Behind the shine The other Shell Report 2003 Dedicated to the memory of our kasama, good friend, hard worker for the people’s cause, Dick Gabac, Pandacan resident who campaigned tirelessly to oust Shell’s depots from his community.
Before, his untimely passing in early 2004, Dick had planned to attend the Shell AGM in London this year to tell Shell personally about the urgent need to relocate their dangerous fuel depot. Contents
This report will highlight Shells poor performance as a leading corporate social responsibility advocate, its failure to address the concerns of Shell fenceline communities from last year’s AGM and the link between Shell’s exaggerated oil reserves fiasco and its exaggerated cliams about its social and environmental performance in order to highlight the need for urgent reform of UK company law and Shells attitude to fenceline communities.
This report is based largely on evidence from people around the world who live in the shadows of Shell’s various operations. This report is written on behalf of Friends of the Earth (FOE), Coletivo Alternative Verde (CAVE), Community In-power Development Association (CIDA), Concerned Citizens of Norco, Environmental Rights Action of Nigeria (FOE Nigeria), Global Community Monitor (GCM), groundWork (FOE South Africa) & groundWork USA, Louisiana Bucket Brigade, Sakhalin Environmental Watch, South Durban Community Environmental Alliance (SDCEA), and United Front to Oust Oil Depots (UFO-OD).
Report Coordinator: Denny Larson, Global Foreword by Tony Juniper 2 Community Monitor. The year in review 3 Contributors: Anne Rolfes, Louisiana Bucket Global recognition for people standing up to Shell 6 Brigade, Hilton Kelley, Community In-power Development Association, Karen Read, South Durban, South Africa: social development schemes to ignore Durban Community Environmental Alliance, refinery hazards 8 Melissa Coffin, Environmental Health Fund, Norbert George, Humane Care Foundation Port Arthur, Texas: environmental injustice by Shell refinery Curaçao, Denny Larson, Global Community plagues African-American neighbourhoods 11 Monitor, Vanessa Stasse, JED Collective Center, Manila, the Philippines: Cesar Augusto Guimarães Pereira & Elson Pandacan oil depots—a disaster waiting to happen 14 Maceió dos Santos, Coletivo Alternative Verde, Hope Tura, UFO-OD, Francesca Francia, Global Norco, Louisiana: health problems still not addressed by Shell 17 Community Monitor, Monique Harden & Nathalie Walker, Advocates for Environmental Human Nigeria: the strange case of Shell’s vanishing oil reserves 20 Rights (AEHR), Dmitry Lisityn, Sakhalin Sao Paulo, Brazil: Shell contamination at the Vila Carioca 22 Environmental Watch, Ikuko Matsumoto, Friends of the Earth (Japan), Peter Roderick, Doug Curaçao, Caribbean: Polluted paradise 24 Norden, Pacific Environment, Marc Pagani. Sakhalin Island, Russia: Shell’s broken commitments 26 Editors: Simon McRae, Friends of the Earth Examples of Shell’s documented spills, fires, (England, Wales & Northern Ireland), Monique and toxic releases since the 2003 Shell AGM 28 Harden & Nathalie Walker, AEHR. Smoke and mirrors: social development and assessments, Thanks to: Adam Bradbury, Rita Marcangelo, pay offs, and community advisory panels 29 Calliste Lelliott, Phil Michaels, Brian Shaad, Tricia Phelan, and Craig Bennett. Corporate lobbying under scrutiny—the case of Shell 30
Design and printing by Design Action Collective Why the voluntary approach just isn’t good enough 32 and Inkworks Press. Printed on 100% post-consumer recyled paper, Processed Chlorine Free. Conclusions 34
Want to know more? Additional Message from the Independent Auditors and assurance report 36 information on Shell can be found in Riding the Endnotes 37 Dragon: Royal Dutch/Shell and the Fossil Fire by Jack Doyle, published by the Environmental Health Fund, available at www.shellfacts.com.
The Other Shell Report 2003 1 Behind the Shine
Foreword
Dear Stakeholder This is the second alternative Shell Corporate Social Responsibility (CSR) report that Friends of the Earth has been privileged to produce with, and for, the many communities that live on Shell’s “fencelines”.
For several years now, Shell has been overstating its social and environmental performance. Our report, Failing the Challenge—The Other Shell Report 2002, documented what it is like for the many communities living next to Shell’s refineries, depots, and pipelines in different parts of the world. We were able to show that, despite making a public commitment to sustainable development eight years ago, Shell is still putting more effort into green spin than green delivery, and that little has changed on the ground.
Behind the Shine—The Other Shell Report 2003 provides an update on the main cases profiled in Failing the Challenge and chronicles Shell’s inaction and procrastination over the last 12 months. 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. Together with these cases, we profile three new case studies. We also challenge the failure of CSR and the use of voluntary codes of practice to address the significant social and environmental impacts of corporations.
Since Shell’s Annual General Meeting in April 2003, shareholders and institutional investors have discovered what fenceline communities have known for a long time: that what Shell says in its reports and what happens in reality are often not one and the same. The company’s announcement in January 2004 that it had overstated its oil and gas reserves by 20% sent shockwaves through world energy markets and the corporate sector as a whole. But at least shareholders have rights established in law, through which they can hold Shell accountable when it fails to act in their interest.
The same cannot be said, unfortunately, for the people who live next door to Shell. These stakeholders have little or no rights of redress, and Shell is working to destroy what few rights they have by lobbying against an important UN standard, Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights. Existing laws governing companies are flawed because they focus on delivering short term profit rather than considering the wider social and environmental impacts of companies.
The time has come for laws governing corporations to protect the environment and the people who are most directly affected by Shell’s poor performance: the fenceline communities. Friends of the Earth is campaigning as part of the Corporate Responsibility (CORE) Coalition to reform UK law so that companies are required to address their impacts on human rights and the environment, both here in the UK and wherever these companies operate overseas.
Justice and accountability should be rights for the stakeholder—not just for the shareholder.
Tony Juniper Executive Director, Friends of the Earth (England, Wales and Northern Ireland)
2 The Other Shell Report The year in review
“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 (then) Chairman of Shell’s Committee of Managing Directors in his Foreword to the Meeting the Challenge—The 2002 Shell CSR Report.
In the year since Sir Philip Watts’ Just as important, people living near the The reality, as known all too well by statement, shareholders have come to fencelines of Shell’s facilities have Shell’s many fenceline communities, is that realize the deep irony of his words. witnessed the emptiness of Sir Philip Shell has been overstating its social and Rather than demonstrating “good Watt’s statement pertaining to sustainable environmental performance for years. For financial performance . . . accompanied development and the commitment he many, the company has become by the highest standard of governance”, made to them during Shell’s Annual synonymous with the word “greenwash”, Shell has created an international General Meeting “AGM” in April 2003. i.e. giving the impression of acting in an corporate scandal by exaggerating its oil At the AGM, shareholders listened environmentally protective way while and gas reserves. Chief Executive Sir patiently while one fenceline community carrying on with unsustainable business Philip Watts has been compelled to representative after another seized the as usual. It was in an effort to expose this resign, and governmental entities in the opportunity to finally put their case gap between rhetoric and reality that United States and Europe have launched directly to Shell’s Board of Directors. Friends of the Earth and the Global Shell investigations of Shell’s business practices. Under the glare of the media and investor Fenceline Alliance last year published the spotlight, Sir Philip Watts made numerous first alternative Shell Corporate personal and corporate commitments to Responsibility (CR) report, Failing the ensure action would be taken. However, Challenge—The Other Shell Report 2002. Shell has failed to deliver any significant on-the-ground improvement in its operations.
Shell neighbors, Desmond D’Sa, Hope Tura, and Oronto Douglas engage Sir Philip Watts at last year’s AGM meeting in London. (Denny Larson, Global Community Monitor)
The Other Shell Report 2003 3 Behind the Shine
The year in review
year in review continued... Who knows the real Shell best—its fenceline neighbours
Shell has always been a big advocate of This report is a message from people it causes and live up to its stated “corporate social responsibility” or CSR around the world who are severely commitments to human rights and and voluntary codes of conduct, but there impacted by Shell’s operations. It presents environmental standards. Unfortunately, comes a time when this isn’t enough. case studies from a few of the many Shell fails to respond to community Friends of the Earth believes that countries, towns, and suburbs that have concerns unless and until its bad practices companies like Shell should be required been damaged by Shell’s environmental are brought to public attention. And even by law to consider a duty of care to the and social failures. People living near when Shell comes under public scrutiny, environmental and social impacts of its Shell refineries, pipelines, and such as in Nigeria, Durban, South Africa, operations. Fenceline communities want petrochemical facilities from places as far and Port Arthur, Texas, it often fails to act, Shell to stop polluting their environment apart as Texas in the USA and Nigeria in or does not act in good faith. and damaging their health. Africa want the world to know that this multinational corporation is jeopardising In response to Shell’s 2003 annual report This report provides an update on the their families’ health, destroying their to shareholders, and its multi-million main case studies profiled in Failing the quality of life, and threatening their lives. dollar public relations campaign to Challenge, and chronicles a pattern of In all of these cases, ordinary people portray itself as being socially procrastination, inaction, and continuing have had to put a great deal of personal responsible, this report brings to the light poor social and environmental time and energy into advocating that of day the truth about Shell’s harmful performance by Shell over the last 12 Shell take responsibility for the problems operations. The communities from around months. Little has changed. the world that are featured in this report share their inspiring and courageous stories about their daily struggle to defend their health and environment from Shell.
