The Corporate Boomerang

1Emily McAteer and Simone PulverThe Corporate Boomerang

Research Articles

The Corporate Boomerang:Shareholder Transnational AdvocacyNetworks Targeting Oil Companies inthe Ecuadorian Amazon

Emily McAteer and Simone Pulver*

On April 21, 2004, Pablo Tsere, the 37-year-old chief of the indigenous Shuartribe of Ecuador, stood before the shareholders of Burlington Resources to callon the oil company to halt its exploration efforts in the central and southern re-gions of Ecuadors Amazon rainforest. The indigenous chiefs long toucan-feather headdress and maroon-painted cheeks stood in stark contrast to thedark business suits of the thirty senior executives and other shareholders sur-rounding him at Burlingtons annual shareholder meeting in Houston, Texas.Tsere had traveled from his home in the Pastaza Province of the Amazon to rep-resent the thousands of members of the Kichwa, Shuar, Zpara, Shiwiar andAchuar indigenous nationalities residing in Burlington Resources newly ac-quired oil concessions.

If it comes to the last resort, we will defend our territory, Tsere toldBurlingtons chairman and CEO Bobby Shackouls. Tsere knew all too well thedetrimental impacts of oil extraction. Indigenous communities throughout theAmazon had been devastated by toxins leaked into groundwater and soil, roadscut through vital ecosystems, gas ares releasing contaminants into once-pris-tine tropical air, pipelines running through croplandthe effects of oil compa-nies seeking to extract resources from under the feet of those who had lived inthe Amazon for generations.

* The authors names are in alphabetical order; each author contributed equally to this collabora-tion. This project received support from the Center for Environmental Studies and the Researchat Brown program at Brown University. We would also like to thank all the interviewees whocontributed their time to this project. An earlier version of the paper was presented at the an-nual meetings of the International Studies Association (San Francisco, CA, 2629 March 2008).We are grateful to the editors and three reviewers for helpful comments. Direct correspondenceto Simone Pulver, Watson Institute for International Studies, Brown University, Providence, RI,02912. Email: [email protected].

Global Environmental Politics 9:1, February 2009 2009 by the Massachusetts Institute of Technology

However Tseres message to Burlingtons shareholders did more than justdemonstrate the unyielding commitment of Pastazas indigenous communitiesto resist oil exploration in their region. Tseres presence at the Burlington Re-sources annual shareholder meeting marked a new twist to the decades-oldconict between indigenous communities and oil companies in Ecuadors Ama-zon rainforest. After years of grassroots organizing and local resistance againstoil workers and oil representatives, indigenous communities had nally gainedaccess to a new arena in which to bring their ghtthe corporate boardroom.

This article investigates the dynamics of transnational advocacy networks(TANs) targeting multinational corporations. Extending the framework devel-oped by Keck and Sikkink in Activists Beyond Borders: Advocacy Networks in Inter-national Politics,1 we develop a corporate boomerang model to describe howTANs exert leverage over corporate targets. We use our model to analyze twocase studies of corporate-focused TANsone targeting Burlington Resourcesand the other the Chevron Corporation, both US-based multinational oil com-panies active in Ecuadors Amazon region. The case studies represent a subset ofcorporate-focused TANs, namely ones in which corporate shareholders play acentral role in the network. We call them shareholder transnational advocacy net-works (STANs). The Burlington and Chevron STANs offer an illuminatingcomparison because, broadly writ, the former was successful in motivating cor-porate change, while the latter failed to do so. From 2002 to 2007, both oilcompanies were targets of STAN activities. The goal of the indigenous commu-nities in the Burlington STAN was to prevent the initiation of oil extraction inBlocks 23 and 24 in the southern Ecuadorian Amazon.2 The Chevron STAN wasfocused on the task of pushing the oil company to remediate the environmentaldamage caused by Texacos operations in Ecuador over ten years ago.3 Whileshareholder pressure caused Burlington Resources to change its corporate policyon indigenous rights and postpone on-site drilling activities, Chevron largely ig-nored shareholder demands for dialogue and policy change and has not in-vested in environmental remediation efforts in the northern Amazon, beyond amuch criticized remediation agreement which Texaco signed with the Ecuador-ian government in the mid-1990s. Our explanation for the differential goal at-tainment of the two STANs focuses on the relative cohesiveness of the two net-works and the respective vulnerability of their corporate targets.

Transnational Advocacy Networks and Multinational Corporations:Theorizing the Corporate Boomerang

Historically, organizations and networks engaged in social change advocacy pri-marily targeted their demands at their home states. However, over the past de-

2 The Corporate Boomerang

1. Keck and Sikkink 1998.2. Ecuadors government distributes drilling concessions via bounded territories called blocks.3. Chevron and Texaco merged in 2001, and Chevron assumed responsibility for Texacos activi-

ties in Ecuador.

cades, activists in the environment, labor, human rights, development, and se-curity arenas have broadened their focus of attack to include both non-domestictargets, such as foreign governments and international organizations, and non-state targets, such as multinational corporations.4 This practice by social move-ment advocates, which Schurman calls decentering the state,5 reects keychanges in economic and political arenas. Increases in global trade and capitalows have both internationalized and privatized the forces that shape nationaland local welfare outcomes.6 Simultaneously, corporations are making them-selves targets by publicly claiming advisory and even decision-making roles inglobal governance arenas.7

The literatures on social movements in sociology and interest groups inpolitical science tend to reect the historical primacy of the state as the target ofadvocacy.8 Changes in social movement practice thus present the challenge toscholarship of following practice and decentering the state in the conceptualframeworks used for analyzing social change advocacy. Re-theorizing is aimedat transnationalizing political dynamics9 and at embedding corporations in thepolitical eld of action.10

Our research builds on this body of work and brings corporations to thecenter of an analysis of two transnational environmental/indigenous rights ad-vocacy networks. We extend Keck and Sikkinks research on transnational advo-cacy networks and theorize the particular characteristics of TANs targeted atmultinational corporations. Like state-focused TANs, corporate-focused TANsemerge when local communities, living at points of production or extraction,are blocked in their efforts to inuence the operating practices of a corporatesubsidiary. Appeals to local corporate managers may fail because they are pro-tected by local governments loath to challenge corporate practices and jeopar-dize the economic base of the locality. In addition, these local authorities oftenlack the capacity to regulate or to enforce compliance with regulation.11 In suchsituations, local communities engage in the strategy of creating external linkagesto other groups in order to drive change via top-down pressure on senior execu-tives in the corporations headquarters. The subsidiarys parent corporation be-comes the target of activism. We call this pattern of inuence the corporate boo-merang model. We argue that corporate-focused TANs differ from thosechallenging state targets in 1) the strategies they employ, 2) the determinants ofnetwork effectiveness, and 3) assessments of goal achievement.

Emily McAteer and Simone Pulver 3

4. Evans 2005; Everest 1985; ORourke 2005; Watts 2005; and Wenger and Mockli 2003.5. Schurman 2004, 247.6. Evans 1997; and Korten 1995.7. Carroll 1999; and Jenkins 2005.8. See for example McAdam, et al. 1996; or Wapner 1995 for a discussion.9. Betsill and Corell 2007; Kay 2005; and van der Heijden 2006.

