ShellNews.net: DRAFT AFFIDAVIT OF DR JOHN HUONG: AN UNPARALLELED INDICTMENT OF ROYAL DUTCH SHELL GROUP: AN UNAUTHORIZED PUBLICATION: 7 FEBRUARY 2006
IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR
SUIT NO. S2-23-41-2004
1. SARAWAK SHELL BHD (71978-W)
2. SHELL MALAYSIA TRADING SENDIRAN BERHAD (6078-M)
3. SHELL REFINING COMPANY (FEDERATION OF MALAYA) BHD (3926-U)
4. SHELL TIMUR SDN BHD (113304-H)
5. SHELL EXPLORATION AND PRODUCTION MALAYSIA B.V. (993963-V)
6. SHELL OIL AND GAS (MALAYSIA) LLC (993830-X) check
7. SHELL SABAH SELATAN SDN BHD (228504-T)
8. SABAH SHELL PETROLEUM COMPANY LTD (993229) PLAINTIFFS
HUONG YIU TUONG DEFENDANT
I, Dr Huong Yiu Tuong, a Malaysian of full age, of Lot 845, Pujut 4C, Dawai 2, 98100 Miri, Sarawak, do solemnly and sincerely affirm and say as follows;
1. I am a geologist by profession and make this affidavit from personal knowledge, and from documents that I have seen. The facts deposed to this affidavit are true to the best of my knowledge, information and belief.
2. I was employed by the First Plaintiff, Sarawak Shell Berhad for some 29 years from 1974 to 2003.
3. I was dismissed by Sarawak Shell Berhad on 28th May 2003.
4. Complaints pertaining to the alleged wrongful dismissal were lodged with the Labour Office, Miri on 22nd July 2003 and were given approval by Datuk Dr. Fong Chan Onn, the Malaysian Minister for Human Resources to proceed for hearing in the High Court of Borneo in Miri. Sarawak.
5. I brought legal proceedings for unfair dismissal against Sarawak Shell Berhad. The first hearing was held in June 2005. That litigation is currently in progress.
6. The case before The Industrial High Court Miri, Sarawak, Malaysia (in The Matter of Industrial Court No. 8/4-1377/04) is between Sarawak Shell Berhad (Company) and Huong Yiu Tuong (Claimant).
7. Shell Malaysia is a name used to cluster Shell’s business interests in Malaysia and as far as I am aware it is not a registered business name. In addition to the eight companies that sued me are some 10 other companies that are joint ventures involving the Plaintiff companies e.g. Shell Timur SDN. BHD. I do not know why I have been sued for defamation by these eight Plaintiff Shell companies as opposed to being sued by the Plaintiff company which I worked for, or any number up to some 18 Shell companies that operate in the region.
8. It would not be appropriate under the present circumstances to rehearse the full detail of the Industrial High Court litigation. However, since the Plaintiff companies have accused me of making alleged defamatory statements as an act of malice arising from my dismissal, I will deal with the most significant aspects in that regard. I will also provide examples of what I consider to be the real reasons as to why my good working relationship with Shell management for over 20 years soured.
9. This Affidavit is in relation to articles about the multinational, Royal Dutch Shell Group, published under my name allegedly on a website known as “Shell Whistleblower No 2”. The Plaintiff companies contend that the said articles (hereinafter referred to as “the whistleblower articles”, contained defamatory comments.
10. The website on which “the postings” were published was owned at the material time by Mr Alfred Donovan and was operated with the assistance of his son Mr John Donovan. It is my understanding that they have owned and operated Shell related websites since 1997 under various domain names.
11. I understand that all of the Donovan websites and other information published and circulated by them including leaflets distributed outside Shell HQ buildings have contained commentary highly critical of Shell. For example, in one such leaflet bearing a picture of a Shell HQ building flying a skull & crossbones pirate flag, Shell senior managers were described as “masters of double-talk and double-dealing”. I further understand that Shell lawyers first raised the subject of issuing libel proceedings against the Donovan’s over a decade ago, but have never done so.
12. Furthermore, I understand that the domain names used at various times between 1997 and 2003 included: shellshareholders.org; don-marketing.com and shellsucks.info. “Don Marketing” was the name of a sales promotion agency founded by Mr Alfred and John Donovan which had a long trading history with Shell which ended in acrimony.
13. At the time when “the whistleblower articles” were published, the website in question was known principally as “shell2004” but also had a section operating as a new version of the “shellshareholders.org” domain.
14. The website domain names now include: shellshareholders.org; shell2004.com; shellscandal.com; shellnews.net; tellshell.org; royaldutchshellgroup.com; royaldutchshellplc.com; jorma-ollila-shell.com; royaldutchshellnews.com; royaldutchshelldotcom.com; shellsarawak.com and jeroen-van-der-veer-shell.com.
15. I understand that most of these domain names are in fact all pointed towards a single website and that all of them are registered in the name of Mr Alfred Donovan in the USA at a New York address.
16. It is my further understanding that neither Mr Donovan nor his son John have ever owned or operated a website under the domain name of “Shell Whistleblower No 2”.
17. I have never owned or operated any website.
18. I provided the above information for the sake of clarity in regards to the website in question and will deal further with the website/domain name issue at a later stage in this affidavit.
19. When I started off with Shell all those years ago I was proud to be an employee of what I considered to be nothing less than the best company in the world (at least that was what I was thinking then); an internationally respected brand and an equally respected management. The “Shell” brand had a first rate reputation and the globally famous advertising themes and slogans such as “You Can be Sure of Shell” – all seemed entirely appropriate.
20. Shell’s code of ethics, known as THE STATEMENT OF GENERAL BUSINESS PRINCIPLES (the SGBP) reinforced the projected image of an ethical business pledging honesty, integrity, openness (and respect for people including its employees) in all of its dealings. The SGBP was initiated by Sir Geoffrey Chandler and drafted by Mr. Louis Wesseling in 1976, acclaimed at the 1977 AGM and has been in force since then under the management of successive Royal Dutch Shell Group Chairman including Mr. C A J Herkstöter, Sir Mark Moody-Stuart, Sir Phil Watts and Mr. Jeroen van der Veer.
21. A senior Shell legal official (a barrister and solicitor), Mr Richard Max Wiseman, has had a constant high level presence at Shell throughout the period since the advent of the SGBP.
22. Mr Wiseman served for some time as Secretary to the Committee of Managing Directors of the Royal Dutch Shell Group. He was subsequently appointed Legal Director and General Counsel of Shell UK Limited. He is currently General Counsel of Shell International Petroleum Company Limited. As will be seen, his name crops up many times in matters discussed herein.
23. Mr Wiseman’s comments regarding the legal status of the SGBP are published on the same website as the articles which are the subject of the defamation action by the Plaintiff companies.
24. I have the deepest respect for the noble qualities and values enshrined in the SGBP and wholeheartedly subscribed to these statements which have been endorsed, promoted and supposedly made mandatory by many senior Royal Dutch Shell executives in speeches and company promotional materials directed at the public and various stakeholders. Examples of their fine words are quoted below.
25. “The Group is a decentralised, diversified group of companies with widespread activities, and each Shell company has wide freedom of action. However what we have in common is the Shell reputation. Upholding the Shell reputation is paramount. We are judged by how we act. Our reputation will be upheld if we act with honesty and integrity in all our dealings and we do what we think is right at all times within the legitimate role of business.” – Mr. C A J Herkstöter, March 1997.
26. “Commercial activity not only can be, but should be, undertaken with positive underlying values – ethical and moral… The Statement of General Business Principles constitutes a set of basic core values – honesty, integrity and respect for people… We do not bend these Principles. They are non-contestable and non-negotiable. If an employee fails to uphold these values he or she no longer belongs with us.” - Sir Mark Moody-Stuart, 6th October 1997. (Source: Leaflet headed “THE STATEMENT Of GENERAL BUSINESS PRINCIPLES”, dated 19 October 1998, published on ShellNews.net website).
27. “Our commitment to contribute to sustainable development is not a cosmetic public relations exercise. We believe that sustainable development is good for business and business is good for sustainable development. Last year’s financial results were encouraging, in a very difficult business environment. However, the corporate scandals of the past year underlined that good financial performance must be accompanied by the highest standards of governance. Shell’s Business Principles assurance process ensures we meet and maintain those standards.”: Sir Philip Watts, Chairman of Shell’s Committee of Managing Directors in his Foreword to the Meeting the Challenge—The 2002 Shell Corporate Social Responsibility (CSR) Report.
28. The pledges in Shell’s SGBP were compatible and in consonant with my own personal principles. For many years I felt secure and happy in the belief that I was working for a principled/respected multinational.
29. Unfortunately, a considerable volume of evidence, including admissions by Shell senior management, proves that Shell management has not practised what it has preached in relation to ethical conduct and that consequently my faith in the SGBP was misplaced.
30. Furthermore, contrary to the heavy promotion of the SGBP on a global basis, the aforementioned senior Shell legal official, Mr Richard Wiseman, has stated in writing that the SGBP was not produced for use in the courts. The correspondence in which Mr Wiseman makes this admittance is published on the same website as the articles which are the subject of this defamation action. Being nothing more than a voluntary code, they are legally worthless and therefore amount to empty words. Like a bet placed with a bookie, they are binding in honour only. It follows that if a company operating a voluntary code of ethic based principles is dishonourable, then such codes of conduct amount to what Mr Donovan has described in a published article as a “Confidence Tricksters Charter”. In other words they can be used to project a false image to the public, shareholders, employees, suppliers and regulators.
31. In the latter connection, Shell emphasised to the US Securities & Exchange Commission (the SEC) as part of Form 20F Declarations (signed by senior Shell executives) submitted in respect of Shell’s hydrocarbon reserves, the reliance that could be placed in the SGBP for “Risk management and internal control”.
32. I am a deeply religious man and attend Church every Sunday. My social work includes hospital visits and serving the needy, the poor, the aged and the abandoned. Currently, I am a District Fellow for dedicated humanitarian services of Lions Clubs International in District 308-A2 and a Director for Education. During the school holidays, I conduct Leadership Camp for primary and Secondary School Students free. I care for my fellow human beings and in 2003 offered my services, again free of payment or compensation, to help in an Iraqi water irrigation project. I have evidence of the relevant email correspondence.
33. It is not my nature to reveal my humble contribution to the service of mankind. However, under the current circumstances, I am forced to defend myself from serious accusations made against my character when terms such as “recalcitrant attitude”, “malice”, “vendetta”, “scurrilous”, etc are used to describe me and my alleged actions. This is uncalled for especially when such defamatory words emerge from a learned lawyer who is currently legal manager for Shell Malaysia. These unfounded accusations will be fully addressed.
34. In 1997, while fulfilling the role of Production Geologist for the Kinabalu Field project in Malaysia, I raised safety, geological and reserves issues concerning Field Development with my managers. This included faulty design in relation to the integrity of the platform which rendered it unsafe and liable to sink at the material time. I discovered the conductors piled, stopping short in the soft sediments. Indeed the first production well experienced total mud loss when drilling below conductor shoe. This necessitated continuous pumping of seawater that fluidised the surrounding sediments below the platform. As a result further drilling progress was not possible in the second well and the problems were remedied by costly cementation work.
35. In this connection I note that a fatal accident Public Inquiry is current underway in Scotland in respect of admitted breaches by Shell of Health and Safety regulations relating to the Shell Brent Bravo Platform. Shell has already been fined a record sum of £900,000 UK pounds in respect of that matter after two Shell contractors tragically lost their lives.
36. While still Production Geologist for the Kinabalu field I put into writing my moral reservations regarding Shell filing a formal declaration – a Form 502F – containing potentially misleading data about hydrocarbon reserves in relation to the field reservoir. This dubious information was used to seek funding from Shell shareholders. I wrote in one internal Shell document in 1997: “Do you want to tell your investors that the volume carried in the ARPR (Annual Review on Petroleum Reserves) is suspected because a change in reservoir work will be expected! How can we live a day with a free conscience by getting the money from our investors through the 502F when our depositional model work is in question?”
37. Ethical accountability at the workplace was poor due to dysfunctional criteria used in the reward system and associated scorecards. For example, at a team meeting I shared and explained the problems the Kinabalu project faced. When the team leader realised the seriousness of the issues I had raised, he said, "let us not talk about this because it will affect our variable pay". In an email to the project team, I subsequently asked, “Can you tell me honestly if our working relationship is affected because I was pushing too hard for proper homework to be made? As far as I am concern we owe the company a duty of care and I am not going to give a dime about any colleague whose individual agenda supersede that of the corporate objectives.”
38. My warning in relation to providing misleading information to Shell shareholders regarding safety, geological and hydrocarbon reserves was not welcomed by Shell management.
39. On reflection I believe that it was at that juncture that I realised for the first time that Shell management’s pledges to uphold the code of ethics enshrined within the Statement of Shell Business Principles were hollow. Subsequent events have only reinforced that conclusion.
40. Shell has subsequently paid USD150 million dollar fines imposed by the SEC and the UK Financial Services Authority after these financial regulators found Shell guilty of providing misleading/false filings in respect of claimed hydrocarbon reserves. Shell is also being investigated by Autoriteit Financiele Markten for alleged insider trading in the Netherlands and the US Justice Department is still considering bringing charges for fraud against former and current Shell directors. Both investigations are in respect of filing false declarations with financial regulatory bodies pertaining to hydrocarbon reserves.
41. Shell has also settled related class action lawsuits brought by shareholders. The fines and settlements have already cost Shell shareholders approximately USD240 million while at least one other class action lawsuit from institutional shareholders (US Pension Funds) claiming billions of US dollars is pending. The relevant case has been given permission to proceed by a US Federal Judge.
42. In July 2002, not long before I was dismissed, I produced a “30 seconds asset integrity documentary” video in which I included a hypothetical helicopter crash. The work was rejected by the Asset Integrity Steering Committee as being “overly sensitive”.
43. Upon the completion of that project, I was tasked to close out earlier audit findings concerning helicopter flight services where I had raised the issue of Shell Helicopter safety. I was at the time a Shell Asset Integrity Engineer (an assignment into which I had been sidelined/demoted as a consequence of the previously mentioned Kinabalu events).
44. I raised the issue of helicopter safety after my research revealed a number of serious incidents, including red warning lights flickering in flight; a series of unstable or aborted flights and violent vibration. These incidents which had not been officially reported occurred during the ferrying of Shell contractors/employees to and from offshore platform locations. The incidents understandably caused considerable stress to passengers and crew.
45. I gathered documentary evidence including feedback from Shell employees who worked in Logistics and as Offshore Installation Managers. In the midst of the data gathering, a Shell helicopter, though a different type, crashed in the North Sea killing all passengers and crew on board. That tragic event increased my anxiety for all Shell personnel using helicopters.
46. A feedback email I received revealed that passengers were ordered to board flights after repairs had just been carried out, without being informed that they were in effect “test crews”. The relevant person stated in his email: “I am not familiar with aviation procedure for testing aircraft after repair. However, I believed there should be more thorough & stringent test done before accepting the passengers.”
47. As the relevant internal correspondence will show, my concerns were again not welcomed by management. Shell commissioned DuPont to make a study to report on health, safety and environment. The findings contained in the Management Summary of that report said, Shell is a “good news company” and that the “messenger of bad news” will be punished.
48. That was prophetic because not long after I was again transferred out of the Asset Integrity team and punished because I was not helping Shell to generate good news creatively. To do so, I would have had to act in breach of the Shell Statement of General Business Principles; something I was not prepared to do.
49. In June 2005 one of the same Shell helicopters experienced difficulties as it approached the B11 gas field (offshore Sarawak) for landing on the helideck. Split seconds before landing, the helicopter was diverted and crashed into the sea. Thankfully the accident did not result in any fatalities. It could easily have ended in a tragedy claiming many lives and destruction of national assets.
50. Despite repeated pleas by me, Shell management refused for a number of years to give me a job description even though the Company was in 2001 certified with an ISO 9001 for Human resource Product and Services. It was witnessed by the same Malaysian Minister of Human Resource during a related award ceremony. Such reasonable requests were repeatedly ignored.
51. This was an issue of fundamental importance to me for a number of reasons: it was an indication of whether my job was an established budgeted position approved by Exploration and Production Business Council (EPBC); it would have provided the basis on how I would relate to my colleagues i.e. my position within the company, and my job specification in relation to my work and job competency. Instead I was left without the security and comfort of a permanent role with associated responsibilities, accountability and prospects of career progression.
52. Shell Management attitude was unsettling and caused me a great deal of stress. I felt humiliated at being treated so shabbily after working diligently for almost three decades. As far as I am aware all other fellow employees had job descriptions, except me. This affected my self-esteem. It was demoralising and demeaning which affected my good medical health record which I had enjoyed for more than 2 decades of my working life.
53. I believe that Shell management treated me this way in the expectation that I would either resign or adopt a servile attitude, including turning a blind eye to management violations of the Shell Statement of General Business Principles. I believe that this was the fundamental reason why Shell management was hostile towards me. I was even told by two well engineers that their team leader had instructed that I was “not to walk along his corridor”. Such unprofessional childish nonsense was totally out of order because my operational geological work required me to discuss matters face-to-face with his engineers. It was also humiliating in the extreme that the Team Leader conveyed his instructions via individuals I had to work with. That was insulting to me and highly embarrassing for staff involved.
54. Such shabby and inhumane treatment was inflicted on me after I had consistently promoted and protected Shell’s best interests during my work. My adherence to the ethical codes enshrined in the Statement of General Business Principles; the Health, Safety and Environmental policy guidelines: and the Human Resource Policy and Procedures Manual were not appreciated. Instead I was abused and crucified by Shell’s management and its officials.
55. I believe such actions were in violation of all ethical norms and constituted serious breaches of my Human Rights under the UN Universal Declaration of Human Rights – rights which Shell purports to support.
56. The current defamation law suit against me by EIGHT Royal Dutch Shell companies also constitutes a breach of my rights to freedom of expression and freedom of conscience accorded to me and fellow human beings under the aforementioned United Nations Declaration.
57. The fact that it was deemed necessary for EIGHT Shell companies to collectively sue one unemployed Malaysian seems to be a classic case of overkill. It would have already been an uneven struggle even if only one such company had directed its wrath (and retribution) against me.
58. In July 2003 I wrote an email bringing to the attention of senior Shell executives, Sir Philip Watts, Mr. Dominique Gardy and Jon Chadwick, an outline of the “Train of Events Leading to The Termination”. After nearly 30 years of working for the company, I did not even receive the courtesy of a response or even an acknowledgement. The email was simply ignored. That was 6 months before Shell announced the first write-down of some 20 percent of proved reserves in what became known as the Shell reserves scandal and subsequently as a reserves fraud with five consecutive downgrades.
59. After being dismissed on what I consider to be false grounds (hence my case for wrongful dismissal) I carried out some research into the experiences of other people and companies who have had dealings with the same senior Shell management that has been at the helm of the Royal Dutch Shell Group during my own unfortunate experiences.
60. While “surfing the Internet” in the spring of 2004 I stumbled across a remarkable website then operating under the domain name of “shell2004.com”. This site had apparently been launched in January 2004 just before the Shell reserves scandal made news headlines around the globe.
61. Shell2004.com contains thousands of web pages all relating to the activities of Shell. The site is owned by Mr Alfred Donovan, an almost 89 year old Englishman and is jointly operated by his only son Mr. John Donovan. There is a Shell Breaking News section updated several times daily plus articles relating to Shell. It also features leaked Shell internal documents. The shellshareholders.org section of the same website contains Mr Donovan’s biography setting out his life story and the long business relationship that he and his son had with the Royal Dutch/ Shell Group.
62. The section of the website containing his biography includes what is described as “Pre-Publication Correspondence” which took place in or around November and December 2002. The correspondence was with Mr Richard Wiseman, the aforementioned Shell Legal Director and now General Counsel of Shell International Petroleum Company Limited. Basically Mr Donovan supplied to Mr Wiseman a 103 page draft manuscript of his biography which was in turn circulated by Mr Wiseman to the most senior executives of the Royal Dutch Shell Group and a firm of London solicitors acting for the Group, DJ Freeman (now known as Kendall Freeman).
63. The senior Royal Dutch Shell executives who received copies included Sir Philip Watts, the successor to Sir Mark Moody-Stuart as Group Chairman of the Royal Dutch Shell Group; Group Managing Director, Mr Malcolm Brinded and Sir Mark Moody-Stuart, who was still a Director of The Shell Transport and Trading Co plc.
64. Also published in the “Pre-Publication Correspondence” is a reply letter from Mr Colin Joseph of DJ Freeman dated 6 December 2002 which threatened proceedings if the manuscript was published.
65. Mr Alfred Donovan has confirmed to me that the manuscript, as per the draft shown to Shell, was subsequently published on his websites, initially in 2003 on the website known as “shellsucks.info”, and subsequently from January 2004 on shell2004.com. It has remained on the shell2004.com site for two years.
66. Far from suing Mr Donovan, Shell stated the following in a domain name legal Complaint filed in May 2005 with the World Intellectual Property Organisation (WIPO) in relation to his website: “The Complainant and the Group it represents have been aware of the site since the beginning and whilst they would not endorse or agree with many of the comments made by the Respondent on the website, they have taken the view that the Respondent is entitled to express his opinions and to use the Internet as a medium for doing so.”
67. Furthermore, on 11th November 2005, Mr Richard Wiseman sent a revealing email to Alfred Donovan in which he made the following comments in relation to the Donovan website: “The extraordinary tolerance shown to your internet activities ought to demonstrate better than anything else the fact that we are uninterested in, and unmoved by, your current activities. It is true that when your comments to "Tell Shell" overstep the bounds of honest comment and become vituperative or defamatory, we remove them.”
68. Firstly, the “tolerance” includes the “whistleblower articles” which are the subject of this litigation which remain published on the Donovan website, where they have been on permanent display for the last 18 months despite my request for their removal. The Royal Dutch Shell Group has not taken any action against Mr Alfred Donovan in respect of the articles for which the Plaintiff companies are suing me.
69. Secondly, Mr. Alfred Donovan, who is a creative gentleman, took it upon himself to post the same articles on to Shell’s Internet forum for open and lively debate, “Tell Shell”, as referred to by Mr Wiseman. “TellShell” is a feature on the main portal website for the Royal Dutch Shell Group, “shell.com”. All three “whistleblower articles” were posted by him on Tell Shell on 19th October 2005, where they have remained accessible globally up to the current date. The site was last checked on 3rd February 2006. The articles can immediately be found by entering “Whistleblower” in the “Tell Shell” internal search facility (not the shell.com search engine). I understand that the said articles have also been published by Mr Donovan on other websites including his new site which operates under the domain names of “royaldutchshellplc.com” and “tellshell.net”.
70. Thirdly, Mr Wiseman admitted in his email that Shell has deleted postings by Mr Donovan which are “vituperative or defamatory”. Apparently this description does not apply to the “whistleblower articles” on Shell’s own website, shell.com.
71. The relevant correspondence between Mr Alfred Donovan and Mr Wiseman is published on the Donovan and Mondaq websites.
72. The domain name Complaint filed under US jurisdiction by Shell International Petroleum Company Limited on behalf of the Royal Dutch Shell Group with the WIPO was in relation to Mr Donovan’s registration and use of Shell related domain names on his website. The domain names included royaldutchshellplc.com, which is the dotcom domain name of Shell’s unified company: Royal Dutch Shell Plc.
73. For the record, an illustrious three person WIPO panel gave a unanimous verdict against Shell rejecting two out of the three grounds on which Shell based the proceedings.