Norco residents remember playing beneath these live oak trees as children, before they were moved off their land when Shell built their chemical plant in the 1950’s. The trees are now fenced within the Shell Chemical facility. (Louisiana Bucket Brigade)
4 The Other Shell Report Shell’s neighbours tell Shell:
? To stop wasting its resources on “feel ? To comply with local legislation and ? To take full responsibility for past good” social projects that do nothing relocate oil depots away from Manila, environmental damage that continues to solve the serious health and where the densely populated area is to impact the health and environment environmental problems of its facility subjected to the depot’s constant toxic of people in places like Sao Paulo, operations that plague communities emissions, as well as the threat of the Brazil and Curaçao, Caribbean. around the world. depot being a terrorist target. ? To fully and accurately assess the ? To eliminate hazardous and life- ? To improve and enhance its significant impacts of massive projects, threatening facility accidents by identification and measurement of like the Sakhalin II oil and gas drilling, replacing antiquated and dilapidated facility pollution by employing state-of- processing, and export complex in pipelines and relocating them to non- the-art real-time environmental Russia, which could ultimately subject residential areas. monitoring, which thoroughly involves Sakhalin Island to irreversible community participation. environmental disasters and ? To significantly reduce pollution where devastating economic losses. Shell operates in communities of color, ? To cease any and all delays in just as Shell has done at its facilities in terminating the odious practice of gas Denmark and other locations that are flaring in Nigeria. predominantly populated by Caucasians.
Global Delegation of Shell neighbors from Asia, Africa and North America in front of the Shell AGM meeting last year. (Nick Cobbing/Friends of the Earth).
The Other Shell Report 2003 5 Behind the Shine Global recognition for people
The Goldman Environmental Prize, Margie Eugene Richard, Goldman Prize Winner 2004 considered the “Nobel Prize for the Environment,” is the world’s largest prize “If a person does not live where Margie was first motivated to take on program honouring grassroots people live who are impacted, Shell in 1973 when a Shell pipeline environmentalists from the six continental they really, I think, have exploded, killing an elderly woman and regions of Africa, Asia, Islands and something missing in teenage boy only a block from her house. Island Nations, Europe, North America, understanding the daily ills of In 1988 there was another major and South and Central America. Over not being able to enjoy where accident at the plant which killed seven the last several years, the Goldman you live, where you work and workers and resulted in over 150 million Environmental Prize has been awarded where you play.” tonnes of toxins being spewed into the in three separate instances to community air. In 1989 Margie formed the leaders for their inspiring work in Margie Richard, Goldman Prize Winner, 2004 Concerned Citizens of Norco to seek combating Shell’s destructive practices justice from Shell. and related injustices in their countries. In 2004 the Goldman Prize was Margie Richard grew up in the Margie has led the 13-year campaign of awarded to Margie Richard from Norco, community of Diamond and lived within Concerned Citizens of Norco for a fair Louisiana, USA; in 1998 Bobby Peek 25 feet of the Shell chemical plant in buy-out of their contaminated from Durban, South Africa won the Norco, Louisiana. Margie and her neighbourhood. Margie was awarded the prize; and in 1995 the late Ken Saro- neighbours believe that the high rates of Goldman Environmental Prize 2004 for Wiwa from Nigeria was posthumously cancer, birth defects, and serious ailments persuading Shell to relocate residents awarded the prize. These awards stand such as asthma were caused by pollution who had grown up living next door to the as a testament to both the profoundly from Shell’s operations. The Shell plant at chemical plant and to reduce its toxic negative global impacts that Shell has on Norco dumps more than two million emissions from their operations by 30%. communities around the world, and the pounds of toxic chemicals into the exceptional courage, commitment, and environment each year. personal sacrifice of the people living in these communities, who tirelessly fight for justice.
Margie Richard on the banks of the Mississippi River, Louisiana, along a 136 kilometer stretch known as "Cancer Alley", because of the high concentration of industrial chemical facilities . (Marc Pagani, Louisiana Bucket Brigade)
6 The Other Shell Report standing up to Shell
Previous winners of the Goldman Prize who stood up to Shell
Ken Sarowiwa, Goldman Prize In May 1994, Ken was abducted from his Winner 1995 home and arrested with other MOSOP leaders for the alleged murder of four Ken Saro-Wiwa, a well-known Nigerian Ogoni leaders. In October 1995, despite award-winning author and activist, was the protests of people around the world, executed by the Nigerian government in including government officials from other 1995. Ken Saro-Wiwa was president of countries and human rights organizations the Movement for the Survival of the such as Amnesty International, Ken and Ogoni People (MOSOP), an organization eight co-defendants were convicted by a Bobby Peek addresses a rally of South Durban residents fighting to defend the environmental and military tribunal and hanged. Many Ogoni believe that the only crime concerned with pollution from Shell’s refinery. (South human rights of the Ogoni people. Durban Community Environmental Alliance) committed by Ken Saro-Wiwa was his Since the late 1950’s, Shell has been daring to stand up to Shell. Bobby Peek, Goldman Prize operating in Nigeria, extracting more Winner 1998 than US$30 billion of oil and contaminating the farmland and fisheries Sven ‘Bobby’ Peek grew up in South of the Ogoni. Many of the fish and Durban in South Africa next to one of the wildlife in the area have vanished. Ken largest oil refineries in Africa, the South Saro-Wiwa mobilized his people to African Petroleum Refinery (SAPREF). The demand compensation from Shell for oil refinery, which is jointly-owned by Shell spills on Ogoni farmland and in the and BP, operates in communities where wetlands, rivers, and streams of the Niger poor black, Indian, and mixed race Delta. In January 1993, Ken brought people live. Every family on the block together 300,000 Ogoni who took to the where Bobby lives has lost at least one streets in the largest demonstration member to cancer. against an oil company in history. Bobby was awarded the Goldman Environmental Prize in 1998 for his vision and leadership in uniting multi-ethnic communities, in post-apartheid South Africa, to advocate for reductions in Shell’s significant pollution levels.
Ken Saro-Wiwa
The Other Shell Report 2003 7 Behind the Shine Durban, South Africa Social development schemes to ignore refinery hazards
Durban is home to the massive Shell’s assurance to Durban at Double standards South African Petroleum Refinery the 2003 AGM (SAPREF) which is the largest Shell asserts that it uses the best Desmond D’Sa is a Durban resident and environmental standards at its facilities crude oil refinery in South Africa. Chairperson of the South Durban worldwide. In fact, however, Shell is guilty Jointly owned by Shell and BP, Community Environmental Alliance of using a double standard, one that the SAPREF refinery began (SDCEA), a coalition of community often provides cleaner facilities in areas operating in the 1960s and has organisations from diverse racial, ethnic, around the world with predominantly Caucasian populations as compared to the capacity to process more than and religious backgrounds that advocates for industrial pollution reduction and dirtier and more hazardous facilities 185,000 barrels of oil per day. accident prevention. In 2003, Desmond located in places where people of color The refinery complex is in an travelled to the Shell AGM in London and live. For example, on a daily basis, the area of south Durban populated eloquently spoke out against Shell’s SAPREF refinery dumps 19 tons of by poor black, Indian, and hazardous operations in Durban. During sulphur dioxide into the air that people in the AGM, Sir Philip Watts, then CEO of the neighbouring communities breathe1, mixed-race communities. the Shell Group, gave Desmond his which is more than six times the amount SAPREF’s aging infrastructure has personal assurance that action would be of sulphur dioxide released by Shell’s caused an appalling catalogue of taken to clean up the SAPREF facility. refinery in Denmark2. Sulphur dioxide is accidents in recent years that Such action has not occurred. One year a severe respiratory irritant which can trigger asthma attacks, and a 2002 have had devastating after Watts’ assurance, the South Durban communities continue to suffer from health study by the Durban Environmental consequences for local people repeated industrial accidents and Health Department and two universities and the environment. hazardous spills. (See section entitled confirms the significant incidence of Examples of Shell’s documented spills, chronic asthma among Durban residents, fires, and toxic releases since the 2003 especially children3. Further, unlike Shell Shell AGM). facilities in Europe, the SAPREF refinery does not employ an effective rust- detecting system, which has resulted in the leakage of 25 tons of tetra ethyl lead, a harmful neurotoxin, into the environment.
Shell refinery flaring in South Durban, South Africa. (South Durban Community Environmental Alliance)
8 The Shell Report South Durban residents protest pollution problems in front of Shell refinery. (South Durban Community Environmental Alliance)
Ignoring the problem attention from the serious health and Dialogue without action environmental impacts of its operations. SDCEA and groundWork (Friends of the SAPREF has been holding Community Earth South Africa), an environmental In those instances when SAPREF does Liaison Forum meetings for a number of justice organisation, have repeatedly urged attempt to address environmental issues, years. However, people in the community Shell to deal specifically with the such attempts are woefully inadequate, are tired of “talkshops” that have environmental issues of its refinery that fail to respond to community demands, achieved nothing. SAPREF managers say plague Durban residents. However, rather and ignore the root of the problem. For they that want to build trust and move than taking action to remedy the excessive example, although SAPREF brought Shell beyond an adversarial role with the pollution and frequent accidents at its experts from its offices in the Hague and community, but these managers have operations, SAPREF has gone to the London to assist in cleaning up around completely ignored the community’s expense of bringing international leaking pipes that have spilled over 1.3 repeated admonitions that trust cannot be consultants from Shell’s headquarters in million litres of petrol under the homes of bought with so-called “social projects”. London to spend their time and resources Durban residents, SAPREF and Shell on what they believe are social issues experts refuse residents’ demands for affecting fenceline communities4. This is relocation of the faulty pipelines away reflective of a strategy increasingly from their homes, and the implementation employed by Shell to offer “feel good” of appropriate environmental projects, such as academic scholarships and improvements in SAPREF’s refinery new playgrounds, in order to divert operations5.
How meaningful are Shell’s voluntary environmental management standards?
