v. Barlow (1953), which definitively established corporations’ ability to make philanthropic donations and offered support to Dodd’s arguments. In all likelihood, this decision convinced Berle that even if corporations must be run with their shareholders’ best interests in mind, the law gives corporations some opportunities to consider other stakeholders. For those who act to protect and promote the public’s health, this nuanced understanding of a corporation’s purpose is key.
References
[1] Kerr JE. Sustainability means profitability: the convenient truth of how the business judgment rule protects a board’s decision to engage in social entrepreneurship. Cardozo Law Rev. 2007;29:623-668, at 660.
[2] Allen WT. Our schizophrenic concept of the business corporation. Cardozo Law Rev. 1992;14:261-281, at 264-265.
[3] Millon D. Theories of the corporation. Duke Law J. 1990;1990:201-262, at 201.
[4] Allen WT. Our schizophrenic concept of the business corporation. Cardozo Law Rev. 1992;14:261-281, at 265.
[5] Millon D. Theories of the corporation. Duke Law J. 1990;1990:201-262, at 201.
[6] Schwartz DE. Defining the corporate objective: section 2.01of the ALI’s Principles. George Washington Law Rev. 1984;52:511-533, at 522.
[7] Berle AA. Corporate powers as powers in trust. Harvard Law Rev. 1931;44:1049-1074, at 1049.
[8] Berle AA. Corporate powers as powers in trust. Harvard Law Rev. 1931;44:1049-1074, at 1074.
[9] Dodd EM. For whom are corporate managers trustees. Harvard Law Rev. 1932;45:1145-1163.
[10] Dodd EM. For whom are corporate managers trustees. Harvard Law Rev. 1932;45:1145-1163, at 1156.
[11] Dodd EM. For whom are corporate managers trustees. Harvard Law Rev. 1932;45:1145-1163, at 1157.
[12] Dodd EM. For whom are corporate managers trustees. Harvard Law Rev. 1932;45:1145-1163, at 1159.
[13] Dodd EM. For whom are corporate managers trustees. Harvard Law Rev. 1932;45:1145-1163, at 1161.
[14] Dodd EM. For whom are corporate managers trustees. Harvard Law Rev. 1932;45:1145-1163, at 1163.
[15] Velasco J. The fundamental rights of the shareholder. U.C. Davis Law Rev. 2006;40:407-467.
[16] Matheson JH, Olson BA. Corporate cooperation, relationship management, and the trialogical imperative for corporate law. Minnesota Law Rev. 1994;78:1443-1491, at 1485.
New Report Shows Car Safety Rules Save Lives
A new report from the National Highway Traffic Safety Administration found the number and rate of traffic fatalities in 2010 fell to the lowest levels since 1949, despite a significant increase in the number of miles Americans drove during the year. As Brian Wolfman noted on the Consumer Law and Policy Blog, “a combination of safety factors – safer vehicles (prompted by government rules), more seat belt use (prompted by government rules, increased enforcement, and public education), and less drunk driving (prompted by government rules, increased enforcement, and an all-out public awareness campaign) – have come together to bring the number of highway traffic deaths, in absolute numbers, to their lowest level since 1949. That’s astounding given the immense increases over the period in the number of drivers and miles driven and the increased speeds at which people drive. A triumph of government regulation that is hard to overstate.”
Corporations and Health Watch 