10. Schurman 2004; and Wapner 1995.11. D. ORourke 2003.

Network Strategies

Keck and Sikkink describe four types of pressure mobilized by state-focusedTANs: information politics, symbolic politics, accountability politics, and lev-erage politics.12 Parallel pressure mechanisms exist for corporate targets. Inthe corporate arena, annual reports, toxic release registries, and government-mandated reporting requirements all provide advocacy networks with informa-tion they can use to challenge corporate practices.13 Corporate brands and ad-vertising offer fertile terrain for symbolic politics.14 The recent wave of corporatesocial responsibility (CSR) has generated new opportunities for holding corpo-rations accountable for claims made in CSR reports and policies.15

The most direct form of TAN inuence is leverage politics, dened as theability to call upon powerful actors to affect a situation, where weaker membersof a network are unlikely to have inuence.16 In Keck and Sikkinks analysis lev-erage is exerted by strong states over weaker peers, who depend on the strongstates for military or nancial support. Corporate targets are subject to differentforms of leverage. The parent company-subsidiary structure of transnationalcorporations establishes the parent corporation as a potential actor throughwhich to exert leverage on a subsidiary facility. Corporate-focused TANs targetparent companies through the range of constituencies to which corporationsare accountable. Campaigns targeted at employees, both at the CEO and rank-and-le levels, attempt to effect change through insider strategies.17 Consumerboycotts use the leverage exerted by customers to change corporate behavior.18

Affected communities can drive change and seek recompense through law-suits.19 Finally, the corporate shareholder structure, the empirical focus of ourstudy, creates a unique leverage mechanism over publicly-held corporations. In-vestors owning a set minimum number of shares in a corporation have the legalright to le resolutions regarding operating practices for vote at annual share-holder meetings. Such resolutions have been effective in forcing managementattention to shareholder concerns and in motivating change in corporate prac-tice. To use Keck and Sikkinks language, shareholders are the powerful actorsthat can drive change in corporate behavior in situations where local communi-ties, i.e. the weaker members of a network, feel powerless.

Shareholder advocacy is becoming an increasingly common form of lever-age politics targeted at corporations. In 2007, 359 resolutions relating to socialresponsibility topics were led with publicly-held corporations in the UnitedStates.20 Shareholder advocacy has given rise to a particular instantiation of cor-porate-focused TANs, the shareholder transnational advocacy network. Like


12. Keck and Sikkink 1998.13. Hamilton 1995.14. Garwood 2005.15. Winston 2002.16. Keck and Sikkink 1998, 16.17. Weinberg 1998.18. Micheletti, et al. 2006.19. Spar and la Mure 2003.20. RiskMetrics 2007.

TANs, STANs link local communities to local social movements, domestic andinternational NGOs, parts of international organizations, branches of govern-ment, and the media.21 However, central actors in a STAN are large corporateshareholders, such as pension funds, religious communities, and socially re-sponsible investment rms.22 Corporate-focused TANs will use shareholder tac-tics when they can convince investor groups that the issues addressed by the net-work pose nancial, competitive, reputational, and/or legal risks to the targetedcompany and its shareholders.

The particular network strategies available to STANs, and corporate-focused TANs more broadly, vary depending on the corporate targets homecountry. The STANs analyzed in this article both target corporations headquar-tered in the United States, and thus Securities and Exchange Commission (SEC)rules govern shareholder activism. In other countries, different shareholderregulations apply, thus shaping varying opportunities for leverage politics.23

Likewise, variety in corporate reporting requirements24 and home country legalsystems25 offers divergent opportunities for information, symbolic, and ac-countability politics targeted at parent corporations.

Determinants of Network Effectiveness

The effectiveness of both state and corporate-focused TANs depends on a net-works cohesiveness, the vulnerability of its target, and the network context.26

Network cohesiveness is a function of the total number and size of organizationsin a network, the quality and quantity of interactions between network actors,and the networks ability to accommodate multiple goals and identities. Thevery nature of a TANas an arena of convergence between widely differentactors separated by cultural differences, geographic location, and access toresourcesmakes network cohesiveness a difcult challenge at all network lev-els.27 Network actors must negotiate internal issues of legitimacy and represen-tation and fend off external disruptions.28 For example, a corporate-focusedTAN may include actors inside the corporation, such as sympathetic employeesor shareholders, who must both retain credibility among their corporate peersin order to be convincing in their portrayal of the environmental and social con-cerns of the network and remain at least partially immersed in the other levelsof the activist network, whose voice they claim to bring to the corporate board-room.29 At the local level, corporate-focused TANs may need to defend against


21. Keck and Sikkink 1998, 9.22. Hetherington 1969; Marinetto 1998; and A. ORourke 2003.23. Doh and Guay 2006; and Vogel 1983.24. Sullivan and Gouldson 2007.25. Anderson 2002.26. Keck and Sikkink 1998, 2529.27. Batliwala 2002; Fisher 1997; Hudson 2001; Pieck 2006; and Thayer 2001.28. Brysk and Wise 1995; Conklin and Graham 1997; Garvey and Newell 2004; Rodrigues 2000;

and Sawyer 2004.29. Poncelet 2001.

corporate attempts to exploit community heterogeneity by privileging certainsubgroups through corporate offers of jobs or community development fund-ing as rewards for cooperation.30

A second determinant of TAN effectiveness is the vulnerability of networktargets. For corporate targets, vulnerability is dened by their position as actorsin competitive markets. In the short-term, quarterly earnings and shareholdervalue determine a corporations competitive position, while the long-term sur-vival of corporations is predicated on a protable business strategy and contin-ued license to operate.31 Comparing across corporate targets, relative vulnerabil-ity to TAN pressure is a function of rms operational, organizational, andcultural characteristics, what Schurman terms the industry opportunity struc-tures that confer particular strategic openings and closures on social move-ments and render rms and industries more or less vulnerable to social move-ment actions.32

Operationally, the nature of the good/service produced by a corporationcan be a strong indicator of the companys vulnerability to activist pressure. Aretail presence, high brand value, and elastic product demand make corpora-tions more likely to submit to external pressure.33 Schurman also describeschallenger rms, or companies seeking to unseat industry leader incumbents,as particularly good targets for activists, as such rms may be more willing torisk deviance from industry conventions.34 Finally, companies may also be re-ceptive to activist pressure if physical infrastructure investments are consideredat risk,35 although calls for changes in corporate behavior that would require acompany to retire heavy infrastructure are most likely to be met with strong re-sistance by the corporation.36

At an organizational level, the responsiveness of corporations to TAN de-mands is shaped by corporate governance structures. Executive compensationtied to environmental outcomes, a board of directors oversight committee dedi-cated to social and environmental issues, and independent board members, in-cluding the board chair, can enhance a corporations responsiveness to TAN de-mands.37 Openness to TAN pressure will also depend on a corporations culture,i.e. the explicit and taken-for-granted norms and practices of business behav-ior,38 which can be a product of its geographic location,39 the belief systems of acompanys founder, CEO, and/or largest shareholding family,40 and currenttrends in business management.41 For example, some companies have em-


30. Sawyer 2004.31. Baron 1996.32. Schurman 2004, 248.33. Lawrence 2002; and Utting 2002.34. Schurman 2004.35. Utting 2002.36. Schurman 2004; and Spar and la Mure 2003.37. Cogan 2006; and Utting and Ives 2006.38. Schurman 2004, 250.39. Hampden-Turner and Trompenaars 1993.40. Moreton 2006.41. Kunda 1992.

braced ideas of stakeholder dialogue, while others eschew partnerships and col-laboration.42

A nal component of target vulnerability relates to the parent corpora-tions home country. As discussed earlier, a corporations home country shapesthe strategies available to corporate-focused TANs. Home country also affectstarget vulnerability. Governments vary in the relative privileging of businessvoices in politics and in the patterns of interaction between corporations andregulators, what Vogel terms national styles of regulation.43 For example, the in-timate state-corporate relationships of Japanese logging companies are arguedto protect them from TAN campaigns.44 More generally, transnational corpora-tions headquartered in developing countries make less vulnerable targets thanthose based in Europe or North America, due to a greater emphasis on corpo-rate accountability in the latter regions.45