74. As a result, Mr Donovan retains ownership of all Shell related domain names which Shell attempted to seize.
75. The panel consisted of (1) Mr Michael Cover, a British solicitor who specialises in Intellectual Property law covering trade mark infringements, domain name disputes, passing off, copyright etc; (2) Ms Diane Cabell, an American lawyer, who is one of the worlds leading authorities on Internet law. Since 1997 she has been the author of many major publications relating to Internet law. Diane Cabell is currently Corporate Counsel of Creative Commons and previously held a senior legal position at The Berkman Center for Internet & Society at Havard Law School. Daniel J Gervais is a Canadian Professor of Technology Law. Professor Gervais held senior legal positions at the WIPO in Geneva for several years and is the author of a host of major publications relating to the Internet and associated law. He acted as the presiding panellist in the WIPO Shell case.
76. The following is an extract from the panel’s decision: - The use of a domain name to criticize a company is prima facie fair use. The Respondent is entitled to use the Internet to use his free speech rights and express his opinion in this way, subject to other laws of course (copyright, libel, etc.). However, by reflecting the exact trade names of the Complainant and using the exact name of a facility specifically designed to send messages to or post messages about the Complainant, the Complainant argues that Respondent’s intent is to tarnish the mark. The distinction between constructive criticism and tarnishment can be a difficult one to draw. In this case, there is no evidence that Respondent’s actions are for “commercial gain” or that they are intended to tarnish the Complainant’s mark as required by paragraph 4(c)(iii) of the Policy. The Respondent does own some shares of stock, but the impact of his activities on the value of such shares is presumed by the Panel to be remote. The Panel thus finds that the Respondent has a legitimate interest in the domain names.
77. The following is an extract from Mr Donovan’s submission to the WIPO as the “Respondent” in the proceedings: “There are no current legal proceedings between the Complainant and the Respondent. However, eight companies within the Royal Dutch Shell Group have obtained a Malaysian High Court Injunction in respect of webpage’s on the Respondents web site. The Injunction is against Dr John Huong, a Malaysian former Shell geologist of almost 30 years standing. His “whistleblower” disclosures were posted by the Respondent on his website. The Injunction is totally at odds with the claims by the Complainant about the Groups benevolent attitude to the Respondent in respect of his postings on his web site. With all due respect, the “Group” seems to be facing in two directions at once. “ (The underlining is mine)
78. Basically Shell lawyers completely twisted their case in knots by pretending to the WIPO that Shell is favourably disposed to freedom of speech on the Internet, whilst failing to inform them that at the time when it it made the statement, it held a High Court Injunction over postings published under my name on the same website. That must be a prime example of deceit and hypocrisy.
79. I contend that the information set forth in Mr Donovan’s published manuscript cannot be compared with a newspaper clearing an article with Shell’s media department before publication. In this case, a complete manuscript was sent prior to publication to a senior legal official of Shell, Mr Wiseman, who in turn circulated it to the senior partner of DJ Freeman Solicitors, Mr Colin Joseph, and several of the most senior Shell executives. That to my mind adds considerable weight to the veracity and credibility of the content. I understand that Mr Wiseman even sought permission from Alfred Donovan on behalf of Sir Mark Moody-Stuart for a copy of the manuscript Sir Mark had received to be passed on to Sir Mark’s son, Mr Tom Moody-Stuart, a practising barrister. Mr Alfred Donovan has copies of the correspondence.
80. I arrived at the conclusion that what was stated in the manuscript must be fundamentally true or otherwise Shell or one of the other parties involved would have instituted legal proceedings to prevent such publication. Most of the manuscript was about Donovan dealings with Shell, not about Mr Donovan’s life story, interesting and moving though it is.
81. For the record, the following are extracts from notices directed at Shell which are prominently displayed on the gateway web page to the Donovan website: -
“Shell is of course free to issue libel proceedings if anything published herein is untrue”.
There is also displayed an: “OPEN INVITATION TO PUBLISH, UNEDITED, ANY RESPONSE SHELL WISHES TO MAKE TO ANY ARTICLE PUBLISHED HEREIN”
82. The Shell senior executives to whom Mr Donovan refers in his manuscript, which covers a decade long period, are the same individuals involved in the reserves scandal and named as Defendants in the pending US Class Action lawsuit which accuses them of fraud and other misdeeds relating to the reserves scandal. They are also the same executives involved in my case.
83. At least one other US class action lawsuit making similar accusations against the same Shell executives has already been the subject of a multimillion dollar (USD) settlement by Shell. This was an action brought by US employees of Shell in relation to their pension fund.
84. There are also lawsuits in progress in Malaysia against Shell which have been brought by its former employees. One High Court case involves a group of 399 former Shell employees known as “Team A”. Their action relates to deductions made by Shell to their Employee Providence Fund. A Judge has already ruled that the deductions were “unlawful”. Shell has appealed that decision apparently in an attempt to exploit a legal loophole relating to time limits. This appears to be a ploy by Shell to evade its moral responsibilities to its former employees. News reports related to this distressing case are published on the Donovan website.
85. Current employees and employees who had resigned after 1997 were persuaded by the company to opt for a Defined Contributory Scheme (DCS). The relevant employees wrongly thought that Shell management was acting in their best interests. It turned out however to be a detrimental move for the relevant employees and a financially beneficial manoeuvre for Shell. Eventually the company paid an ex-gratia payment plus adjustments for the DCS holders in early 2004 provided they were willing to sign off a letter of undertaking not to pursue legal action against the company in future.
86. In a related question and answer leaflet, published by Shell, employees such as me, who have been dismissed, would not be entitled to receive any such ex-gratia payments, nor the adjustment paid to other employees. Therefore, the representation by Sarawak Shell Berhad to me of the alleged benefits in the Defined Contributory Scheme and my subsequent dismissal under the most extraordinary circumstances has caused me to be prejudiced and to suffer financial loss and financial insecurity.
87. I too have been severely penalised by what I consider to be completely improper decisions made in respect of Shell employee pension funds. The Malaysian people are by nature (in my humble assessment) fairly docile, dedicated and basically decent human beings. The fact that several hundred hard-working and loyal Shell employees felt compelled to institute legal proceedings against their former employer speaks absolute volumes. I am truly appalled by the Royal Dutch Shell Groups’ unscrupulous heartless treatment of the sick, elderly and dying, as reported by the Malaysian news media. I believe that such conduct is indeed evil and in line with Shell’s management actions in other Countries e.g. Nigeria, Africa, South America, Nicaragua, Caribbean, USA, Canada, Russia, Vietnam, Philippines, Papua New Guinea, County Mayo in Ireland, etc
88. Reading the biography/manuscript and other information on Mr Donovan’s website, including numerous newspaper articles about the reserves scandal, combined with my own experiences with Shell and information gained from other sources, were ALL part of the thought processes which led me to reach further conclusions about the ethical conduct of Shell senior management.
89. I was unaware that I was working for a multinational which had engaged in such despicable behaviour, around the world, including the activities in Nigeria which Shell has admitted i.e. feeding the endemic violence and corruption. Shell has plundered more than $30 bn USD in oil revenues from Nigeria in cooperation with a series of corrupt regimes over recent decades, while leaving the local population to live in fear, abject poverty and a hellishly polluted environment. The one constant element has been the involvement of Shell. When I read that Shell management has bought a fleet of luxury jets to transport themselves it makes me feel ashamed to have been an innocent accessory to these evil multinational crimes.
90. Currently, I have encountered technical problems in searching the shell2004.com website for information. Google provides a search facility built into the shell2004.com web site. Although very useful as a tool to carry out research relating to the content of the site, it provides a limited service due to technical problems. I have been informed by Mr John Donovan that a new dedicated search facility may soon be installed which will enable visitors to facilitate a search of every web page (over 7,500) and every PDF file – several hundred more pages of information. In other words, if the word “evil” is entered, every publication of that word on the entire website will be listed. This will be an invaluable resource to anyone carrying out research about Shell.
91. As the shell2004.com web site is far and way the single most important source of information relevant to my defence of the action brought by the Plaintiff companies, I would seek the right under the circumstances to supply further information at the appropriate time.
92. I have provided three annexes (A-C);
93. Annex A deals with Mr Donovan’s manuscript submitted to Shell which has been published on the Internet since 2003, originally on a website under the domain name of shellsucks.info and subsequently under the domain name of shellshareholders.org;
94. Annex B contains examples of newspaper headlines (some with brief extracts from related articles) and information featured on the Donovan website and/or elsewhere BEFORE the publication of the three “whistleblower articles” (described as “ internet postings” in Shell’s Affidavit) on the Donovan website, under my name, on the10th, 13th and 16th June 2004;
95. The raw draft correspondence I supplied to Mr Donovan in or around June 2004 drew on all of the information categories in annexes A & B above.
96. Annex C contains examples of newspaper headlines (some with brief extracts from the related articles) and information featured/found on Donovan website domains and/or elsewhere AFTER the three “whistleblower articles” were published by the Donovan’s under my name on their website. This additional information further justifies comments made in the three “whistleblower articles”.
97. The headlines and brief extracts give some idea of the global dimensions of the firestorm of adverse publicly generated by the Shell reserves scandal and the affect it has had on the reputation of the Shell brand and on working ethos/culture of Shell management. The full articles provide evidence that a host of major media organisations have published or broadcast information which have described the activities of Shell management in terms just as forthright (and on occasion more forthright) than the terms used in the “whistleblower articles”. This was the case both before and after the articles in question. Because of concerns over the length of the Affidavit I have only provided a limited selection of the web page content. Likewise, I have only provided a limited number of headlines. There are several thousand on the Donovan websites.
98. As already indicated the information and articles had a major bearing on the comments about Shell attributed to me in the “whistleblower articles” published on the Donovan website under my name.
99. They cover issues relating to Shell and its management including tainted gasoline; banned chemicals, a cover-up mentality; greed; reckless flaring, arrogance; ruthlessness; lies; fraud, deception; misrepresentation, dishonesty; corruption; conspiracy and support of injustice in countries in which they operate; victimisation of employees; unethical conduct; intimidation of employees; empty pledges (the SGBP); breaches of health and safety issues; pollution and despoliation in areas in which Shell operates, etc.
100. Eighteen months later, having spent a huge amount of time and other resources on further research, I came to the conclusion that the comments made in my name about the conduct of Shell’s activities in various countries around the world were well founded. Frankly it is sickening to know that evil is perpetrated by a multi-national company whereby for example, as also previously mentioned, the poor are exploited in Nigeria, forced to live in a horrifically polluted environment and robbed of basic human dignity, while disgraced, dishonest Shell senior directors are given multi-million USD payoffs. Having learned so much more about the disgraceful activities of Shell, I feel ashamed and betrayed.
101. However, for the reasons which I explain below, the majority of the terms and phrases to which the Plaintiff companies object were not in fact originated by me.
102. Mr Alfred Donovan and his son John have already confirmed in published articles their role in what they have described as “co-authoring” (with me) the “Whistleblower No.2” articles on shell2004.com, which are the basis of Shell’s defamation action against me. Mr Alfred Donovan has also correctly stated that he, not I, was the publisher of ALL the “Whistleblower No.2” articles.
103. Mr Alfred and John Donovan have also correctly claimed in their articles that the majority of the allegations cited by the Plaintiff companies in their legal documents were either quotations from allegations/comments about Shell management previously published by the Donovan’s and/or new commentary authored by them.
104. For some unknown reason, Shell appears disposed to suing me, but not Mr Alfred Donovan who re-published the very same articles in their entirety on his website and even on Shell’s own portal website. Mr Alfred Donovan has speculated in widely circulated articles that this may be because he is a white European, whereas I am not.
105. Shell Chairman Lord Oxburgh was profiled in “The Other Shell Report 2004”, entitled “Lessons not Learned” on page 8. It stated that to the date of publication, “Lord Oxburgh has failed to report anything back to the South Durban community” for the promises he made “to bring their concerns to the Shell board of directors”. According to the report, Mr. Jeroen van der Veer left “behind a mess” (page 17 of the report) in Curacao, Netherlands Antilles. This area is populated by predominantly dark skinned citizens located thousands of miles from South Africa. This is in striking contrast to the emphasis given to health, safety and environmental issues in respect of the Geelong refinery in Australia. I find these varying standards in the application of SGBP apparently dependent on the nationality (and possibility the pigmentation of local populations) to be of great concern, especially on “Compliance”, a new feature highlighted by Mr. Jeroen van der Veer in August 2005.
106. The apparent discrimination is also in contravention of the UN Declaration of Universal Human Rights which Shell purports to support.
107. Mr. Alfred Donovan has pointed out in the same vein that Shell settled a retirement funds related class action law suit brought against it by its American employees, while it has for years, dragged out retirement fund related lawsuits brought by its Malaysian former employees.
108. If there is any substance to Mr Donovan’s speculation, then we would have to add “racist policies” to the descriptions listed above.
109. Although I am reasonably fluent in spoken English, I am less competent in written English. I did correspond by email with Mr Alfred Donovan and have spoken by telephone to him briefly from time to time, but mostly to his son John. This is because Mr Donovan senior has poor hearing due to his advanced years (he will be 89 years old in April 2006).
110. From the email correspondence and the telephone conversations, Mr Alfred and John Donovan composed the finished articles which were then published under my name. I have never met either individual. I never had any editorial authority in relation to the published introductory email or the three “Whistleblower” articles described as “internet Postings” and/or “Instalment one, two and three”, published on shell2004.com under my name. Mr Alfred Donovan published the three “whistleblower articles” on his website.
111. At the material time I relied upon the expertise and experience of Mr. Alfred Donovan as to what was proper to publish. I would compare this to submitting a letter for publication to a newspaper. I would expect the newspaper editor/publisher to vet the content and make any amendments at their discretion as the publisher has ultimate legal responsibility for what is published.
112. I had no input over the design, layout, colours, font type or size, or title of the web pages on which the relevant articles were published (which the Plaintiff has complained about) nor on the web site/domain name chosen by Alfred Donovan for publication of the articles. As indicated, he had at least two Shell related domain names in operation at the material time.
113. The Plaintiff companies have alleged that the postings were made by me on “the website known as Shell Whistleblower No. 2.” In fact, to the best of my knowledge there has never been an Internet domain name or a website known as “Shell Whistleblower No. 2.”
114. The “Shell Whistleblower No.2” title for the relevant web pages was originated entirely by the Donovan’s, not me.
115. The publication of the relevant articles was on the shell2004.com website. As previously stated I have never been the owner or publisher of this (or any other) website.
116. It was impossible for any visitor to the shell2004.com website in any event to make any “posting” on it. It is not a “blog” type website e.g. the Shell.com “Tell Shell” discussion forum which does allow visitors to make postings directly on to it, even if, as Mr Wiseman has admitted, the postings are sometimes censored at the whim of Shell.
117. I have never made ANY posting on shell2004.com. It is a physical impossibility because there is no such technical facility on the website and never has been. I have made “postings” on Shell’s “Tell Shell” forum. Shell has not made any complaint about them.
118. Hence Shell has either made a huge blunder in believing that the shell2004.com site is a “blog” site on which it would have been possible for me to post articles, or has deliberately misled the court.
119. Shell2004.com was owned at the material time by Mr Alfred Donovan. He was the publisher of material on his website, which for the sake of clarity I will hereinafter refer to as the “Donovan” website.
120. I would however confirm that although the majority of the allegations cited by the Plaintiff companies were originated by the Donovan’s, it fairly reflected my own thinking and general views I had expressed in my correspondence and telephone conversations with Mr Alfred and John Donovan.
121. Whether I would have dared to publish what I considered (and still consider) to be well-founded assertions if I had my own means to do so is another matter. The fact is that I had no website of my own or any means to publish any such assertions.
122. Also posted on the Donovan website is a copy of the aforementioned legal statement submitted by Shell International Petroleum Company Limited to the World Intellectual Property Organisation on 18th May 2005 in regards to the Donovan website and Shell related domain name aliases owned by Mr Alfred Donovan.
123. I would point out that this legal statement was made by Shell some 11 months after the publication of the three articles under my name by Mr. Alfred Donovan. Shell’s statement therefore covered the articles published under my name on the Donovan website, the same website mentioned in Shell’s statement to the WIPO. I have a copy of Shell’s entire submission to the WIPO.
124. For the reasons already given I have never posted or published anything on the Donovan website, not a single word.
125. Shell is well aware of the situation I have described because Mr Alfred Donovan faxed a letter to the relevant Judge in Kuala Lumpur on 5th July 2004 admitting his facilitating key role, yet Shell has not taken any action against Mr Alfred (or John) Donovan other than the domain name proceedings against Mr. Alfred Donovan via the WIPO (which was unsuccessful).
126. The following is taken from Mr Donovan’s faxed letter to the Judge: -
In the interests of justice Your Honour I respectfully invite you to visit my website and scan through the Shell news headlines of recent months. In particular, please read the news reports posted on it yesterday, Sunday 4th July 2004. You will be able to draw your own conclusions.
I have reprinted just the headlines below: -
The Observer: Bad publicity - not goodbye, but good buy: “Shell illustrates how a steady barrage of negative publicity can bring a company to its knees”: “The company's reputation is now in tatters”
The Observer: Counting the wrong beans: 'At some stage something happened to Shell's values that made it acceptable to put up figures that weren't completely above board,'
The Observer: British firms escape abuse lawsuits: “One of the allegations that is still likely to get a hearing is a high-profile case against Shell that claims that the oil giant colluded in Nigeria's brutal oppression of Ogoni villagers”
News Leader.com: Shell admits overstating its profits: "also made errors in the way it accounted for exploration costs, certain gas contracts and earnings per share of its parent companies"
Sunday Telegraph: BP reserves the right to go its own way: “in the wake of the scandal at Royal Dutch/Shell”
THE BUSINESS: CASE BUILDS AGAINST SHELL: Shell’s embattled former and present management may have less than a month before new allegations are released.
THE BUSINESS: Shell shareholders fail to put foot down over vital reforms: "any sense Oxburgh hoped to give of the smooth functioning of the two-board system was undermined by the two chairman’s differing answers on when the company’s non-executive directors had known about the reserves problems."
Shell’s action in issuing a Writ based on damage to its reputation is unbelievably bad timing on their part, as the first Observer article contains two survey lists relating to brand/company reputation. The top 10 and the worst ten; Shell is top of the “Worst” list. In other words, it now has the WORST reputation of any company. How can you damage a vehicle which has already been crushed? Frankly it is laughable (but not to Dr Huong) for Shell to issue such proceedings when its reputation is at an all time low.
This is due to the oil and gas reserves understatement which has resulted in the recent departure of three Group Managing Directors including the Chairman of Royal Dutch Shell, Sir Philip Watts. Shell is beset by class action law suits and investigations by various regulatory authorities in the USA, the UK and The Netherlands.
The new Chairman of the Committee of Managing Directors Mr Jeroen van der Veer has admitted to being shocked, dismayed and ashamed at what has happened to Shell. You will find a catalogue of admissions by senior Shell management posted on the website. The comments attributed to Dr Huong are entirely in line with similar comments published by numerous newspapers, magazines and the broadcast media
The question therefore arises of why eight different Shell companies have joined together to sue one individual, a former Shell geologist of almost 30 years standing. Particularly when they base their case mainly on alleged damage to Shell’s reputation, which in reality, is already in tatters. Is it because he is a financially weak opponent compared with media giants, or is Shell, as some newspapers have recently claimed, a multinational in denial; or is there a more sinister ulterior motive.
Within 2 hours of deleting the website postings attributed to Dr Huong, I was contacted by Mr Steven J. Peitler, an investigator from the New York law firm, Bernstein Liebhard & Lifshitz LLP. They act for the lead Plaintiff, the Pennsylvania State Pension Fund, in the largest US class action multi-million dollar law suit being brought against the Royal Dutch Shell Group and named current and former directors.
Mr Peitler urgently wanted to make contact with Dr Huong to discuss his knowledge as a Shell geologist of matters relating to the Shell reserves scandal. Mr Peitler said that Shell had a track record for cutting off his lines of enquiry. They apparently have a talent for silencing/neutralising potential witnesses just before Mr Peitler tries to make contact. It appears that this may have happened again.
LETTER EXTRACT ENDS
127. The results of another corporate reputation survey were coincidently published just a few weeks ago.
128. The following is the relevant article/link on the Donovan website for December: THE WALL STREET JOURNAL: Ranking Corporate Reputations: Bottom 10 (Worst Reputations): At 54. Royal Dutch Shell: 55: Tyco International: 57: Halliburton: 60: Enron: Tuesday 6 December 2005: READ
129. The following is a related article published by the Donovan’s: ShellNews.net: ALMOST 2 YRS AFTER THE RESERVES FRAUD, SHELL’S REPUTATION IS STILL RANKED IN THE CORPORATE GUTTER ALONGSIDE ENRON: "Sir Philip must qualify as the worlds greatest conman having pulled off a multi-billion dollar scam while retaining an $18 million dollar payoff/pension pot": (revised Sat 10 Dec 05): READ
130. On or around 1st September 2004, Mr. Alfred Donovan submitted a letter for publication in The Independent newspaper. Mr Alfred Donovan published the letter on his own website on that date. The content of Mr Alfred Donovan’s letter is material to issues involved in this action entitled “Oil companies must be made to follow UN on human rights” and can be accessed via the following link:
131. It may also be material that other former employees of Shell in Malaysia are currently suing Shell. I have already cited the case of the group of 399 former employees known as “Team A”. Mr John Donovan has informed me that participants in the “Team A” litigation have been in contact with him and his father. They have indicated that they would supply letters for publication on the website if it were not for the fact that they feel intimidated on receiving threats from the company lawyers and are very mindful that the Plaintiff companies have brought a defamation action against me.
132. As already stated, the Donovan website is now known by many Shell related domain name aliases, all pointed at the same website which is accessible globally. I understand that the website and the domain names are all registered in North America.
133. The purpose and background of the Donovan website is described at length in an article published by “SpinWatch” under the headline: “Royal Dutch Shell PLC Dotcom, The Ultimate Internet Gripe Site”. “SpinWatch” is “an independent organisation” launched in 2004 to “monitor and expose corporate and government public relations and propaganda”.
134. Shell is I understand already aware of all of the above facts but has chosen to sue only me, rather than the publishers of the articles who for over a decade appear to be Shell’s management most persistent and outspoken adversaries.
135. The following is from a draft article supplied to me before its publication on the Donovan website in June 2004. It was written by Mr. Alfred Donovan at the invitation of an Ogoni student union for a convention held in the USA: The article has been published on the Donovan website ever since: “For over a decade I have been involved in more battles, this time not against an evil axis of rogue nations, but the scourge of the modern day, an evil multinational goliath; in my case (and yours) the Royal Dutch Shell Group. That does not mean that everyone who works for Shell is evil: “Shell” is of course just a name. It is Shell senior management that are responsible for Shell’s crimes and misdeeds which has brought shame and infamy on a once proud name. Shell should have got rid of every director tainted to the least extent by the past scandals, so that Shell could have a fresh start. Instead it has retained directors deeply implicated in past misdeeds.” – By Alfred Donovan, June 2004.
136. The articles under my name are still published on the Donovan websites and on Shell’s own website. They were initially removed from the Donovan website following the commencement of legal proceeding by the Plaintiffs’ companies who obtained an injunction that restrained me from further publication. I fully complied with the Court Order. However, Mr Alfred Donovan republished the articles without my consent shortly thereafter. Commonsense and logic suggests that Shell should have obtained an injunction in the UK against the owner of the relevant websites. In that event, issues could have been resolved between the appropriate parties in the appropriate legal jurisdiction rather than coming before courts thousands of miles away from the relevant websites and the real protagonists; Shell and the Donovan’s.
137. Mr Alfred and John Donovan have both assured me that they are willing to supply testimonies in connection with the Donovan website and the articles published on it.
138. I have already quoted from a Shell Annual Corporate Social Responsibility (CSR) Report. I have for a number of years read these reports avidly which can be downloaded via a link on the Royal Dutch Shell portal website: shell.com.