In attempting to defend its indefensible operation of the SAPREF refinery, Shell points to its ISO 14001 certification as evidence that its environmental management of the SAPREF refinery is entirely appropriate. However, ISO 14001 is merely a body of voluntary environmental standards which pertain to on-site industrial activities. These standards do not require Shell to consider either the environmental sustainability of its operations, or the off-site impacts that these operations have on local communities. In short, the ISO 14001 certificate is meaningless to communities who bear the significant off-site health and environmental consequences of SAPREF’s toxic pollution and frequent industrial accidents.
The Other Shell Report 2003 9 Behind the Shine
Durban
Desmond D’Sa of SDCEA (right) reads a list of environmental justice demands to South African government officials. (South Durban Community Environmental Alliance)
SAPREF’s leaks waste money What has SAPREF done for South Durban residents since the Shell and disrupt the AGM in April 2003? community
The community is outraged that SAPREF’s ? Polluted the community with accidents ? Turned away community leadership routine response to its frequently leaking and leaks from Remediation Site Meetings pipelines consists of nothing more than pertaining to massive leakage of oil excavating some of the contaminated ? Exceeded air quality guidelines under their homes land in their neighbourhoods, and ? applying patches to corroded segments of Offered little other than excuses when ? Locked out community leaders from a the antiquated pipelines. SAPREF’s leaks the community complained about toxic meeting when members of the South and attendant excavations are a continual emissions and flaring African Portfolio on the Environment nuisance that severely disrupt the lives of ? Withheld information from community Committee visited SAPREF residents. Why isn’t there a program to groups by using old apartheid relocate and replace all the pipelines? legislation known as the National Why doesn’t Shell recognize that it is an Keypoint Act injustice to jeopardize the health and lives of residents with faulty pipelines that leak dangerous substances? Why does Shell continue to waste shareholders’ investments by failing to fully and finally stop the leakage of refinery materials into the ground of South Durban?
10 The Other Shell Report Port Arthur, Texas Environmental injustice by Shell refinery plagues African-American neighbourhoods
The Motiva Refinery, a Shell joint Shell’s assurance to Port Arthur, venture in Port Arthur, Texas, is Texas at the 2003 AGM one of North America’s busiest and most productive oil Hilton Kelley, Founding Director of Community In-power Development refineries, currently processing Association (CIDA), a community more than 235,000 barrels of oil environmental justice organisation in Port per day. Shell profits financially Arthur, Texas, USA, travelled to the 2003 from the refinery at the expense Shell AGM in London. At the AGM, Hilton confronted Sir Philip Watts Global Delegation of Shell neighbors holds a press of the low-income community conference in Port Arthur, Texas, to highlight Shell’s poor regarding the health-damaging pollution that lives in its shadow. Local environmental performance. (Global Community from the Motiva Refinery. Speaking Monitor) residents call the area around immediately after the AGM, Hilton said “I West Port Arthur “Gasoline am hopeful that something will be done. Community mobilizes in Alley” because of the high levels Sir Philip looked me in the eye and defence of their health promised. Things have to change. And if of toxic pollution. they do not, I will be here next year and In December 2003, CIDA opened the in coming years.” Center for Environmental Education and Health. The Center provides information After returning to Texas, Hilton found that on health and toxic exposure, offers youth Shell hadn’t changed. (See section activities, and in the future will make entitled Examples of Shell’s documented computers, faxes, and printers available to spills, fires, and toxic releases since the the public. CIDA has organized 2003 Shell AGM). A few months later, community health surveys conducted by Hilton and his community decided that the University of Texas at Galveston they had no option left but to bring legal Medical Branch, which document that proceedings against Shell. 80% of the surveyed residents in neighbourhoods near the refinery have heart conditions and respiratory problems, compared to 30% of people in non-refinery areas.
A young Port Arthur, Texas, child with acute asthma during breathing treatments. (Hilton Kelley, Community In- power Development Association).
The Other Shell Report 2003 11 Behind the Shine
Port Arthur
Residents hold Shell liable for health-damaging refinery
For many, Texas and oil go together, but for the residents of the West-Side neighbourhoods of Port Arthur, such a mixture is a hazard to their health. As in many of the communities where Shell operates, community members in West- Side believe that their concerns about Shell’s pollution have been ignored.
The West-Side of Port Arthur is an African-American community that is literally located “on the other side of the tracks”. People living in the public housing developments and single-family homes on the West-Side suffer from high levels of asthma and cancers. They bear the brunt of Shell’s pollution most directly. Residents believe that Shell has exploited them; if Hilton Kelley of Port Arthur explains the impact on Shell’s neighbors of toxic releases on April 14, 2003, when the they were white and affluent, they reason, refinery lost power and sent all their product to the flare—see photo on page 13. (Denny Larson, Global Community Monitor) Shell’s response would be different.
Hilton Kelley’s Story informing me about the new way In the summer of 2003, representatives of they would be dealing with our CIDA met with Tom Purvis, the manager “Last year I went to the Annual community but this did not of the Shell facility. CIDA offered him and General Meeting in London, happen. Nothing has changed executives from Shell’s corporate office in England, and I met with Sir Philip [since last year’s AGM]. Pollution- Houston, Texas the opportunity to Watts, Chairman of the Shell wise, emissions are still high and negotiate steps for addressing the serious Corporation. Upon meeting him the plant manager is still environmental and health problems in the and telling him about the ignoring our concerns from last community. When the managers refused pollution problems from the year. Apparently Sir Philip Watts to enter negotiations, the residents felt Shell facility that plague our never talked with the plant compelled to file a lawsuit against Shell. community, he assured me that manager at the Shell Facility in he would do everything in his Port Arthur, Texas, so we had no Ignoring the problem power to rectify the situation. I choice but to file a lawsuit left that meeting thinking that his against the Shell facility. Shell refuses to address the significant word would hold true. health concerns of Port Arthur’s West-Side Now we will let the courts decide residents, all of which are related to “Upon arriving back to the US, I who is dumping what.” refinery pollution. Instead, Shell has thought that I would receive a funded a health clinic, which is located call from the Shell facility on the other side of town, and thus inaccessible to most of the residents in the West-Side neighbourhoods.
12 The Other Shell Report Bad air day in Port Arthur, April 14, 2003 (Hilton Kelley, Community In-power Development Association)
Legal action against Shell The lawsuit is being brought pursuant to pleadings charge that local industries the common laws of Texas and the have “violated these basic human rights Over 1,200 Port Arthur pollution victims Wrongful Death Act and the Survival which we must honour as a society if we are alleging air, soil, and other Statute. According to the citizens’ are all to live in peace and well-being.” contamination due to the release of attorneys, “The evidence we have “noxious fumes, vapours, odours and obtained shows a habitual pattern of Because management refused to even talk hazardous substances.” The number of emissions and discharges that endanger with affected neighbours, Shell is now citizens participating in the lawsuit is the health of the public. These are clearly being sued in Port Arthur. Is this a good expected to grow dramatically. The not ‘unavoidable accidents’.” way to manage shareholders’ lawsuit seeks medical monitoring and investments? reimbursement of medical expense, as Don Maierson, one of the attorneys for well as compensation for loss of quality of the fenceline neighbours in Port Arthur life. The specific legal claims include said, “The industries have destroyed the trespass, nuisance, and negligence, as quality of life of their neighbours. It is well as fraud and misrepresentation of the clearly illegal to deny citizens the right to harm caused by the toxic releases6. breathe clean air and have full use and enjoyment of their property.” The legal
The Other Shell Report 2003 13 Behind the Shine Pandacan oil depots A disaster waiting to happen
Pandacan is a residential Philippines’ activist exposes Circumventing the law: neighbourhood of the city of truth about Shell’s oil depot at ignoring health and safety risks Manila in the Philippines where 2003 Shell AGM The oil depots are located in a densely- Shell owns a massive oil and gas Hope Esquillo Tura, a member of the populated district located in the heart of depot. Shell refuses to relocate its United Front to Oust the Oil Depots (UFO- Manila. Pandacan has a population of depot, despite legislation OD), travelled to the 2003 Shell AGM in about 84,000 people who come from requiring them to do so. Over the London where she presented community diverse economic backgrounds, the past year, Pandacan has been concerns that the continued presence of majority of whom are urban poor. More Shell’s oil depot was circumventing a city than 15,000 students are enrolled in the site of an ongoing battle ordinance that requires its removal. She elementary and high schools situated between residents and Shell (and explained that Shell had used its near these facilities. The largest university two other oil companies, Caltex significant influence to secure a special in Asia, the University of the Philippines, and Petron) regarding the permit to operate, rather than respect and which has a student population of about 25,000, is located directly across from companies’ refusal to remove the comply with the local ordinance. At the AGM, Sir Philip Watts announced that the depots on the banks of the Pasig oil and gas depots located on 33- Shell would protect the local community River. Daycare centers, churches, and hectares of land. by creating a “buffer zone” between the small businesses are located in the area oil depots and nearby residents. However, as well. The Malacanang Presidential Hope exposed the misleading nature of Palace is just two kilometers away from this announcement, pointing out that the the depots. so-called “buffer zone” was only going to be a few meters wide.
