For a century, Shell has explored the Earth to make our lives more comfortable. But in its wake, says Andrew Rowell, lies corruption, despoliation and death
The Queen and the Duke of Edinburgh went to the Shell Centre on the Thames riverside near Waterloo last Tuesday, to crown the company’s centenary celebrations. Critics claim the timing of the Queen’s visit was slightly unfortunate: it came just one day after the second anniversary of Ken Saro-Wiwa’s death in Nigeria: he was campaigning against Shell’s oil exploitation in the region.
The Shell Transport and Trading Company (STTC) has risen from its humble roots in a cramped office in the East End to become one of the most successful corporations of the century. What we collectively know as “Shell” is in fact more than 2,000 companies. Last year, the Shell Group’s profit was a record pounds 5.7 billion, the proceeds from sales of pounds 110 billion. “Were our founder, Marcus Samuel, to reappear today, I do not think he would be displeased with what has grown from his efforts,” says Mark Moody-Stuart, STTC’s chairman.
As part of the centenary celebrations, the cream of the City were invited to a reception at the Guildhall. There is also to be a commemorative book. Whilst it may mention the Shell Better Britain Campaign, and even the controversy over Brent Spar, not everyone will agree with the authorised biography’s version of Shell’s history. Here is a less authorised approach.
After it merged in 1907 with its rival Royal Dutch, the Royal Dutch Shell company was formed; its first chairman was the Dutchman Henri Deterding. By the 1930s, Deterding had become infatuated with Adolf Hitler, and began secret negotiations with the German military to provide a year’s supply of oil on credit. In 1936, he was forced to resign over his Nazi sympathies.
During the early 1940s, as the world waged war, Peru and Ecuador had their own armed border-dispute – over oil. Legend in Latin America says that it was really a power struggle between Shell, based in Ecuador, and Standard Oil in Peru. The company left a lasting reminder of its presence in the country: a town called Shell. Activists in Ecuador are seeking to get the town renamed Saro-Wiwa.
In the post-war years, Shell manufactured pesticides and herbicides on a site previously used by the US military to make nerve gas at Rocky Mountain near Denver. By 1960 a game warden from the Colorado Department of Fish and Game had documented abnormal behaviour in the local wildlife, and took his concerns to Shell, who replied: “That’s just the cost of doing business if we are killing a few birds out there. As far as we are concerned, this situation is all right.”
But the truth was different. “By 1956 Shell knew it had a major problem on its hands,” recalled Adam Raphael in the Observer in 1993. “It was the company’s policy to collect all duck and animal carcasses in order to hide them before scheduled visits by inspectors from the Colorado Department of Fish and Game.” After operations ceased in 1982, the site was among the most contaminated places on the planet, although Shell is now trying to make it into a nature reserve.
At Rocky Mountain, Shell produced three highly toxic and persistent pesticides called the “drins”: aldrin, dieldrin and endrin. Despite four decades of warning over their use, starting in the 1950s, Shell only stopped production of endrin in 1982, of dieldrin in 1987 and aldrin in 1990, and only ceased sales of the three in 1991. Even after production was stopped, stocks of drins were shipped to the Third World.
Another chemical Shell began manufacturing in the 1950s was DBCP, or 1,2 -Dibromo-3-Chloropropane, which was used to spray bananas. This was banned by the US Environmental Protection Agency in 1977 for causing sterility in workers. In 1990, Costa Rican workers who had become sterile from working with the chemical sued Shell and two other companies in the Texan Courts. Shell denied that it ever exported the chemical to Costa Rica and denied that it exported it to any other country after the ban in 1977. The case was settled out of court.
Just as people had begun to question Shell’s products, so they began to challenge its practices. In the 1970s and 1980s, Shell was accused of breaking the UN oil boycott of Rhodesia (now Zimbabwe) by using its South African subsidiary and other companies in which it had interests. Shell, singled out by anti-apartheid campaigners for providing fuel to the notoriously brutal South African army and police, responded by hiring a PR firm to run an anti-boycott campaign.
By the 1980s criticism of Shell’s operations was spreading. From Inuit in Canada and Alaska, to Aborigines in Australia and Indians in Brazil, indigenous communities were affected by Shell’s operations.
In the Peruvian rainforest, where Shell conducted exploration activities, an estimated 100 hitherto uncontacted Nahua Indians died after catching diseases to which they had no immunity. Shell denies responsibility, and says that it was loggers who contacted the Nahua. By the end of the decade, the company’s image was suffering in the US and UK, too.