139. The following is an extract from “The Shell Report 2004”: “In 2004, we provide the number of proven incidents of bribery and fraud gathered by our internal audit system and reported to the Group Audit Committee – 16 bribery incidents and 123 fraud cases were reported, resulting in the dismissal or resignation of 203 staff and contractors. We will continue to improve our detection and data quality.” Recently, on Friday 13th January 2006, Mr. Alfred Donovan received comments from a Shell insider in response to a Dow Jones article concerning an alleged attempt to bribe the Mayor of Sakhalin for some USD 50,000. see royaldutchshellplc.com for Thu 19 Jan 2006 on “Bribery and Corruption at Shell”.
140. The following is an extract from “Meeting the Energy Challenge: The Shell Report 2003” (page 39): “Bribery, by its nature, is difficult to detect and prove. Many accusations prove unfounded. Our businesses run control systems based on the risks they are facing. Globally, we require businesses to report incidents of bribery and corruption to the Group Audit Committee. Annually, Country Chairs report proven incidents of bribery through our annual assurance process. Internal audit runs an internal incident reporting process. We suspect that we still detect only a fraction of the actual incidents that occur. We continue to report this information (see data tables) to be transparent and to signal our seriousness in stamping out these practises. We will be looking for ways to improve our detection and reporting processes in 2003.” These reports were written and published under the Shell management responsible for the reserves fraud.
141. The following extract is from page 13 of the “2003 PEOPLE AND THE ENVIRONMENT ANNUAL REPORT” published by The Shell Petroleum Development Company of Nigeria Limited. Whistle-Blowing: During the year, Tell Shell made ground in fostering the habit of promptly reporting wrongdoings in order to maintain the ethical fibre of our operations. In 2003, 174 reported cases led to the release of 29 career and contract staff (apart from monetary penalties) and the de -registration of 16 contractors. At present, one in eight reported cases results in action being taken against individuals - justifying the whistle-blowing process as a significant, confidential means of correcting inappropriate behaviour.” Although there is no indication of what the “cases” were about, the preceding section of the same page was headed “Tackling Corruption”.
142. Shell’s own admissions about corruption and bribery speak for themselves. In the wake of the reserves scandal, Shell management admitted that they have to mark up the proven reserves in Nigeria because of tax incentives.
143. I have also made a point of reading what are described as the “alternative” or “other” “Shell Annual Reports” published by the Friends of the Earth which cover many of the same issues as the official Shell Annual Corporate Social Responsibility (CSR) Reports, including environmental issues such as pollution caused by Shell’s activities. Their interpretation of Shell’s activities is completely at odds in many ways with the information in the Shell Annual CSR Reports.
144. The activities of the Donovan’s are dealt with at the highest levels of Shell Management. This is confirmed by an email which fell into their hands. Shell has not denied its authenticity. It was an email from Shell General Counsel Mr Richard Wiseman to Royal Dutch Shell Chief Executive Mr Jeroen van der Veer and Malcolm Brinded, the Executive Director of Shell Exploration & Production. The email stated as follows: “I am getting PX to send out our usual response to the Association of British Insurers. I will also let Mark Moody-Stuart know that Donovan in now accusing Mark’s brother of being in on the act.”
145. The “usual response” is a statement which the Press Office for Royal Dutch Shell has ready for reaction to initiatives taken by Mr Alfred Donovan. Mr Wiseman supplied a copy to Mr John Donovan on 7 July 2004. It is headed “Holding Statement. For reactive use only.”
146. The reference to the brother of Sir Mark was in relation to the question mark over the purported independent endorsement of The Shell 2003 Report by Transparency International which Shell had circulated to its shareholders.
147. A section on page 25 was devoted to Shell’s reputation. Alongside the hype about survey results carried out in 2003, was an endorsement of Shell’s ethical policies by “Transparency International” – which promotes business ethics and, as its name implies, “transparency”. The organisation’s endorsement was within the stated context of the so-called “Panels of external experts”, who “gave their independent views of how well Shell has performed.” This was all very impressive.
148. However, it was not disclosed that Mr George Moody-Stuart, an Executive Committee member of the organisation (and its former Chairman) is the brother of Sir Mark, who at the time, was still a Shell director. Is it possible that Shell shareholders would have been less impressed about the “independent” endorsement if they had known about that undeclared connection?
149. The internal email at the very highest levels of Shell and the “Holding Statement” are indications of just how seriously Shell management takes the activities of Mr Alfred Donovan and his website. Yet Shell has never sued Mr Donovan for libel despite the proliferation of extremely outspoken statements about Shell management on his websites, including those attributed to me, which would indeed be defamatory if untrue.
150. Unfortunately for Shell shareholders the comments are well-founded on facts. I sincerely believe that this is the truth of the matter.
151. Mr. Alfred Donovan has launched a further website in January 2005 also operating under Shell related domain names. It is a “blog” type site on which visitors can post their comments.
152. The Donovan websites are now recognised as the worlds No.1 Internet gateway for communicating with Shell employees and shareholders, as is evident from the following paragraphs.
153. A number of prestigious non-governmental organisations are currently using Mr Donovan’s websites to communicate with Shell shareholders and Shell employees. I refer to the WWF (The World Wildlife Fund), .the U.S. Public Interest Research Group (U.S. PIRQ based in Washington DC) and The Ecumenical Council for Corporate Responsibility (an organisation which includes within its membership representatives of many mainstream Christian denominations, corporate agencies of the churches, religious communities and orders).
154. Bernstein Liebhard & Lifshitz LLP, the New York law firm acting for the lead Plaintiffs, Pennsylvania State Retirement Funds, in the largest US class action law suit against the Royal Dutch Shell Group and named current and former directors, has successfully used the Donovan website to recruit Shell whistleblower employees. I understand that the law firm has acknowledged in writing that the Donovan website generated evidence which contributed towards the decision by Chief District Court Judge John Bissell to allow the case to proceed.
155. The appeal for insider evidence was so successful that another appeal by the same law firm is currently published on the Donovan website under the headlines: “Court Sets 1 March 2006 Deadline For Non-U.S. Purchasers of Royal Dutch/Shell Transport Securities” (and a ShellNews.net headline): “Global Floodgates Open on Shell Reserves Fraud Class Action”. This time the appeal is directed at Shell shareholders. It is understood that the appeal has already produced results.
156. An increasing number of Shell “insiders” contribute commentary and leaked Shell internal documents are published on the Donovan websites. I note that many of the comments are in keeping with my own analysis of Shell management. I will therefore present them as evidence at the appropriate time. I also note that some Shell internal communications have been published on the Donovan websites on the same day that they were first issued/transmitted by Shell.
157. I note in particular the leaked document relating to Miss Jyoti Munsiff, the Chief Ethics & Compliance Officer for Royal Dutch Shell Plc. I would also draw attention to a related article by Mr. Alfred Donovan dated 2nd February 2006 with the headline: Jyoti Munsiff: more analogous to a poacher turned gamekeeper. It is ironic indeed that Royal Dutch Shell Plc should appoint Miss Munsiff as its first Chief Ethics and Compliance Officer bearing in mind the content of Mr Donovan’s article.
158. Shell has insisted on pursuing its defamation case against me in the High Court of Malaya in Kuala Lumpur which is some 1300 kilometres from where I live in Miri, near the High Court of Borneo and the Shell offices where I worked for so many years. This puts a further intolerable financial burden on me because of the airline and hotel costs. It also further unfairly tilts the scales of justice in favour of the party which has 650 in-house lawyers, its own fleet of luxury executive jets and which last week announced records profits of almost $13bn for the last trading year (an event which generated a huge outcry with calls for a windfall tax).
159. Reflecting back on all that has occurred in what has been an on-going trauma for me and my family, it is difficult to avoid the conclusion that I WAS initially the victim of a co-ordinated effort by Shell to rid the company of a disillusioned employee who had once thought that the pledges in the SGBP were genuine, and that I am NOW the target of a co-ordinated revenge designed to silence and destroy me.
160. What other explanation can there be for the spectacle of EIGHT Royal Dutch Shell companies ganging together to sue me rather than the parties who have admitted to the Judge and to Shell responsibility for developing my raw drafts, writing additional copy and editing and PUBLISHING the whistleblower articles. Despite the admissions, Shell is bent on hanging me.
161. It is surely remarkable under the circumstances that Shell has insisted on pursuing their defamation claim against an unemployed Malaysian rather than Shell’s obvious real adversaries, who are clearly a force to be reckoned with.
162. I have been advised that it is up to Shell whom it decides to sue, but with all due respect, this seems to be a case of choosing to chase a chicken rather than a fox (although I may prove to be rather indigestible and unpalatable).
163. As so often when censorship rears its ugly head, the information which is the target of the attempt to obstruct freedom of expression and prevent the truth from being heard actually results in far greater public exposure of the relevant information. That is exactly what has happened in this case.
Facts about Shell Activities as Documented in the Manuscript supplied by Mr. Alfred Ernest Donovan, Page 29 – 38.
Newspaper Articles and Information Featured on the Donovan website and elsewhere BEFORE the publication of the alleged defamatory articles on the Donovan website, Page 39.
· Annex B1: “Scandal, Lies & Cover-up Destroy Shell’s Reputation”, Pg 40-69.
· Annex B2: “Royal Dutch Shell Plc: A Focus on Shell’s Conduct in Nigeria”, Pg. 70-72.
· Annex B3: “Remarkable Admissions and Apologies by Shell”, Page 73.
“Newspaper Articles and Information Featured on the Donovan website and elsewhere AFTER the publication of the alleged defamatory articles on the Donovan website”, Pg. 74-89.
“Our Leaflets and Advertisements about Shell via Link “Our Archive leaflets about Shell” Pg. 90.
“Articles Published under the Name of AED which are Featured at www.Mondaq.com” Pg. 91-95)
FACTS ABOUT SHELL ACTIVITIES AS DOCUMENTED IN THE MANUSCRIPT SUPPLIED BY MR. ALFRED ERNEST DONOVAN
1. A manuscript of the biography of Mr Alfred Donovan was supplied by email to Shell UK Legal Director and General Counsel, Mr Richard Wiseman, on or around 26 November 2002.
2. Information relating to the background and circulation of the manuscript prior to its publication on websites owned by Mr Alfred Ernest Donovan (hereinafter referred to as AED) have already been supplied in my Affidavit.
3. I will now deal with details on some of the matters published in the manuscript which I read on the Donovan website prior to the publication of the “whistleblower articles” which are the subject of the defamation action. I took the published information into account in my original emailed comments to AED and my subsequent telephone conversations with AED and his son John Alfred Donovan (hereinafter referred to as JAD) regarding the articles being jointly prepared for publication under my name.
4. The information set out below is based on what I read on the shellshareholders.org website (which is I understand part of the shell2004.com website) or read via links from the Donovan website. The www.shellshareholders.org site contains the manuscript plus some preamble including a home page, an introduction, a “Profits and Principles” page and a “Pre-Publication Correspondence” section.
5. The entire manuscript has been published on a global basis for a number of years on more than one website – from 2003 on shellsucks.info and for the last two years on the current Donovan website. The Royal Dutch Shell Group has taken no action against the Donovan’s for defamation regarding the veracity of the published manuscript and associated material during that entire period.
6. The “Pre-Publication Correspondence” between AED and Shell contained the following invitation by AED: “If Shell or any other party wishes to sue for defamation, I would welcome the opportunity to bring these matters to the attention of the public in such a forum. As you know, I have sued Shell in the High Court for libel and accepted a very substantial consideration from Shell partly to withdraw that action.”
7. The preamble entitled “PROFITS AND PRINCIPLES” includes the following extract from a statement by the then Group Chairman of the Royal Dutch Shell Group, Sir Philip Watts: “BUILDING ON OUR REPUTATION: We will also leverage reputation. This is built solidly on our strengths – on tangible elements such as our technology, products and services, as well as intangible elements, which include our ability to deliver on our promises and our firm adherence to the business principles that underpin everything we do. A good reputation encourages consumer brand loyalty and allows us to forge profitable new business relationships.”: PHILIP WATTS: 14th March 2002
8. The aforementioned sales promotion agency founded by AED and JAD, “Don Marketing”, brought a series of High Court actions against Shell UK Limited alleging breach of confidence. JAD brought a further action against Shell in his own name on the same basis after Shell had settled the first three claims “out of court” for £260,000 UK pounds, plus legal costs.
9. In Chapter 5 of the biography, mention is made of how Shell instructed that £300,000 (UK pounds) worth of “Star Trek” promotional scratch cards (30 million) be buried (literally) after a blunder involving Shell’s distribution of scratch cards stocks to participating outlets. In other words £300,000 of Shell shareholder’s money was wasted (about $450,000 USD) without shareholders ever being aware of what had happened. Motorists complained bitterly that Shell stations had run out of stocks of the much sought after scratch cards and Shell ended up burying the evidence of the management blunder.
10. Chapter 5 also reveals how a Shell UK national manager, Mr Andrew Lazenby, was caught “red-handed” by JAD secretly having a multimillion UK pounds “Make Money” promotion printed in Wales. The relevant promotional rights were jointly owned by Don Marketing and Shell but Mr Lazenby ignored this fact even when offered sight of the relevant documents. Unbeknown to Mr Lazenby, JAD taped his telephone conversations with Mr Lazenby on the matter after being tipped off as to what was actually going on. As a consequence, Mr Lazenby’s deceitful reply when directly asked if the game pieces were being printed was captured on audio tape. Don Marketing issued a High Court Writ and Shell settled out of court for the sum of £60,000 UK pounds. Mr Lazenby had commissioned an agency called “Option One” to produce the “Make Money” scheme, effectively substituting them for Don Marketing, who actually owned the joint rights with Shell.
11. Don Marketing subsequently issued legal proceedings in respect of two more claims: a “Nintendo Gameboy” promotion and a movie themed loyalty scheme called “Now Showing”. Don Marketing had disclosed both ideas to Mr Lazenby in strictest confidence and he had then commissioned the same agency, “Option One”, to secretly produce both promotions without the knowledge of Don Marketing.
12. On 17th March 1995, Shell UK circulated to the UK media a press statement headed: “DON MARKETING LIMITED –V- SHELL UK LIMITED. The following is an extract from assertions made by Shell in its statement: “Shell believes these actions are an attempt to sully Shell’s reputation with sensationalist allegations, in the hope that the company may be coerced into settling false claims.” This was a reference to the “Nintendo Gameboy” and “Now Showing” claims then in progress. (Both of these “false” claims were subsequently settled out of court by Shell for £100,000 each, making the aforementioned total of £260,000 for the three claims).
13. During the course of the “Nintendo Gameboy” and “Now Showing” litigation, AED and JAD, who are both Shell shareholders, founded the “Shell Corporate Conscience Pressure Group”. The membership included Shell suppliers, fellow Shell shareholders and Shell retailers. Nearly 15% of Shell UK retailers joined the pressure group which campaigned for Shell management to abide by the Shell Statement of General Principles (SGBP).
14. Over 1400 hundred Shell stations throughout the UK participated in “business ethic” surveys about Shell which were conducted by the pressure group. The results were published in whole page notices in the UK gasoline retailing trade press. All responses were opened under the supervision of an independent solicitor who provided an Affidavit verifying the results. The following are some examples:
· “89% of respondents said that they would not recommend any petrol retailer considering a brand change to switch to Shell.”
· “75% of the Shell stations that participated were of the opinion that Shell was unethical, incompetent, and greedy.”
15. Shell never did take up a challenge made by the pressure group to commission and publish the results of independent research, using precisely the same questions and offering respondents GUARANTEED anonymity. This challenge to Shell was published in every announcement of the survey results.
16. Shell brought the activities of the pressure group to the attention of the UK Advertising Standards Authority (the ASA) – the body responsible for regulating UK advertising. The ASA asked the Donovan’s to supply evidence of the membership of the pressure group and the affidavits provided by the independent solicitor. The ASA was satisfied with the information provided.
17. The pressure group received letters from Shell stations complaining about the business practices of Shell. A selection of quotes from some of the letters are published in the manuscript: -
· (1) “Extremely bad company”,
· (2) “I believe the current regime is totally immoral”,
· (3) “We have serious concerns about Shell’s ethical conduct”
· (4) “The fickle nature and lack of honour within our
negotiations were a shock to ourselves coming from a
large company… We would hope this letter may help you
and serve as a warning to others contemplating any form
of activity with this company”,
· (5) “You are not alone in being steamrollered by this
18. Shell retailers who had grievances against Shell management made contact with the Donovan’s. I would draw attention in particular to the references made in the manuscript and on the Donovan websites to Mr Pat Bradshaw, a former Police Officer, and Sheila Gee: both were Shell retailers.
19. AED and JAD subsequently had a meeting at the 1997 Shell Transport AGM with Sir John Jennings, the then Chairman of the Shell Transport And Trading Company plc. This was followed by an invitation for JAD to have a meeting with Dr Chris Fay, the then Chairman and Chief Executive Officer of Shell UK Limited. During a subsequent meeting between Dr Fay and JAD, also attended by AED, Shell put an extraordinary offer to the Donovan’s which resulted in what became known as the “Funding Deed”. A copy of the remarkable document referred to is published on the Donovan website.
20. The relevant document link is on a webpage headed: “PUBLISHED HERE FOR THE FIRST TIME ANYWHERE: INCONTROVERTIBLE DOCUMENTARY EVIDENCE OF A DEEPLY INGRAINED SHELL CORPORATE CULTURE OF COVER-UP AT THE HIGHEST LEVEL OF THE ROYAL DUTCH SHELL GROUP: A CMD LED POLICY OF CONSISTENTLY HIDING INFORMATION FROM SHELL SHAREHOLDERS: EXAMPLES OF THE INSTITUTIONALISED PRACTICES WHICH FOSTERED THE RESERVES SCANDAL: INVOLVES CURRENT DIRECTORS AND TOP OFFICIALS OF ROYAL DUTCH SHELL: INCLUDES INDIVIDUALS NAMED IN THE US CLASS ACTION LAW SUITS”
21. The following description of the Funding Deed is published on the above headed web page: “It is a Confidentiality Agreement/Deed signed on behalf of Shell UK Ltd by its then Managing Director David Varney and by Richard Wiseman who is a director of Shell UK and General Counsel of Shell International. My son (John) and I signed on behalf of our former company, Don Marketing UK Ltd and as co-founders of an NGO, the Shell Corporate Conscience Pressure Group. As can be seen, a primary purpose of this document was to impose confidentiality. Shell management did not want its shareholders to know what was going on in their name. In other words, a cover-up.”
22. The Shell Corporate Conscience Pressure Group was a forerunner to the Shell Shareholders Organisation.
23. The following statement is also published on the same web page: “The correspondence below is proof of how senior management years later were still insistent on keeping information about the Funding Deed and associated matters from reaching Shell shareholders. As can be seen in the letter below, the then Chairman of Shell Transport, Sir Mark Moody-Stuart, was sufficiently agitated to actually issue a threat on behalf of Shell UK Limited. His wife, Lady Judy Moody-Stuart, subsequently intervened in the dispute without her husbands knowledge. Readers can see for themselves from the content that top management at Shell were directly involved or were copied on the incriminating correspondence, including individuals who are still Shell directors, or in the case of Jyoti Munsiff, still Company Secretary of Shell Transport.” The relevant correspondence is published on the Donovan website.
24. The Funding Deed was repudiated by Shell when Shell Legal Director, Mr Richard Wiseman, and the then Senior Partner of DJ Freeman, the solicitors acting for the Royal Dutch Shell Group, disclosed in a taped interview with an investigative reporter for The Guardian newspaper, Mr Simon Rines, confidential terms of the Deed.
25. There is another example of the same Shell management cover-up culture accessible via the same web page. It is once again supported by documentary evidence. This example is in respect of a complaint filed by the Donovan’s with the UK Advertising Standards Authority (the ASA).
26. AED and JAD alleged that Shell ran the aforementioned multi-million UK pounds “Make Money” promotion despite knowing that the game pieces were insecure and that as a consequence, gasoline station staff could remove all of the winning game pieces before they could be distributed to motorists.
27. The link for the relevant information states as follows: “SHELL "MAKE MONEY" COVER-UP: DOCUMENTARY EVIDENCE OF HOW SHELL MANAGEMENT BLOCKED AND PERVERTED AN INVESTIGATION BY THE UK ADVERTISING STANDARDS AUTHORITY”
28. The ASA investigation was still in progress during the negotiation of the Funding Deed. The ASA wrote to the Donovan’s seeking any final evidence. The Donovan’s were in possession of further important evidence and asked Shell if the information should be handed to the ASA. Shell instructed them not to do so. The documentation is also published on the Donovan website.
29. Again on the same web page dealing with alleged Shell cover-ups, there is a link to another document. The link reads as follows: “The letter dated 18 May 1994 from Mackrell Turner Garret, solicitors representing Shell, setting forth the terms of a gagging agreement specifically designed to prevent information from reaching Shell shareholders”. This letter confirmed that Shell was willing to enter into a mediation process to try to resolve the Nintendo Gameboy claim provided the Donovan’s did not attend the AGM of Shell Transport and Trading Company Limited being held the following day and raise questions about the pending legal claims or the flawed promotion. Once again embarrassing information was deliberately prevented from being disclosed to Shell shareholders. Shell did enter into that agreement.
30. The reserves scandal is therefore just the most recent manifestation of the Shell corporate culture of deceit and cover-up.
31. I will at the appropriate time produce the relevant correspondence in support of the cover-up culture of Shell management, as asserted in the articles published under my name.
32. The biography published details of verbal and written admissions made by Shell regarding the “Nintendo Gameboy” and “Now Showing” litigation, including a letter of apology JAD received from Dr Chris Fay in relation to the claims after they had been settled by Shell for £200,000 UK pounds plus costs. These were the claims described in the aforementioned Shell press statement as being “false”.
33. The relevant letter dated 21st October 1996 is published on shell2004.com. The content states as follows: “Dear Mr Donovan: I am pleased that our long running dispute has been satisfactorily resolved. It is unfortunate that some of our dealings with you appear not to have met the high standards we set ourselves and which our long relationship had led you to expect of us. On reflection it seems that, had this aspect been more focused on than the strict legal issues, we might have been able to resolve our differences more quickly. May I wish you and your business every success for the future.” CE Fay Chairman and Chief Executive”
34. This was not the end of the bouts of litigation involving the Donovan’s and Shell. JAD subsequently brought a fourth High Court action against Shell for alleged breach of confidentiality, this time in respect of the Shell SMART loyalty card scheme. It later became apparent as a result of the discovery process in the SMART litigation that Mr Lazenby had a close personal relationship with the directors of Option One and an off shore bank account.
35. The discovery process produced other evidence of wrongdoing by Mr Lazenby.
36. In Chapter 21 of the manuscript, AED mentions documentary evidence in Shell’s discovery papers in the form of an email from Mr Lazenby to his colleagues stating his willingness to engage in “illegal” activity despite the prospect that it could be discovered. The email he circulated to senior Shell managers on 4th November 1993 (in relation to the SMART scheme) contained the following comment: “My note of 25/10 expressed a personal and pragmatic view of how to handle the problem – it is in fact illegal and is certainly unofficial, and if we were discovered then we will enforce the official position…”
37. There was also evidence that Mr Lazenby had misappropriated ideas and information given to Shell in confidence by other promotion agencies, including a retained agency called Senior King.
38. A document confirmed that the Shell Account Director for Senior King. Mr Mike Fairhurst stated that Andrew Lazenby had: “turned round all sorts of things that we’ve put forward”. He commented: “I wouldn’t trust Mr Lazenby as far as I could spit”. He also said, “He’s a liar mate”… “he hasn’t got any scruples at all…”
39. A Witness Statement and documents relating to a proposal put to Mr Lazenby by a Mr John Armstrong-Holmes, confirmed a pattern of unethical conduct by Lazenby, as did a statement from Mr Mike Mahon of Concept Systems.
40. There is also a complete set of documents which prove that Mr Lazenby deliberately cheated companies who were pitching for a major contract in respect of the SMART loyalty scheme. This conspiracy involved other Shell managers. Eventually Mr Lazenby awarded the contract to “Option One”, a company which had never even been part of the tendering process. All ideas presented in confidence to Mr Lazenby and adopted by Shell, were apparently channelled by Mr Lazenby to “Option One”.