Residential neighborhoods in Metro Manila, the Philippines, in an area known as Pandacan, co-exist adjacent to fuel storage depots operated by Shell and other oil companies. (Francesca Francia, Global Community Monitor)
14 The Other Shell Report Local residents and governmental officials in court13. An alliance of university advocate for the removal of the oil depots students, professors, and employees because the continuous presence of the joined UFO-OD in filing a complaint with depots in Pandacan is a disaster waiting the Office of the Ombudsman against the to happen. They warn that an accident or Mayor for issuing the permit to Shell, terrorist attack could result in the biggest claiming that the Mayor violated his duty disaster in the history of petrochemical to enforce the ordinance. The alliance facilities, affecting the 10.9 million also requested that the Ombudsman residents of metro Manila7. investigate “three Pandacan [officials] for seeking ‘benefits’ from the oil firms in On November 28, 2001, the city of return for their support of the depots”.14 Manila passed ordinance number 8027 requiring Shell, Caltex, and Petron to Exponentially exacerbating Shell’s brash relocate their oil depots outside of Manila circumvention of local law requiring Shell city limits by the end of April 20038. to move its operations out of Pandacan is However, in June 2002, the Mayor of the fundamental fact that Shell’s lease from Manila, Lito Atienza, signed a the University of the Philippines for use of memorandum of understanding (MOU) the property expired on May 3, 2000. The with the three companies allowing them University was so outraged by Shell’s to “stay” if certain conditions were met, failure to honor the terms of its lease including the construction of the woefully agreement that it urged the Supreme Court inadequate “buffer zone”9. The legal to direct the mayor to enforce “the city adequacy of this MOU was obviously not ordinance banning oil companies from apparent to the companies, who maintaining oil depots in Pandacan15”. thereafter each filed separate petitions Warning the court that the presence of with the Manila Regional Trial Court Shell’s depot in Pandacan poses a “major seeking injunctions to suspend the threat to national security, considering the Children of Pandacan living in the shadow of Shell’s ordinance from taking effect10. On April present escalation of terrorist activities”16, huge fuel depot. (Francesca Francia, Global Community 30, 2003, the trial court denied Shell’s the University expressed concerns about its Monitor) petition for an injunction, but granted the liability for “death and destruction” from petitions by Caltex and Petron11. The Shell’s continued presence17. Mayor then issued “special permits” to Caltex and Petron to continue operations during the pending litigation12. And, in a highly controversial decision, the Mayor also issued a similar permit to Shell, notwithstanding Shell’s failure to prevail
The Other Shell Report 2003 15 Behind the Shine
Pandacan
Ignoring the problem Buffer zone: false sense of The United Firefighters of the Philippines security and international experts on disaster Instead of complying with the existing management estimate that an accident or law, Shell uses its seemingly limitless After entering into a scandalous explosion in the Pandacan oil depots resources to fund a massive public arrangement with the Mayor of Manila, could result in devastation within a two- relations campaign. That campaign Shell and the other oil companies scaled kilometer radius19. Local residents promulgates misleading claims by the down their operations and constructed a continue to complain about the foul odour company, and also employs Shell’s so-called green buffer zone. Although this from emissions released by the depots, increasingly routine tactic of enticing area measures only 5 to 7 meters in and continue to suffer from respiratory residents with “feel good” offers, such as width, Shell claims that it provides a safe diseases, skin diseases, and other scholarship programs and supposed distance between fenceline communities ailments associated with toxic pollution. employment opportunities18, which, of and the oil depots. Commerical course, do nothing to address residents’ advertisements paid for by Shell and the In short, Shell’s scaling down of complaints of environmental and health two other oil companies falsely describe operations, creating a so-called buffer problems, as well as security concerns. the buffer zone as a “park” or zone, and offering air monitors do not Rather than acting as a socially “promenade area”. Continuing the farce, adequately address the serious health responsible corporation, Shell perverts the Shell painted its depot with pictures of and environmental risks to the entire principle of social responsibility into bushes and trees. population of Pandacan and metropolitan something more akin to “pay-offs” in an Manila. The continued presence of the oil attempt to pacify serious local community depots in Pandacan is a disaster waiting concerns. to happen. The health, safety, and welfare of residents is of paramount importance, and must take precedence over the business interests and profits of Street scene in Pandacan community is dominated by looming fuel storage tanks. (Francesca Francia, Shell and the other oil companies. Global Community Monitor)
16 The Other Shell Report Norco, Louisiana health problems still not addressed by Shell
Norco, on the banks of the Mississippi River in Louisiana, is home to a large Shell oil refinery (now a joint venture called Motiva) and a Shell chemical facility. Norco is located in “Cancer Alley”, a 136 km span of the Mississippi River where over 130 refineries and petrochemical facilities operate in communities that complain of high rates of cancer. The Norco neighbourhood of Diamond, where generations of close-knit African American families have Shell Norco refinery flares again. (Louisiana Bucket Brigade) lived since the1700’s, is locked between the two Shell facilities. Margie Richard and Iris Carter are Norco firms, progressive members of the US In 2002, Diamond residents, residents who have been fighting for years Congress, and scientific experts. With organized as Concerned Citizens to get Shell to relocate residents and deal significant public scrutiny, the community of Norco, compelled Shell to offer with the health problems in their organisation compelled Shell to enter into them relocation and reduce the community that are associated with the negotiations for a fair and just relocation. toxic pollution released by the Shell In 2002, Shell finally agreed to buy out pollution from its facilities. This facilities. Margie and Iris travelled to the polluted neighbourhood at a fair price unprecedented victory was a Shell’s headquarters in both London and that allowed residents to move. Shell bittersweet one for residents, in the Netherlands to demand action. claims that the rationale for its relocation who left their homeland in order Margie, who organized Concerned decision was simply to create a “green” Citizens of Norco, also spoke out about buffer zone by offering to move residents to find a healthy place to live. the community’s environmental justice on the first two streets abutting the facility. struggle to overcome Shell’s resistance at Shell also claims that it was only the 2003 AGM. interested in maintaining the “historic unity” among residents by offering Leaving home relocation to the remainder of the community. To date, Shell has never Concerned Citizens of Norco developed a acknowledged any of the health impacts residential relocation plan and worked of its operations, although residents made tirelessly to bring Shell’s harmful practices it abundantly clear that the issue of health to international attention. The was their motivating factor in demanding organisation garnered the support of a relocation. diverse international coalition of environmental, health, and human rights “We realized that under no circumstances advocates, socially responsible investment would it ever be fair for people to live next to a toxic industrial facility. For us, relocation was the only option.” Margie Richard, Goldman Prize Winner 2004.
The Other Shell Report 2003 17 Behind the Shine
Norco
The legacy of health problems Since the relocation in 2002, Shell has Concerned Citizens of Norco were begun several community initiatives in certain that, notwithstanding Shell’s Now out of harm’s way, many Norco Norco. Among these initiatives are a representations to the contrary, they were residents are reflecting on the trauma they health survey and an air monitoring being exposed to significant pollution suffered living next to Shell. They recall program. Unfortunately, both the health from Shell’s facilities, and so set about to their neighbours who were killed by survey and the monitoring program are document that fact. With the assistance of Shell’s accidents, the cluster of rare reflective of Shell’s pattern of designing Global Community Monitor and the diseases, and the respiratory problems self-serving programs that fail to Louisiana Bucket Brigade, organisations suffered by so many in the community. meaningfully address the vitally important that train local residents to collect samples Numerous residents continue to suffer environmental and health problems of air pollution in their neighbourhood what they believe are the effects of associated with its massive pollution which are then analyzed by an chemical exposure, and are burdened by impacts on the community. Further, the accredited laboratory, Norco residents the associated crippling health care costs. supposed “health survey”, conducted by were finally able to make their case. In the Tulane University School of Public the air samples they collected, Shell’s As Iris noted, “We’re still dealing with Health, merely focused on residents’ toxic chemicals were detected at levels that, we’re still dealing with health issues. perceptions about the environment, not exceeding health based standards I went to England, to Shell’s headquarters, on residents’ actual health conditions, established by the State of Louisiana. and was promised that Shell was going to exposure to toxic chemicals, or medical work on it. We had a meeting… and we needs. still haven’t resolved anything.”
Air samples taken by Norco community members with their buckets have proven ongoing exposure to toxic chemicals. (Marc Pagani, Louisiana Bucket Brigade)
18 The Other Shell Report Problems with Shell’s air PROBLEM SOLUTION monitoring program Takes an air sample once every Shell should install real-time Following the relocation of Diamond six days monitors that detect and record residents, Shell initiated an air monitoring emissions occurring 24 hours a program in Norco pursuant to the terms ■ People do not breathe once every six day. of a settlement agreement it had reached days. Chemical exposure in Norco is with the Louisiana Department of ongoing, 24 hours a day. Environmental Quality pertaining to various air and water quality violations at ■ The monitoring system offers no its facilities in Norco and another facility information whatsoever on air emissions 21 approximately 30 miles from Norco . during each 5-day interval between However, this air monitoring program is sampling dates, and the majority of woefully inadequate — the monitors do emissions could be released during such not even detect sulphur compounds, intervals. which are lung-damaging pollutants routinely released in massive quantities by Does not detect sulphur Shell should install a monitor Shell facilities in Norco. compounds that detects, speciates, and ■ Sulphur compounds are a primary measures the various sulphur emission of oil refineries. compounds released by its facilities. ■ Sulphur has a highly offensive rotten egg odor and is scientifically known to harm the respiratory system.
One of the homes of Norco residents Uses inferior technology Shell should employ effective, adjacent Shell Chemical plant being reliable monitors that provide torn down during relocation ■ program. Relocation and the Shell employs Suma canisters to collect instantaneous data on emissions. destruction of their historic air samples. Such monitors are readily community was the only option for available at reasonable cost. Shell’s neighbors in Norco,La. ■ Although Suma canisters are used at (Louisiana Bucket Brigade) many industrial facilities, they are far inferior to many other state-of-the-art air monitoring devices.
