PROFITS AND PRINCIPLES

I want readers to be aware of the emphasis which Shell places on its much hyped business principles which have been heavily promoted in its advertising and pr campaigns e.g. Profits AND Principles. They are designed to give confidence to all who do business with Shell. I have printed some extracts from them overleaf and would ask readers to bear them in mind when reading my story. Judge for yourself whether Shell lives up to its lofty promises. It is also important to note that when I make comments concerning unethical/corrupt practices at Shell, those comments are based on Shell’s own definitions of such activity as indicated below, and the associated expectations in respect of all Shell staff and management.

EXTRACT FROM A STATEMENT BY THE FORMER ROYAL DUTCH SHELL GROUP CHAIRMAN, 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

14^th March 2002

Mr Watts was until March 2004 also Chairman of Shell Transport and Trading Co plc and the Chairman of the Committee of Group Managing Directors of the Royal Dutch Shell Group.

Some extracts from Shell’s Business Principles;

We have nine Principles, which apply to all our business affairs and describe the behaviour expected of every employee. The Principles are based on our core values of honesty, integrity and respect for people. They also indicate how we promote trust, openness, teamwork and professionalism, and pride in what we do.

The Shell Group Business Principles have existed in their written form since 1976, and have remained highly consistent ever since, because the core values on which the Principles were originally based have endured.

Principle 4: Business integrity

Shell companies insist on honesty, integrity and fairness in all aspects of their business and expect the same in their relationships with all those with whom they do business. The direct or indirect offer, payment, soliciting and acceptance of bribes in any form are unacceptable practices. Employees must avoid conflicts of interest between their private financial activities and their part in the conduct of company business. All business transactions on behalf of a Shell company must be reflected accurately and fairly in the accounts of the company in accordance with established procedures and be subject to audit.

Principle 8: Competition

Shell companies support free enterprise. They seek to compete fairly and ethically and within the framework of applicable competition laws; they will not prevent others from competing freely with them.

EXTRACTS FROM A SHELL MANAGEMENT PRIMER; DEALING WITH BRIBERY AND CORRUPTION

Section 5: Recommendations for good practice

Underpinning the overall strategy is the principle of transparency. Concerns can be reported, recorded, discussed and improvements suggested. Without transparency, poor practices continue and may only come to light when a problem develops.

Page 51: Operating company policies and guidelines on business integrity.

Typically these include gifts, entertainment, hospitality, avoiding conflicts of interest and safeguarding confidential information. These polices are based on two principles: transparency and the need to uphold a corporate reputation for ensuring that all act and are perceived to be acting with integrity. Conducting business in accordance with Group values and principles, by ensuring that all act and are perceived to act with integrity.

Page 55: The Slippery Slope

Under this heading graphics depict potential entrapment devices which could be aimed at Shell employees including the following: -

Lunches

Dinners

Mixing business and pleasure

Swiss Bank accounts

END OF EXTRACTS

Unfortunately as already indicated, we discovered that the STATEMENT OF GENERAL BUSINESS PRINCIPLES is not actually regarded by Shell as being legally binding on them. Furthermore, Shell has no formal system for monitoring alleged breaches. Richard Wiseman confirmed these facts to us. Apparently there is not even any laid down procedure for dealing with complaints. In other words, the STATEMENT is misleading as it encourages Shell shareholders and the wider public to believe that Shell insists that all of its dealings are conducted on an ethical basis.

Part of the revealing correspondence between John and Shell Legal Director Richard Wiseman is published below.

EXTRACT FROM A DON MARKETING LETTER TO RICHARD WISEMAN DATED 2^nd JUNE 1997 WRITTEN BY JOHN DONOVAN.

“There is another issue which we consider to be an important factor in these matters. We would welcome your comments as to the legal status of Shell’s Statement of General Business Principles e.g. do you consider that they are binding in honour only?”

REPLY FROM RICHARD WISEMAN 5^th JUNE 1997

“In your letter of 2 June you asked me whether we regard the statement of General Business Principles of The Royal Dutch/Shell Group of Companies to be legally binding.

I have consulted widely on the intention of those responsible for the drafting of the statement. They have confirmed that there was no intention to create a document for use in the courts. It was intended to lay down a code of behaviour by which we think we should be judged by the public at large and in this respect perhaps define higher standards than some other commercial organisations impose upon themselves. Our legal obligations are defined by specific contracts and the general legal principles applying in the relevant jurisdiction. We are subject to the same legal standards as apply to everyone else”.

R M Wiseman

General Counsel & Company Secretary

In other words, binding in honour only…

PROMISES VERSUS PERFORMANCE

Please read my true story and as previously suggested, I invite you the reader to judge for yourself how Shell senior management’s actions measure up in practice with its impressive pledges to enforce compliance with its claimed business ethics.

It has taken nearly a year to write. I did not even know at the start whether I would live long enough to complete the task. But unfortunately for Shell Legal Director, Mr Richard Wiseman, I am still alive and kicking. We will see whether he remains as dismissive of an octogenarian old soldier as he was in his written comments about me to a third party on 7^th September 2001.

I have endured a huge amount of traumatic stress from Shell’s actions and suffered a considerable financial loss, including losing my own home to pay lawyers fees. This all occurred as a result of the failure of Shell senior management to live up to its promises. At least I now have the satisfaction of putting my account on these remarkable events into the public domain.

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