41. AED and JAD brought all of the incriminating evidence of corrupt behaviour of Mr Lazenby and his colleagues to the attention of Shell senior management including Sir Mark Moody-Stuart and Malcolm Brinded, currently Executive Director of Shell Exploration and Production. Shell management simply turned a blind eye to the evidence and did not enforce compliance with the SGBP.
42. In fact, Mr Lazenby was able to boast in his Witness Statement that he had support from the highest levels of Shell management. After reading this claim the Donovan’s wrote to senior Shell directors, including Sir Mark Moody-Stuart and Malcolm Brinded, informing them about the incontrovertible evidence of Mr Lazenby’s unscrupulous conduct which had been found in discovery documents. The Donovan’s invited Shell management to withdraw its support for Mr Lazenby. Their invitation was ignored. The relevant correspondence is published on the Donovan website.
43. During the SMART trial Shell lawyers deceived the court by carrying out an outright deception while JAD was being cross examined. It was a premeditated attempt at entrapment based on an unfounded accusation of forged documents - a serious criminal offence. It involved a motorbike messenger supposedly bringing documentary evidence to court. In fact there was no messenger, no motorbike and no such evidence in transit to the court. The ambush was a charade and a complete fabrication.
44. Shell lawyers again raised the issue of forged documents with a key witness for JAD, Mr Roger Sotherton, during his cross examination. Mr Sotherton said in reply that burglars had broken into his house before the trial and had access to his trial documents. Mr Sotherton also raised the question of other possibly related pre-trial burglaries at the home of JAD and the solicitor acting for JAD. The Queens Counsel representing Shell, Mr Geoffrey Hobbs immediately ceased that line of questioning.
45. There was further drama in the middle of Mr Lazenby’s cross examination in the witness box when Shell approaching the Donovan’s with a suggestion of settlement negotiations in respect of the SMART claim which led to a compromise resolution of the action.
46. Accordingly a “joint press statement” was made by Shell UK and JAD announcing a “stalemate” in respect of the SMART litigation three weeks into the High Court Trial. In reality, Shell paid all legal costs said to be over £1 million UK pounds and JAD also received a secret settlement payment. This was another example of the true facts being hidden from the public and from Shell shareholders.
47. The SMART settlement was subsequently repudiated by Shell as a result of its actions in breach of the terms. Shell Legal Director Mr Richard Wiseman sent an email to a third party company making comments and offering information about JAD which could only be construed as defamatory. In May 2005 Shell International Petroleum Company, of which Mr Wiseman is now General Counsel, made comments regarding JAD in a legal submission to the World Intellectual Property Organisation. The comments would have been in breach of the terms of the SMART settlement (if it had not already been repudiated by Mr Wiseman in the third party incident mentioned above). Mr Wiseman acted as an advisor to the Shell lawyers who brought proceedings against AED in respect of Shell related domain names.
48. The Donovan’s brought libel proceedings against Shell UK on two occasions. According to the manuscript Shell paid a consideration to AED and JAD of £125,000 UK pounds to withdraw the first libel action. The consideration was part of a wider agreement called a “Funding Deed”. The second libel action was part of the SMART settlement.
49. The Donovan’s were disenchanted with Shell because of what they considered to be unacceptable tactics by Shell during the SMART litigation including its admitted use of an undercover agent, who like Mr Lazenby, was caught red-handed. The agent used fake documents and a fake company. He was spotted examining private mail at offices being used by the Donovan’s. Shell lawyers were cornered into making a written admission which is published on the Donovan website.
50. The Donovan’s claim that they were besieged by undercover activity: threats were made against them and their witnesses and a series of burglaries were carried out at their own home, the residence of a key witness (Roger Sotherton) and even at the home of the solicitor representing JAD. Documents relevant to the litigation were tampered with. Individuals posing as journalists interviewed the solicitor acting for JAD, key witnesses and JAD himself. One gentleman even flew in from Paris to carry out interviews claiming to be a reporter working for The European newspaper. The journalists turned out to be bogus. Shell denied any involvement with the further uncover activity.
51. However, Shell admitted after a story published by a UK newspaper, The Sunday Times, on 17 June 2001, that it had used a serving German Secret Service Agent on undercover missions targeted against its perceived enemies including Greenpeace, The Body Shop and Nigerian activists.
52. The agent, who was employed by a Hakluyt Limited, a sinister London-based "business intelligence bureau", had engaged in sabotage, espionage, betrayal, deception and intelligence gathering. The following are extracts from The Sunday Times article: “Behind the facade, however, Schlickenrieder was a spy working for both the German secret service and for Hakluyt, a private intelligence agency based in London's West End and set up by former officers of MI6, the secret intelligence service. His codename was Camus after Albert Camus, the existentialist author of L'Etranger. Hakluyt paid him thousands of pounds to inform on the activities of Greenpeace, Anita Roddick's Body Shop and other environmental campaigners. The BND, the German equivalent of MI6, allegedly paid him £3,125 a month living expenses.”
53. The agent also had a sinister role in connection with Ken Saro Wiwa, the Nigerian Nobel prize laureate, who was hanged on false charges by the then corrupt military regime in Nigeria with which Shell was closely involved. Mr. Wiwa was hung along with eight others after leading a peaceful campaign against Shell’s activities including horrendous environmental consequences resulting from oil spills and gas flaring in Ogoniland in the Nigerian Delta.
54. The Donovan’s discovered that senior titled directors of Shell were also directors and the ultimate spymasters of Hakluyt, one serving as Chairman of the operating company and the over as President of what is supposed to be an oversight organisation, The Hakluyt Foundation. The relevant gentlemen were simultaneously major shareholders in Shell and Hakluyt.
55. Via a link on the Donovan website, I visited a website called “nuclearcrimes.com”. This is owned by a gentleman called Mr. John Alfred Dyer. He has accused Shell of lies and cover-up in respect of the alleged improper dumping of contaminated materials, including nuclear isotope Strontium-90, at the Shell Research Limited’s, Thornton Research Centre, Cheshire, England. This allegedly happened many years ago. Mr Dyer had correspondence with Mr Richard Wiseman at Shell and with Shell’s solicitors, DJ Freeman. He claims that subsequent to his approach to Shell: “Investigators kept me under surveillance. My telephone was tapped. My mail was intercepted, and destroyed and/or kept.”
56. It is against this sinister backdrop that I have changed my email addresses several times after suspecting that my mail was being tampered with. My home was also burgled repeatedly in March 2005. I have no idea whether any of these activities had any connection to the current litigation. Reading about such activities relating to other parties at odds with Shell may have perhaps understandably made me paranoid.
This annex (B) contains examples of newspaper articles featured on the Donovan website and elsewhere BEFORE the publication of the alleged defamatory articles on the DONOVAN website domain under my name – the last one being published on or around 16 June 2004
The news reports were all first published by the relevant newspaper titles or other sources as indicated before also being published on the Donovan website.
With regard to the Donovan website, when extracts are taken from the body copy of news stories and added to the headlines, the extracts are shown within quotation marks. The items listed below were all published on the Donovan website in the months indicated. They are currently compiled on the Donovan web site on web pages with the indicated headings.
Each headline as displayed on the Donovan website is a hyperlink to the relevant report/information. The headlines, quoted extracts and the content of each article/information have relevance to the allegations which gave rise to the defamation action. There may be a degree of repetition as a few news reports appear under more than one web page heading.
For ease of referencing, ANNEX B contains various themes in their own chronological order based on the dates published and/or posted on the Donovan Website.
· ANNEX B1: Scandal, Lies & Cover-up Destroy Shell’s Reputation”
· ANNEX B2: “Royal Dutch Shell Plc: A Focus on Shell’s Conduct in Nigeria”
· ANNEX B3: “Remarkable Admissions and Apologies by Shell”
ANNEX B1: WEB PAGE HEADED:
“SCANDAL, LIES & COVER-UP DESTROY SHELL'S REPUTATION”
(accessible via link on “Home Page” of Donovan website)
The Guardian: Unloveable Shell, the goddess of oil
The Times: How Shell blew a hole in a 100-year reputation
Daily Telegraph: Shell drops 'bombshell' on reserves
The West Australian: Investors howl for Shell's blood
The Independent: Reserves shock wipes £8bn from value of oil giant Shell
London Evening Standard: Reserves shock hammers Shell
The Sunday Times: Shareholders can no longer be sure of Shell
The Sunday Times: A broken Shell
The New York Times: Shell Chairman Resigns Over Reserves Shock
The Mail on Sunday: Scandal of Shell's oil bonus
The Sunday Telegraph: Shell board shocked by devastating report
London Evening Standard: Shell facing up to 15 fraud claims
Yahoo News Report: Shell Execs Hid Reserves Problem
The Wall Street Journal: Shell Officials Kept Board in Dark
The Economist: Royal Dutch/Shell - Another Enron?
www.bergermontague.com: The law firm of Berger & Montague, P.C. has filed a securities fraud class action complaint against Royal Dutch Petroleum Company
The New York Times: Credit Agency Lowers Its Outlook on Shell
The Observer: FSA probes scandal of 'missing' Shell reserves
Mail on Sunday: Now FSA probes scandal at Shell
London Evening Standard: Watchdog probes Shell scandal
The Miami Herald: UK Financial Watchdog Launches Investigation into Shell Scandal
The Times: Shell chiefs in criminal inquiry over ‘lost’ reserves
The Times: Are predators eyeing lame Shell?
BBC News: Shell boss 'shocked' at revisions
The Guardian: Busted brands
The Sunday Telegraph: You can't be sure of Shell
The Sunday Telegraph: The Shell debacle infects four FTSE company bosses
The Observer: The Shell supertanker is holed below the line ('Everyone's very scared. They've all got their own lawyers,' said one City expert late last week about Shell, the once-unsinkable flagship of the global oil industry).
SundayHerald.com: After week of shocks, you can’t be sure of Shell
Daily Mail: Crisis grows at oil giant Shell
HoustonChronicle .com: Criminal investigation possible, Shell confirms
BBC RADIO 4 "FILE ON 4" TRANSCRIPT OF PROGRAMME BROADCAST ON 23 MARCH 04: "The world’s third largest oil and gas group, a British icon, is reeling from a scandal
Daily Times: Shell's corrupt shell game in Nigeria
Mail on Sunday: Shell chief 'had a private army'
The Independent: Shell faces human rights grilling
The Independent: Shell man speaks (...entire CMD would be forced to resign)
The New York Times: Shell Officer Said to Have Ordered Report Destroyed
The Independent: Shell board studies crunch report on oil reserves fiasco
Financial Times: Unsure of Shell
The Daily Star: Shell scandal points to exaggerated estimates of oil reserves
Daily Telegraph: Shell to report on reserves debacle
London Evening Standard: Shell bosses lied to the City
Bloomberg.com: Shell Loses AAA Credit Rating, Lowered to AA+ by S&P (Update2)
San Francisco Chronicle: Shell exec said he was tired of lying; company's finance chief resigns
Houston Chronicle: 'Sick and tired about lying' at Shell
BBC.co.uk: Shell bosses 'fooled the market'
The Independent: Lies, cover-ups, fat cats and an oil giant in crisis
ChannelNewsAsia: Shell name dragged through mud after explosive report: “The closely guarded reputation of Royal Dutch/Shell was left in tatters as British newspapers accused the oil giant of lies and a cover-up after an explosive internal report admitted executives knew of problems with reserves over two years ago.”: “"Lies, cover-ups, fat cats and an oil giant in crisis," was the damning front-page verdict of the Independent newspaper, which said Shell was facing the "biggest corporate scandal for almost 30 years". (ShellNews.net) 20 April 04
The Times: Deceitful Shell 'needs ten years' to rebuild exploration business
The Times: Unravelling of the cover-up
The Guardian: Trail of emails reveals depths of deceit at the heart of Shell
The New York Times: Shell's Report on Its Troubles Cites Discord at Top: "The report also noted that last December, Mr. van de Vijver sent an e-mail message directing a subordinate, Frank Coopman, to destroy a document Mr. Coopman had produced that concluded that the company was "under a legal obligation" to immediately correct overstatements of its proven reserves.": "Our story is not one anyone would be proud of, and we have no excuses," said Lord Ron Oxburgh, chairman of Shell Transport and Trading, the British half of Royal Dutch/Shell” (19 April 04)
The Scotsman: Shell admits reserve 'lies'
Edinburgh Evening News: Damning report shows Shell hid reserves shortfalls
The Scotsman: Shell implodes as e-mails provide damning evidence
Financial Times: Unsure of Shell
Financial Times: Observer Column: Shell-shocked
(Corporate slogans consigned to the dustbin of history no. 94: "You can be sure of Shell.")
Minneapolis Star Tribune: Dutch/Shell Group exec was 'sick and tired' of lying
The Scotsman: Shell's reputation left in tatters
The Scotsman: Shell faces 15 US lawsuits
Tallahassee.com: Shell shaken by execs' dishonesty on holdings
TheStarOnline: Shell report exposes lies, CFO sacked
PlanetArk.com: Shell reserves scandal may aid Ogoni case
London Evening Standard: Shell facing court over 'rights abuses'
Bloomberg.com: Shell Loses AAA Rating at Fitch; Rating Cut to AA+ (Update1)
The Independent: Criminal charges loom over Shell
The Independent: We can all learn from Shell's debacle
Financial Times: Staff around the world left reeling as Shell image cracks
Forbes.com Shell's Watts was fired face to face, escorted away
Investors.com: Exxon, Halliburton, Shell and more
Money.Telegraph: Sacked Shell boss 'escorted from HQ'
FROM THE WEBSITE OF SHELL.COM: REPORT OF DAVIS POLK & WARDWELL TO THE SHELL GROUP - AUDIT COMMITTEE EXECUTIVE SUMMARY
The Economist: Humiliation: A once proud firm, brought down by its own flaws, needs a thorough shake-up
The Economist: Royal Dutch/Shell: Sick and tired about lying: “I AM becoming sick and tired about lying.” Those are not words shareholders want to hear from a senior executive.": “The report into how the phoney numbers emerged paints a picture of deception and backbiting at the top—and, despite ongoing board efforts to exonerate the new management, contains plenty to encourage shareholder lawsuits and, maybe, criminal prosecutions, not least in America, where jail may await. More senior Shell people may yet have to quit.”
Daily Telegraph: Shell's lies over reserves spark FSA investigation
The Independent: FSA confirms formal inquiry into Shell over reserves scandal
Financial Times: Shell will have to dig deep to recover its reputation
ChannelNewsAsia.com: Shell name dragged through mud after explosive report
ChannelNewsAsia.com: Moody's cuts 'AAA' debt rating of Shell subsidiaries
SundayHerald.com: Who can be sure of Shell today?
The Independent: DTI is poised to probe Shell as scandal grows
TimesOnline: Agenda: William Lewis: And so farewell then dour, plump, bald bloke..
(Shell is a disreputable company in need of a strong injection of ethics)
Al-Jazeera: Shell Oil Lies - A tip of the iceberg as World Oil crisis looms?
Daily Mail: Shell attacked from all sides
Daily Mail: Shell's £13bn credibility gap
National Post: Shell Canada distances itself from parent company reserves estimates scandal
The Independent: Watchdog shakes up oil audits in the wake of Shell scandal
smh.com.au: Shell reputation reserves close to empty
International Herald Tribune: Shell Concealed Extent of Its Problems to Protect Nigeria Partnership.
The Independent: Shell paid little attention to its in-house legal team. But as the recent scandal showed, no modern business can afford to keep its briefs unbriefed
Newark Star-Ledger: Judge to choose lead plaintiffs in Shell oil reserve fraud case.
("This is a fraud that was orchestrated apparently at the highest levels of the company, extending over many, many years, and executed knowing that this is defrauding the public.")
Sacramento Bee: Shell denies greed spurs the closure
BBC News: Shell trims back reserves again -Can Shell draw a line under the scandal?
Financial Times: Shell aims to Shed arrogant reputation
Daily Telegraph: Watts' pension pot tops £10m
news-press.com: Shell Oil replaces sulfur-tainted gasoline
Local10.com: Tainted Gas Leads To Class-Action Suit: Federal Lawsuit Filed Against Shell Oil
The Wall Street Journal: US Court Reinstates Shell, ChevronTexaco Price Fixing Suit
The Independent: “Even those clowns at Shell”
Mail on Sunday: Chairman Jeroen van der Veer in frame over Shell scandal – could lead to 20 years in jail
nbc6.net: Another Class-Action Lawsuit Filed Against Shell Over Tainted Gas; “Another day, another lawsuit for Shell Oil”: 9 June 2004
Rather than quote extensively from a selection of the above articles, I will instead just print one entire article: -
The Economist: Royal Dutch/Shell: Sick and tired about lying: (ShellNews.net)
Apr 22nd 2004
From The Economist print edition
The crisis at Shell has become much more serious
“I AM becoming sick and tired about lying.” Those are not words shareholders want to hear from a senior executive. They are certainly not words anybody ever expected from an heir-apparent at Royal Dutch/Shell, one of the world's largest—and until recently, one of its most admired—oil companies.
And yet, as a new report revealed this week, those words of exasperation did indeed come from a senior Shell executive. Walter van de Vijver, until recently the firm's head of exploration and production (E&P), wrote them in an angry e-mail to Sir Philip Watts, then the firm's chairman, in November 2003—fuming that he was tired of covering up for shortfalls in the firm's reserves that resulted from “far too aggressive/optimistic bookings”. Alas, the over-zealous booker was none other than Sir Philip, who preceded him as head of E&P.
The overbooking finally caught up with both men when, in January, Shell was forced to reclassify a whopping fifth of its “proved” reserves. When preliminary investigations pointed the finger at the two men, both were forced out.
This week, Shell's board unveiled part of the final results of those investigations. An analysis of reserves, done by Ryder Scott, an audit firm, explained what happened to the numbers, and an investigation of documents and processes by Davis, Polk & Wardwell, a New York law firm, explained how and when it happened.
The big unanswered question, however, is why it happened. Was it just Shell's “technocratic hubris”, as one manager called it, leading it to ignore the increasingly strict rules of America's Securities and Exchange Commission (SEC) about booking reserves, without pausing to think about the consequences of, in effect, lying? Or had Sir Philip been deliberately inflating the figures, taking full advantage of Shell's own, loose, guidelines to conceal disappointing exploration results and so book himself into the top job?
The report into how the phoney numbers emerged paints a picture of deception and backbiting at the top—and, despite ongoing board efforts to exonerate the new management, contains plenty to encourage shareholder lawsuits and, maybe, criminal prosecutions, not least in America, where jail may await. More senior Shell people may yet have to quit.
In the mid-1990s, it is now clear, Shell lost its way, finding it ever harder to replace the oil and gas reserves that it was pumping out of the ground. In 1997-2001, when Sir Philip was head of E&P, the firm inflated the reserves that it reported to the SEC as “proved”. The SEC defines proved as reserves that the company has firm plans to get to market quickly. Many oil executives dismiss this measure as a misleading guide to the value of a firm. But, nonetheless, it is a legal requirement for oil companies listed in America.
This week's Ryder Scott report “de-books” a further 1-2% of proved reserves, less than some analysts had feared. Shell's numbers may now, at last, be believable. Oddly, auditors do not routinely scrutinise reserve figures, despite their use in valuing oil companies. Shell now has only 14.5 billion barrels of proved oil and gas, which represents about ten years' worth of current production. BP has 18.3 billion barrels, enough for over 14 years; Exxon Mobil has more than 21 billion, which could keep it going for almost that long. Shell has been falling behind its peers for years in reserve replacement—and massaging the numbers to conceal the fact.
The report by the lawyers cited memos, e-mails and details of private meetings to show how Mr Van de Vijver and Sir Philip fought over the handling of the firm's shaky reserves position. The lurid details (for example, talk of a “script” and of keeping investors “fooled”) make it clear that both men knew that reserves were inflated—although Mr Van de Vijver alone seemed to want the truth to be made clear.
One possible interpretation of all this has Sir Philip doing his best to cover up his past over-bookings, while Mr Van de Vijver struggled in vain to become a fully-fledged whistle-blower. But one senior director describes instead a prolonged drift at Shell as top management slowly came to realise that their numbers had strayed far from the SEC rules. Says one insider, neither Sir Philip nor Mr Van de Vijver really understood how “serious, serious” the situation was becoming. Directors also say, bitterly, that Shell's auditors failed to point out that the firm's reserving guidelines did not comply with SEC rules.
The report suggests that Judy Boynton, the (now-ex) chief financial officer (CFO), and Jeroen van der Veer, Sir Philip's replacement as chairman, were informed about the problems—as was the committee of managing directors. Mr Van der Veer says that he did not “appreciate the magnitude and severity of the situation”.
Robert Roseman of Spector, Roseman & Kodroff, one of several American law firms now bringing class-action suits against Shell, is delighted: “This makes our case a whole lot easier, because these e-mails show that people high up in Shell clearly knew what was going on and hid it from investors.”
The two boards that control the group (Royal Dutch and Shell) tried this week to spin the reports as the definitive cleansing of its sins. The two board chairmen exonerated all members of the current management and boards, claiming that “none of them bore a material responsibility for the difficulties.” Judy Boynton, the CFO, had to step aside, but her integrity was “unimpeachable”; she will remain as an adviser. The chairmen insisted: “We have complete and unreserved confidence in the leadership of Jeroen van der Veer.”
There is already reason to consider such faith unjustified—and not just because various American authorities are investigating. The big worry goes back to that basic question left unanswered by the reports—why did things go so wrong at Shell?
Dealing with what ails the firm will not be easy. The measures floated this week may help. But they seem unlikely to be enough to change the culture of the place. The awkward bi-national structure, with two weak boards and a committee of managing directors, leads to an inward-looking bureaucracy that breeds arrogance. A more straightforward reporting structure with one board, a chairman and a chief executive might do better, although in the Netherlands, where Royal Dutch/Shell stills enjoys huge respect as a national champion, there has been little appetite for change—and Dutch shareholders have the voting power to block it.
Some British directors have been advocating a single board and a dual listing for years. Perhaps the new reports will wear down Dutch resistance. However, to transform the culture would probably require an accomplished outsider in the top job, willing to question everything and push through changes. But the boards seem unlikely to opt for that.
At least the crisis has had no significant impact on Shell's cashflow. Indeed, it may demonstrate impressive underlying strength on April 29th, when its first-quarter results are likely to show a “clean” profit of some $3 billion. Hence Mr Van der Veer's grand claim: “Despite the difficulties of recent months, Shell is a sound and profitable group. We are making the changes to our reserves practices to ensure that that remains the case.” We shall see.