The Other Shell Report 2003 19 Behind the Shine Nigeria The strange case of Shell’s vanishing oil-reserves
In the last year, shareholders Exaggerated oil reserves scrapped in 2000 by Nigerian President have come to learn what oil- Obasanjo. A Shell spokesman told The producing communities in Nigeria In January 2004, Shell shocked its Independent newspaper in February shareholders by announcing that it had 2004, “I do not know whether it was a have known for decades: Shell overstated its oil and gas reserves by matter of public record that these can’t be trusted to regulate itself. 20%. Shareholders were then left incentive payments were being made in wondering how Shell could lose almost 4 return for booking reserves.”23 billion barrels of oil and gas22. Initially, Shell stated that it revised its Nigerian It was unclear at the time this report went reserves over concerns about the cost of to print, if the March 2003 decision of infrastructure investments needed to deal Shell’s new Board of Directors to drop its with the natural gas found in its oil fields, claim that Shell made the Nigerian but it appears that there well may have bookings of its reserves “in good faith” is been other influences at work. related to the tax breaks Shell received. The US Securities and Exchange Damage from oil spill and fire in a wetlands During the 1990s, Shell and other Commission and US Department of area in first reported to Shell on December companies received incentives under Justice who are currently investigating 3rd 2003 by local villagers of Rukpokwu. (Copyright Stakeholder Democracy Network Nigeria’s bonus scheme in the form of tax Shells misquoting of oil reserves should 2004) credits for every barrel of oil booked. The determine if any influence has occurred. scheme ran for nine years, but was finally
20 The Other Shell Report Polluted land—oil spills, fires, What happened to the money and gas flaring for development?
Flaring natural gas from oil fields is one Shell has benefited from the billions of of the visible impacts the oil industry has dollars of oil that have been pumped out on daily life in Nigeria. Flares tower over of the ground in Nigeria while basic farms, schools, and communities, spewing economic development—hospitals, flames and acrid plumes of charred schools, running water—are seriously smoke, day and night, seven days a under funded. Shell claims that 75% of week. The Nigerian government wants the development projects it supports are flaring to stop, and has passed successful, but Shell only allows external environmental laws that should end the reviewers to examine projects that are no practice beginning in 2010. Shell more than one year old. committed to ending its flaring earlier, in Rukpokwu, Nigeria, January 7th 2004, fire erupts in a 200824, but unfortunately Shell is now high-pressure, 28-inch pipeline operated by SPDC, A recent Christian Aid news article Shell's Nigeria affiliate, (copyright Stakeholder backsliding on this commitment by Democracy Network 2004) revealed that a critical internal Shell claiming that it will be expensive. report about community relations was shredded. “Even the computer hard discs a problem since 1963, ruptured, causing Speaking in February 2004, Chris were wiped”, according to one Shell an oil spill and fires. It took Shell more Finlayson, chairman of SPDC [Shell insider. Oil-producing communities in than six weeks to put out the fires and Nigeria] told the Financial Times Nigeria want to know how Shell can carry out basic repairs. Rukpokwu is less newspaper, “To put in an integrated gas spend US$69 million a year of than an hour’s drive from Shell’s and oil development is more expensive shareholders’ money on social headquarters. than a simple oil development […] with a development projects in the Niger Delta, limit on the funding going into the with no visible benefits for the majority of Speaking about the oil spill and fires, industry, clearly that does constrain how people who own the land which contains Paramount Ruler, Chief Clifford E. 26 much you can do.” the oil and gas . Enyinda, and Chairman of the Mgbuchi Community, Azunda Aaron, have said, Local people have suffered from decades “If Shell wants to put US$69 million into “Our only source of drinking water, of pollution as a result of oil spills and community development, why doesn’t it fishing stream, and farm-lands covering fires from Shell’s rusting network of pipes. set up a foundation which has no direct over 300 hectares of land with aquatic In early December 2003, a high pressure links to the company and let development lives, fishing nets and traps, farm crops, oil pipeline in Rukpokwu, which has been workers who know what they’re doing animals, and economic trees worth manage the projects?” asks Oronto several billions of naira (equivalent to Douglas of Environmental Rights Action millions of US dollars) are completely (Friends of the Earth Nigeria). destroyed by the spillage and was made worse by the three separate fires that broke out of the spill site”25.
The Other Shell Report 2003 21 Behind the Shine Sao Paulo, Brazil Shell contamination at the Vila Carioca
For decades the residents of Vila Shell, along with ExxonMobil, arrived in Carioca in Sao Paulo, Brazil, Brazil in 1912 as Anglo Mexican have been using drinking water Petroleum, Inc. The company established a facility in the neighbourhood of Agua contaminated by the nearby joint Funda, next to the Santos-Jundiai railroad Shell ExxonMobil facility. In 1993 line on which it transported gasoline, local unions joined Coletivo kerosene, diesel, cooking oil, insecticides,
Alternativa Verde or the Green and pesticides to the Port of Santos/São Panel in the Chamber of the Representatives Brasilia— Paulo. Alternative Collective (CAVE) and Commission of Environment—Public Hearing about environmental contamination in Villa Carioca, including Greenpeace, and filed a Shell and ExxonMobil continued to representatives from Shell Brazil, ExxonMobil Brazil, complaint in the courts, citing operate in Agua Funda until 1942, when Petrobras and Coletivo Alernativa Verde - 04/09/2003 (Cláudio Guimarães, Coletivo Alernativa Verde) contamination of Vila Carioca the Santos-Jundiai oil pipeline was with hydrocarbons, heavy inaugurated. After this, Shell built a new storage tank depot and shipping terminal Toxic drinking water metals, and organochlorides. in Vila Carioca and ExxonMobil built a Since then, despite investigations facility in Mooca. In 2001, ExxonMobil For decades, residents have been using by local health and closed its Mooca facility and became a the drinking water wells on their properties, which have been environmental authorities, partner with Shell at Vila Carioca, buying 21.66% of the land and 45% of Shell’s contaminated by industrial waste. The progress, if any, has been slow. processing capacity. thousands of families of Vila Carioca Despite evidence which indicates have used that water not only for breaches of environmental law, drinking, but for their gardens and for Shell has yet to be prosecuted. growing fruit trees as well.
22 The Other Shell Report Vila Carioca has over 40,000 residents, Above the law? mostly working-class, who are at the mercy of carcinogenic, mutagenic, and For years, Shell and ExxonMobil were teratogenic contamination from Shell’s able to act with impunity because they practices. had a virtual monopoly on the distribution and importation of petroleum Shell denies responsibility for any derivatives, pesticides, and herbicides. contamination. Numerous residents have However, in 1993 SIPETROL, in testified to serious health problems, collaboration with CAVE and among them tumours, cancers, infertility, Greenpeace, filed a joint complaint in leukaemia, respiratory problems, and court, citing contamination of Vila Shell neighbours hold a protest in Vila Carioca (Coletivo Alternative VerdE) depression, which they believe are Carioca with hydrocarbons, heavy caused by Shell’s operations27. metals, and organochlorides. Heavy the shut-down, shortly thereafter Brazil’s metals were identified, including lead, environmental agency fined the company The Sindicato dos Trabalhadores no mercury, and arsenic, as were traces of for its “grave fault” in polluting the Vila 30 Comércio de Minérios e Derivados de chromium, barium, strontium and cesium. Carioca site . Shell currently faces Petróleo de São Paulo (SIPETROL), or the mounting potential liabilities, as a Union of Workers in Mining, Petroleum Since the filing of the complaint, both growing number of lawsuits and and Related Industries of the state of São Shell and ExxonMobil have been the complaints continue to be filed by 31 Paulo, is a member of a working group subject of investigations by the São Paulo residents and local governments . that is preparing a report on the health State Department of Health and by the hazards faced by workers and State Environmental Protection Agency. In The poisoning of an entire community is neighbouring residents of the facility, as 2002, the investigations revealed that continuing with the complicity of some well as on the environmental Shell’s large fuel-holding tanks located in regulatory agencies. Although CAVE and contamination of the soil and the water. Vila Carioca had been operating without SIPETROL are pressuring the Ministry of a valid permit28. Governmental officials the Environment to fine Shell under the determined that the permit had expired in Environmental Crimes Law, thus far, 1985, and ordered an immediate shut- despite clear evidence of violations, the down of the facility29. Although Shell was Ministry has not been willing to enforce able to obtain a court order overturning the law. The struggle continues, with the aim of forcing federal authorities to investigate the potential commission of environmental crimes by Shell and ExxonMobil.
Authors of this chapter are Cesar Augusto Guimarães Pereira, Executive Director of SIPETROL-SP and Director of the Coletivo Alternativa Verde (CAVE), and Elson Maceió dos Santos, CAVE Co-ordinator.
