The Guardian: Friends of the Earth says Shell fails own green pledge

Mark Tran

Wednesday June 23, 2004

Friends of the Earth, the environmental group, today accused oil giant Shell of failing to live up to its promise of environmental and social responsibility. Already under scrutiny for overstating its oil reserves, Shell came under attack from FoE for polluting communities and damaging wildlife habitats in a report released ahead of the company's annual general meeting next week.

"In Texas, Durban, Manila and the Niger delta, communities have been offered endless dialogue, projects and pilot projects instead of the concrete action needed to stop the harm the refineries, depots, gas flares and pipelines are causing," said Tony Juniper, the executive director of FoE, in the foreword of Behind the Shine.

Mr Juniper contrasted the position of Shell shareholders, who can seek redress against the company after it overstated its oil reserves, to the lack of such rights among communities affected by Shell.

FoE said there was an urgent need to reform company law so that directors have a "duty of care" to consider the significant environmental and social impacts of their companies' policies and operations. "It is time the British government legislated and gave communities the right to protection from such corporate abuse. And they must be compensated when abuse occurs," Mr Juniper said.

Oronto Douglas, from Friends of the Earth Nigeria, who is travelling to Shell's AGM said: "Shell's business practices in the Niger delta have destroyed our environment, our farmland and our fisheries. Oil spills are not cleaned up and gas flares dominate the sky line. The people in Nigeria are not benefiting from Shell's presence in our country - we are paying the price."

However Matt Samuel, a Shell spokesman, said oil spills were fewer in 2003 than in the year before and blamed most of the spillages on sabotage. "Two-thirds of oil spills by number and volume are caused by sabotage," Mr Samuel said.

Shell has also said it plans to eliminate all routine flaring - the practice of burning gas into the air - by 2008. "It is a major corporate commitment. This target is becoming tight and during 2004 we will be reviewing what resources will be necessary to achieve it," Shell said.

Shell is also coming under attack from institutional investors, appalled by the company's reserves downgrade. Shareholders in Royal Dutch are being urged to vote against chairman Jeroen Van der Veer and eight other directors at next week's AGM in The Hague. Influential US-based shareholder activist Institutional Investor Services is recommending voting against two key motions to "discharge directors of their responsibilities" for the last year at the meeting, which is being held concurrently with that of Shell, the London-based arm.

Such motions - which, in effect, call for shareholders to confirm their confidence in the company's management - are required by Dutch law. Voting against the motions would be a serious blow to the directors' public credibility and could lead to mass resignations.

Shell has revised down its oil reserves four times, totalling 4.47bn barrels, since January, creating turmoil at the oil giant.

http://www.guardian.co.uk/business/story/0,3604,1245686,00.html