STILL JUNE 2004 – A
ARTICLES PUBLISHED UNDER THE SAME WEB PAGE AFTER THE PUBLICATION OF THE “WHISTLEBLOWER” ARTICLES
The Guardian: Shell tries to win friends as it owns up to mistakes: 15 June 2004
Times-Picayune: Company can't say which locations sold the tainted gasoline: 16 June 2004
The Guardian: 'I'm really very worried for the planet': Ron Oxburgh is chipping away at the fossilised thinking that cost Shell its reputation: 17 June 2004
The Times: Double Dutch: Once again, Shell has managed to strike negative publicity where it was thought that none could be found: 17 June 2004
Financial Times: How Shell changed its culture and lost its way: Or, as a "shocked, dismayed and ashamed" Mr van der Veer put it: "We have more problems than just the reserves issue.": 18 June 2004
USNewsWires.com: Regulators Given Internal Shell Documents: "provide incontrovertible evidence the company has once again misled California…”
The Times: The lost Arabic school for scandal: “the spy school": 22 June 2004
TheAdvocate.com: Woman sues Shell Oil, refinery for damage caused by gasoline: 23 June 2004
The Independent: Shell hires new finance director after reserves scandal 25 June 2004
London Evening Standard: Shell 'has lied for 10 years': 25 June 2004
The Independent: Shell hires new finance director after reserves scandal: 25 June 2004
London Evening Standard: SHAMED “Shell chairman Sir Philip Watts has secured a pay-off worth more than £1m in cash plus stock options potentially worth £6m more”: 25 June 2004
Reuters.com: Shell says Watts pay-off does not rule out legal action: "Asked if the announcement earlier in the day of a one million pound settlement meant the company SHEL.L had decided not to sue its disgraced boss, a spokesman said on Friday, "We cannot speculate on the outcome and implications of external investigations.": 25 June 2004
ChannelNewsAsia: Shell hit by new lawsuit in US over reserves scandal: “fresh lawsuit names 27 directors and officers of Royal Dutch/Shell, and also their accounting and audit firms, PricewaterhouseCoopers International and KPMG International": 26 June 2004
NewsDay.com: Shell pays former executive nearly $2 million in severance: PLUS "lawsuit... suggests the defendants forfeit salaries, bonuses, stock awards, profits and special benefits for violating their fiduciary duties": 26 June 2004
Daily Telegraph: Sacked Shell boss walks away with £1m: “despite his role in the oil giant's reserves debacle": 26 June 2004
Paper by Alfred Donovan prepared for presentation at the National Union of Ogoni Students (NUOS International, USA) Convention in Lincoln, Nebraska, held on 26/27 June 2004
LETTER TO WILLIAM LERACH, US CLASS ACTION LAWYER: INCONTROVERTIBLE DOCUMENTARY EVIDENCE OF SHELL DELIBERATELY HIDING INFORMATION FROM ITS SHAREHOLDERS FROM 1994 ONWARDS: 26 June 2004
ChannelNewsAsia.com: Embattled Shell braces for shareholder showdown: “officers and directors of these interconnected companies have hidden behind an opaque and complicated corporate structure to falsify proved oil and gas reserves for nearly 10 years": 27 June 2004
The Observer: Ethical funds dump Shell shares: “blue-chip City institutions have confirmed that they have ditched all their Shell shares”": 27 June 2004
Taipei Times: Former chairman of Royal/Dutch Shell gets giant payout: "after an accounting scandal": 27 June 2004
BBC News: Shell appeals to shareholders' patience "You are still covering up the scandal," the heckler cried to some applause,": 28 June 2004
The Guardian: Shareholders vent anger over Shell scandal: 28 June 2004
The New York Times: Shell Asks Shareholders for Forgiveness: 28 June 2004
Oil & Gas Journal: Pension funds sue Shell brass, auditors, seeking damages, policy changes": 28 June 2005 (This claim resulted in a multi-million dollar settlement by Shell in 2005)
Daily Telegraph: Shell's board survive: No wonder Shell is in such a mess: 29 June 2004
The Guardian: Shell investors vent fury on 'incompetent' board: "This company is giving world class salaries to non-executives for a world class scandal.": 29 June 2004
The New York Times: Testy Annual Meeting Focuses on Shell's Scandal: “A few of Shell's top executives mislead shareholders and the financial world, he said. ”In the United States,'' he said, "they'd have been taken away in handcuffs.": 29 June 2004
Business Report (SA): Shell chairman to view problems at Sapref, says activist: "Shareholders are tired of Shell's lying and spinning": “a chorus of disillusionment over its integrity and transparency": 29 June 2004
Toronto Star: Oil giant's brass beg for pardon and time: Contrition expressed at Royal Dutch/Shell: Reserve-booking fiasco stays at centre stage: 29 June 2004
The Times: Investors snub Shell in vote on liability: “When this scandal came up, Sir Mark was present. Why did he allow this departure from Shell’s business principles? He should resign from all his other directorships.": 29 June 2004
The Independent: Investors lambast Shell over ousted chairman's £1m pay-off: “the £1.06m pay-off for Sir Philip Watts proved that, even under new leadership, the company was still living in "a parallel universe": 29 June 2004
The Independent: Still Shell-shocked: “a company which is obviously still in denial": 29 June 2004
Daily Telegraph: Shell to clean up its act with assets sales: “struggling to restore its reputation": 2 July 2004
The Wall Street Journal: Shell Will Take Quarterly Charge Of $330 Million: “reserves-booking scandal this year exposing Shell's need for new reserves": 2 July 2004
Toronto Star: Shell reduces profit over reserves $276 million U.S. overstatement: “Filing reveals impact of debacle”: "inappropriate" accounting in other areas": 3 July 2004
Washington Post: Shell Restates Profits: "revision followed an embarrassing series of disclosures": 3 July 2004
The New York Times: Shell Says It Overstated Profits by $276M: "profits.. exaggerated.."; "inappropriate accounting.."-"resulted in profits being embellished": 3 July 2004
The Observer: Bad publicity - not goodbye, but good buy: “Shell illustrates how a steady barrage of negative publicity can bring a company to its knees”: “The company's reputation is now in tatters”: "We list the latest batch of leaders and laggards in the corporate publicity league in the accompanying table. These rankings are based upon news reports in the last three months. The current '10 worst' list is led by Shell.": 4 July 2004
The Observer: Counting the wrong beans: 'At some stage something happened to Shell's values that made it acceptable to put up figures that weren't completely above board,': 4 July 2004
News Leader.com: Shell admits overstating its profits: "also made errors in the way it accounted for exploration costs, certain gas contracts and earnings per share of its parent companies": 4 July 2004
Sunday Telegraph: BP reserves the right to go its own way: “in the wake of the scandal at Royal Dutch/Shell": 4 July 2004
Business Day: Overstatement raised oil giant's profit by $432m: “Last Monday the leaders of Royal Dutch/Shell asked shareholders for forgiveness and time to revamp the oil giant.": 5 July 2004
nzherald.co.nz: Shell takes profit hit: “profits being exaggerated”: "inappropriate accounting”: “profits being embellished": 5 July 2004
Email from Mr Charles Wiwa, nephew of the late Nobel Laureate Ken Saro-Wiwi: "...we trust that our weapon of TRUTH will prevail over the evil tendencies of the 'multi-national goliath'": 8 July 2004
Financial Times: Shelled out: “If only the executives of Royal Dutch/Shell, under fire over its reserves debacle, could achieve redemption so easily": 9 July 2004
Financial Times: S&P raises concerns over Shell review: “battered by a scandal": 9 July 2004
Financial Times: Shell edges closer to shake-up: “in the wake of the Anglo-Dutch oil group's reserves crisis": 9 July 2004
The Wall Street Journal: Shell Sold 24% Of Its Malaysian Refining Company Thursday: “dogged for months by a scandal over the accounting of its oil and natural gas reserves": 9 July 2004
The Times: SHELL SHOCK: The Money Programme provides a clear and merciless indictment of Shell, a company that prided itself on being a safe investment for widows and orphans: "...Walter van de Vijver, was appalled and fired off numerous warnings. “I am becoming sick and tired,” he wrote, “of lying about the extent of our reserves.”: 10 July 2004
Daily Telegraph: Shell accounts change brings $226m upgrade: “Shell has been plunged into crisis after admitting that it had overstated its "proven" oil and gas reserves by 23pc": 14 July 2005
The Wall Street Journal: Shell's Outside Auditors Got Warning on Reserves in 2002: “The documents also suggest that some potential reserves problems at Shell were much more widely known and discussed": "Shell's reserves-accounting scandal raises new questions about the responsibility of independent auditors." 15 July 2004
London Evening Standard: Shell alarm two years before scandal: “SHELL'S external auditors were warned the oil giant was inflating its energy reserves two years before the company finally came clean": 15 July 2004
Reuters: Outside auditors warned on Shell reserves: “documents… indicate problems were flagged repeatedly to a wider circle of senior executives and board members than previously disclosed": 15 July 2004
BBC TV: Oil giant Shell's investors shocked: “that's fraud in the United States and the Justice Department will have a basis for criminally prosecuting the executives": 15 July 2004
The Times: SHELL SHOCK: BBC Two, 9.50pm: “I am becoming sick and tired,” he wrote, “of lying about the extent of our reserves.": 15 July 2005
The Times: Shell tipped to merge UK and Dutch parents: “Shell is under intense pressure to streamline its complex board structure after the reserves misreporting scandal": 15 July 2005
The Scotsman: Shell tight-lipped on claim: “TROUBLED Shell was involved in fresh turbulence yesterday as it stonewalled questions": 16 July 2004
The Guardian: Shell had early reserves warning: “Shell admitted yesterday that it had been warned about inflated reserves before it was forced to issue the first of four downgrades this year.": 16 July 2004
SHELL2004.com: UNOFFICIAL TRANSCRIPT BBC2 TV “THE MONEY PROGRAMME”, BROADCAST 15 JULY 2004, 9.50pm: 17 July 2004 - For extracts from the content read below: -
ShellNews.net commentary on the content: Stanley Bernstein of Bernstein Liebhard & Lifshitz LLP, the lead US plaintiff lawyers bringing a class action case against Shell for Pennsylvanian State Retirement Funds, described the scandal on the BBC TV Money Programme in the following terms: "There are a lot of investors and many maybe more investors that were affected by this fraud than any other fraud in history". The following are extracts from the same programme broadcast on 15
Comments about current Shell Chief Executive, Jeroen van der Veer:
"signed statements declaring that the submission known as a 20F
was a true and faithful description of Shell’s reserves"; "He signed
false financial statements"; "he signed certifications that the financial
statements met with SEC guidelines.”
Comments about the Royal Dutch Shell Committee of Managing Directors (the CMD): "And what about the Committee of Managing Directors? They too had received a much stronger warning about fooling the market. Jeroen van der Veer and the rest of the CMD still took no action."
DESCRIPTIONS USED ABOUT THE CONDUCT OF SHELL MANAGEMENT: "deceit"; "false pretences"; "falsely exaggerating"; "misled the world"; "basically they had been told a lie"; "embellished on the numbers"; "exaggerated the numbers"; "basically we lied to you"; "cover it up"; "doctoring the books"; "inventing numbers"; "certifying the reserve which he knows doesn’t exist"; "reserves replacement and production growth were inflated"; "I am becoming sick and tired of lying about the extent of our reserves"; "cover-up"; "actually destroyed documents"; "the scandal blew up and the company’s reputation carefully nurtured over a century was destroyed"; "Shell has lied intentionally and deceived the public" ; "now they know that Shell lied to them and cost them money"; "a fraud perpetrated over a long period of time"; "a fraud perpetrated by the very heads of the company".
There was none of the usual caveats which precede statements or comments which would otherwise be labelled as libellous: e.g. "allegedly". The above descriptions were applied during the BBC TV programme without any such qualification. They were put on record as statements of FACT.
The Guardian: worthwhile policy or simply propaganda?: Or take Shell. It suffered a series of public relations disasters in the mid-90s, notably the Brent Spar oil rig disposal fiasco and its association with human rights abuses in Nigeria. These debacles spurred it on to spend millions on rebranding, wooing environmentalists and human rights groups and investing in renewable energy. Yet, having done all that, it now finds a lot of its good work undone by the financial scandal of its under-reporting of oil reserves.17 July 2004
The Sunday Times: Market Mover: Richard Dunn: “As the Shell scandal proves, there are reserve issues with some of the major oil companies": 18 July 2004
Financial Times: Shell in move to reduce its legal costs: a host of civil lawsuits following its admission that it overstated its oil and natural gas reserves”: “550 in-house lawyers": 20 July 2004
The Guardian: Nigerianisation: Shell's solution for troubled delta: “The reserves scandal that led to Sir Philip's removal in part related to Nigeria": 21 July 2004
The Wall Street Journal: SEC May Require Auditors To Sign Off on Oil, Gas Reserves: “SEC's re-evaluation of its rules comes on the heels of the accounting scandal": 21 July 2004
The New York Times: House Panel to Begin a Hearing on Shell's Reserve Scandal: "Shell officials were asked to testify, but will not, the company said.": 21 July 2004
LA Times: "scandal at Shell oil": SEC Weighs Requiring Certified Reserves: 'overstatement of its proven reserves and "inappropriate" accounting in other business areas resulted in profits being inflated by $432 million.': 21 July 2004
CBCNews: Shell to compensate Quebec motorists for damage caused by gas additive: “Hundreds of thousands of Quebec motorists may be eligible to receive money from Shell as part of a settlement of a class-action lawsuit.": 21 July 2004
CJAD.com: Shell Canada disputes $100 million figure in suit involving Quebec drivers; "related to a fuel additive the company used in 2001 and 2002": 22 July 2004
The Times: US watchdog under fire over oil reserves scandal: “House Committee on Financial Services convened a hearing on the Shell reserves scandal.": 22 July 2004
The Wall Street Journal: Shell Canada Settles Suit Involving Quebec Drivers –CP: "Shell Canada could pay up to $100 million to about 500,000 Quebec drivers": 22 July 2004
National Post: Shell Canada settles Quebec class-action suit: “Radio-Canada reported Shell Canada could pay as much as $100-million": 22 July 2004
London Evening Standard: How BP lords it over Shell: “looking ahead, one is in terrific shape, the other could be in terrible trouble”: “Shell's reputation among investors lies in tatters": 25 July 2004
London Evening Standard: The oil giants' scorecard: "How they add up: BP 66, Shell 49": "Shell Desperately needs to find more oil after the reserves debacle”: “Bonuses for the executive team for 2003 were scrapped in the light of the reserves scandal" 25 July 2004
Bloomberg.com: BP, Shell, Eni Results May Put European Oil-Stock Gains at Risk: “The company disclosed in January it overstated oil reserves for more than five years.": 26 July 2004
Financial Times: Oil sector governance: “Royal Dutch/Shell's reserves downgrade was a dramatic failure of corporate oversight.”: “Good reputations take time to build, but are quickly lost.": 26 July 2004
Business Week: Can Shell Put Out This Oil Fire? "a devastating portrait of Shell as a dysfunctional company”: "The two boards should move quickly to find a successor to the 56-year-old van der Veer, who looks like a caretaker.": 26 July 2004
Reuters: BP profits at bottom of forecasts: “has outshone scandal-hit rival Royal Dutch/Shell": 27 July 2004
Fortune.com: Is Shell Ready to Rebound? "Forget Iraq and Iran," says Gheit. "Royal Dutch/Shell needs a regime change.": 27 July 2004
Fortune.com: Now If Only Shell Could Find Some Oil: Forget the reserve drama: At the current rate, Shell will run out of oil in a decade: "Shell will be a no-growth company at least for the next few years.": 27 July 2004
Financial Times: BP earnings rise 23% as week of good news begins: "Shell was especially hit this year by the scandal that revealed it had wrongly booked more than 20 per cent of its reserves" 28 July 2004
The Guardian: Kremlin soothes BP over trading in Russia: “now was the opportune time to make a takeover move for Shell, whose share price has been battered by slow growth and the oil reserves scandal.": 28 July 2004
The Guardian: High oil prices boost BP profits: “outshone its scandal-hit rival Royal Dutch/Shell this year": 28 July 2004
Thursday 29 July, 2004
Wall Street Journal: Shell Transport To Resolve FSA And SEC Investigations: "Shell to cease and desist from future violations of, the antifraud, reporting, recordkeeping and internal control provisions... SEC rules.”
Wall Street Journal: Royal Dutch/Shell 2Q Net Profit $4.0B: “Management… remains unable…to estimate…possible losses from the entire set of regulatory and other actions and litigation in relation to the reserves restatement.”
The Scotsman: Shell Fined £65M after Reserves Crisis: “inquiry which found that Shell violated reporting, record-keeping and anti-trust rules.”
Reuters: Shell pays fines for reserves woes: “Royal Dutch/Shell will pay about $150 million (82 million pounds) in fines for an oil reserves scandal that tarnished its reputation”
TheStarOnline: Shell fined US$120 million "Rebuilding credibility'' and "regaining trust'' are now the company's key priorities, it said in its annual report.”
BBC NEWS: Shell fined over reserves scandal: “will pay a penalty of £17m to the FSA - the biggest fine ever imposed by the regulator - and a $120m (£65.7m) civil penalty in the US.
London Evening Standard: Shell pays over reserves scandal: “It still faces a host of multi-billion dollar class-action lawsuits and a US Department of Justice probe.”: "Shell revealed today production was likely to remain flat until 2007 at best"
Bloomberg: Shell Pays $150 Million to End Probe; Output May Fall: “hopeful step in ending the reserves debacle that led to the ouster of three senior executives, the loss of a top-tier investment rating and more than a dozen shareholder lawsuits”
Yahoo.com: SEC Settlement With Royal Dutch Shell Fails to Fix Governance Flaws That Allowed Fraud to Occur and Fails to Hold Executives Personally Accountable for Over $150 Million in Fines
Friday 30 July, 2004
The Times: Simple solutions are best for Shell: “One of the world’s most trusted investments lost its credibility and its top credit rating.”: "directors and top managers were the authors of Shell’s misfortunes"
The Times: Shell and BASF set to sell $6bn plastics business: “first strategic move for the Anglo-Dutch oil company since becoming mired in its oil reserves scandal in January.”
The Times: Shell agrees to pay fines of £83m: “continuing criminal investigation by the US Department of Justice.”: “Both Euronext and AFM, the Dutch securities institute, are also investigating Shell”
Financial Times: Shell pays $151m to watchdogs: “Thursday's announcement has no bearing on the civil and criminal cases against individuals linked to the company.”
Financial Times: US watchdog shows its teeth: "Parmalat"; "Enron"; "Shell"
AccountancyAge.com: Shell pays huge penalties to regulators: “Shell also confirmed that it breached market abuse provisions of the FSA's Financial Services and Markets Act 2000”
Business Report: Shell gets hefty fine for reserves fiasco: “The SEC found the Anglo-Dutch group had violated reporting, record-keeping and anti-trust rules”
The Washington Times: Shell agrees on penalty to settle charges: “While trying to put the scandal behind it, Shell reported a 16 percent increase in underlying second-quarter profits thanks to higher oil prices.”
Financial Times: Setting the scene: "Shell expects hostile takeover bids from BP and ExxonMobil within the next few months. These bids will be followed by a successful 'white knight' bid from Total”
Financial Times: Shell fighter begins the big clean-up: “it could itself become a bid target”; “if you get it hopelessly wrong, then people start sniffing around.": "In answer to a question about whether they are sniffing now, he said: "You will have to ask the sniffers"
Financial Times: UK and US regulators team up and levy £83m in penalties: “more robust policing since the Enron scandal broke in 2001.”
The Independent: Shell's road to redemption remains a long one: “An extradition battle involving Shell's former chairman Sir Phil Watts would provide splendid entertainment but it would also guarantee plenty more bad headlines”
The Independent: Shell pays £83m fine to settle scandal over oil reserves: “Shell and a number of former and serving directors are also still under criminal investigation by the US Justice Department”
The Boston Globe: Shell to pay $151m to settle misstatements: “fails to hold personally accountable the corporate insiders who perpetrated the fraud,"
Daily Telegraph: Shell to pay watchdogs £80m for oil reserves row: “but warned it could not put a figure on the cost of investor lawsuits.”
The Wall Street Journal: Shell to Pay $150 Million in Penalties: “Shell also has arranged with U.S. authorities to grant Dutch and British employees special diplomatic safe passage to and from American shores”
New York Times: Shell to Pay $150 Million in Settlement on Reserves: "production fell 5 percent to the equivalent of 3.58 million barrels of oil a day": "The underlying numbers are 'pretty horrendous,' said Neil McMahon, an analyst with Sanford C. Bernstein in London,": “Separately, the Commodity Futures Trading Commission said… Shell's energy trading unit, Coral Energy Resources, had agreed to pay $30 million to settle accusations that it had submitted FALSE price data to publishers"
Daily Mail: Shell is beached in the past: “there are deep-seated problems at Shell that go far beyond fiddling the numbers to make the reserves look better than they were.”: “exploration and production look dire”
Financial Times: An ocean of difference across the Atlantic: “It still faces a regulatory inquiry in the Netherlands, potential criminal investigation by the US Justice Department and myriad class action suits. They form a pretty powerful deterrent against following Shell's abuse of the markets."
Financial Times: Shell files revised statement with SEC: The revision was necessary because of the Dutch-UK oil and gas group's serial restatements of proved reserves earlier this year.
Financial Times: Settling the bill but not the issues: “companies also tend to look to their more reputable peers, of which Shell used to be one. This is no longer the case.”: “whether a management that lied to its biggest shareholders would have any compunction doing the same to Nigerian villagers.": 30 July 2004
Saturday 31 July, 2004
The Guardian: Shell fined £84m over reserves scandal: “Shell is facing a criminal investigation by the US department of justice, ongoing inquiries by the Dutch financial market regulator and the Euronext stock exchange as well as litigation in the US”
The Wall Street Journal: Moody's Confirms Aa1 Ratings Of Royal Dutch Shell Entities: “the negative outlook reflects uncertainties”: “Another factor implicit in the negative outlook”
The Wall Street Journal: Moody's Cuts Motiva Enterprises L-T Debt To A2: “The long-term rating downgrade primarily reflects the impact of Moody's downgrade in May 2004 of Motiva's 50% owner, Shell Oil”
The Wall Street Journal: Shell SEC Deal Fails To Solve Governance Issues – Lawyer: “accuses executives and board members of numerous wrongdoings - including breach of fiduciary duty and fraud”
The Wall Street Journal: UK Market Regulator Earns Stripes With Shell Fine: “"The Shell case, by raising the stakes so dramatically for the FSA, is kind of another way of rattling the handcuffs."
The Guardian: British watchdog catches up with US hare: “Shell faces the prospect of a string of civil actions from shareholders who feel duped.”