The Other Shell Report 2003 23 Behind the Shine Curaçao, Caribbean Polluted paradise
The small island of Curaçao has so-called enclaved economy. The Poisoning the community a population of approximately ecological balance and 130,000 inhabitants and only development of the island In 1982, a Venezuelan lab reported that 2 the concentrations of sulphur compound 444 km of land. The island has gradually became contaminated emissions from the Shell refinery were over 20 km of coral reefs by toxic pollutants. In particular, more than twice the levels established by contained inside the Underwater the Shell refinery caused major the US EPA and could be responsible for Marine Park, sandy beaches in environmental damage to the respiratory diseases suffered by people living on the island33. the south, and remnants of old Caracus Bay, the Spanish mahogany forests inside Waterlake, Bullen Bay, The following year, the Central Christoffel National Park in the Schottegat Bay, Sint Anna Bay, Environmental Management Service of north32. In 1914 Shell constructed Valentijn Bay, and Brusca Bay. Rijnmond (DCMR, Rotterdam), visited the the largest oil refinery in the Ultimately, Shell sold the refinery site and conducted interviews. This agency concluded that “The continuous western hemisphere on Curaçao. to the Curaçao government for emission of extremely high concentrations Shell was able to dominate the US$1 and left behind a toxic of sulphur dioxide and particulate matter, micro-scale island community, legacy that continues to plague on relatively low stacks, is a huge which found itself trapped in a what was once an island problem. Measurements of the concentrations of pollutants in the air paradise. downwind of the Shell refinery indicate that the pollution is influencing and damaging the health of the people living downwind of the refinery. The
Shell sold this aging refinery to the government of Curaçao for US $1 in 1985, but the toxic legacy lives on today. (January 23, 2004, Norbert Gerorge Humane Care Foundation Curaçao)
24 The Other Shell Report health crisis is evidenced by the high Curaçaons hold Shell liable for number of poor townships exposed to massive environmental damage excessive emissions35. In 2003, the people of Curaçao In 1985, Shell sold the aging refinery to organised a campaign called the Humane the island for US$1 on terms that Care Foundation Curaçao, in order to included an indemnity clause transferring hold Shell liable for the massive damage to the local government financial that it has inflicted on the community. The responsibility for any vital habitats and natural resources on the environmental/health impacts caused by island have sustained significant toxic Shell’s 70 years of operation. Local damage38 that affects more than 12.5% of authorities now bear the financial the population, including more than Residents have named this refinery dumping area: the responsibility for the premature deaths, 39 asphalt sea (Norbert George Humane Care Foundation 5,500 children . Central to the campaign Curaçao) cancers, birth defects, bronchitis, chronic is obtaining redress for Shell’s legacy of obstructive pulmonary diseases, asthma, environmental devastation that violates concentrations of pollutants on Curaçao skin diseases, respiratory disorders, and the fundamental human rights of people are approximately four times higher than childhood illnesses suffered by residents36. living on Curaçao. maximum concentrations accepted anywhere else in the world. This implies Just as the case in Nigeria and the that irreparable damage is being inflicted Philippines, Shell has been accused of to the health of human beings that inhale exhibiting an undue influence over the the chemical, organic and toxic pollutants isolated Antillean/Curaçaon emitted by Shell.”34 Epidemiologists from governments. As a former Shell manager the Pubic Health Services of Curaçao exclaimed in an interview in 1980, “The further noted that the scope of the public Antillean government? We are the government!”37 During its 70 years as the major employer in Curaçao, Shell clearly wielded its financial might as the supreme rule of the island.
The Other Shell Report 2003 25 Behind the Shine Sakhalin Island, Russia Shell’s broken commitments
“Shell’s policy to save money at About Sakhalin Island and Endangered gray whales under the expense of Russia’s Sakhalin II threat environment and the health of On Sakhalin Island in the Far East of The waters off Sakhalin Island are home local people is causing a reaction Russia, Shell is proposing to build the to 25 marine mammal species, 11 of from Russian and international world’s largest single integrated oil and which are endangered, including the non-governmental organisations. gas facility that is known as Sakhalin II. world’s most critically endangered gray Shell must finally take full This massive facility would include off- whale species, the Western Pacific gray responsibility for its Sakhalin II shore oil and gas drilling platforms, an whale. This whale has been identified by enormous liquefied natural gas the International Union for Conservation project and conduct appropriate processing and export facility, an oil of Nature and Natural Resources as studies of its impacts to society export terminal, and over 800 kms of “critically endangered” with only 100 and the rich environment in onshore pipelines. The off-shore waters of whales estimated to remain, including just 40 Sakhalin. Shell has taken an Sakhalin Island are some of the most 23 reproductive females . The Scientific species-rich marine environments on the Committee of the International Whaling enormous risk with its Sakhalin II Pacific Rim with crab, herring, cod, and Commission is concerned about Sakhalin project. In its haste to save salmon—including the unique masu II and noted that “it is a matter of money there is considerable cherry salmon—as well as the absolute urgency. . . to reduce various evidence that Shell is violating endangered Sakhalin taimen, the most types of anthropogenic disturbances to Russian environmental laws. It is ancient salmonid. The off-shore platforms the lowest possible level” [emphasis will be adjacent to the Western Pacific maintained]41. essential to ensure species are gray whales’ feeding and migrating not put at risk.” — Dmitry habitat, and undersea pipelines will be Lisitsyn, Chairman of Sakhalin trenched directly through that habitat. Environmental Watch
Whales living in the shadow of oil drilling platforms in waters off shore of Sakhalin Island, Russia. (Gravilov/Greenpeace)
26 The Other Shell Report Flawed environmental impact Oil spill preparation is second assessment best
Local environmental organisations have In October 1999, environmental groups uncovered flaws in Shell’s environmental brought independent consultants from impact assessment (EIA) of Sakhalin Alaska and the North Sea, who have Island. A study of Steller’s sea eagles by expertise in oil spill prevention and the Wildlife Preservation Bureau of response, to review Sakhalin’s standards Hokkaido/Moscow State University found for spill prevention and response. The 15 pairs of Steller’s sea eagles, in report, Sakhalin’s Oil: Doing It Right, addition to many other hatchlings and contains 78 recommendations, and notes juveniles, while the Shell EIA indicated that Shell’s current Oil Spill Contingency only five pairs43. The EIA information fails Plan in Sakhalin falls far short of to correctly describe the current measures taken in Alaska and the North conditions and thus the potential impact Sea46. Given the difficult climate and of Sakhalin II on the rare Steller’s sea seismic conditions of the Sea of Okhotsk, Cartoon depicting oil spill threat from drilling in Sakhalin 44 (Sakhalin Environment Watch) eagles. along with the great value of marine resources, an oil spill anywhere along the Shell has also failed to carry out coast of Sakhalin would be disastrous. adequate consultation with Japanese Damaging local fisheries governmental officials and citizens, in Not benefiting local people particular the fishermen, even though Traditionally, Sakhalin Island’s Hokkaido, the northern island of Japan, Local Sakhalin residents feel betrayed, as employment has centered on the fishing is just 40 km away from Sakhalin Island. promises to supply gas to the island have industry, which in recent years has seen a not been fulfilled. Ludmila Ponomaryova, steady decline in the number of fish Earthquake risks a 61 year-old Sakhalin inhabitant, was caught. Now the rich salmon fishing quoted recently by the BBC, “We don’t grounds are under threat as Shell has Shell proposes to bury on-shore oil and see the oil and gas. We can’t even buy refused to stop dumping one million gas pipelines across 800 kms of coal to keep warm. So us mortals, we’re tonnes of tailings into Aniva Bay to build Sakhalin, an area that includes 22 active not counting on it.”47 piers for Sakhalin II, rather than dump it faults. Further exacerbating this problem, at an alternative site that would avoid these pipelines would traverse hundreds Shell claimed that the Sakhalin II project damaging local fisheries. Local fishermen of wild salmon-bearing streams. These was supposed to bring significant are angry as they believe this violates streams support fisheries vital to the economic benefits to the people of Russian environmental regulations that island’s communities and indigenous Sakhalin, while protecting the 42 protect rich fisheries . people. An independent report released 2 environment. However, a review by the March 2004 by environmental Auditing Chamber of the Russian organisations exposes flaws in the seismic Federation on the Sakhalin II Production risk analysis conducted by Shell for the Sharing Agreement shows that “…the Sakhalin II project, including understating interests of the State in issues of ecology, the seismic risks45. mineral use, tax and customs legislation, as well as government control, were not adequately taken into consideration, which has led to damaging the interests of the Russian Federation during the process of realization of the given projects”.48 Further, the Chamber determined that inappropriate financial transfers pertaining to the Sakhalin II project amounting to US$19.7 million occurred49.
The Other Shell Report 2003 27 Behind the Shine
Examples of Shell’s documented spills, fires, and toxic releases since the 2003 Shell AGM
Durban, South Africa Port Arthur, Texas Deer Park, Texas
Durban, South Africa Since February 2003, Shell’s Motiva “The Deer Park plant has emitted Refinery reported 18 toxic releases and substances into the air in such October 2003 spills to the Texas Commission on concentration and duration as to SAPREF pipeline leaks 75,000 litres of Environmental Quality. adversely affect human health or welfare. diesel into Durban Harbour. Dead fish These activities are also in violation of air were found floating in the Harbour the 13 September 2003 permits governing emissions.” next day50. Monitoring data from the An underground line to Motiva tank no. —Harris County Attorney, Harris County, Texas Settlers Monitoring Station show that 1475 ruptured and caused the spill of SAPREF is partly responsible for over 120,000 pounds of hexane, butane, From 1 February to 31 December exceeding sulphur dioxide emission and isopentane. Later that day, a loss of 2003 the refinery had 27 limits51. electrical power to certain units led to an accidental releases, emitting hydrocracker shutdown resulting in the more than 700,000 pounds of 24 December 2003 release of 2,100 pounds of sulphur pollution, according to a Houston SAPREF refinery engulfs the community in dioxide. A plant-wide power outage due Chronicle news report. huge clouds of black smoke. Residents to poor electrical connections caused the are exposed to toxic gases affecting their fluid catalytic cracker unit (FFCU) to 3 April 2002 health52. shutdown. The FCCU pressure relief a tank that caught fire as it was being valves depressured to the alkylation flare cleaned enveloped a local highway in 28 December 2003 and the FCCU flare, due to temporary dense black smoke, closing a highway SAPREF pipeline leaks marine fuel oil into power failure. Over 1,000 pounds of and causing a nuisance in nearby Durban Harbour53. sulphur dioxide are released. communities.
