Archived press release

Shareholders face challenge at Shell AGM

16 May 2006

Shareholders will challenge the oil giant Royal Dutch Shell on its appalling performance on environmental and ethical issues when the newly-merged company holds its first Annual General Meeting today (Tuesday 16 May) in the Hague and in London [1].

Campaigners from Friends of the Earth in London and the Netherlands will be joined by people living next door to Shell's operations around the world who will question the company's failure to address crucial issues of environmental pollution and human rights, despite record profits and the company's supposed commitment to ethical practice outlined in its business principles.

Friends of the Earth says that Shell's record is so poor that the company cannot be trusted to comply with voluntary standards. New legislation is needed to ensure that all UK companies operate in an ethical way. The environmental campaign group has sent video evidence to MPs, highlighting Shell's environmental and social performance and is calling for tougher standards to be incorporated in the Company Law Reform Bill, currently in Parliament [2].

Friends of the Earth's Corporates Campaigner Hannah Griffiths said:

"Despite years of campaigning, media exposure and pressure, Shell is still damaging the environment and harming communities. The bottom line is that Shell will not clean up its act until it is forced to do so. MPs have a fantastic opportunity to make UK businesses operate more sustainably and they have a duty to act to protect communities and our environment."

The environmental campaign group is urging MPs to back amendments to include tougher requirements for companies to report on their environmental and social impacts, to put duties on directors to take their environmental and social obligations seriously and to allow affected communities the right of redress in UK courts where they cannot get justice in their own countries.The campaign group will be joined in the Hague by representatives from communities in Nigeria, Sakhalin Island, Russia, South Africa, the USA and Ireland who will probe the company on its performance.

On the island of Sakhalin in the Russian Far East, environmental campaigners have resorted to legal action to challenge the legality of construction works. Experts have also criticised Shell's Sakhalin II project - the world's largest integrated oil and gas project - because of the threat posed to the last remaining population of Western Pacific Grey Whales whose feeding grounds lie off the island.

In Nigeria, following a community action, a court has ruled that Shell's persistent practice of flaring gas breached local people's human rights, as well as being illegal under Nigerian law. Yet Shell states in its Business Principles [3] that it "compl[ies] with all applicable laws and regulations of the countries in which we operate."

Shell also claims in its principles that: "Shell companies recognise that regular dialogue and engagement with our stakeholders is essential", communities claim they have been fobbed off by Shell. The Chief Executive Jeroen Van der Veer, has consistently referred community representatives back to local managers. Other than in Durban, South Africa [4], attempts at local dialogue have been unsuccessful. Local managers have either failed to engage or have refused to engage in real issues, instead applying diversionary tactics by engaging only in broader social forums. Communities will be outlining major flaws in Shell's local engagement strategy, including the clear conflict of interest created by the fact that many of the people recruited to engage in Shell's local panels receive direct or indirect financial benefit from Shell, its foundations or other related processes. Hannah Griffiths continued:

"Van der Veer smiles and nods and says Shell cares, yet he knows he has no real responsibility to his company's neighbours. We need to see a legal obligation on directors so that they must take the environmental and social impacts of their companies' operations into account, not just talk about doing so."Shell is also failing to live up to its promises on climate change, where it says "Action is needed now to lay the foundation for stabilising GHG [greenhouse gas] levels in the atmosphere" [5]. While the company boasts of reducing CO2 emissions from its own operations, it continues to develop its oil and gas portfolio, fuelling climate change.

Earnings in Shell's exploration and production division - the division that explores for and extracts oil - increased by 45 per cent this year [6] and Shell added 160 thousand square kilometres of exploration acreage to its portfolio, with new exploration licences in 14 countries [7]. It also has announced the intention to expand its operations [8], aiming to increase production by 9 -14% by 2009 and approximately 30 - 40% by 2014 [9].

Notes

[1] Shell's 2006 Annual General Meeting takes place on Tuesday, May 16, 2006 in The Hague, The Netherlands, with an audio-visual link to a satellite meeting place at the Novotel London-West Hotel and Convention Centre, 1 Shortlands, Hammersmith, London, W6 8DR, in the UK. The meeting will start at 11.00 am (Dutch time), 10.00 am (UK time). While the Directors will be located in The Hague, shareholders located in London will be able to participate fully in the meeting via an audio-visual satellite link. See www.shell.com

[2] Make business work for people and planet (PDF)

[3] Shell General Business Principles

[4] In Durban, successful community dialogue had led to Shell committing to replace aging and dangerous infrastructure[5] The Shell Sustainability Report 2005[6] Royal Dutch Shell Plc - Annual Report 2005[7] Algeria, Australia, Brazil, Canada, Cameroon, the Faroe Islands, Kazakhstan, Libya, Malaysia, Norway, Nigeria, the Republic of Ireland, the UK and the US[8] Royal Dutch Shell Plc - Annual Report 2005[9] The Shell Sustainability Report 2005

Lessons Not Learned: The Other Shell Report 2004 (PDF)
Failing the challenge: The other Shell report 2002 (PDF)
Behind the shine - the other Shell report 2003 (PDF)

†To view PDF files you will need to download Adobe Acrobat Reader. Visually impaired users can get extra help with these documents from access.adobe.com.

If you're a journalist looking for press information please contact the Friends of the Earth media team on 020 7566 1649.

Published by Friends of the Earth Trust