Financial Times: Victims punished at Shell: “The FSA justifies the fine by saying it has to send a signal to the market about unacceptable behaviour.": 2 August 2004
Financial Times: Lament of the Shell shareholder The penalty is the equivalent to the imposition of a fine on a victim of a robbery rather than on the perpetrator!: 3 August 2004
3 July, 2004
Reuters: Shell to unify boards: 3 August 2004
Daily Herald: County wants changes from Shell: “illegal dumping of 201 tons of benzene-tainted soil”: "We have found problems with the procedures Shell followed," said county board Chairman Mike McCoy. "It was more than just a simple, honest mistake.": 5 August 2004
The Guardian: Corporate battle lines: "stories of corporate fraud, unbridled greed and negligent auditing, have given much support to the Galbraithian thesis": “How different are the skills required to succeed in, say, Shell, from those needed in the Treasury? (Apart of course from the need in the former case to cultivate a blind eye.)": 7 August 2004
The Independent: Bill Gammell: A £2.2bn Indian summer for rugby international who struck black gold: “And Cairn's success will be all the more satisfying because it came at the expense of the oil giant Shell": 11 August 2004
The New York Times: Gas Traders, Supervisors Face Probe: “commission collected a total of about $250 million in penalties… $30 million from Coral Energy Resources, a Houston-based trading subsidiary of Shell: "11 August 2004
Reuters: Ex-Shell director gets 2.5 million pounds: “Walter van de Vijver": "Former Royal Dutch/Shell director Walter van de Vijver, who resigned after a reserves scandal at the oil giant...":12 August 2004
Financial Times: Shell to unify boards and look at merger: “to restore the company's credibility": 12 August 2004
Pulse TC.com: Firing Shell’s Chairman? “Sir Philip the Finagler after it was discovered in an internal investigation that, on his watch, Shell had been cooking its books Enron-style": 12 August 2004
The Independent: Michael Harrison's Outlook: Money talks for Shell's singing director: “Shell is hardly a byword for good corporate governance, and yesterday it lived up to its reputation by producing another stonker": 13 August 2004
The Times: Shell director who was 'tired of lying' given £2.5m payoff: “Shell investors lost 50p for every barrel that went missing while Phil and Walter together earned 80p for every barrel mislaid": 13 August 2004
DAILY EXPRESS: BUMBLING SHELL BORDERS ON FARCE: “HAPPY memories of Peter Sellers' portrayal of the bumbling Inspector Clouseau": 13 August 2004
Daily Express: Shell scandal boss wins £2.5m payoff": "I am becoming sick and tired about lying about the extent of our reserves issues and the downward revisions that need to be done because of far too aggressive/optimistic bookings.": 13 August 2004
The Star-Ledger: Major shareholder lawsuit pending: “the Royal Dutch/Shell Group's legal woes aren't yet finished.”: “a mega-lawsuit making its way through the U.S. District Court in Newark.": "In the SEC agreement, Shell neither admitted nor denied any wrongdoing, but allowed that the company violated anti-fraud, reporting, bookkeeping and internal control provisions of the securities laws. It will pay about $125 million in penalties. The company will also pay roughly $31 million to cover the British penalties, according to a statement.": 14 August 2004
The Scotsman: Shell 'Braced for Takeover Bid from Oil Rival Total': “an inquiry found it violated reporting, record-keeping and anti-trust rules.": 15 August 2004
SUNDAY EXPRESS: WHY SHELL MUST ACT NOW TO CALM TROUBLED WATERS: “But restructure may not be enough after scandal, resignation and fines, reports Robin Pagnamenta": 15 August 2004
Sunday Express: All’s well with Cairn in the Indian desert: It was an act of stupidity... You don't sell off your golden eggs like that. Shell's loss is Cairn's gain.”: "Oil minnow’s £4m field is worth billions": 15 August 2004
Channel News Asia: Shell fears swoop by French oil giant Total: report: “Shell has been shaken by a scandal involving the overestimation of its reserves of oil and gas.": 16 August 2004
London Evening Standard: Shell in the bid spotlight as oil price keeps climbing: “reports suggested top brass at scandal-struck Shell think a bid may be on its way from France's Total.": 16 August 2004
The Scotsman: Cairn's soar-away success ups pressure on Shell: “The Edinburgh-based group’s astonishing success raises further questions about the quality and calibre of Shell’s management and the company’s modus operandi.": 16 August 2004
Daily Telegraph: Cairn oil bonanza nets chiefs £4m bonus: “Cairn's finds in India are a source of continued embarrassment to Shell, which sold its 50pc share in the concession to Cairn for just $7.25m.": 16 August 2004
Financial Times: Virtually no hiding place from long arm of computer detectives: “…fraud investigation is to turn on a "smoking gun" document…,”: "I am becoming sick and tired about lying about the extent of our reserves issues.": 19 August 2004
Financial Times: Instant messaging used in 'untraceable' City leaks: “follows a string of cases where e-mails have provided crucial evidence, such as when Royal Dutch/Shell disclosed e-mails showing the feud between two of its directors over its overstatement of reserves.": 20 August 2004
Guardian: Corporate battle lines: “The collapse of Enron, and the related and unrelated stories of corporate fraud, unbridled greed and negligent auditing”: “How different are the skills required to succeed in, say, Shell, from those needed in the treasury? (Apart, of course, from the need in the former case to cultivate a blind eye.): 20 August 2004
The Times: Lifers who climb right to the top: “A less edifying example of the breed is Sir Philip Watts, chairman of Shell, who was forced to resign after the group admitted to misrepresenting oil and gas reserves.”": 21 August 2004
Sunday Express: Shell cuts back on forecourts to boost production: “managers hoped the new strategy would draw a line under the reserves-misreporting scandal which triggered the departure of three of Shell's bosses earlier this year.": 22 August 2004
The Business: Shell powers ahead with plan to clear out $15bn of its assets: “Underspending in exploration and production throughout the 1990s is seen as partly to blame for the 4.35bn barrel reduction in reported reserves that made this year one of the worst in Shell's 97-year history.": 22 August 2004
London Evening Standard: Damage question: “Shell… everyone knows its reputation is still in tatters and it will take years for the company to rehabilitate itself.": 22 August 2004
The Times: Need to Know: Royal Dutch/Shell… appeared in a Swedish court again over a 1999 price-fixing cartel": 24 August 2004
Bloomberg: Shell to Update Investors on Governance Next Month: “Van der Veer, 56, is trying to regain investors' confidence after the company said in January it had overstated oil reserves by a fifth. That led to an investigation by the U.S. Securities and Exchange Commission, the ouster of three top executives and the loss of Shell's top-tier credit rating.": 24 August 2004
Wednesday 25 August, 2004
Financial Times: Shell ‘knew of reserves overstatement in 2000': TWO YEARS EARLIER THAN PREVIOUSLY REPORTED BY THE COMPANY'S OWN INVESTIGATION INTO THE REPORTING SCANDAL."
Financial Times: Lex: Royal Dutch/Shell: “Creating value through entrepreneurial management of hydrocarbon resource values” could be the title of just another jargon-filled memo. The fact that the paper was written at Royal Dutch/Shell in May 1998 and led to a relaxation of reserve guidlines lends it a more ironic slant.": "The findings further damage the oil group's battered reputation."
Lloyds List: Shell settles with regulators to end reserves scandal: “findings and conclusions in the FSA's 'final notice' and the SEC's 'cease and desist order'.”
The Independent: Shell still wrestling with its moment of shame: “Shell is bluntly accused of making false and misleading statements about its oil reserves over a five-year period, of doing so despite internal warnings that the statements were false"
The Independent: Regulators to pursue former Shell chiefs over market abuse: “The UK's market regulator set out in detail a pattern of "false and misleading" information given to the market between 1998 and 2003 which Shell did not start to correct until January this year."
AccountancyAge: Shell committed 'unprecedented misconduct': “This included the false announcements made about the levels of its oil reserves, despite warnings that its figures were 'false or misleading'.”
Fool.com: Shell Shocked?: “If the stink of a recent restatement and high-sulfur gas mixture wasn't enough to have shareholders gasping for air, then the past year's proven oil reserves scandal certainly was.”
The Scotsman: Shell's £82.7M Fines over Reserves Crisis Confirmed: “False or misleading statements were given to investors about the extent of Shell’s reserves as far back as 1998, the FSA said.”
thisislondon.co.uk: Shell oil scandal 'began in 1998': “the FSA said Shell made false and misleading statements between 1998 and 2003.”
CNN: Shell settles fraud case for $150M: Oil company agrees to pay SEC for overstating reserves, also settles market abuse case in Britain.
Acrobat Reader is needed to access the SEC & FSA Report files below. Please be patient when downloading as the files contain multiple pages. (To download a FREE Acrobat Reader click on the adobe link): http://www.adobe.com/products/acrobat/readstep2.html)
CLICK ON LINK BELOW TO READ SECURITIES & EXCHANGE COMMISSION REPORT: http://www.sec.gov/litigation/admin/34-50233.pdf
CLICK ON THIS LINK TO READ FINANCIAL SERVICES AUTHORITY REPORT:
The Times: FSA exposes long-running deception by Shell executives: “raises questions about the role of senior executives who led Shell in the late 1990s, including Sir Mark Moody-Stuart”
The Times: SHELL shareholders have demanded that more heads roll at the world’s third-largest oil company to regain investor confidence.: “The people who are in charge of Shell today ... were there when these activities were going on and are still involved at the highest level..."
The Times: Pressing questions: “Can Shell rebuild its reputation?”: “Is Shell a takeover play?”: “Why did the auditors not resign when they questioned the booking of gas reserves in 1998?”: “Should they resign now?”
Daily Telegraph: Shell takes mauling over 'market abuse': “Shell was yesterday savaged by regulators in Britain and America for "unprecedented misconduct": ‘The FSA said Shell "disseminated false or misleading information as to the true extent of its proved reserves" from 1998 until last July.'
The Guardian: Solitary part-timer conducted group audit: “The FSA makes clear that Shell's reserves difficulties began in 1997”
The Guardian: Shell's shame: FSA spells out abuse: “Fadel Gheit, an oil analyst at broker Oppenheimer & Co in New York, said the latest revelations from the regulators proved this was a corporate scandal of "historic proportions". He added: "Short of Enron... I have not seen anything like this in 30 years of covering the market."
The Guardian: Damned in detail - but let off lightly: Shell faced far higher penalty in the US: The Financial Services Authority's judgment of the Shell reserves scandal is damning both in detail and conclusion, accusing the company of "unprecedented misconduct".
THE WALL STREET JOURNAL: SEC Order Shows Many Involved In Shell Reserves Debacle: “administrative order confirms that the scandal touched many officials beyond the senior executives who have left the company”
THE WALL STREET JOURNAL: SEC, FSA Fine Shell For Reserves Overstatements: "The SEC can still bring civil charges against individuals. Prosecutors at the U.S. Justice Department - who can bring criminal and civil charges - are continuing their own probe into the reserves issue"
Houston Chronicle: Probe aims at top: Investigators say Royal Dutch-Shell officials in sights
Investors.com: Royal Dutch/Shell Fined $120 Million, Lives On to Overstate Another Day: “It is the third largest for the SEC, after WorldCom Inc…”
The New York Times: Shell Settles Oil Reserve Fraud Case for $150.7 Million: Degenhardt added that the overstatements had occurred ``over an extended period.''
The Times: An auditor of no account: “the horror story that has emerged from Shell”: “determination to present the City with inflated numbers…widespread": "when the company, under the leadership of SIR MARK MOODY-STUART, established five Value Creation Teams, it was certainly looking for creativity. That a paper of May 1998 could have been entitled 'Creating Value through Entrepreneurial Management of Hydrocarbon Resource Values' is an eloquent indication of what was to follow"
Daily Mail: Shocking rebuke stings Shell: “Officials are said to have found Shell's behaviour particularly appalling given the fact that the Anglo-Dutch giant had appeared a pillar of respectability.”
London Evening Standard: Shell scandal 'could be repeated’: “Findings by regulators have widened the scandal by accusing Shell of giving false reserve figures from 1998 to 2003, raising questions about the role of executives, including SIR MARK MOODY-STUART"
The Scotsman: Fresh probe into Shell oil reserves scandal: Watchdogs to target ‘those responsible’
ShellNews.net: The Shell Chairman responsible for Shell’s descent into cover-up, scandal and shame on an epic scale - Sir Mark Moody-Stuart
London Evening Standard: Shell faces £830m Nigeria claim: “The FSA's conclusions will raise questions about the part played by Watts' predecessor, SIR MARK MOODY-STUART, chairman between 1997 and 2001.
Forbes: Nigerian Senate Orders Shell Unit to Pay: “Nigeria's Senate has ordered a subsidiary of petroleum giant Royal/Dutch Shell to pay a Nigerian ethnic group US$1.5 billion… for oil spills in their homelands”
Forbes: Shell to Spend More on North Sea Venture: Shell has acknowledged that the overstatement of reserves and "inappropriate" accounting in other business areas resulted in profits being inflated by US$432 million.
Los Angeles Times: Shell Increases 2004 Spending in Europe: “The alleged role of individuals in the scandal remains under investigation by the SEC, and Shell also faces a separate probe by the U.S. Justice Department.”
Thursday 26 August, 2004
The Independent: Shell hit by $1.5bn oil pollution claim from Nigerian Senate: “Shell was linked by international campaigners to the military government of Sani Abacha, which executed a delta activist, Ken Saro-Wiwa.”
ShellNews.net: Sir Mark Moody-Stuart - The Shell Chairman responsible for Shell’s descent into cover-up, scandal and shame on an epic scale
The Times: The misreporting scandal: Shell penalties 'bolster' “BILLION-DOLLAR” class action lawsuits: “A source close to the SEC told The Times last night that a list of questions had been sent to all Shell executives involved in the inquiry. It is understood that those questions have been passed to, among others, SIR MARK MOODY-STUART..."
Financial Times: Regulators dig deeper into Royal Dutch/Shell's problems: “The SEC is scathing about Shell's advice to investors that it had changed its mathematics, saying in its 1998 annual report only that estimation methods "have been refined".
The Times: Shareholders could be damaged beyond repair: “Several lawyers specialising in class actions on behalf of aggrieved investors are circling the Anglo-Dutch group, which is well within the orbit of American law.”
The Guardian: Shell hit by $1.5bn Nigeria spill claim Senate: action on pollution adds to damage from reserves scandal
Friday 27 August, 2004
Financial Times: Governance: Managers look for the moral dimension: “Post-Enron, post-Shell, post-WorldCom, post-Parmalat”
The Independent: Oil companies must be made to follow UN on human rights: “Shell and BP the leaders in building a human rights responsibility into their business principles and recognising that explicit adherence to the Universal Declaration of Human Rights"
Saturday 28 August, 2004
Daily Telegraph: The landslide bringing down Shell grandees: “The SEC and FSA reports, however, go back to the previous regime, when Sir Mark Moody-Stuart was chairman.”: "The Shell Show, a tragicomedy in an unlimited number of parts..."
The Times: “FSA’s report accuses Shell of market abuse by announcing false oil reserves between 1998 and 2003, implicating several major executives in the scandal, including Sir Mark Moody-Stuart”
Financial Times: Shell-shocked: “Shell was found to have "announced false or misleading reserves and reserves replacement ratios throughout the period 1998 to 2003"…: “three heads have rolled… other people in key positions during that time remain. They include Jeroen van der Veer… and Sir Mark Moody-Stuart”
Financial Times: Buoyant E&P sector “Shell has a particular problem at the moment. It is running out of oil in the ground and has lost a chairman and faced public humiliation following surprise cuts in its oil reserve estimates earlier this year.”
The Guardian: He's no Hector: David Varney, executive chairman of Revenue and Customs: “Varney admits to being "very concerned" about seeing Shell immersed in a reserves scandal.”
Daily Mail: Alarm at former Shell chiefs' options: “Pirc says Watts could make £3.1m if the shares reach 552p”: “Regulators are still investigating those believed to have had a role in the company's reserves scandal.”
Sunday 29 August, 2004
Sunday Telegraph: Shell's auditors in firing line as US lawyers prepare class action: “Shell had ignored internal warnings for several years that it was overstating its reserves"
Sunday Telegraph: Shell in Hell
The Observer: We all pay price for murky gas market: “Shell's £84 million fine for falsifying its gas and oil reserve statements”
THE BUSINESS: Regulators must bring Shell directors to book: “a deliberate attempt by Shell, over a number of years, not just a few months, to overstate their oil and gas reserves.”
Daily Express: FAT CATS REWARD: SIR PHILIP Watts: His deputy, Dutchman Walter van der Vijver, repeatedly warned him of the overstatement and finally exploded in an angry e-mail last November that he was "sick and tired of lying about the extent of our reserves".
Sunday Times: Shell plans bonus to rally workforce: “some staff in the exploration and production division had oil-reserves replacement as one of the targets that determined their pay.”
The Scotsman: Concerns over potential £3m windfall: “Ensuing investigations by the US Securities and Exchanges Commission and the UK Financial Services Authority revealed that the oil major had been over-inflating its reserves since 1998, implicating the company’s top management in the scandal.”
Stuff.co.nz: Oil finds fuel shareholders' bid against Shell: “to press their long-running $23 million insider trading case against Shell.”: “The High Court has already ruled the small shareholders had a case to take against Shell. That decision was upheld by the Appeal Court.”
Monday 30 August, 2004 (UK BANK HOLIDAY)
The Scotsman: Shell knew of error in reserves in 1998: “AUDITORS at Royal Dutch/Shell, the British-Dutch energy group, warned the company as early as 1998 that its reserves figures may have been overstated…”
The Scotsman: Auditors dragged into Shell lawsuit: “role of auditors KPMG and PricewaterhouseCoopers in the scandal that wiped £2.9 billion off Shell’s market capitalisation in one day.”
Daily Telegraph: Shell will abolish 'discovery bonus' “Crisis-hit Shell is scrapping a controversial scheme which links staff pay levels to the amount of oil and gas employees find.”: “latest attempt by Shell to restore its reputation”
The Times: Shell boss pours oil on troubled water: “the scathing reports, in which the FSA accused Shell of announcing false oil-reserve figures since as far back as 1998 again drove investors to rage that not enough was being done to restore credibility.”
The Guardian: £17m Shell shock was just an early broadside in FSA war on abuse: “Shell's action was made more serious because false or misleading announcements on reserves were made from 1998 to 2003. Even though Shell had indications and warnings from 2000 to 2003 that figures for proved reserves were incorrect, its actions continued.”
Financial Times: Royal Dutch/Shell to revise staff bonus scheme: “The scandal prompted the resignation of three senior executives, investigations by US, UK and Dutch regulators, a criminal probe by the US Department of Justice and investor lawsuits.”
THE WALL STREET JOURNAL: Shell Plans Team Performance Bonus Scheme From January: “intended to help rebuild the company's credibility.”
Planet Ark: Russian Oil Project to Be Vetted for Whale Threat: “the International Whaling Commission last month warned energy exploration could kill off the 100 or so remaining gray whales on the oil-rich shelf near Russia's Pacific coast”
Tuesday 31 August, 2004
Daily Telegraph: Boards beware: the road to Shell was paved with 'good' intentions: “This being Shell, everything was systematic, and was approved at the highest level, and had been going on for years.”: “On top of all this comes the loss to Shell's reputation - its ultimate hidden reserve.”: “It will have to be rebuilt and earned, and that takes time, if it can be done at all.”
THE WALL STREET JOURNAL: Shell Sheds Refineries, Gas Stations: “Even after this year's headline-grabbing scandal over its oil reserves, most people still best know Anglo-Dutch oil company Royal Dutch/Shell Group by the scallop-shell logo”: “a lot fewer people will be seeing this iconic emblem in the future”
The Scotsman.com: Shell Abandons 'Self First' Bonus Culture: "Shell was found by the Financial Services Authority in the UK and the Securities and Exchange Commission in the US to have committed market abuse and breached listing rules by misleading the market over the extent of its reserves."
ANNEX B2: WEB PAGE HEADED:
“ROYAL DUTCH SHELL PLC:
A FOCUS ON SHELL'S CONDUCT IN NIGERIA”
(accessible via link on “Home Page” of Donovan website)
The Guardian: Unloveable Shell, the goddess of oil: “in its wake, says Andrew Rowell, lies a trail of corruption, despoliation and death” (ShellNews.net) Posted 9 August 2004: Originally published Saturday 15 November 1997
Radio Netherlands: Shell On Shaky Foundation: 21 July, 2000
The Sunday Times: MI6 'Firm' Spied on Green Groups (Sunday Times archive article: 17 June 2001)
mallenbaker.net: Shell under pressure over Ogoniland: 28 July, 2001
mallenbaker.net: Brazilian police accuse Shell of eco-crime: 11 August, 2001
mallenbaker.net: Shell contests Brazil toxic site report: 8 September, 2001
Fortune.com: Oil Giant Could Do Better in Nigeria: “where the contrast between the region's poverty and its mineral wealth has fuelled unrest”:
1 October, 2001
Radio Netherlands: Shell & The Ogoni People?: 28 December, 2001
Wiwa v. Royal Dutch Petroleum (Shell): United States District Judge rules case can proceed under the Alien Tort Claims Act, the Torture Victim Protection Act and RICO (Racketeer Influenced and Corrupt Organizations) Act. : 28 February, 2002
Reuters: “Leaked” Report says Shell actions feed Nigeria violence: “corporate behaviour of Royal Dutch/Shell in Nigeria feeds a vicious cycle of violence and corruption” (Sunday 13 June 2004) RELATED REPORT ACCESSIBLE VIA ShellNews.net link
CONFIDENTIAL REPORT: LEAKED SHELL CONFIDENTIAL INTERNAL REPORT ON SHELL’S ACTIVITIES IN NIGERIA BY WAC Global Services: “PEACE AND SECURITY IN THE NIGER DELTA”. ShellNews.net:
www.bergermontague.com: On September 20, 2002, fourteen individual plaintiffs including Mr Charles Wiwa, the nephew of the late Nobel Prize Laureate, Mr Ken Saro-Wiwa, filed a class action complaint against Royal Dutch Petroleum and Shell Transport, p.l.c., ("Shell") in the United States District Court for the Southern District of New York charging violations of customary international law under the federal Alien Tort Claims Act relating to Shell’s oil operations in Ogoniland, an area located in the Niger River delta area of Nigeria.: Click here to access the Class Action Complaint (A Judge decided early in 2004 that the plaintiffs case had sufficient merit to proceed and as a result Sir Philip Watts and Sir Mark Moody-Stuart were deposed in the UK in April 2004.)
Some related newspaper reports are accessible below.
Mail on Sunday: Shell chief 'had a private army': 4 April 2004
Daily Times: Shell's corrupt shell game in Nigeria: 4 April 2004
The Observer: UK firms face lawsuits as Watts quits ICC post: 4 April 2004
The Independent: Shell faces human rights grilling: 11 April 2004
London Evening Standard: Shell facing court over 'rights abuses': 21 April 2004
HoustonChronicle.com: Questions due on human rights lawsuits: 26 March 2004
SwissInfor.Org: Ex-Shell head to face Nigeria case questions: 26 March 2004
London Evening Standard: Sir Philip to be quizzed over Nigeria: 27 March 2004
The Independent (UK): Shell opens talks about a return to Nigeria's troubled Ogoni region: “More than 12 years since it fled the Nigerian region of Ogoni in fear at the growing violence towards its operations from the local population, oil giant Shell has reopened talks with the people of the Ogoni about a possible return.”: “The conflict reached one of its darkest moments in 1995, when Ken Saro Wiwa, who led Mosop, was executed by the military dictatorship. (ShellNews.net) 1 June 05
Reuters: NIGERIA: Obasanjo appoints independent mediators to reconcile Shell and local Ogoni community: “Angry and violent Ogoni protests inspired by the campaigns of MOSOP under the leadership of writer Ken Saro-Wiwa, forced Shell to shut down its oil wells in Ogoniland, in January 1993. The wells had produced 28,000 barrels of crude a day.” (ShellNews.net) Posted 2 June 05
From The Observer (UK): It just won't work: By Ken Wiwa: “It will be 10 years in November since my father was murdered for daring to expose the complicity between Shell and the Nigerian military dictatorship to exploit the oil reserves of my Ogoni community.”: “Only last year, Shell admitted putting a false prospectus to investors…“: Posted Monday, 13 June 2005: Read the article
Reuters: “Leaked” Report says Shell actions feed Nigeria violence: “corporate behaviour of Royal Dutch/Shell in Nigeria feeds a vicious cycle of violence and corruption”: 13 June 2004
Related Paper by Alfred Donovan presented at the National Union of Ogoni Students (NUOS International, USA) Convention in Lincoln, Nebraska, held on 26/27 June 2004. (I was emailed a copy prior to 16 June 2004* )
* Extract from the Convention Paper: THE OPPRESSION AND EXPLOITATION OF THE OGONI PEOPLE: I was stationed in Palestine in the 1930’s. I regret to say that the Arabs were treated with distain and generally viewed as being second class citizens in their own Countries. How things have changed. The Arabs were sitting on top of the worlds largest oil reserves. Quite correctly, citizens in the oil rich Arab nations have benefited from their own natural resources and are now among the wealthiest people in the world. They have considerable power, influence and respect. It is impossible to reconcile that situation with what has happened in Nigeria where the population has been oppressed and exploited by Shell and successive Nigerian regimes and Ogoniland has been subjected to long term ecological degradation. While the Ogoni people sit on top of oil fields, but remain abysmally poor, Sir Philip Watts sits on an $18 million (US dollar) pension pot. It is simply obscene and indefensible. After yet another document meant for consumption solely by Shell management was leaked to the press in mid June, Shell was forced to admit that its actions in Nigeria fed “a vicious cycle of violence and corruption”. Under the circumstances, it speaks volumes for the Ogoni people have not resorted to violence, but are pursuing a legal peaceful campaign to right a monumental injustice.
ANNEX B3: WEB PAGE HEADED:
“REMARKABLE ADMISSIONS AND APOLOGIES BY SHELL”
(accessible via link on “Home Page” of Donovan website)
New reports on www.Shell2004.com also cover the many amazing admittances made by Shell management of arrogance, bullying, lies, and cover-up.