12 January 2004 14 October 2003 13 May 2002 SAPREF pipeline leaks approximately Power failure results in emergency another fire ignited natural gas, in 20,000 litres of marine fuel into Durban shutdown because of lack of back-up violation of open burning laws, and Harbour, once again affecting marine power systems at the refinery, resulting in closed the freeway. life54. over 24,000 pounds of sulphur dioxide being released to the air. September 2003 21 April 2004 a pungent odour from a holding pond Power failure at SAPREF shuts down 27 October 2003 generated complaints from Jacinto Port to steam boilers, causing flare gases to be The FCCU shutdown when the combustion Tomball. burnt off, forming thick black soot55. Local air blower tripped off, resulting in a flare residents wake up to sirens at the refinery off of over 5200 pounds of sulphur December 2002 and a cloud of thick black smoke over dioxide. The filter on the hydrocracking a storm snuffed out a flare, releasing their homes56. unit plugged, resulting in the unit thousands of pounds of hydrogen depressuring to the flare. Over 1,100 sulphide. pounds of sulphur dioxide were released to the air in just a 15 minute period.
6 December 2003 The refinery lost vacuum on the vacuum tower and vented gases to the flare for over 3 hours, resulting in over 3,000 pounds of toxic chemicals being released.
Flaring in Port Arthur, Texas. (Hilton Kelley, Community In-power Development Association)
28 The Other Shell Report Smoke and mirrors
Social development and assessments, pay offs, and community advisory panels
Shell spends substantial resources on its community—that Shell values and protects believes will placate the local community. so-called Sustainable Development the communities where it operates. If Shell hopes to make any progress, it Program. However, these resources are must undertake actions that are responsive largely wasted, as they do not However, as documented in this report, to the demands articulated by meaningfully address Shell’s endemic Shell operations severely threaten the communities affected by Shell’s pollution problems. health and environment of people around and facility hazards. the world. Far from living up to its Untold sums have been spent by Shell to advertised image, Shell does little more Shell should realise by now that its public portray itself as a good corporate citizen. than dismiss local community demands for relations tactics are completely It is not difficult to find media coverage, safety and better environmental transparent to affected communities circulated in communities where Shell conditions—whether in the form of around the world. In fact, the operates, that features beaming Shell legislation, health reports, or citizen communities profiled in this report officials standing beside an oversized advocacy. The stronger the local demand provided the following summation of the check presented to a local school or civic for safety, health, and environmental various tactics used by Shell to counter program. The photographs suggest to the protection, the harder Shell works to their fundamental demands for a healthy world—and emphasize to the local engineer public relations programs that it environment.
Community Advisory Panel (CAP) or Community Liaison Financial donations Social assessments Forum
Members of local communities who A process initiated by Shell to determine Money given by Shell to civic regularly meet with industrial facility what it believes to be the social factors organisations and local governments. management. The CAP was conceived by related to community needs. the chemical industry as a form of ? The recipients are those who do not damage control following the 1984 ? The assessments often include complain about the harmful impacts of Dow/Union Carbide industrial disaster in geographic areas where people do not Shell’s operations on human health and Bhopal, India. the environment. suffer from or do not acknowledge that they suffer from the impacts of Shell’s ? CAP members are usually hand-picked ? The recipients unwaveringly describe operations, in order to avoid an by Shell from communities that are not Shell as a “good neighbour”, and accurate assessment of the impacts of affected by Shell operations because deny all criticisms pertaining to the the company’s operations. company’s environmental record. they are located miles away from Shell ? The assessments usually take months, if facilities or are not in the wind path of ? The donations are used as not years, to design and implement, Shell’s pollution. (This suggestion for “greenwash” to portray Shell as an diverting resources away from and member selection is found in the environmental steward for contributing delaying solutions to the environmental official CAP manual.) to non-controversial public events, such and health problems related to Shell’s ? CAP meetings are not open to the as litter pick-ups and maintenance of operations. hiking trails. To create the impression public and meeting minutes are not that the event is widely embraced by readily available to the public. the local community, Shell often directs numerous of its employees to participate.
Walking bridge in London leading to area where Shell headquarters is located. (Denny Larson Global Community Monitor)
The Other Shell Report 2003 29 Behind the Shine
Corporate lobbying under scrutiny
The case of Shell
“From a Shell perspective we don’t find 1998, which remains one of the most The UN Sub-Commission on the the Norms helpful.” advanced corporate statements on human Promotion and Protection of Human rights in existence. Until this ground- Rights unanimously adopted the UN Robin Aram, Vice President of External Relations breaking activity by Shell, the Norms in August 2003. This represented and Policy Development, Shell57 international business community had a major step forward in establishing a considered human rights to be a political common global framework for defining In response to the pressures that Shell issue beyond its sphere of influence. The the responsibilities of business enterprises found itself under in Nigeria during the tragic events in Nigeria signalled the start with regard to human rights. The UN mid 1990s, when it was being associated of a journey by Shell to convince the Norms set out in a single, succinct with human rights violations committed by world that human rights are “at the heart statement, a coherent and comprehensive the government of General Abacha of our business”. list of the human rights obligations of against the Ogoni people, Shell changed companies. The UN Norms do not create its statement of business principles to However, Shell’s journey came to an new legal obligations, but simply codify recognise its responsibility for human abrupt end in 2003 when the company existing obligations under international rights. Shell was one of the first embarked on a lobbying campaign law that are applicable to business. companies to recognise the relevance of against unprecedented efforts by the international human rights standards, United Nations (UN) to define the human Shell is leading the opposition to the UN referring to the Universal Declaration of rights responsibilities of companies.This Norms, which includes the International Human Rights in its policy documents and initiative, known as the UN Norms on the Chamber of Commerce, the International reports. Shell even produced a Responsibilities of Transnational Organisation of Employers, the US management primer on human rights in Corporations and Other Business Council of International Business, and the Enterprises with Regard to Human Rights, UK Confederation of Business and is widely supported by international non- Industry. Shell asserts that the UN Norms governmental organisations (NGOs) and seek to impose responsibilities on has also received the support of some businesses that are not appropriate for corporations. them. However, the entire thrust of the UN Norms is to encourage the development of stable environments for investment and business, regulated by the rule of law, in which contracts are honoured, corruption is reduced, and business enterprises, both foreign and domestic, have clearly defined rights and responsibilities.
Decorative sphere at Shell London headquarters depicts the corporate logo circling the earth. (Denny Larson, Global Community Monitor)
30 The Other Shell Report In opposing the UN Norms, Shell argues other laws60. Specifically, the lawsuit It seems that human rights considerations that human rights standards should be claims that Shell and its subsidiary are relegated to Shell’s CSR and external voluntary for businesses, and not colluded with Nigeria’s military relations functions—in other words, they mandated by law58. Shell further asserts government to bring about the arrest and are at the periphery of the organisation. that it is already implementing human execution by hanging of Ken Saro-Wiwa Such fundamentally important rights standards, so that the UN Norms and John Kpuinen, two of nine leaders of considerations should be part and parcel offer little value59. If Shell is truly the Movement for the Survival of the of Shell’s day-to-day business decisions committed to upholding human rights, Ogoni People (MOSOP), an organization and operations throughout the Shell then why is the company leading efforts that campaigned against Shell’s Group. to block human rights standards for operations in Nigeria61. The lawsuit businesses? Any impacts from Shell’s further alleges that Shell and its In the words of the Financial Times supposed implementation of human rights subsidiary gave money and weapons to editorial of 5 April 2004, “There is a standards are clearly not evidenced in the Nigerian government to crush the respectable body of opinion that believes any of the communities documented in protest movement, and bribed witnesses social responsibility is a costly distraction this report, who suffer significant harms to give false testimony62. Shell and from companies’ one true purpose of as a result of Shell’s operations. business groups are advocating that US making a profit.” Despite Shell’s rhetoric courts dismiss human rights cases brought to the contrary, it appears that Shell is Attempting to minimise their under ATCA, and the US Supreme Court part of that body of opinion. accountability for the social and is expected to decide this issue63 within environmental impacts of their operations, the next several months. Shell’s opposition to legal protections for Shell and other business associations human rights is fast becoming the subject have lobbied not only against the UN The enormous resources that Shell of growing public scrutiny and Norms, but also against recent lawsuits expends on attacking laws and standards condemnation. Such public attention to brought under the Alien Tort Claims Act that would make the company the stance of corporations on human (ATCA), which has become a vital accountable for any human rights rights laws and standards may well channel for victims of human rights violations belies Shell’s purported become a new trend, similar to the public abuses that are committed abroad. ATCA commitment to human rights, as stated by pressures that some energy companies enables any victim of an alleged violation Shell’s Vice President of External have come under for opposing the Kyoto of international law to use the US courts Relations, Robin Aram: Protocol. In the future, the social to sue the alleged violator, provided the responsibility of companies may be alleged violator has assets in the US. In “Addressing human rights abuses calls for assessed not just on the basis of their the case of Wiwa v. Royal Dutch action at many levels from political will policies and practices, but also on the Petroleum, Shell has been sued for and high policy, to ‘bearing witness’ and positions they take regarding human violating human rights under ATCA and practical actions by companies and rights and other critical issues pertaining others. Our job is to work out what to international laws and policies. Shell realistically we can do to enhance human should take notice. rights in the context of doing our business—and then do it.”