The third and nal determinant of TAN effectiveness is the network context.Contextual factors, external to the TAN and its target, may vary by historical pe-riod and by issue area.46 Specic to corporate-focused TANs, the rise of corpo-rate social responsibility as an accepted element of business practice representsa change over time.47 Likewise, issue differences affect TAN success. Activism fo-cused on labor issues must overcome a zero-sum perception of competition be-tween national labor communities, while environmental TANs can mobilize thetransboundary aspects of international environmental problems.48

Goal Achievement

The preceding discussion of network strategies and determinants of network ef-fectiveness necessarily raises the question: how does one measure TAN goalachievement? We identify three levels of goal achievement with regard to corpo-rate-focused TANs: 1) getting an issue onto the corporate agenda; 2) motivatingcorporate policy change; and 3) changing corporate procedures and practices.49

Goal achievement in agenda-setting can be measured via internal and ex-ternal criteria, e.g. the initiation of internal dialogues or the discussion of issuesin corporate annual reports or on a company website. Policy changes initiatedby executive ofcers or other members of a companys senior managementmark a second level of progress in a networks efforts to achieve its goals. Suchpolicy changes may come in the form of business guidelines for operations orissue-specic policy statements. Finally, while dialogue and policy change showa companys acknowledgement of TAN pressure, the degree to which a policygenerated at headquarters is translated into practical changes at sites of opera-


42. Pulver 2007.43. Vogel 1986.44. Dauvergne 1997.45. Wehrmeyer and Mulugetta 1999.46. Keck and Sikkink 1998, 27.47. Banerjee 2008.48. Evans 2005.49. Keck and Sikkink 1998, 25, 201.

tion is often questionable. A TAN may succeed in driving institutional changewithout bringing about improvements in environmental quality.50 Therefore,the third tier of goal achievement for corporate-focused TANs is to bring aboutchanges in corporate on-site procedures and practices. Procedural change mayinclude changes in the manner by which stakeholder engagement is managed.51

Changes in practices may include the use of best available technology, compen-sation for environmental damages, abandoning a proposed project, or even ces-sation of the contested activity.

In the particular case of STANs, shareholder resolutions aim at all threelevels of goal achievement. Whether they pass or not, shareholder resolutionsare generally effective in forcing issues onto the corporate agenda. Annual gen-eral meetings (AGMs) offer a forum for airing shareholder concerns. Consistentlings of resolutions can serve to keep an issue on the corporate agenda for mul-tiple years and can spur behind-the-scenes dialogue between shareholder pro-ponents and company executives. Shareholder resolutions can also drivechanges in policies and practices, the second and third tiers of goal achieve-ment.

In the United States, a submitted shareholder resolution is subject to oneof three outcomes: the company may request that the SEC approve omission ofthe resolution from the ballot on the basis of one of thirteen establishedgrounds; the shareholders may choose to withdraw the resolution after receiv-ing adequate response from the company; or, lastly, the resolution may go to avote at the companys AGM. SEC grounds for omission range from an assess-ment that the concern highlighted in the resolution is not signicantly relatedto the companys business to an evaluation that the company has already sub-stantially implemented the proposal. Shareholder withdrawals are generally re-garded as the most successful outcome for a resolution, as they imply that thecompany has responded satisfactorily to shareholder demands. Shareholdersmay withdraw resolutions if the company takes measures such as opting to en-gage in dialogue with shareholders and other stakeholders or releasing an ac-ceptable statement or policy.52

Resolutions that are not omitted or withdrawn proceed to a vote at theAGM, where lers are permitted to present their resolutions before the generalbody of shareholders. Because a corporations management and board mem-bers typically own a large number of shares in the company, and large institu-tional investors often vote with management, environmental and social propos-als typically only receive approximately 10 percent of shareholder votes. Thushigher votesin the range of 20 to 30 percentare regarded as signicantachievements, and enough support to spur a response from senior manage-ment. In addition, voting results determine whether or not a resolution can beled again the following year; a resolution must receive 3 percent of the vote in


50. Ktting 2000.51. Jones 1999; and Lawrence 2002.52. Hetherington 1969; Marinetto 1998; and A. ORourke 2003.

its rst year, 6 percent of the vote in the second year, and 10 percent of the votein its third year in order to return to the ballot the following year.53

In the rest of this article, we apply the corporate boomerang model to ex-plain the relative achievements of two corporate-focused TANs that both usedshareholder mechanisms to target US-based companies implicated in the strug-gle over oil in the Ecuadorian Amazon. We begin by providing a brief history ofoil extraction in Ecuador, to introduce readers to the context in which the twonetworks operated.54 We then describe the organization, activities and out-comes of the Burlington and Chevron STANs. Finally, we analyze the determi-nants of the relative effectiveness of the two networks.

Network Context: The Struggle over Oil in the Ecuadorian Amazon

Oil extraction and exploration in Ecuador date back to the 1960s, when the Ec-uadorian state granted its rst oil concession. The rst commercial oil reserveswere discovered in 1967 by Texaco, the primary oil multinational active in Ecua-dor. Texacos operations with its local partner Petroecuador, Ecuadors state-runoil company, were carried out from the initiation of its contract in 1964 to thecontracts expiration in 1992. Activities initally centered on the northern Ama-zon region surrounding Lago Agrio and then spread throughout the northernEcuadorian Amazon provinces of Napo, Orellana and Sucumbos. At the con-clusion of its contract, Texaco turned over its operations to Petrocecuador.55

Thirty years of oil activity had a profound effect on the indigenous com-munities in the northern Amazon. It is estimated that Texaco constructed 350wells and 1000 open-air waste pits, discharging eighteen billion gallons of toxicwastewater into the Amazons surface and subsurface waters and soils during itsoperations in Ecuador.56 Epidemiological studies have shown high rates of can-cer, birth defects, and spontaneous abortions among populations living in areasaffected by Texacos operations.57 Direct dispossesion of land for oil infrastruc-ture and the inux of settlers using Texacos newly constructed roads forcedmuch of the indigenous population to migrate from ancestral territories and re-locate within ever-diminishing indigenous territories. Moreover, the combina-tion of environmental pollution and widespread loss of land deprived many in-digenous peoples of subsistence access to the Amazon and forced them to enterinto the cash economy to purchase food and other items.58

Although Texaco no longer operates in Ecuador, the legacy of its oil ac-tivities in the region remains a potent force, relevant to both the Chevronand Burlington STANs. Chevron directly assumed Texacos Ecuadorian legacywhen the two companies merged in 2001. A part of this legacy is the landmark


53. A. ORourke 2003.54. Those interested in a detailed account of oil in Ecuador are directed to Sawyers 2004 book,

Crude Chronicles: Indigenous Politics, Multinational Oil, and Neoliberalism in Ecuador.55. Kimerling 2006.56. Frente 2006.57. Donziger 2004.58. Kimerling 2006.

Aguinda v. Texaco class-action lawsuit led in 1993. The Ecuadorian Amazon res-idents acting as plaintiffs in the case are seeking remediation and compensationfor the environmental and social damage caused by Texacos thirty years of op-erations, and Chevron is now the primary target of their demands. Texacos leg-acy was also a key feature in the social and political context of Burlingtons op-erations. Although Burlingtons concessions were located in Blocks 23 and 24 ofthe southern Ecuadorian Amazon and were not included in state oil concessionnegotiations until 1995, three years after Texaco withdrew from Ecuador, the in-digenous communities in the southern Amazon learned the lessons of the in-digenous experiences in the north.