In April 1988, 440,000 gallons of oil was discharged into San Francisco Bay from the company’s Martinez refinery, killing hundreds of birds. The following year, Shell spilt 150 tons of thick crude into the River Mersey, and was fined a record pounds 1 million.
But by now, the company was responding to growing international environmental awareness. “The biggest challenge facing the energy industry is the global environment and global warming,” said Sir John Collins, head of Shell UK, in 1990. “The possible consequences of man-made global warming are so worrying that concerted international action is clearly called for.”
Shell joined the Global Climate Coalition, which has spent tens of millions of dollars trying to influence the UN climate negotiations that culminate in Kyoto next month. “There is no clear scientific consensus that man-induced climate change is happening now,” the lobbyists maintain, two years after the world’s leading scientists agreed that there was.
At the same time, the company has taken its own preventive action on climate change and possible sea-level rise by increasing the height of its Troll platform in the North Sea by one metre. By 1993, as Shell’s spin-doctors were teaching budding executives that “ignorance gets corporations into trouble, arrogance keeps them there”, 300,000 Ogoni peacefully protested against Shell’s operations in Nigeria. Since then 2,000 have been butchered, and countless others raped and tortured by the Nigerian military.
In the summer of 1995 there was the outcry over the planned deep-sea sinking of the redundant oil platform Brent Spar, and in November Ogoni leader Ken Saro-Wiwa was executed, having been framed by the Nigerian authorities. At the time Shell denied any financial relationship with the Nigerian military, but has since admitted paying them “field allowances” on occasion. This year in Nigeria, the three-million-strong Ijaw community started campaigning against Shell, leading to another military crackdown.
“The military governor says it is for the purpose of protecting the oil companies. The authorities can no longer afford to sit by and have the communities mobilise against the companies. It is Ogoni revisited,” says Uche Onyeagucha, representing the opposition Democratic Alternative. In Peru, Shell has returned to the rainforest. It acknowledges “the need to consider environmental sustainability and responsibility to the people involved”, but the move is still criticised by more than 60 international and local environmental, human-rights and indigenous groups.
“Shell has not learnt from its tragic mistakes,” says Shannon Wright from the Rainforest Action Network, which believes there should be no new fossil-fuel exploration in the rainforest: “They continue to go into areas where there are indigenous people who are susceptible to outside diseases.” Meanwhile, Shell publicly talks of engaging “stakeholders”.
It hopes that we, as consumers, will continue to give it a licence to operate. However, for each barrel produced, the ecological and cultural price increases exponentially. Everyone knows we need to reduce our consumption of oil: but Shell’s very existence depends on selling more of it. Senior executives are said to be “girding our loins for our second century” because “the importance of oil and gas is likely to increase rather than diminish as we enter the 21st century”. Can we let that happen?
Shell has for many years supposedly operated within an ethical code which, according to its current shell.com webpage on the subject, was first published in 1976.
This does not tally with the relevant pages in “A HISTORY OF ROYAL DUTCH SHELL, Volume 3,” about the history of the code – known in the 1990′s as the Shell Statement of General Business Principles.
Apparently they were first drafted in 1962, restated and first published in 1976, made freely available to the public from 1981 and reformulated in 1997, for the first time including human rights.
(According to the current version, they were last updated in 2005.)
The principles pledge “safe conditions of work” (Page 243).
In reality Shell management operated a “Touch F*** All” safety policy on North Sea platforms, which cost Shell workers their lives. Safety records were routinely falsified. After the Brent Bravo explosion, Shell admitted responsibility for avoidable deaths and received a record breaking fine.
According to page 307/8, relating to Shell business principles, criticism from Shell employees “should be considered an asset…”
In reality, Dr John Huong, who worked diligently for Shell for decades as a production geologist, was sacked after criticizing deliberate deception of Shell shareholders over claimed oil and gas reserves. Dr Huong is a deeply religious man with a conscience, so he did not fit in. The exact opposite of The Reverend Fraudster Sir Philip Watts.
Eight Royal Dutch Shell companies subsequently joined forces to obtain an injunction in an unsuccessful attempt to stop this website from publishing criticism emanating from Dr Huong. So much for another claimed virtue of the code: transparency. Shell buried Dr Huong in injunctions and threats of imprisonment.
A Shell executive, Mr John Johns, suffered a similar fate for his misplaced faith in the claimed principles.
