Chevron Shareholders to Vote on Accident Risk Proposal

When the energy company holds its annual meeting May 30, the sixth shareholder proposal would require the corporation’s board to prepare a report on steps taken to reduce the risk of accidents.

A shareholder proposal to be voted on during the May 30 annual meeting of Chevron Corporation would, if approved, require the company's board of directors to prepare a report within 90 days of the meeting that lists steps Chevron has taken to reduce accidents. The proposal's supporting statement mentions the Deepwater Horizon explosion and spill in 2010, the Tesoro refinery explosion in Anacortes, Wash., that killed seven workers that year, and OSHA's national emphasis program for petroleum refineries.

It also mentions OSHA fines issued to Chevron and potential fines for an oil spill off the Brazilian coast.

"In our opinion, the cumulative effect of petroleum industry accidents, safety violation citations from federal and state authorities, and the public's heightened concern for safety and environmental hazards in the petroleum industry represents a significant threat to our Company's stock price performance," the statement says. "We believe that a report to shareholders on the steps our Company has taken to reduce the risk of accidents will provide transparency and increase investor confidence in our Company."

The board recommends that shareholders vote no on the proposal. Its statement says the board believes the processes and steps "are in place and functioning to provide effective oversight of risk management." The statement adds that the processes include Chevron's Operational Excellence Management System, which meets both ISO 14001 and the Occupational Health and Safety Assessment Series (OHSAS) 18001 standard; periodic Operational Excellence audits; a process safety management approach consistent with the Center for Chemical Process Safety's Guidelines for Risk Based Process Safety; and a focus on safe drilling operations through well design, training, and a structured management of change process.

Another shareholder proposal to be voted on at the meeting requests that at least one independent member of the board be appointed who has a high level of expertise and experience in environmental matters related to hydrocarbon exploration and production. The board likewise opposes this proposal, saying the company's operations are environmentally sound and having a special-purpose director "is not a good corporate governance practice."

The meeting will begin at 8 a.m. PDT in San Ramon, Calif.

Chevron on April 27 reported its first quarter 2012 earnings were $6.5 billion versus $6.2 billion a year earlier. For all of 2011, it posted $26.9 billion in earnings (up 41.4 percent from the prior year) even though net oil and natural gas production dipped slightly.

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