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The Observer: UK firms face lawsuits as Watts quits ICC post


Conal Walsh and Oliver Morgan

Sunday April 4, 2004


Companies left fighting US human rights act after former Shell chairman resigns


In a fresh blow to his reputation, Sir Philip Watts, ousted as Shell chairman last month, has relinquished two high-profile international business posts. 


He has quit as the UK head of the International Chamber of Commerce and as chairman of the World Business Council for Sustainable Development.


The resignations will come as a blow to British companies fighting human rights lawsuits in the US.


Watts was leading the ICC's lobbying effort against America's Alien Tort Claims Act, under which a number of UK firms, including Shell, are being sued for alleged abuses around the world.


Despite the ICC's efforts, Washington has not yet committed to reforming the act, and Watts's departure leaves Shell facing a high-profile legal claim that it colluded in the state-sponsored oppres sion of Ogoni villagers in Nigeria. The beleaguered oil giant denies this.


Watts was forced to quit as Shell chairman after the company overestimated its proved reserves of oil and gas by 4 billion barrels.


That revelation sparked investigations by US financial regulators and protests from investors, who claimed they had been misled. Fresh disclosures this weekend about production difficulties at flagship Shell projects in Siberia and Nigeria prompted more shareholder anger.


An internal inquiry into Shell's reserves mis-statement will be highly critical of internal controls and communications at the company.


One investor said he had been briefed on the probe's conclusions by a Shell insider. 'Important issues were insufficiently debated, and not discussed at a high enough level. The key point will be that this is a company that needs to change.'


Meanwhile, Shell is also facing a multi-million pound lawsuit brought by inhabitants of Port Arthur, Texas, who claim pollution from its nearby refinery has damaged their health.


The plaintiffs will allege that sporadic accidents at plants run by several oil companies in the area have contributed to respiratory diseases and above-average levels of cancer in the local population. 'For years, Shell has been dumping toxic chemicals into our lives,' community representative Hilton Kelly said. 'We have asked them to reduce emissions, and been ignored.'


Craig Bennett of Friends of the Earth accused Shell of 'once again treating people and the environment with little or no respect'.


Shell is expected to fight the action. A spokesman declined to comment on the dispute which relates to Motiva, the Texan subsidiary of which it owns 50 per cent.,6903,1185022,00.html

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