The recently disgraced Group Chairman, Sir Philip Watts, has been publicly accused (by the "Mail on Sunday" on 4/4/04) of setting up and funding a private army of 1400 Police spies in Nigeria: Mail on Sunday: Shell chief 'had a private army' 4 April 04
(Shell has also admitted using undercover agents in UK litigation.)
The Guardian: Shell admits it misled investors: 20 April 2004
The Scotsman: Shell admits reserve 'lies': 20 April 2004
The New York Times: Shell's Report on Its Troubles Cites Discord at Top: "The report also noted that last December, Mr. van de Vijver sent an e-mail message directing a subordinate, Frank Coopman, to destroy a document Mr. Coopman had produced that concluded that the company was "under a legal obligation" to immediately correct overstatements of its proven reserves.": "Our story is not one anyone would be proud of, and we have no excuses," said Lord Ron Oxburgh, chairman of Shell Transport and Trading, the British half of Royal Dutch/Shell (19 April 04)
The Guardian: Apologetic Shell promises culture change: 29 May 2004
Local10.com: Gas Company Apologizes; Service Centers To Make Repairs: 9 June 2004
CNN.com: Shell admits blame in Nigeria: "Royal Dutch/Shell has taken responsibility for contributing to the fighting and corruption in oil-rich Nigeria".: 11 June 2004
The Scotsman: Shell admits it may have had role in violence: 12 June 2004
BBC News: Shell admits fuelling corruption: 12 June 2004
Annex C contains examples of articles and information published on the Donovan website and elsewhere AFTER the publication of the articles under my name on the Donovan website. It is my contention that they justify the comments made in the articles published under my name on the website.
UNDER THE “HOME PAGE” WEB PAGE HEADING: “This is the home of ShellNews.net”
CLICK ON LINK BELOW TO READ SECURITIES & EXCHANGE COMMISSION REPORT ON SHELL RESERVES SCANDAL: http://www.sec.gov/litigation/admin/34-50233.pdf
CLICK ON THIS LINK TO READ FINANCIAL SERVICES AUTHORITY REPORT ON SHELL RESERVES SCANDAL: http://www.fsa.gov.uk/pubs/final/shell_24aug04.pdf
PRESS STATEMENT BY FINANCIAL SERVICES AUTHORITY: FSA fines Shell £17,000,000 for market abuse
Click here for UNOFFICIAL TRANSCRIPT BBC2 TV “THE MONEY PROGRAMME”, BROADCAST 15 JULY 2004, 9.50pm
UNDER THE WEB PAGE HEADING: REMARKABLE ADMISSIONS AND APOLOGIES BY SHELL
(accessible via link on “Home Page” of Donovan website)
Shell has also admitted using undercover secret agents to infiltrate and betray its perceived enemies including Greenpeace and The Body Shop: MI6 'Firm' Spied on Green Groups (Sunday Times archive article 17 June 2001)
Shell Group Chairman Jeroem van der Veer admitted in a speech given in Texas in May 2004, to 400 Shell top managers, that he is "shocked, dismayed and ashamed at what has happened": Financial Times: How Shell changed its culture and lost its way (published on 18 June 2004).
Financial Times: How Shell changed its culture and lost its way: It is a tale of incompetence. Or, as a "shocked, dismayed and ashamed" Mr van der Veer put it: "We have more problems than just the reserves issue.": "While Mr van der Veer was preparing his admissions in Houston last month...": 18 June 2004
Financial Times: Shell apologises to angry shareholders: "When somebody is asked to leave under a shadow and yet paid a huge amount of money, it is usually to keep them quiet isn't it?": 29 June 2004
News Leader.com Shell admits overstating its profits: "also made errors in the way it accounted for exploration costs, certain gas contracts and earnings per share of its parent companies": 4 July 2004
Daily Telegraph: Shell accounts change brings $226m upgrade: “Shell has been plunged into crisis after admitting that it had overstated its "proven" oil and gas reserves by 23pc": 14 July 2004
The Guardian: Shell had early reserves warning: “Shell admitted yesterday that it had been warned about inflated reserves before it was forced to issue the first of four downgrades this year.": 16 July 2004
Financial Times: Shell in move to reduce its legal costs: a host of civil lawsuits following its admission that it overstated its oil and natural gas reserves”: “550 in-house lawyers": 20 July 2004
The Times: Lifers who climb right to the top: “A less edifying example of the breed is Sir Philip Watts, chairman of Shell, who was forced to resign after the group admitted to misrepresenting oil and gas reserves.": 21 August 2004
London Evening Standard: Vision needed to revitalise Shell: “It is just six months since possibly the biggest post-Enron scandal erupted at Shell with the stunning admission that a group regarded as one of the most reliable in the world had lied about the health of its business.": 17 September 2004
London Evening Standard: Shell's battle plan fails to win City: “But the overhaul promised by the Dutchman left the City distinctly unimpressed after he failed to commit to increasing share buybacks and admitted that it may be 2009 before oil and gas output grows.": 22 Sept 2004
Daily Telegraph: City comment: For a company that has so long considered itself top of the heap in the oil game, the humiliation inside can only be guessed at. Even Jeroen van der Veer, Shell's top executive, had to admit the business was in crisis…”: “Shell's slide show was ghastly. Meaningless management-speak phrases such as "fix and reset the business" and "growth in markets of choice" might have been designed to reassure, but instead showed that Shell's problems extend beyond its reserves issue.": 23 Sept 2004
The Age (Australia): Shell spends big to recoup 'lost' oil: “Managing director of exploration and production Malcolm Brinded admitted that Shell's reserve replacement rate would only be 100 per cent over the next five years - less if the "lost" barrels were excluded.": 24 Sept 2004
Sunday Telegraph: Market miscellany: It's too early to buy Shell: “Over the past year Shell has made a habit of delivering nasty surprises, notably its disastrous admission in January that it had overbooked its proven oil and gas reserves by 25 per cent. Last week the oil giant's long-awaited strategy presentation for once contained no surprises - but it didn't impress either.": 29 Sept 2004
The Globe & Mail: Oil: Too much discipline at $50: “…Shell has now rejected this approach, in part because it has to. Its much-publicized scandal, in which it admitted to significantly overstating its oil and gas reserves, forced it to wipe the equivalent of 4.47 billion barrels of oil from its ledgers -- a quarter of the total.": 2 October 2004
Financial Times: Shell apologises for bitumen meetings in Brussels probe: Royal Dutch/Shell said it regretted attending meetings with roadbuilders and bitumen suppliers. The apology came as it responded to charges from the European Commission of possible price-fixing in the Dutch bitumen market.”:” Separately yesterday, Nigeria's Ogoni tribe threatened mass action against a local Royal Dutch/Shell unit unless the company failed to withdraw troops from the Ogoniland area, where it abandoned oilfields in 1993. Shell has denied deploying troops.": 22 October 2004
AFX Europe (Focus): Shell admits role in EU bitumen investigation: “Royal Dutch/Shell Group said it is involved in the European Commission's investigation into alleged cartel-forming in the bitumen market. In late 2002 the commission raided the offices of a number of oil companies including Shell…”: "We are concerned about this issue," said Rein Williams, president of Shell Nederland BV. "We should not have been present these meetings and we regret our connection to this case.": 22 October 2004
WILLS & CO STOCKBROKERS LTD: ANALYSTS REPORT ON SHELL TRANSPORT & TRADING: “Shell admitted back in January that it had overstated its oil & gas reserves by 20%, leading to the ousting of 3 senior executives, including Chairman Sir Philip Watts, and to $150m in fines from U.S. and U.K. regulators. The company's bloated board structure, with 16 non-executives between Royal Dutch and Shell, has to be addressed and an update following a review of its corporate governance is due in November.”: “We feel that a turn around in the company's fortunes may not begin to show through until 2006”: “Our recommendation is to sell your holding, and switch to BP - which has much stronger growth potential -or something more exciting.": "SELL": 27 October 2004
London Evening Standard: Market Report: SPEAKING OUT: “All of us are deeply ashamed about what happened about the reserves, but we are determined to regain our position. — Shell chairman Jeroen van der Veer on the oil giant's attempts to put its misdemeanours behind it": 27 October 2004
Financial Times: Not clammed shut: “Jeroen van der Veer remains refreshingly candid even after all Royal Dutch/Shell has been through this year.”: "We are like the schoolboy standing in the corridor outside the classroom. I don't think it is for us to lead the charge of new rules on reserve accounting, we shall leave that to others. But whatever the rules are, we will comply with them.: 27 October 2004
THE NEW YORK TIMES: Royal Dutch/Shell to Unify: “Separately on Thursday, the group also released third quarter results that were overshadowed by the admission that it was once again reviewing the equivalent of "approximately 900m" barrels of oil reserves following an extensive audit.": 28 October 2004
The Guardian (UK): City hails Shell Anglo-Dutch merger: Headquarters shifts from London to the Netherlands; Investors braced for further downgrades in oil reserves: “Malcolm Brinded, the director in charge of exploration and production admitted: "I'm disappointed to have to flag the issues of reserves." He said the information had only come to light in recent days and though the audit process was not complete Shell had thought it right to inform the market.": 29 October 2004
The Times (UK): Need to Know: “Royal Dutch/Shell raised fears that it may have to write down its reserves by more than 1.5 billion barrels, or 10 per cent, after the Anglo-Dutch oil company admitted that it was considering its fifth “volume adjustment” this year.": 29 October 2004
Financial Times: Shell begins corporate restructuring: “Royal Dutch/Shell on Thursday embarked on the historic dismantling of its 97-year-old corporate structure. But the news was overshadowed by a warning that it may have overstated its proved oil reserves by even more than previously admitted.": 29 October 2004
The Sunday Times (UK): Anglo-Dutch oil giant casts off its old Shell: The recent reserves scandal and the subsequent pressure from shareholders have forced Shell finally to change its dual format.: “At the same time as it made the restructuring announcement, Shell warned yet again that it might have overstated the size of its oil reserves. Having already marked them down by about 4.5 billion barrels this year, the company admitted it was reviewing the status of another 900m barrels, with perhaps more to come as it continued an internal probe.": 31 October 2004
The Independent On Sunday (UK): Business View: Shell's real location problem is finding more black stuff: “The misreporting of reserves scandal showed all the worst Shell traits - secrecy, haughtiness, inertia.”: “So what's the hurry? Was it because Shell had to admit that it had uncovered another 900 million barrels of doubtful crude in its reserves and was likely to uncover 600 million more?": 31 October 2004
The Observer (UK): Unsure of Shell – still: “Shell's presentation was marred by the admission that on top of the three announcements of reserve downgrades this year - totalling 4.47 billion barrels - there could be more to come.”: “Brinded was clearly embarrassed. The fiasco has dragged Shell's name through the mud, and led to the departure of his and van der Veer's predecessors amid allegations of cover-up and lying.": 31 October 2004
BLOOMBERG: Netherlands Buys Gas Pipes From Exxon, Shell Venture (Update4): “Shell Chief Executive Jeroen van der Veer plans to sell assets worth as much as $12 billion, after the company admitted in January it had misled investors for six years about its oil and gas reserves.": 1 November 2004
Lloyds List: Last Word: By any other name...: “Royal Dutch/Shell's corporate changes are going to require a large volume of investment in new letter heads and logos just to remove a forward slash.”: “…van der Veer told delegates his company was ashamed of the reserves slashing and the scandal of over optimistic bookings in the past. He said his management had felt like naughty school boys being sent to the corner to think about what they had done before repenting. We guess the fines from the US and UK regulators were enough punishment for the group then.": 2 November 2004
Newstatesmen: The business - Patrick Hosking on Shell's move to the Netherlands: The London head office of the UK half of the business, Shell Transport & Trading, is being disbanded.”: “…London will become a mere branch. The company's centre of gravity will shift further over the North Sea.”: “Last month, the company had to admit that it may have got its figures wrong for the fifth time in a year.": 4 November 2004
File 2: Shell World Introduction and Article entitled "Going Forward" by Royal Dutch/Shell Group Chairman (now Chief Executive) Jeroen van der Veer: "We are all shocked and saddened by what has happened": "I do not underestimate the scale of the task of restoring credibility" (Shell World is an in-house magazine for Shell employees - relevant issue published by Shell May 04) (ShellNews.net) Posted 12 Nov 04
Financial Times: FSA seeks news of Shell trio: The FSA has been investigating Shell since it admitted this year that it had overstated its proved oil and gas reserves by 25 per cent. Shell has already been fined £17m by the FSA for market abuse and breaching listing rules as well as $120m (£61.7m) by the US Securities and Exchange Commission.”: “The City watchdog is seeking details of what three former executives said to investors during meetings as part of a continuing probe into events that led to the trio's resignation.” (ShellNews.net) 6 Dec 04
Financial Times: Shell chief says he's under threat: Jeroen van der Veer, the chief executive of Royal Dutch/Shell, has admitted that his "head is on the block" unless the company gets to grips by the end of the year with the way in which it books its oil and gas reserves. In a private speech delivered to Shell's 100 most senior executives in the Hague on Wednesday, Mr Van der Veer said the position of Malcolm Brinded, head of the Anglo-Dutch oil giant's exploration and production division, was similarly under threat. (ShellNews.net) 16 Dec 04
The Guardian (UK): My head is on the block, admits Shell chief executive: “Jeroen van der Veer, Shell's chief executive, has admitted privately that many of his own managers have deep misgivings about the way the company is being run by him and his team.”: “And he admitted that if "I look at what our middle levels think about the company, I'm very concerned". (ShellNews.net) 17 Dec 04
THE SUNDAY HERALD (SCOTLAND): Scandal Monger: Blood on the Boardroom Floor: “In a private speech helpfully revealed by the Financial Times the other day, Jeroen Van der Veer, the chief executive of the company, admitted…”: “He also admitted that middle managers had lost faith in the leadership – it was clearly a speech not meant for public consumption when you hear confessions like that.”: “But it is clearly an accurate description of the state of play at Shell. Instead of the shadow left over the company being driven away by the bold moves to change the company’s overwieldy twin board structure, the spectre still very much remains. How much it must have hurt when Brinded had to announce in October that more cuts would be needed.” (ShellNews.net) 19 Dec 04
The Guardian: The path back to trust, truth and integrity: "Corporate social responsibility can be defined in lots of different ways, most of which have something to do with integrity.": “When Shell tried to dump an oil rig in the North Sea, it met a storm of protest.” (ShellNews.net 17 Jan 05
Yahoo! News: Shell to recruit extra engineers to restore good name: report: “Shell is struggling to win back investors' trust after admitting last year it had overstated its proven reserves by 23 percent, and that senior executives were aware of problems long before they were made public.” (ShellNews.net) 18 Jan 05
iwon.com: Shell US Appointment Latest Step To Rebuild Reputation: “Shell's reputation nose-dived in the wake of its announcement one year ago that it was slashing its oil and gas reserves by more than one-fifth.” (ShellNews.net) 18 Jan 05
Yahoo! News: Shell to recruit extra engineers to restore good name: report: “Shell is struggling to win back investors' trust after admitting last year it had overstated its proven reserves by 23 percent, and that senior executives were aware of problems long before they were made public.” (ShellNews.net) 18 Jan 05
iwon.com: Shell US Appointment Latest Step To Rebuild Reputation: “Shell's reputation nose-dived in the wake of its announcement one year ago that it was slashing its oil and gas reserves by more than one-fifth.” (ShellNews.net) 18 Jan 05
THE SUNDAY TELEGRAPH (UK): Shell profits set to gush to record high: Shell, the beleaguered oil giant, is set to report record profits this week on the back of exceptionally strong crude prices.: “Jeroen van der Veer, Shell's new chief executive, is also expected to announce that the company will have to make a further cut in its proven oil and gas reserves of at least 900m barrels of oil. This is on top of the estimated 4.5bn barrels that Shell has admitted it overstated last year.” (ShellNews.net) 30 Jan 05
SUNDAY HERALD (UK): Shell pins hopes on profit surge to restore image: “Shell’s image has been tarnished in recent months with hefty fines following regulatory inquiries into its estimates of oil and gas reserves. There are also uncertainties over the proposed Royal Dutch merger.”: “And like Humpty Dumpty, it could be heading for a great fall unless it gets it right on February 3.” (ShellNews.net) 30 Jan 05
THE LONDON TIMES: Shell in £8bn payout amid reserves cut: “…yesterday admitted that it had found barely enough oil to replenish half the barrels that it pumped last year” (ShellNews.net) 4 Feb 05
The Guardian (UK): Profit without honour: Shell has not had a good year. Yesterday it admitted it had overestimated its oil reserves by a cool 1.4bn barrels. This was the fifth time Shell had downgraded its reserves in a little over a year, the biggest scandal in the company's history…” (ShellNews.net) Posted 5 Feb 05
The Sunday Herald (Scotland): BP bucks poor reserves trend despite demand: “The achievement is in stark contrast to Shell, which has reduced its reserve estimates by almost one-third to less than 13 billion barrels and has admitted that it has been replacing only 15% to 25% of the oil it is pumping from the ground. The reserves are seen as a key indicator to future profitability and show why BP still enjoys a premium stock market rating over Shell…” (ShellNews.net) 6 Feb 05
Daily Telegraph (UK): Shell plays it safe over oil reserves: “Shell, the energy giant which is battling to restore its credibility after overstating its proven oil and gas reserves by a third, now has "the most conservative booking policy" of all its rivals, according to a leading industry analyst.”: “Last week Shell admitted that it had a reserve replacement rate of just 45pc to 55pc in 2004” (ShellNews.net) 7 Feb 05
Daily Telegraph UK: The best is yet to come, says BP: “In contrast to Shell, which admitted its reserve replacement ratio had dropped to 45pc to 55pc in the wake of the company's "lost" oil and gas reserves last year, Lord Browne said BP had "more than replaced its output for the 12th year running", with a replacement rate of 106pc for the group” (ShellNews.net) 9 Feb 05
Reuters: Shell Sakhalin Whale Risks Need More Study – Report: "An international consortium should consider suspending a huge energy project off Russia's Sakhalin island pending fuller studies on saving a rare whale species, a key environmental panel said on Wednesday": “For Shell, still struggling to rebuild investor confidence after admitting last year it had exaggerated its oil reserves, the project is key to increasing output and replacing reserves.” (ShellNews.net) Posted 17 Feb 05
The London Times: Exxon rises above GE to the market's highest peak: EXXONMOBIL has seized the mantle of the world’s largest public company, in terms of stock market value, from General Electric.”: “The SEC’s recent decision to impose year-end pricing also affected the reserves of BP and Shell. The Anglo-Dutch firm was forced to admit that it had barely replaced half of its annual output with new reserves…” (ShellNews.net) 19 Feb 05
DAILY TELEGRAPH (UK): Oil majors back attack on SEC rules: “The SEC is under pressure to reform its strict treatment of companies' oil and gas reserves. The issue has come under the spotlight since Shell admitted that, under the SEC's "proven" definition, it had exaggerated its reserves by a third.” (ShellNews.net) 24 Feb 05
Houston Chronicle: Shell proposes dropping stock options for executives: “Shell has been under heavy scrutiny since it admitted last year it had overstated its proven oil reserves and reduced the figure several times”: “The oil reserves scandal cost the company almost $150 million in fines imposed by U.S. and British regulators and led to the sacking of three senior executives.” (ShellNews.net) 17 March 05
fromthewilderness.com: “THE FIRE IS NO LONGER ON ITS WAY - IT HAS BEGUN”: “Royal Dutch/Shell Group on 5 February 2005 cut its 2002 published estimate of its total oil and gas holdings by one-third. It reduced its 2003 estimate of oil reserves by 1.4 billion barrels, or 9.8 per cent, and admitted that two-thirds of its listed prospective wells in 2004 were in fact dry holes. Shell has been fined $US151.5 million for misleading stock markets. The US justice department is undertaking a criminal investigation. Given that company value is directly related to oil reserves, it is not surprising that Shell has lost its top-tier credit rating.” (ShellNews.net) Posted 24 March 05
BBC NEWS: Shell guilty over gas leak deaths: “Oil giants Shell has admitted three charges over the deaths of two workers in the North Sea two years ago.” (ShellNews.net) 30 March 05
FINANCIAL TIMES: CNOOC head admits to delays in LNG projects: “The company also said yesterday that there was no longer a timetable for closing a deal with the Australian Gorgon venture - controlled by a consortium of ChevronTexaco, Shell and ExxonMobil - to supply its LNG terminal in Shanghai.” (ShellNews.net) 30 March 05
Glasgow Evening Times: Union demands inquiry into two deaths on oil rig: “A UNION leader today called for a fatal accident inquiry after oil giant Shell admitted charges over the gas poisoning deaths of two Scots on a North Sea rig.” (ShellNews.net) Posted 1 April 05
Mail on Sunday (UK): Auditors clean up at Shell: “In a series of downgrades, Shell was forced to slash its estimate of proven reserves by a staggering six billion barrels, almost 30%, after admitting it had misled investors for years.”: “The reserves scandal shattered Shell's reputation…”: (ShellNews.net) Sunday 3 April 05
London Evening Standard: Shell to weather the storm: “Shell's underlying health is under question however.”: “…it was forced to slash its estimate of proven reserves by six billion barrels, almost 30%. The changes came as it admitted having misled investors for years. The scandal shattered Shell's reputation”: “Moreover, Shell revealed recently that its ratio of reserve replacement had collapsed to a paltry 19% - the lowest of any oil major.” (ShellNews.net) Posted 27 April 05
Fort Saskatchewan Record (Canada): Shell sorry for delay: “Shell Chemicals is apologizing for the delay in warning its neighbours of a March 14 chemical leak.”: ”On the day of the leak, Shell’s incident commander, Ted Oud, told media that calls went out about 15 minutes after the incident. That was a misunderstanding, says company spokesperson Beverly Loat.” (ShellNews.net) Posted 7 April 05
Daily Telegraph (UK: Britons gain upper hand in Shell rejig: “The Anglo-Dutch company yesterday formally laid out its plans to unify its structure in the wake of the company's annus horribilis last year when it admitted that it had exaggerated its proven reserves by 25pc (ShellNews.net) 20 May 05
Financial Times: Shell admits second downgrade more serious: “The second cut overshadowed the historic proposal to merge Shell's Dutch and British holding companies in response to investor criticism about the reserves scandal.” (ShellNews.net) 28 May 05
The Guardian (UK): We'll miss our target to stop 'flaring' in Nigeria, admits Shell: “Flaring is considered a major contributor to greenhouse gases and global warming.” “The company suffered a severe dent to its reputation last year after making several downgrades to the levels of its oil and gas reserves” (ShellNews.net) 28 May 05
Houston Chronicle: Shell has fewer spills, deaths among workers: But oil giant says it fell short of emissions goal; bribery cases rose: “Shell staff or intermediaries paid or accepted 16 bribes last year, contravening company policy, the report said. That was double the number in 2003, and four times the reported number for 2002.” (ShellNews.net) 28 May 05
Daily Telegraph (UK): Shell admits rump of stock could trade with new shares: “Shell has pledged to reform its 100-year-old dual Anglo-Dutch structure in the wake of its shock admission that it had overstated its proven oil and gas reserves by 25pc.” (ShellNews.net) 4 June 05
Daily Telegraph (UK): Shake-up at Shell: what shareholders need to know: “Shell, the Anglo-Dutch oil and gas giant, is only just emerging from its annus horribilis of 2004 when it revealed it had over-estimated its proven oil and gas by over a quarter. The shock waves are still being felt, with Shell admitting it will be a few years before it finds more oil and gas than it pulls out of the ground.” (ShellNews.net) 4 June 05
From The Observer (UK): It just won't work: By Ken Wiwa: “It will be 10 years in November since my father was murdered for daring to expose the complicity between Shell and the Nigerian military dictatorship to exploit the oil reserves of my Ogoni community.”: “Only last year, Shell admitted putting a false prospectus to investors…“: Posted Monday, 13 June 2005: Read the article