The history of oil activities in Ecuador provide the context for the two cor-porate-focused TANs under study. Years of oil extraction, an embedded racial hi-erarchy, a consistent lack of indigenous representation in the political sphere,intimate and dependent relationships between the state and multinational oilcorporations, state vulnerability to the demands of multilateral lending institu-tions, and an infamously volatile government suggest a forbidding environmentfor grassroots advocacy.59 However, political openings at the international level,including the global rise in concern for indigenous peoples rights60 and the up-surge of corporate interest in social responsibility,61 offered room for maneuver.Our analysis focuses on the recent history of the struggle over oil in Ecuador,when shareholder groups became active in the TANs focused on oil issues in theEcuadorian Amazon. Between 2002 and 2007, shareholder advocacy on behalfof communities in the northern and southern Ecuadorian Amazon was a keystrategy of both the Burlington and Chevron TANs.

The Burlington and Chevron STANs: Organization, Strategies, andGoal Achievement

Building the Networks

The Burlington and Chevron networks are complex structures with actors oper-ating at four levels: local nodes (including indigenous and settler communi-ties), domestic actors (Quito-based NGOs), international NGOs, and corporateshareholders (Figures 1 and 2). In the Burlington network, local nodes includedcommunities affected by Burlingtons activities, grouped into ve distinct indig-enous nationalities: the Achuar, Shuar, Zpara, Shiwiar, and Kichwa. Each na-tionality was organized into a three-tiered governance structure, with communi-ties representing the most local level, then associationsa collection of roughlyve communitiesand nally, the indigenous nationalitys federation.62 Theactive federations in the network included the Nacionalidad de Achuar del


59. Arteta and Hurtado 2005; Cerretti 2006; Gerlach 2003; and Sawyer 2004.60. Martin 2003; and Williams 1990.61. Finger 1993; Utting and Ives 2006; and Weissbrodt and Kruger 2003.62. Authors interview with NGO leader, Ecuador, 8 January 2007.

Ecuador (NAE), the Federacin Interprovincial de Centros Shuar (FICSH), theFederacin Independiente del Pueblo Shuar del Ecuador (FIPSE), the Nacion-alidad Shiwiar del Ecuador (NASHIE), the Nacionalidad Zpara de la AmazoniaEcuatoriana (NAZAE), and the Tayjasaruta federation of the Sarayaku. Afliatedwith the Sarayaku federation was the Organizacin de Pueblos Indgenas dePastaza (OPIP), an organization loosely joining the Kichwa communities of thesouthern Amazon. Together, the FIPSE, FICSH, and NAE federations and theSarayaku communities represented more than 80 percent of the communities inthe Burlington-owned Blocks 23 and 24.63 FIPSE, FICSH, and NAE united toform the Comit Interfederacional, collaborating with the Sarayaku to offer mu-tual support and coordinate activities related to territorial defense and collectiverights.64

The Burlington STANs local nodes were linked to several Quito-basedNGOs, the most prominent of which was Fundacin Pachamama, the Ecuador-ian arm of the San Fransisco-based Pachamama Alliance. Since its founding in1997, Pachamama played a pivotal role in assisting the indigenous federationsof Pastaza and Morona Santiago, working most closely with the Achuar com-munities but recently extending its work to include FIPSE, FICSH, Shiwiar, andSarayaku.65 Other key Quito NGOs included the Centro de Derechos Econ-micos y Sociales (CDES), the Ecuadorian branch of New Yorks Center for Eco-nomic and Social Rights, the Ecuadorian branch of the Danish NGO Ibis, andAccin Ecolgica, an Ecuadorian environmental organization and member ofthe transnational Oilwatch network.

At the international level, Amazon Watch was the key player among agroup of four primary international NGOs offering nancial and other supportto indigenous initiatives in the Burlington STAN. Amazon Watch also estab-lished the link to shareholders, initiating conversations with Boston CommonAsset Management, a Boston-based socially responsible investment rm. StevenHeim, Boston Commons Director of Social Research, learned of an AmazonWatch-organized presentation in New York City by indigenous leaders from Ec-uador on the oil conicts of the Amazon. In September 2003, Amazon Watchcontacted Boston Common to elicit interest in ling a shareholder resolutionwith Burlington Resources. Boston Commonon behalf of Brethren BenetTrustwas the only rm with shares in Burlington able to respond quicklyenough to prepare the resolution before the November ling deadline. Withthat ling, Boston Common became the key shareholder group member of theBurlington STAN.

As with the Burlington STAN, indigenous communities were the ChevronSTANs raison dtre. Texacos operations, and its widespread effects, spannedover the territory of ve indigenous nationalities spread throughout the water-shed of the Napo River: the Cofn, Siona, Secoya, Huaorani, and Kichwa, the


63. Achuar-Shuar Defense Council 2004. The Achuar-Shuar Defense Council is known in Spanishas the Comit Interfederacional.

64. Authors interview with NAE leader, Ecuador, 11 January 2007.65. Authors interview with NGO staff member, Ecuador, 3 January 2007.

most populous indigenous group affected by Texacos Ecuador activities. As inthe south, each indigenous nationality was represented by a federation, includ-ing the Federacin Indigena de la Nacionalidad Cofn del Ecuador (FEINCE),the Organizacin Indigena Secoya del Ecuador (OISE), the Organizacin de laNacionalidad Indgena Siona del Ecuador (ONISE), the Organizaciones de laNacionalidad Huaorani de la Amazona Ecuatoriana (ONHAE), and twoKichwa federations (FCUNAE and FOKISE). In contrast to the Burlington STAN,the Chevron STANs local nodes also included colonos, i.e. non-indigenous set-


Figure 1Burlington STAN

Note: Figure is not intended to represent all STAN participants and connections, butthose most relevant to the empirical analysis. Based on 20062007 data.

tlers, who began moving into the region upon the discovery of oil. Colono com-munities were primarily represented through the Frente de la Defensa de laAmazona (the Amazon Defense Front, called the Frente), which was createdin 1994 as an organization to spearhead local participation and administrationof monies related to the Aguinda lawsuit. Linked to the Frente was the Asambleade Afectados por Texaco (the Assembly of People Affected by Texaco),66 a struc-


66. Assembly of People Affected by Texaco.

Figure 2Chevron STAN

Note: Figure is not intended to represent all STAN participants and connections, butthose most relevant to the empirical analysis. Based on 20062006 data.

ture created to represent all affected people and make joint decisions regardingthe Texaco case.67 The Asambleas Executive Council included representativesfrom colono communities and the Secoya, Cofn, Siona, and Huaorani federa-tions, although the indigenous federations were only afliates and not mem-bers of the Frente.68

Accin Ecolgica was the key domestic NGO in the Chevron STAN. Theorganization had been involved in oil issues in the area for decades and had ateam devoted entirely to oil issues in the northern Amazon. In addition, CDESand Pachamama staff members reported some involvement with the ChevronSTAN. CDES primarily offered legal advice regarding the Texaco lawsuit, whilePachamama supported capacity-building initiatives in indigenous communi-ties.

Informants listed Amazon Watch, Amnesty International, and Oxfam In-ternational as the key international NGOs involved in the Chevron STAN. Ama-zon Watch once again acted as the primary bridge between local/national actorsin Ecuador and US shareholders. An Amazon Watch member approached Trill-ium Asset Management, the oldest and largest independent socially responsibleinvestment rm in the United States, at a 2002 corporate accountability confer-ence. Having collaborating with Amnesty International on a resolution regard-ing Chevrons human rights practices in 2003, Trillium led its rst resolutionexplicitly related to Texacos legacy in Ecuador for Chevrons 2004 ballot.