Both Shell employees were deceived by comments and pledges about the principles made by senior executives, including Mark Moody-Stuart.
EXTRACTS FROM PAGE 357
Mark Moody-Stuart, Group managing director, stated in 1996 that the public at large now demanded to be convinced that a company practised what it preached. This had clear implications for how Shell companies put their messages across: ‘a fine line had to be steered between a willingness to listen to others and maintaining the courage of one’s convictions’.
The following is a reference to the code in an extract from a letter that Moody-Stuart sent to the Guardian in response to their publication of an extraordinary article: “Unlovable Shell: Goddess of Oil” in November 1997:
“the Statement provides, for our employees to follow and for the outside world to judge us by, an ethical framework which is mandatory, not optional: just having those principles is not enough. In the past: an oil company could say “trust me” and expect that to be enough. Today, people say, “tell me” “listen to me” “show me”. Trust has to be earned by transparency. That’s one of the most important lessons we’ve learned in Shell”.
(Link to more extracts from the Moody-Stuart letter, published by the Guardian)
The supposed existence of and undying commitment to the ethical code was also used to bolster confidence in the integrity of the oil giant with oversight authorities.
For example, Form-20F declarations filed with the U.S. Securities & Exchange Commission, which contained false information about the volume of Shell’s hydrocarbon reserves, made repeated reference to Shell’s business principles. Each such return was signed by a Shell executive director.
In reality, under the management of Moody-Stuart, “value creation teams” had been formed to conjure up proven oil and gas reserves from thin air. The deception, fraud, lies and cover-up, resulted in the biggest scandal thus far to engulf the company.
Many companies doing business with Shell no doubt felt, as we did, an extra sense of protection knowing that the company supposedly operated within an ethical framework.
Soon after it became apparent that a Shell executive had repeatedly stolen ideas we disclosed to him in strictest confidence, we raised the subject of the code (and continued to do so through the years).
Instead of honouring the pledge’s made in the code, Shell decided to back the thoroughly dishonest executive who had rigged a contract tender process so that a company which had not run in the race was miraculously awarded the contract. The company had a close association with the Shell executive.
We had rung alarm bells far and wide during Moody-Stuarts reign, warning that Shell management was unethical.
This is an extract from a leaflet distributed to Shell employees at Shell HQ buildings in London and The Hague:
I caution all businesses contemplating trading with Shell UK Ltd to be on their guard. In my experience, they are masters of double talk and double-dealing. It has at times proved almost impossible to extract the truth from this company.
Bearing in mind that Shell has pirated a series of ideas that Don Marketing disclosed to them in confidence, I take the view that they should fly a “skull and crossbones” flag over Shell-Mex House as fair warning to all who enter.
A press statement released by Shell gives some idea of the scope of our activities. We were told that it was drafted by an irate Shell Chairman.
People must have thought we were unhinged, but subsequent events described above, including the forced resignations of three Royal Dutch Shell executive directors, proved that our warnings were well founded.
We wondered at the time whether legal action could be brought against Shell based on non compliance with the pledges contained in the code?
Hence the self-explanatory correspondence below:
Letter to Shell General Counsel and company Secretary, Mr Richard Wiseman, dated 2 June 1997
Initial response letter from Mr Wiseman dated 3 June 1997
Considered response letter from Mr Wiseman dated 5 June 1997
Faxed letter to Mr Wiseman (Shell Legal Director) dated 22 April 2004
Response email from Mr Wiseman also dated 22 April 2004.
It struck me that although Shell said in its very carefully crafted response that “there was no intention to create a document for use in the court”, that does not necessarily rule out the possibility that the promotion of the code, on a global basis (e.g. the Profits & Principles campaign), has not created a right to bring legal action when Shell fails to honour its pledges.
In other words, although it might not have been Shell’s intention to create a document for use in the Courts, perhaps they inadvertently did so?
If there is no legal redress, then such codes amount to no more that a confidence tricksters charter when used by unethical multinationals, such as Royal Dutch Shell, to pretend otherwise.
Posted in: Alfred Donovan, Business Principles, Dr. John Huong, GoogleNews, Human Rights, John Donovan, Litigation, Oil, Outspoken Articles, Richard Wiseman, Royal Dutch Shell Plc, Shell, Sir Philip Watts, The Guardian, United States.
Tagged: John Donovan · Oil · Royal Dutch Shell Plc · Sir Mark Moody-Stuart · Sir Philip Watts