From the pages of today's NEW YORK TIMES: Shell's Chief Reaffirms Goal of 30% More Output by 2015: “Jeroen van der Veer, chief of the Royal Dutch/Shell Group, said Wednesday that the company would spend more on research, focus on big technology-driven projects and possibly acquire other oil producers and reserves to increase production by 30 percent as planned by 2015. Mr. van der Veer, who took the helm 15 months ago after Shell was forced to admit it had overstated its oil and gas reserves…”: Thursday 23 June 2005: Read the article
Daily Telegraph (UK): Shell shareholders face £80m tax bill: “Oil major accused of 'unacceptable arrogance': “Shell, which has admitted paying $115m in fees, including tax advice during the restructuring, declined to comment. Sources said Shell had tried hard to make the offering fair to as many shareholders as possible.”: Saturday 25 June 2005: Read the article
Just in from Yahoo! News: Shell shareholders prepare to vote on historic merger: “Royal Dutch/Shell has struggled to win back investors' trust after admitting between January 2004 and February this year that it had overstated its proved reserves by almost 6.0 billion barrels and that senior executives were aware of problems long before they were made public.” Sunday 26 June 2005: Read the article
Mail on Sunday: Oil rules Footsie as Shell tie-up looms: “Shell, which admitted last week that the cost of its giant project on the Russian island of Sakhalin had doubled to £11bn, has now run into problems with a much-delayed £650 million gas project in western Ireland, writes Tom McGhie. The largest infrastructure project in Irish history is being held up by the Mayo Five - a retired teacher, a singer and three farmers - who are refusing to allow Shell to build a pipeline across their land. They are in jail for breaching a High Court injunction preventing them from blocking Shell trucks.”: Sunday 17 July 2005: Read the article
AFX Europe (Focus): Gazprom wants Shell to re-negotiate Sakhalin-2 asset swap terms: “Gazprom now demands that the deal is renegotiated after Shell was forced to admit last week that the cost of the Sakhalin-2 gas field project had overrun by an estimated 10 bln usd and could now cost 20 bln.”: Posted Monday 18 July 2005: Read the article
AFX Europe (Focus): Gazprom wants Shell to re-negotiate Sakhalin-2 asset swap terms: “Gazprom now demands that the deal is renegotiated after Shell was forced to admit last week that the cost of the Sakhalin-2 gas field project had overrun by an estimated 10 bln usd and could now cost 20 bln.”: Posted Monday 18 July 2005: Read the article
The Herald (Scotland): U-turn on Brent oil deaths inquiry: “Keith Moncrieff and Sean McCue died when they were exposed to hydrocarbon gases on the Brent Bravo platform on September 11, 2003. At Stonehaven Sheriff Court in March, Shell, the oil company, admitted three safety breaches which led to their deaths.”: Posted Wednesday 20 July 2005: Read the article
BBC NEWS: Law chief orders rig deaths probe: “ The Lord Advocate said it would be in the "wider public interest" for an inquiry into the deaths of Keith Moncrieff and Sean McCue. They were killed on Shell's Brent Bravo platform in the North Sea in September 2003. Shell was later fined £900,000.”: "Shell admitted a series of health and safety breaches and was fined a record amount on a company following a North Sea accident.": Posted Wednesday 20 July 2005: Read the article
Daily Record (Scotland): OIL RIG DEATHS PROBE U-TURN: “In April, Shell were fined a record £900,000 after admitting blunders leading to the deaths of Mr Moncrieff, of Invergowrie, Dundee, and Mr McCue, of Kennoway, Fife.”: Posted Wednesday 20 July 2005: Read the article
Grampian TV (Scotland): FAI to be held into oil platform deaths: “Earlier this year Shell was fined a record nine hundred thousand pounds after admitting health and safety breaches. The Sheriff who heard the case said there had been a "substantial catalogue" of errors.”: Posted Wednesday 20 July 2005: Read the article
Glasgow Evening News: Inquiry into rig workers' deaths: “After the tragedy, operators Shell revised safety procedures and maintenance issues, admitting there were shortcomings.”: Posted 20 July 2005: Read the article
THE NEW YORK TIMES: Shell Turns a Stock Page but Has Chapters to Go: “A year and a half after a reserve scandal that sank Shell's stock, ended its reputation as a conservative company and forced the ouster of three of its top executives, the company is still remaking itself, analysts and investors say.”: “Shell deflated investor confidence again last week, when it said that costs at the Sakhalin II project, which it is leading, could double to $20 billion, and that the project might be delayed for half a year.”: Wednesday 20 July 2005: Read the article
The Guardian (UK): Ousted Shell chairman begins fight against regulator: “A year ago, the regulator decided to fine the company after discovering "unprecedented misconduct". Sir Philip is not named in the report, but he argues that he could be identified because he was running the company at the time.”: “He left Shell in March 2004 after it had admitted overstating reserves by almost a quarter. The company has been trying to put the episode behind it…”: Monday July 25, 2005: Read the article
London Evening Standard: Sky-high crude price propels Shell to within touching distance of BP: “Shell's profits surged by more than a third in the first half of the year, thanks to record oil prices.”: “Shell is attempting to win back investor confidence following the scandal last year when it was found to have been grossly exaggerating the amount of oil it had in reserves, waiting to be pumped out of the ground.”: “But investors remain rattled about huge cost overruns at its flagship gas exploration project in Russia. Sakhalin II could end up costing double the expected $10 billion. "We have to say there are certain large projects which don't go well at all," said chief executive Jeroen van der Veer. He denied the blundered project was of lasting damage to the group's reputation.”: Thursday 28 July 2005: Read the article
THE TIMES (UK): Shell's woes mount as it admits cost overruns and delays: “FURTHER delays and soaring expenditure in big energy projects emerged at Royal Dutch Shell yesterday when the company admitted that the start-up of Bonga, a giant offshore Nigerian oilfield, had been pushed back until late this year.“: “Bonga’s budget has already swelled from a $2.7 billion estimate in 2001 to about $4 billion (£2.3 billion).”: Friday 29 July 2005: Read the article
Daily Telegraph: Shell gushes to $10bn in face of Sakhalin costs: “Shell yesterday declared a 27pc increase in first-half profits to $10.17billion (£5.8billion) but admitted that its oil and gas production had fallen by 129,000 barrels a day over the period.”: “Shell's main problem in the second quarter was a huge cost overrun on its landmark Sakhalin project, which aims to tap four billion barrels of hydrocarbons in the frozen sea off the east coast of Russia. The company recently admitted that its costs had doubled to $20billion. Yesterday, Jeroen van der Veer, the chief executive, said: "It is clear we must improve our project management.": Friday 29 July 2005: Read the article
Daily Telegraph: A summary of this week's main business stories: “Shell declared a 27pc increase in first-half profits to $10.17billion (£5.8billion) but admitted that its oil and gas production had fallen by 129,000 barrels a day over the period.”: Saturday 30 July 2005: Read the article
Daily Telegraph: Not bad results this half but UK plc could do better: “… Jeroen van der Veer, chief executive of Shell, whose sums have given so much trouble recently, admitted: "It is clear we must improve our project management.": Saturday 30 July 2005: Read the article
The Times (UK): That was the week: “Further delays and soaring expenditure in big energy projects emerge at Royal Dutch Shell after the oil group admits that the start-up of Bonga, a giant offshore Nigerian oilfield, has been pushed back until late this year.”: Saturday 30 July 2005: Read the article
ENERGY COMPASS: Sakhalin costs overshadow Shell's new start: “Gazprom has already said the new budget will affect the asset swap that it is negotiating with Shell, and analysts estimate it could cost Shell $1 billion in these discussions alone. But it has broader implications for Shell, which… is developing an accident-prone reputation…”: “Costs have spiraled on the Athabasca oil sands project in Canada, on Bonga in Nigeria, and most recently on the Pearl GTL project in Qatar — priced at $5 billion at its launch last year, but now already creeping up to around $6 billion.”: “Questions have also been raised about Shell's management of investor expectations.”: Posted Monday 1 August 2005: READ
Daily Telegraph: Shell ordered to dismantle pipeline: “The Irish government yesterday ordered Shell to dismantle a gas pipeline that has sparked protests in County Mayo.”: “Shell has suspended its £605m project to link the Corrib gas field to an onshore refinery.”: “The pipeline has become a major public relations disaster for Shell, which admitted at its half-year results last week that it needed to drastically improve its project management.”: Tuesday 2 August 2005: Read the article
The Times (UK): Sakhalin project delays may cost Shell $500m: “DELAYS at Royal Dutch Shell’s Sakhalin Energy project in Eastern Siberia could cost the company as much as $500 million (£282 million) in deferred oil revenues next year…”: “Massive cost overruns at the Dutch energy group’s largest oil and gas project were revealed last month when Shell admitted that the project’s budget had doubled to $20 billion…” Thursday 4 August 2005: Read the article
The Times (UK): Rig evacuated after leak: “A North Sea oil platform where two workers were killed was at the centre of another safety scare yesterday after a leak was discovered in one of the rig’s legs.”: “In September 2003 Keith Moncrieff and Sean McCue died after a massive gas escape on board the Brent Bravo platform. Shell was later fined £900,000 after it admitted a series of breaches of health and safety regulations.”: Tuesday 9 August 2005: Read the article
Daily Telegraph: Shell may offer tax-efficient option to its rebel investors: "Shell admitted yesterday that it was considering a new tax-efficient offer for British shareholders in Royal Dutch Petroleum who are refusing to accept the terms of the merger with Shell Transport and Trading.": Saturday 13 August 2005: Read the article
THE SUNDAY TIMES: Shell bosses live high life on oil profits: “Jeroen van der Veer, the chief executive, and fellow senior executives are understood to have bought three new Falcon aircraft for their boardroom fleet at a cost of nearly £60m.”: “The lavish arrangements for directors are partly a result of the company’s bulging coffers.”: “News of the luxury jets comes as the company begins to rebuild its reputation following a corporate scandal. Last year, it was accused of misleading the stock market by overestimating its oil reserves and had to pay £82m in fines.”: Sunday 21 August 2005: READ
Irish Times: FF chair of committee denies he is avoiding Shell issue: “Meanwhile, a senior Shell executive has apologised for describing the proposed trip to Norway by Dr Jerry Cowley (Ind) as "a junket". Corrib gas project manager Mark Carrigy said he regretted using the term in an interview on Mid West Radio.”: Saturday 10 Sept 2005 4: READ
THE WAY AHEAD: The Future of Ethics: "Shell’s Chief Executive Officer Jeroen van der Veer admits that his company “has been through some tough times over the last year or so” because of “the reserves recategorizations” issue, which itself would not have existed in the first place had all ethical “best practices” been followed.": Posted Monday 24 October 2005: READ
Grampian TV (Scotland): Shell admits failures led to the deaths of two men: “Earlier this year Shell was fined a record nine hundred thousand pounds after admitting health and safety breaches.”: Monday 31 October 2005: READ
The Herald (Scotland): Two deaths on Brent rig were our fault, says Shell: “In April, Shell was given a £900,000 fine, equivalent to about an hour of its global profit, after admitting three health and safety offences.”: November 01 2005: READ
The Scotsman: Shell admits corporate failure on rig led to two men's deaths: “"I wish also to emphasise at the outset of this inquiry that Shell will not depart in this inquiry from the rationale which led to the decision to plead guilty last year. "That involves an acceptance of certain deficiencies at a corporate level.”: Tuesday 1 November 2005: READ
The Daily Record: SHELL FAI: OILRIG CREWMEN WERE KILLED BY PATCHED-UP PIPE: “20-minute repair still there after a year, inquiry is told”: “Shell admitted breaching three health and safety regulations and were fined £900,000.”: Tuesday 1 November 2005: READ
BBC News: Oil platform deaths inquiry opens: "Shell admitted breaching three health and safety regulations and received what was thought to be the biggest fine given to a company following a North Sea accident.": Posted Tuesday 1 November 05: READ
The Times: Inquest into oil rig deaths opens: “Earlier this year Shell was fined £900,000 after admitting health and safety breaches in relation to the incident.”: November 01, 2005: READ
Reuters: FSA drops reserves probe into ex-Shell chairman: “Shell shocked investors in 2004 by admitting it had overstated its reserves by around a third. The scandal cost Watts and other senior Shell managers their jobs.”: Wed Nov 9, 2005: READ
The Times: Veteran of Shell learns to float above many a boardroom crisis: Maarten van den Bergh has survived troubled times at the top of some of Britain's leading companies: "Royal Dutch Shell, where he now sits as a non-executive director, where he was president until 2000 and where he began his career in the late 1960s, was forced to admit almost two years ago that it did not have as much oil as it thought it had. The subsequent revisions showed that its system of auditing reserves, for which the board had ultimate responsibility, was in complete disarray.": Wednesday 9 November 2005: READ
Financial Times: Shell's Sakhalin targets too aggressive: "Royal Dutch Shell has admitted to setting overly aggressive targets and miscalculating the challenges of developing its flagship Sakhalin 2 oil and gas project in Russia, which has doubled in cost to $20bn (£11.6bn) and is running about eight months behind schedule.": "The Kremlin suggested earlier this month that it might not approve Shell's request to double the cost of the project...": Wednesday 23 November 2005: READ
THE WALL STREET JOURNAL: Corporate Reputation Survey: "Companies with the best and worst reputations"
PUBLIC PERCEPTIONS: Royal Dutch Shell - No 54 out of 60
SINCERITY OF CORPORATE COMMUNICATIONS: Lowest Percentage of Positive Ratings for Sincerity: Royal Dutch Shell - Grouped with Tyco, Halliburton, Enron etc
CORPORATE WEB SITE RECALL: Under "Lowest Recall": Royal Dutch Shell grouped with MCl-WorldCom, Enron etc
Tuesday 6 December 2005: READ
THE WALL STREET JOURNAL: Ranking Corporate Reputations: Bottom 10 (Worst Reputations): At 54. Royal Dutch Shell: 55: Tyco International: 57: Halliburton: 60: Enron: Tuesday 6 December 2005: READ
ShellNews.net: ALMOST 2 YRS AFTER THE RESERVES FRAUD, SHELL’S REPUTATION IS STILL RANKED IN THE CORPORATE GUTTER ALONGSIDE ENRON: "Sir Philip must qualify as the worlds greatest conman having pulled off a multi-billion dollar scam while retaining an $18 million dollar payoff/pension pot": (revised Sat 10 Dec 05): READ
ANNEX D: WEB PAGE HEADED:
“OUR LEAFLETS AND ADVERTISEMENTS ABOUT SHELL VIA LINK “OUR ARCHIVE LEAFLETS ABOUT SHELL”
(accessible via link on “Home Page” of Donovan website)
(EACH SUBHEADING IS A LINK TO A LEAFLET WHICH HAS THAT TITLE)
"A DEEP DEPRESSION IS HANGING OVER SHELL TOWER" (Leaflet published and distributed in 1999): "Shell's antiquated 'politburo' - the 'CMD'. dithered, dallied, and danced the Macarena"
A SLASH AND BURN CULTURE AT SHELL
HOW SHELL CONNED UK MOTORISTS
MARK MOODY-STUART A "GREEDY BAS***D"?
LETTER TO QUEEN BEATRIX
RETURN OF THE ROBBER BARONS
75% OF SHELL RETAILERS WHO VOTED IN OUR FIRST SURVEY DECIDED THAT SHELL ARE UNETHICAL, INCOMPETENT, GREEDY BATHBUNS
SHELL SHOCK NEW POLL RESULTS (WITH DETAILS OF SURVEY)
SHELL MANAGEMENT LIES DECEPTION & COVER-UP
SHELL'S STATEMENT OF GENERAL BUSINESS PRINCIPLES
"THE UNETHICAL CLEANSING OF SHELL UK AGENT OPERATORS" (Letter received from Shell Station operator Sheila Gee, published and distributed as a leaflet in 1999)
"WARNING: DO NOT TRUST SHELL UK" (Leaflet published and distributed in mid-summer 98)
ANNEX E: WEB PAGE HEADED:
“ARTICLES UNDER THE NAME OF AED PUBLISHED BY WWW.MONDAQ.COM”
(accessible via link on “Home Page” of Donovan website)
Article 1: Why has Ex-Shell Boss Watts brought proceedings against the FSA who did not name him in their Shell reserves scandal report but not against publishers and broadcasters who HAVE named him in connection with the debacle? (United States): 26 July 2005
Article 2: ShellNews.net: Royal Dutch Shell Farcical No. 2 Ranking in the 2005 "Accountability Rating" Published in FORTUNE Magazine (United States): 27 September 2005
Article 3: ShellNews.net: New SEC Chairman, Christopher Cox, brands Royal Dutch Shell reserves debacle a European "fraud" on a par with the Enron and WorldCom scandals (United States): 11 October 2005
Article 4: ShellNews.net: The Slow Death of the ROYAL DUTCH SHELL PLC "Tell Shell" Internet Discussion Forum (United States): 26 October 2005
Article 5: ShellNews.net: Rattled Shell Management Swamped With Bad News, Issues Threat Following President Putin’s Sakhalin2 Tirade (United States): 17 November 2005
Article 6: ShellNews.net: Global Floodgates Open on Shell Reserves Fraud Class Action (United States).25 January 2006.
Finally, the following is a self-explanatory article published on the Donovan website on 12 September 2003: -
PRWeek.com: News Analysis: Can Shell survive reserves affair? Last week, the FSA imposed the largest fine in its history on Shell for market abuse over the oil reserves scandal. A Shell PR veteran traces the firm's reputational demise.: “the reputation of Shell has been destroyed by hypocrisy, mendacity and deceit. Whether we will ever be able to be 'sure of Shell' again is very doubtful indeed.” (ShellNews.net)
Written by Paddy Briggs
Published on September 03 2004
Posted 12 Sept 04
In 1997, advertising legend Maurice Saatchi was called in by the Royal Dutch/Shell Group to help it improve its image. Saatchi produced a number of adman slogans - but among all the hyperbole he said one very wise thing: 'No communication can work effectively unless backed by real action.'
The years that followed Saatchi's brief involvement with Shell were characterised by a plethora of comms initiatives - but also by actions at the top that have mortally wounded its reputation.
Society's expectation of what is required of businesses generally (and multinationals in particular) underwent a major change in the last two decades of the 20th century, and Shell was not alone in neither fully anticipating these changes nor in developing a strategy to cope with them. Shell has always been essentially unideological, which is why when it was persuaded of the need to create a set of quasi-ideological values and business principles, it struggled.
An organisation run by technocrats (for whom the processing of a series of inputs in a structured way always leads to entirely predictable outputs) was suddenly confronted by new stakeholders. The NGOs were active and the media relished stories about the insensitivity or amorality of big business. It became clear that firms operating in the energy sector were going to have to act if they were to protect reputations.
Shell was initially slow to move. The group's technological imperative was so powerful that there was a presumption that decision making would lead always to the best technical/environmental solution. And there was also a strong belief within Shell that, because it had operated in more than 100 countries for over 100 years, it was culturally understanding and caring.
In 1995, two events blew Shell's presumptions of superiority out of the water. The extensive protests against Shell's plans to dump redundant oil platform Brent Spar in the North Atlantic caused much heart-searching. Around the same time, in Nigeria, the political activist Ken Saro-Wiwa implicated Shell during his 'treason' trial: 'The ecological war that (Shell) has waged... against the Ogoni people will... be punished.' When he was executed, some of the global condemnation of it was aimed at Shell.
In 1996/97, in response to Brent Spar and Nigeria, the then group chairman Cor Herkstroter became obsessed with the need to protect Shell from the type of vitriolic criticism it was then receiving. It was at this time that Saatchi became involved in the project. He had befriended Herkstroter and persuaded him that Shell needed more 'value-based' communications.
Saatchi told Shell that it needed to define its 'core purpose' as a corporation and, under his guidance, senior management was convinced that it should define its corporate raison d'etre as being 'to help people build a better world'. Shell staff were told that this 'core purpose' would be a 'foundation for all our activities and communications'.
By the end of 1997, this was launched externally, along with a declaration of Shell's belief 'that the future is a better place'. But although there was a need for a moral and behavioural underpinning for the business, surely it was not credible to claim that Shell's principal purpose was anything other than the pursuit of growth, reliable future profit streams and the need to offer shareholders good returns. To do this with due regard for all stakeholders was desirable, admirable and necessary. But to claim that its core purpose was to 'help people build a better world' made it sound like the United Nations.
To manage the reputation enhancement process, many professionals were externally recruited to produce both the multimedia communications material and a shelf-bending series of manuals for employees. Shell was soon to launch a series of ads and other comms that were arguably deceptive.
For example, by the 1990s, Shell was dipping a toe in the water of non-traditional energy (wind, solar and forestry), a business for which it coined the descriptor 'renewables'. Much of the advertising and other communications launched in the reputation campaign focused on this area despite the fact that 'renewables' was a very small business.
A raft of other comms initiatives were also launched - including the publication of the 'Shell Report', which itemised how Shell said that it contributed to sustainable development. Shell introduced a positioning that it had a 'triple bottom line', which included the need to take account of the social and environmental aspects of business as well as the economic consequences. There was also the publication of a seemingly unequivocal commitment to human rights - but where such a commitment might be frowned upon (such as in Saudi Arabia) it was not promoted at all.
The intellectual rigour with which the reputation management systems and processes were developed was exemplary and a huge effort was put into this attempt to secure the moral high ground - but other forces were at work that would ultimately make such an ambition unattainable.
Shell managers' primary challenges were not concerned with Shell's reputation but with the more prosaic need to achieve short-term business targets.
Although the comms rhetoric said differently, the reality was that Shell's actual behaviour, particularly in the era of Phil Watts's chairmanship, was as single-mindedly commercial as ever.
This became suddenly and shockingly clear in early 2004 when it was revealed not only that Shell had been systematically overstating its oil reserves for some time but that senior execs recognised that they had been false.
Heads rolled - including that of Watts - and the resultant crisis was far greater than anything in the 1990s. Saatchi had warned that comms need to be backed up by real action - but that warning was ignored when the going got tough.
The reserves issue has shown beyond doubt that there was no connection between the reputation enhancement and comms activity on the one hand, and the reality of top management behaviour on the other. While the Financial Services Authority's £17m fine will be only a pinprick on its balance sheet, the reputation of Shell has been destroyed by hypocrisy, mendacity and deceit. Whether we will ever be able to be 'sure of Shell' again is very doubtful indeed.
Paddy Briggs retired from Shell in 2002 after 37 years. He is writing a book, The Changing Face of Shell, to be published in 2005, about the group and its public image.
Webmaster: Further background information about the author of the above report
Paddy Briggs is the managing partner and founder of BrandAware™
Paddy retired from the Royal Dutch/Shell Group of Companies in 2002 after 37 years service. Over the last twenty years of his career he specialised in Marketing and Corporate Communications and worked for Shell companies in a variety of primarily Communications assignments in The Netherlands, Scotland, Hong Kong, London and Dubai. He has travelled widely and during his time in Shell International in London he was the Project manager for the world's largest brand re-imaging undertaking - Shell's "Retail Visual Identity" (RVI) project. Paddy visited Shell companies in more than 50 countries during the development and implementation of RVI.
Between 1996 and 2002 Paddy Briggs was based in Dubai in the United Arab Emirates and from here he managed key aspects of Shell's brand management across the Middle East region. This included the launch of the magazine "Shell in the Middle East", as well as extensive Corporate and marketing Communications campaigns.
In short, Paddy Briggs is an expert in Marketing and Corporate Communications on a global scale and has a vast insider knowledge of Shell: he therefore has a unique insight on the trials and tribulations of the Royal Dutch Shell Group. When he describes Shell's reputation as being "destroyed", his assessment carries considerable weight and authority: it should consequently be an issue of major concern to Shell stakeholders.
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