STAN Strategies

The Burlington and Chevron STANs both engaged in a wide ranging portfolio ofresistance strategies. For example, in the Burlington STAN, Accin Ecolgicaplayed a key role in facilitating North-South exchanges through Toxitours,in which indigenous representatives from the South were brought to visit oil-devastated areas of the northern Amazon to experience rst-hand the conse-quences of oil development.69 For the Chevron STAN, the legal case againstTexaco/Chevron was the STANs core strategy for redress for affected communi-ties in the northern Amazon.

Both STANs also engaged in shareholder strategies. Between 2002 and2007, the Burlington STAN led four resolutions with Burlington Resources viaBoston Common Asset Management. The resolutions requested that the com-pany adopt an indigenous rights policy (led in November 2003) and publish asustainability report (led in November 2004 and 2005) and an indigenousrights report (led in November 2005). In support of these resolutions, severalindigenous delegates from the Shuar and Achuar federations and the Sarayakucommunity presented their positions to the shareholders at AGMs in April 2004and again in May 2006. In addition, in March 2005, shareholders went on a


67. Authors interview with Frente staff member, Ecuador, 10 January 2007.68. Kimerling 2006.69. Authors interview with NGO staff member, Ecuador, 9 January 2007.

fact-nding mission to Ecuador. The mission included visits to four indige-nous communities of the Pastaza/Morona Santiago provinces, a meeting withfederation leaders of the region, meetings with Ecuadorian authorities, and atrip to witness the oil-devastated areas of the northern Amazon. Its goal was topromote increased understanding and coordination between network membersand to familiarize shareholders with the governance structures of the indige-nous communities in Burlingtons concessions.

Chevron STAN activists engaged in shareholder strategies primarily viaTrillium Asset Management. In resolutions led in 2003 and 2004, the STANasked for a corporate report on initiatives taken to address the environmentaland health concerns of communities in Texaco-affected areas. The 2005 resolu-tion called on the company to report expenditures related to the Texaco lawsuit.In 2006 and 2007 shareholders led Ecuador-relevant resolutions requestingthat Chevron report on the policies and procedures that guide its assessment ofthe adequacy of host country laws and regulations. The Chevron STAN also fa-cilitated direct contact between shareholders and indigenous communities inEcuador. In March 2004, Trillium and other resolution co-lers participated in adelegation to Ecuador, meeting with Ecuadorian authorities, members of Con-gress, and some of the indigenous and settler communities located in Texaco-affected regions of the northern Amazon.

STAN Goal Achievement

In term of goal achievement, Burlington STAN activists achieved some success,while STAN tactics had little effect on Chevron (see Table 1). The BurlingtonSTANs shareholder strategies were most effective in spurring the company to di-alogue and in forcing policy change. In 2004, following Shuar president PabloTseres presentation at Burlingtons AGM, company representatives requested ahalf hour meeting with Tsere, Amazon Watch, and several shareholders to dis-cuss indigenous rights in its Ecuadorian concessions. Similar meetings wereheld again in October 2004 and March 2005 with senior Burlington staff, in-cluding the Vice-President of Investor Relations and Corporate Communica-tion, the Director of Environmental Health and Safety, and the General Coun-sel.70 Although this dialogue often frustrated shareholder advocates, there was asense of positive progress over time.

Shareholder resolutions were also successful in motivating policy change.Of the four resolutions led with Burlington Resources, three were withdrawn;the fourth did not proceed to a vote due to the timing of ConocoPhillips acqui-sition of Burlington. The rst resolution was withdrawn after Burlington pub-lished a one-page indigenous rights policy, directly addressing concerns relatedto its consultation process with indigenous communities.71 Burlington also


70. Authors interview with ler of Burlington resolution, Boston,14 February 2007.71. Burlington 2006. It should be noted, however, that this policy applies only to those concessions

for which Burlington is the designated operator, thereby excluding Block 23, which it shareswith the Argentine Compaia General de Combustibles (CGC).

Table

1Network

char

acteristics,

stra

tegies

and

goal

achieve

men

t

NET

WO

RK

CH

ARACTE

RIS

TICS

AN

DST

RATE

GIE

S

Bur

lingt

onST

AN

Che

vron

STAN

Reg

ion

Cen

tral/S

outh

ern

Am

azon

Norther

nAm

azon

Indi

geno

usgr

oups

Ach

uar

,Shuar

,Zp

ara,

Shiw

iar,

Kichwa

Cof

n,S

ecoya

,Sio

na,

Kichwa,

Huao

rani

Shar

eholde

rre

solu

tion

s(A

GM

year

:Req

uest)

20

04:I

ndigen

ousrigh

tspolicy

20

05:S

ustainab

ilityre

port

20

06:S

ustainab

ilityre

port;In

dige-

nousrigh

tsre

port

20

04:R

eport

on

man

agem

entin

itiative

sre

enviro

nm

enta

lconta

min

atio

nin

Ecuad

or

20

05:R

eport

on

man

agem

entin

itiative

sre

enviro

nm

enta

lconta

min

atio

nin

Ecuad

or

20

06:D

isclose

costsre

lated

toEc

uad

orlitiga

tion

20

07:R

eport

on

thepolicies

and

pro

cedure

sth

atgu

ideChev

rons

asse

ss-

men

tofth

ead

equac

yofhost

countrylawsan

dre

gulations

NET

WO

RK

GO

AL

ACH

IEVEM

ENT

Bur

lingt

onST

AN

Che

vron

STAN

Res

ults

ofsh

areh

olde

rre

solu

tion

s

Firstth

reere

solu

tionswithdra

wn

Fo

uth

reso

lution

delay

edbyac

quisitio

nofBurlin

gton

Res

ources

byConoco

Phillips

Res

olu

tionsrstch

allenge

d

Res

olu

tionsth

envo

ted

on

atAGM

s;all

rece

ived

less

than

10%

ofvo

teAge

nda

settin

g

Dialo

guewith

senio

rstaf

f

Som

efrustra

tion

butove

rall

pro

gres

sin

dialo

gue

Attem

ptto

quas

hissu

eat

AGM

s

Dialo

gueonly

with

non-sen

iorstaf

fPo

licych

ange

20

04:I

ndigen

ousCom

munitiesRights

Policy

CEO

pledge

tonotpro

ceed

into

oil

conce

ssio

nsbyfo

rce

20

06:C

hev

ron

Hum

anRights

Stat

emen

t

No

Ecuad

or-sp

eci

cpolicies

orstat

emen

tsCha

ngein

proc

edur

esan

dpr

actice

s

Pledge

tore

spec

tgo

vern

ance

pro

cesses

ofin

digen

ousco

mm

unities

Pre

vented

initiation

ofoil

activities

None

agreed to provide the details of its consultation processes, leading the lers towithdraw the second and third resolutions. Other policy successes identied bythe shareholders included a public statement by Burlington CEO Bobby Shack-ouls and a commitment in the 2004 annual report that the company would notproceed into its Ecuadorian oil concessions by force. While shareholders mostlyagreed that the withdrawal conditions of the rst three resolutions representedsome progress toward achieving certain policy goals established by the STAN,there were caveats. For example, the indigenous rights policy represented mixedresults. Some saw it as a rst step in getting Burlington to pay at least some at-tention to shareholders concerns.72 Others described the policy as weak73

and criticized it for failing to address the real issues.74 The latters rationale forwithdrawing the shareholder resolution was not satisfaction with the policy butthe desire to avoid a precedent with the SEC that weak policies constitute com-pliance for policy requests.

