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Threat to Shareholder Value Unocal has faced
and is currently facing various lawsuits due to its
poor environmental and human rights records.
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Unocal is facing lawsuits in both the State of
California and a U.S. federal court for human rights
abuses associated with its Yadana Pipeline project
in Burma. As the Oil and Gas Journal noted
in June 2000, Unocal is "again facing legal
and political pressure. . .for its involvement in
Yadana…it is the suits against Unocal that have
the gravest potential consequences. The class action
suits, originally filed in 1996, seek more than
$1 billion in damages."
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U.S. Federal Judge Ronald Lew concluded that Unocal
executives were aware of human rights violations
associated with the Yadana project, that "The
evidence does suggest that Unocal knew that forced
labor was being utilized and that the Joint Ventures
(Unocal, Total, MOGE and PTT) benefited from the
practice." * A Harvard Business School
report, "The Burma Project" concluded
that "The controversy that emerged around
Yadana quickly became serious enough to put Unocal’s
involvement in the project –and the firm’s reputation-
into serious jeopardy."
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Unocal has had numerous environmental violations,
especially at a number of California locations (e.g.
Guadalupe spill, the largest in California, costing
$43.8 M), Avila Beach spill (killing a town economically-costing
up to $200 million), San Francisco Bay Spill
(costing $83 million with a possible $50 million
more), and Molycorp Pass Mine (failed to report
toxic discharges).
Negligible Cost
- Preparing the requested report to review ways to
link executive compensation to Unocal’s ethical and
social performance and to report the results of this
review to shareholders would be negligible.
Corporations with Executive Compensation
- Numerous other companies, including Kodak, Bristol
Myers Squibb, IBM and Proctor & Gamble have social
responsibility goals and performance reflected in
their compensation formula
Existing Shareholder Support
- Last year, 16.3% of the shareholders voted FOR the
Executive Compensation Resolution, including such
prominent shareholders as CalPERS. CalPERS explained,
"CalPERS believes the company has a poor environmental
and human rights record. The requested report could
help dispel investors’ concerns about financial liabilities
in these areas." (www.calpers.org).
Send a Message to Management
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Protect long term shareholder value.
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Urge Unocal to ensure that the company is serious
about following its own Guiding Principles
and adopted principles by reviewing ways to provide
incentives to executives through their compensation
formula to meet those goals.
We urge you to vote FOR Proposal No. 5
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