Beyond dialogue and policy, change in on-site procedures and practicesis the key metric by which to evaluate STAN goal achievement. Members ofthe Burlington STAN pointed to the lack of any oil development in Blocks 23and 24prevented through a variety of network strategiesas the networksgreatest success.75 Shareholders attributed the recent calm in Ecuadors oilconicts in the southern Amazon to shareholder pressure on the company, al-though acknowledging the disconnect between the policies issued by Burling-tons headquarters and its practices on the ground.76 Informants in Ecuadorwere less ready to attribute any changes in company practice to shareholderactivity.77

While the Burlington case represents a qualied success, the comparisonacross cases underscores the lack of progress by the Chevron STAN. At Chevron,all resolutions were rst challenged with the SEC and then proceeded to a voteat the companys AGM. Each resolution received under ten percent of share-holders votes. When intepreting the AGM results, shareholder advocates ex-plained that the votes were initially regarded as successes, as the issue was rela-tively new to shareholders, but that the continued low vote in the third year wasdisappointing, because the votes just plateaued, instead of going up.78 The2005 resolution, voted on in 2006, did not receive enough votes to be includedon the next years ballot, and shareholders were forced to submit a new resolu-tion with different content.

Chevron also responded to shareholder-initiated dialogue by trying to re-


72. Authors interview with resolution ler, Boston,14 February 2007.73. Authors interview with resolution ler, Boston, 14 February 2007.74. Authors interview with shareholder proxy at Burlington Resources annual meeting, Quito, 8

January 2007.75. Authors interview with Sarayaku leader, Ecuador, 11 January 2007.76. Authors interview with shareholder proxy at Burlington Resources annual meeting, Quito, 8

January 2007.77. Authors interview with NGO staff member, Ecuador, 4 January 2007.78. Authors interview with ler of Burlington Resolution, Boston, 14 February 2007.

strict shareholder input. The companys CEO refused to answer questions askedduring the annual meeting, repeatedly asserting that he had already spoken onthe issue and did not intend to continue dialogue.79 Chevron executives limitedthe number of questions shareholders were allowed to ask on the issue at theAGM. Shareholders even reported that indigenous leaders and NGO memberswere cut off from speaking at the shareholder meetings.80 Chevron sharehold-ers consistently accused the company of trying to contain [the issue] at lowerlevels, failing to provide senior staff in dialogues between the company andshareholder advocates.81

Finally, shareholders revealed great frustration in trying to motivatechanges in the companys policies and practices. While Chevron did release aHuman Rights Statement in 2006, the statement was primarily prompted bystakeholder pressure on a separate issue and did not directly address the issuessurrounding Texacos Ecuador operations. Chevron did not even frame the Ec-uador issue as one of corporate accountability, maintaining a separation be-tween its corporate social responsibility division and its litigation team. Whenasked to comment on the Ecuador situation, CSR representatives claimed that itwas a legal matter that did not fall within their purview.82 Not surprisingly,shareholders also reported little progress in changing on-site procedures andpractices, i.e. forcing remediation of environmental damages in Texaco-affectedregions of the Amazon beyond the 1990 agreement. One shareholder com-mented that she felt like [Chevron] isnt taking it seriously at all.83

Explaining STAN Goal Achievement

Our explanation for the divergent goal achievement of the Burlington andChevron STANs focuses on differences in the cohesiveness of the two networksand the relative vulnerabilities of the two oil company targets. By comparingtwo shareholder transnational advocacy networks both focused on indigenouscommunities in Ecuadorian Amazonia, both targeted at US-based multina-tional oil corporations, and both active between 2002 and 2007, we have lim-ited some of the variation between the two cases. However, we recognize thatthe remaining differences, including divergences in the history of oil activity innorthern and southern Ecuador and in the aims of the two STANs, preclude acausal analysis identifying one key difference as the source of variation in thetwo STANs goal achievement. Rather our goal is to illustrate the elements of thecorporate boomerang model, showcasing the interaction between contextualfactors, network characteristics, and target characteristics.


79. Authors telephone interview with ler of Chevron resolution, 28 February 2007.80. Authors telephone interview with shareholder proxy, 2 March 2007.81. Authors telephone interview with ler of Chevron resolution, 28 February 2007.82. Authors telephone interview with shareholder proxy, 2 March 2007.83. Authors interview with ler of Chevron resolution, Boston, 22 March 2007.

Network Cohesiveness

Network cohesivenessassessed as communication, coordination, shared iden-tity, and goal alignmentreects both dynamics within and between networknodes. The domestic components of the Burlington STAN exhibited greater co-hesiveness than those of the Chevron STAN. In contrast, the Chevron STAN wasmore successful in facilitating contact between shareholder and local nodes.

Local nodes: All interviewed members of the southern Ecuador Amazonianindigenous groups in the Burlington network listed communication and coor-dination between indigenous communities and federations as a key resistancestrategy and a critical element of network strength. The different indigenous fed-erations interacted by radio, phone, email, and in-person meetings. Within fed-erations, representativesbased in cities on the outskirts of the Amazonoftentraveled into the selva to visit communities or contacted remote communities byradio. Communities also met through annual community conventions and for-mal meetings of the Comit Interfederacional, at which over 500 participantsdiscussed the Comits position on oil extraction and established action plansto coordinate resistance strategies.84

Communication allowed the ve nationalities of the southern Amazon toovercome cultural and regional differences and unite in their resistance againstoil. Leaders emphasized that the indigenous federations were all amigos, com-paeros with similar agendas. They were unied by the need to protect [their]way of living in the selva, which included traditional land use managementand other cultural practices that were heavily dependent on rainforest resourcesfor the provision of food, water, medicines, and other necessities.85

It is important to note that relations among local actors in the southernAmazon were not seamless. A study conducted in 2004 identied three smallerfederations and several Kichwa communities in the Pastaza and Morona Santi-ago provinces with receptive positions to oil development, challenging the ma-jority point of view.86 When asked to identify the greatest challenges to the localnodes of the Burlington STAN, nearly every informant responded that Burling-tons community relations program, which was widely viewed as an attempt bythe company to seek out individuals and communities receptive to oil develop-ment, and the existence of ghost federations, i.e. indigenous federations withlimited territorial claims but comprised of individuals willing to negotiate withthe company, had provoked divisions within the indigenous communities andfederations. Nevertheless, as we demonstrate, intra-local node tensions were lessdetrimental to cohesiveness in the Burlington STAN than in the Chevron STAN.

In the northern regions of the Ecuadorian Amazon, local nodes of theChevron STAN struggled with communication, coordination, shared identity,


84. Comit 2004.85. Authors interview with Sarayaku leader, Ecuador, 11 January 2007.86. Achuar-Shuar Defense Council 2004.

and goal alignment. In the north, the Frentes Assembly of Affected Peoplesbrought together indigenous and colono representatives every two months toanalyze the [Texaco] case and make resolutions, dene strategies and also re-ceive information from leaders about how the case is advancing.87 Coordina-tion through the Frente created problems, in part due to pre-existing tension be-tween indigenous communities and colonos relating to the Texaco lawsuit.88

Some indigenous groups felt excludedthe Aguinda lawsuit did not name asplaintiffs members from the Cofn, Huaorani, and Siona indigenous groups, al-though the group of plaintiffs was intended to represent the entire settler andindigenous population living in the affected area. Others were worried aboutthe equitable disbursal of funds related to the lawsuit.89 Others still regarded thenon-indigenous residents as part of the problem and were wary of collabora-tion with a colono organization. Finally, unlike in the Burlington network whereindigenous leaders represented indigenous communities to other networkmembers, indigenous groups in the northern Amazon were mainly representedto other STAN members through the non-indigenous Frente. While indigenouscommunities coordinated among themselves to some degree on non-oil issuesthrough regional and national organizations, interviewees stated that inter-indigenous communication focused specically on the Chevron issue was verylimited among the communities of the northern Amazon. Moreover, the Frenteforum did little to bridge geographic and cultural separations between variousindigenous nationalities or to develop a strong, unied identity among indige-nous communities.90

Finally, indigenous communities in the Chevron STAN also lacked theshared goal of preserving a traditional lifestyle as the basis for a unied front ofresistance against oil development. Many indigenous communities in the northno longer lived according a lifestyle highly dependent on natural resources. Asone informant observed:

[The Cofn] still have culture. The women still wear their traditional dresses. . . but they cant ght to protect their traditional lifestyle, because they cantlive that lifestyle. They cant shthey have to buy canned tuna, and thenthey need cash. So many of them dont have that traditional lifestyle, thatdependency on the forest, to protect in the same way that they do in thesouth.91

Because the impacts of oil were relatively unknown when Texaco rst beganproduction near Lago Agrio, indigenous communities did not feel pressure to


87. Authors interview with Frente leader, Ecuador, 10 January 2007.88. Authors interview with lawyer of a Texaco lawsuit, New York, 3 March 2007.89. Kimerling 2006.90. It should be noted that this negative view of the Frente was not uniform. Some NGO staff

stressed that the Frente presented the opportunity for indigenous communities to be afliatedwith and represented by an organization with far greater resources than the individual indige-nous federations.

91. Authors telephone interview with NGO staff member, 2 March 2007.

develop a strong, unied resistance against oil development.92 Thirty years later,displacement and devastation in the region has further distanced communitiesfrom one another, although efforts are currently underway to encourage moredirect communication between indigenous communities in Texaco-affectedareas.

Connecting to other network nodes: For both the Burlington and ChevronSTANs, communication, coordination, and goal alignment among the upperthree network nodes, i.e. domestic NGOs, international NGOs and sharehold-ers, generated few problems. These network members all described frequentcontact as a key network attribute and strategy. However, divergent tensionsarose in the interactions between local nodes and upper network levels.

The Burlington STAN beneted from close collaboration between indige-nous nodes and Quito-based NGOs. They communicated often, including dailytelephone/fax communication and frequent eld visits. As a member of Pacha-mama explained, We are always in contact [with southern indigenous federa-tions]. Always. Always. Always.93 Quito-based NGOs also emphasized that theydid not have agendas beyond those established by the indigenous communities;the role of the NGOs, according to informants, was to assist indigenous groupsin implementing the projects and strategies initiated by their communities andfederations.

In contrast, staff members of Accin Ecolgica, the primary EcuadorianNGO participating in the Chevron network, acknowledged that the NGOsgoals did not consistently overlap with either local indigenous communities orthe non-indigenous Frente. One staff member explained that We are a group ofenvironmentalists that have our own policy position and our own voice, notlike other organizations, who support communities in whatever they want to do. . . We support only the indigenous organizations that share our positionagainst oil.94 Members of Accin Ecolgica and the Frente also both acknowl-edged that while the two organizations had closely coordinated their work forseveral years in the mid-1990s, signicant tensions between the two groupsdue in part to differing ideologieshad recently dramatically limited the extentof their collaboration.

In terms of coordination between the local and shareholder nodes of thenetwork, the Chevron STAN outperformed the Burlington STAN. Burlingtonshareholders, as company owners interested in nancial success, did not sharetheir indigenous partners unyielding opposition to oil extraction in Ecuador.When asked to state their ideal outcomes for network activities, all indigenousinformants replied that Burlington Resources must cancel its contract for Blocks23 and 24. Burlington shareholders were more cautious, explaining that theirgoal was not to block all drillingthus depriving the company of its fundamen-


92. Authors interview with NGO staff member, Ecuador, 8 January 2007.93. Authors interview with NGO staff member, Ecuador, 3 January 2007.94. Authors interview with NGO staff member, Ecuador, 9 January 2007.

tal source of revenuebut to ensure that activities continued accordingto proper procedures, was based on consultation, and respected indigenousrights.95 The direct contact between shareholders and indigenous communitiesalso created tension in the Burlington STAN. The fact-nding shareholder del-egation was received with varying degrees of warinessand, in some cases,hostilityin the different communities visited in the Southern region. Stafffrom Amazon Watch found it difcult to explain the abstract concept of share-holder activism to local community members and even to some Quito-basedNGOs. Members of the delegation were frequently misidentied as companyrepresentatives seeking to negotiate side deals.

In contrast, shareholders in the Chevron STAN rmly endorsed the localindigenous and colono communities demands for compensation. Shareholderdelegates visiting a Cofn community described community members as verycordial and welcoming and willing to tell their story.96 Chevron sharehold-ers also expressed that their personal experiences on the fact-nding mission al-lowed them to better understand the issues for which they were advocatingparticularly the profundity of the physical impacts of oil development.97 In thewords of one ler of a Chevron resolution, When I was there and I saw it, I wasstruck by realizing that . . . weve got to preserve their way of life.98

Target Vulnerability

Network dynamics offer a partial explanation for the variable goal achievementof the Burlington and Chevron STANs. Target characteristics also shaped Burl-ington and Chevrons relative vulnerabilities to network pressures. The formerwas more responsive to STAN advocacy than the latter due to operational, orga-nizational, and cultural differences between the companies.

Operational characteristics: Operationally, the two rms differed in size,scope of operations, and retail presence. Chevron was the worlds fth largestpublicly traded oil company, with annual revenues of US$142.9 billion in2004. The company participated in all aspects of the oil and natural gas indus-try, including selling gasoline through retail outlets.99 Before ConocoPhillipsacquisition of Burlington in 2006, Burlingtons core focus was natural gas pro-duction in North America, and in 2004, its annual revenues totaled US$5.6 bil-lion.100 As a smaller company, Burlington had less brand recognition and no re-tail presence. Shareholder advocates explained that Chevrons internationalbrand and visibility to consumers should have made the company more suscep-


95. Authors interview with ler of Burlington resolution, Boston, 14 February 2007.96. Authors interview with ler of Chevron resolution, Boston, 22 March 2007.97. Authors interview with ler of Chevron resolution, Boston, 22 March 2007.98. Authors telephone interview with ler of Chevron resolution, 26 February 2007.99. Chevron 2005.

100. Cogan 2006.

tible to public awareness strategies.101 Yet, Chevron disregarded the reputationalrisk associated with its lack of response to shareholders concerns. Shareholderadvocates accounted for the disregard by pointing out that the issue involvedthe past operations of Texaco.102

The second difference in target vulnerability relates to the companies in-vestments in oil production infrastructure in Ecuador. The companies were sim-ilar in that both had not invested heavily in drilling infrastructure in Ecuador.Texaco pulled out of Ecuador more than a decade ago, and Chevron had no in-terest in resuming operations. In the Burlington case, international oil produc-tion accounted for less than one percent of the companys income.103 Moreover,Burlington had yet to establish drilling infrastructure in its Ecuador conces-sions. One shareholder advocate commented that the lack of drilling operationsin Blocks 23 and 24 may have made it easier to walk away from the controver-sial concessions, should community opposition prove to be too great a risk tolong-term protability.104 However, Burlington and Chevron differed in theirplans for the future. In the words of one shareholder expert, there was more atstake [for Burlington] in terms of the business going forward, providing greaterincentive to accommodate shareholders and local communities.105 In contrast,Chevrons only stake in Ecuador was remediation of past activities.

A third key operational difference related to the Aguinda v. Texaco lawsuit.In the context of the lawsuit, any receptiveness by Chevron to shareholder con-cerns regarding Ecuador could have been interpreted as an admission of liabil-ity. The outcome of the lawsuit was central to Chevrons operations because itcould set a precedent for additional litigation in other countries where the com-pany operates.

Organizational structures: Analyzing Burlington and Chevrons organiza-tional structures presents a mixed picture. In terms of corporate governance,both had some structures in place that could benet shareholder advocates. AtBurlington Resources, executive compensation was linked specically to envi-ronmental, health, and safety performance, while Chevron performance bo-nuses were tied to unspecied non-nancial goals. On the other hand, Chev-rons board of directors included a Public Policy Committee created in 1989 tooversee international, social, political and environmental issues. In BurlingtonResources, an Audit Committee was charged with oversight of environmental af-fairs, but not as one of its primary functions. Both companies had independentboard members, but not independent board chairs.106

Both companies had other organizational structures in place that helped


101. Authors interview with ler of Burlington resolution, Boston, 14 February 2007 and tele-phone interview with ler of Chevron resolution, 28 February 2007.

102. Authors telephone interview with corporate governance expert, 9 March 2007.103. Burlington 2005.104. Authors telephone interview with corporate governance expert, 9 March 2007.105. Authors interview with ler of Chevron resolution, Boston, 22 March 2007.106. Burlington 2005; Chevron 2005; and Cogan 2006.

to deect shareholder demands. In Chevron, the assignment of responsibilityfor the Texaco legacy to different divisions within the company created barriers.When Chevron shareholders met with the CSR team, including the Director andManager of Corporate Responsibility,107 they felt that the team [did] not havemuch power.108 Moreover, the CSR team was not familiar with the details ofthe lawsuit, as they insisted that the Texaco case was the responsibility of thecompanys legal team. Burlingtons smaller size and concentrated operationsmitigated this challenge somewhat. While Burlington shareholders expressedfrustration that they were often communicating with an investor relations repre-sentative whose understanding of the situation in Ecuador had little effect onthe companys executive ofcers, they did have repeated access to Burlingtonssenior management team.109

Finally, in both Chevron and Burlington, there was a disconnect betweensenior management in headquarters and corporate practice in the eld. As oneco-ler for a Chevron resolution explained, the CEO is saying one thing, butthe staff is not carrying it throughwhich shows that [indigenous rights are]not actually a priority.110 Shareholders suggested that the companys highly de-centralized structure made top-down implementation of CSR initiativesdifcult.111 Likewise, Burlington shareholders pointed to the gaps between head-quarter policies and on-site eld operations.112

Corporate culture: Chevron and Burlingtons receptiveness to STAN activitieswas directly shaped by the companies prior experiences with shareholder advo-cacy. Nearly every shareholder in the Burlington STAN identied the companyslack of experience regarding shareholder activism as key to its responsiveness. Ashareholder explained, I never work with Wal-Mart; too many shareholdersmaking too much racket . . . I think that the biggest contribution to shaping[Burlingtons] corporate culture is their inexperience with shareholders . . . theyare somewhat willing to be taught.113 In contrast, Chevron, as a larger companywith extensive global operations, had far more experience with shareholderpressure on social and environmental issues. Another shareholder proxy com-pared the two companies: Chevron has been dealing with this stuff for awhilethe big international human rights and environmental stuff . . . ButBurlington had never had to deal with it . . . I dont think that they knew how toreact.114 A member of Amazon Watch present at Chevrons AGM observed, Alot of [Chevrons] corporate culture has been shaped by the fact that theyve al-ways had people questioning them . . . they know how to deal with it. And


107. Authors interview with ler of Chevron resolution, Boston, 22 March 2007.108. Authors telephone interview with ler of Chevron resolution, 26 February 2007.109. Authors interview with shareholder proxy, Ecuador, 8 January 2007.110. Authors telephone interview with ler of Chevron resolution, 26 February 2007.111. Authors telephone interview with ler of Chevron resolution, 26 February 2007.112. Authors interview with ler of Burlington resolution, Telephone, 26 February 2007.113. Authors interview with ler of Burlington resolution, Telephone, 26 February 2007.114. Authors interview with shareholder proxy, Ecuador, 8 January 2007.

theyre so big that they can afford to turn off the microphone on an indigenousperson. Theyre . . . relatively immune.115

The two companies also diverged in their framing of Ecuador-related is-sues. Burlington and Chevron both exhibited corporate commitment to CSRvalues. A review of Burlingtons annual reports revealed mounting direct atten-tion to environmental and indigenous rights issues. Likewise, Chevron had re-leased four annual Corporate Responsibility Reports, covering its performancethrough 2005. However, while Burlington Resources made Ecuador operationsa central issue in the companys CSR efforts, Chevron maintained a careful sepa-ration between the Aguinda v. Texaco case and its CSR initiatives, termed TheChevron Way. Chevrons 2005 Corporate Responsibility Report made no linkbetween the Texaco lawsuit and the human rights or stakeholder consultationpriorities of the Chevron Way. Shareholders accused the company of hiding be-hind the lawsuit, by referring to the issue as a legal matter, rather than as an is-sue of corporate accountability.116 A corporate governance expert also noted thatChevrons response showed the companys litigious reputation; the companyhad historically tended to go the legal route as opposed to the accommodatingroute when dealing with shareholder resolutions on social and environmentalissues.117

Conclusion

This research investigated the complex interplay of network, corporate target,and contextual variables that explain the different goal attainment of two share-holder transnational advocacy networks active in the Ecuadorian Amazon re-gion. We extend Keck and Sikkinks concept of transnational advocacy networksto describe TANs that target multinational corporations. We develop the corpo-rate boomerang model to explain the processes by which local activists link withdomestic and international NGOs and other groups to exert leverage over cor-porate behavior. We evaluate the relative success of two corporate-focused TANs,which used shareholder tactics to target the Ecuador operations of the oil com-panies Burlington Resources and Chevron. We argue that the gains made by theBurlington STAN in comparison to the Chevron network can be explained bydifferences in the cohesiveness of the two networks and the specic vulnerabili-ties of the two targets.

Regarding network cohesiveness, the lack of oil development in the south-ern provinces of the Amazon afforded the Burlington network certain advan-tages in maintaining a cohesive identity among indigenous network membersin contrast to the Chevron STAN. The Burlington-Chevron comparison also sug-gests that while effective networks must be cohesive within and between proxi-


115. Authors telephone interview with NGO staff member, 2 March 2007.116. Authors telephone interview with shareholder proxy, 2 March 2007.117. Authors interview with corporate governance expert, Telephone, 9 March 2007.

mate network levels, strong relationships between indigenous and shareholdernodes are not critical. Regarding target vulnerability, our analysis revealed sev-eral operational, organizational, and corporate culture differences between thetwo companies, including Burlingtons relative inexperience with shareholderadvocacy and the multiple effects of the Texaco legacy on Chevrons operations.

The primary contribution of our research is the development of a system-atic approach for analyzing and assessing the effectiveness of corporate-focusedtransnational advocacy networks. Looking forward, there are several opportuni-ties for expansion and further development. First, our research focused on a par-ticular period in the history of the Chevron and Burlington STANs. The futureactivities and goal attainment of both STANs will be interesting to follow withthe acquisition of Burlington by ConocoPhillips and the pending resolution ofAguinda vs. Texaco lawsuit. Both events change the vulnerability of the networktargets. Second, the framework we developed identies key nodes in corporate-focused TANs. Each merits further scholarship, as do their interactions. For ex-ample, an analysis of the voting histories of primary corporate shareholderscould reveal the drivers of shareholder support for CSR initiatives and the mech-anism linking shareholder pressure and decisions by senior managers. Likewise,the importance of close interactions between distant network nodes needs fur-ther study. Finally, our research illustrates the corporate boomerang throughcase studies of TANs targeting two US-based multinational oil corporations op-erating in Ecuador. Additional research on corporate-focused TANs operatingacross a range of contexts and targets is needed to assess the generalizability ofour model.

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The Corporate Boomerang

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