Black smoke from pipeline spill fire fills the sky in Rukpokwu, Nigeria, January 7, 2004. (Copyright Stakeholder Democracy Network 2004)
The Other Shell Report 2003 31 Behind the Shine
Why the voluntary approach just isn’t good enough
Great expectations—corporate social responsibility (CSR)
“Our core values of honesty, integrity and In 1998, Shell produced its first CSR One of the obstacles to the respect for people define how we work. report, Profits and Principles—Does There implementation of CSR strategies is that These values have been embodied for Have to Be a Choice? Thereafter, Shell company law promotes the pursuit of more than 25 years in our Business began withdrawing from anti- short term profit above all else. This focus Principles, which since 1997, have environmental lobby groups such as the on the short term means that important included a commitment to support human Global Climate Change Coalition, an long term environmental and social issues rights and to contribute to sustainable industry lobby group which had spent are simply not addressed. The lack of real development. We continue to make US$60 million denying the existence of “on the ground” success in CSR also progress in translating our commitment to climate change in the 1990s. clearly demonstrates how it is driven contribute to sustainable development into largely by the PR and marketing action.” So where did it all go wrong? departments rather than any genuine desire to change business policies and — Shell, How We Work, report available on practices. Shell website www.shell.com CSR—what is it all about? So the real reason for CSR appears to be Shell has been recognized by many as Corporate social responsibility implies to maintain and enhance a company‚s one of the pioneers of “corporate social that the values that drive multinational reputation locally, nationally and globally responsibility” or CSR, based on its initial corporations are compatible with the which in turn; enables companies to response to the international outcry over values that drive society and our concern deflect bad PR with good PR, neutralise the execution of Ken Saro-Wiwa, and the for the environment and human rights. local opposition and watchdog NGOs, proposed dumping of its Brent Spar oil The experience of many communities attract foreign investment and reduce platform in the North Sea. CSR was a living in the shadow of companies regulatory pressures by arguing that the promise that companies would go beyond operating in their backyard, as illustrated company is being a “socially responsible” their existing legal obligations to address in this report, show that this is far from corporation. issues of sustainability, development, and reality. human rights. The concept of the socially responsible The corporate values that appear to drive company is used to most effect by Shells managers are exaggeration, greed companies to support of the use of the and cover-up. An internal report voluntary approach rather than legally commissioned by Shell after the fiasco binding regulations and legislation. The related to its report of inflated reserves hidden agenda of CSR, though, is to revealed a three-year plan to deceive mask the private lobbying that company’s investors regarding the level of reserves. do which often contradicts the position Eventually the production manager taken in their CSR reports (see responsible was forced to concede in an “Corporate lobbying under scrutiny—the internal email to the CEO: “I am sick and case of Shell”). tired of lying about the extent of our reserves” although he didn’t subsequently inform investors.”64
32 The Other Shell Report Need to reform UK Pitfalls of the voluntary approach company law
From a stakeholder perspective the to enhance their reputation in the areas of Currently, UK law governing voluntary approach is flawed because it sustainability, international development companies does not consider the provides little incentive for a company and human rights. All companies have to significant impact that companies beyond its protecting its reputation to do to comply with the lofty aims have on human rights, significantly improve its social and embedded in the nine general principles communities, and the environmental performance, doesn’t give of the Global Compact is file an annual environment. What is clearly affected stakeholders the right of redress, report. Effectively, companies monitor needed is a law that holds and fails to deal with companies that themselves while affected stakeholders are companies accountable for their choose to ignore it. left on the outside. social and environmental impacts, and affords redress to Companies favour the voluntary The irony of the Global Compact is that affected stakeholders. approach as they want self regulation. the reputation most likely at risk is that of They claim by using the voluntary the United Nations itself by association As this report demonstrates, approach they have more flexibility and with corporations with poor human rights there is an urgent need to reform freedom to implement various codes of and environmental records as well as the company law so that directors conduct, such as the Global Compact, more sinister cultural impact of being have a “duty of care” to consider rather than comply with new legislation. overly influenced by the short-term profit the significant environmental and More and more Governments in turn driven ideology of major corporations.”65 social impacts of their fearful of company threats to relocate or The myth of CSR and the effectiveness of companies’ policies and lay off workers are also encouraging this the voluntary approach need to be operations. This duty of care approach as it easier to implement and exposed to prevent inhumane and should apply not just in the UK requires little if any governmental environmentally unsustainable business but wherever a company oversight. policies and practices continuing. operates in the world.
The UN Global Compact is typical of many voluntary approaches to incorporate codes of conduct for addressing social and environmental issues. A motivating factor for many companies to join the Global Compact is
The Other Shell Report 2003 33 Behind the Shine
Conclusions
The fenceline communities tell Shell...
Cultivation of its image as a responsible Shell has not met the sustainability ? Improve and enhance its identification multinational corporation is a significant challenge it set for itself in 1995, and is and measurement of facility pollution priority for Shell. It spends millions of still putting short-term profit before people by employing state-of-the-art real-time dollars on glossy brochures and and the environment. It is time for Shell to environmental monitoring, which advertising to convince us all—and move beyond the PR. In order to do so, thoroughly involves community perhaps itself — that it is a leader in Shell CEO Jeroen van der Veer must: participation. corporate social and environmental responsibility. ? Stop wasting its resources on “feel ? Cease any and all delays in good” social projects that do nothing terminating the odious practice of gas At conferences and international to solve the serious health and flaring in Nigeria. meetings, such as the 2001 UN World environmental problems of its facility ? Take full responsibility for past Summit on Sustainable Development in operations that plague communities environmental damage that continues Johannesburg, Shell trumpets to around the world. to impact the health and environment governmental officials its commitment to ? Eliminate hazardous and life- of people in places like Sao Paulo, sustainable development and human Brazil and Curaçao, Caribbean. rights. But in trumpeting this commitment, threatening facility accidents by Shell advocates for an entirely voluntary replacing antiquated and dilapidated ? Fully and accurately assess the approach, which has not resulted in pipelines and relocating them to non- significant impacts of massive projects, securing the vitally important changes residential areas. like the Sakhalin II oil and gas drilling, that communities in the shadows of Shell ? Significantly reduce pollution where processing, and export complex in facilities are demanding. The real-life Shell operates in communities of color, Russia, which could ultimately subject stories in this report demonstrate the need just as Shell has done at its facilities in Sakhalin Island to irreversible for Shell’s senior management to spend Denmark and other locations that are environmental disasters and less time on the message and more on predominantly populated by devastating economic losses. making a difference where it matters Caucasians. most—in the communities living next to Shell’s operations. ? Comply with local legislation and Each case documented in this report relocate oil depots away from Manila, represents a potential and significant where the densely populated area is liability for Shell. It is important that subjected to the depot’s constant toxic Shell’s shareholders and financial analysts emissions, as well as the threat of the recognize that for every case detailed depot being a terrorist target. here, there are many more around the world.
34 The Other Shell Report Friends of the Earth tells Shell...
The UK is the fourth largest economy in Unfortunately we don’t have much to We call on the UK Government to the world, and the largest foreign direct show after six years of broken promises. support the reform of company law as investor. The way UK plc goes about its The Government-appointed Company promoted by the CORE coalition in order business directly affects the lives of Law Review Steering Group published a to: hundreds of millions of people across the report in 2001 that marginalises the role globe. of stakeholders and the consideration of ? Place a duty of care on directors to wider social and environmental issues67. take reasonable steps to reduce any When the Labour Party came to power in Rather than legislate in this area, the significant social or environmental 1997 it promised to implement an ethical Government believes that companies can impacts. foreign policy. In 1998 the Government be made accountable through CSR, announced a review of company law that voluntary codes of conduct, and ? Require all UK companies to report would recognise the role of stakeholders partnerships with civil society and on the significant negative in company law. Three years on, the government. social or environmental impact Foreign Secretary Jack Straw stated “we of their operations, polices, products, cannot leave companies to regulate As this report shows, relying on CSR and and procurement policies with themselves globally any more than we the voluntary approach to make independent verification. can in our national economies. Setting companies accountable for their social ? Create foreign direct liability for common standards at a global level and environmental impacts is 66 companies so that affected requires legislation.” fundamentally flawed. communities can seek redress in the UK for human rights, social and Friends of the Earth (England, Wales and environmental abuses as a direct result N. Ireland) is working as part of the of their operations or of their oversees Corporate Responsibility (CORE) Coalition subsidiaries. which includes trade unions, environment, human rights, development and faith organisations including Amicus, Amnesty We call on Shell to cease relying on CSR International, Christian Aid, Transport & and voluntary codes of conduct to General Workers Union, New Economics address corporate abuse of the Foundation, Save the Children, Traidcraft, environment and human rights, and the public service union UNISON, and the instead to: Unity Trust Bank to promote the reform of company law to take into account social ? support initiatives like CORE to reform and environmental impacts 68. company law to address social and environmental impacts, and
? stop lobbying against international corporate accountability initiatives like the UN Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights, and the US Alien Torts Claim Act.
The Other Shell Report 2003 35 Behind the Shine
Message from the Independent Auditors
Message from the Independent Auditors
As Shell’s neighbours, we have been Assurance report comparing—for decades—the To: Friends of the Earth information that Shell presents in glossy From: Global Community Monitor brochures against what’s really Re: the Other Shell Report 2003 happening on the ground. Introduction We have aligned ourselves with We have been asked to provide assurance over the community testimonies and first standards of truth, accuracy and justice hand accounts detailed in this Report. This Report is the responsibility of Friends of the for all. We live in the hot spots that Shell Earth. Our responsibility is to express an opinion on the information, testimonies and has created by placing refineries, statements indicated, based on our experiences referred to above in “Message from the pipelines and wells in our communities. Independent Auditors.” We do not represent a hand-picked external panel of so-called experts In our opinion working in comfortable offices hundreds The social and environmental performance of Shell, as indicated in this report, properly or even thousands of miles away. We are reflects reality. Personal statements are sufficiently supported by experience of living the true experts, and pay the price for our next to Shell’s polluting activities. proximity to Shell’s polluting activities. Assurance work performed We do not use complicated symbols to In forming our opinion, we have studied this report in the context of our expertise and categorise data. We have no caveats, experiences as detailed above in “Message from the Independent Auditors”. We used complicated disclaimers, limitations or a multi-disciplinary team, comprising fenceline neighbors and environmental and social aggregate numbers in our testimonies. specialists. Our first-hand accounts are based on something far more reliable: our Considerations and limitations experience of having Shell as a neighbor. None
—Shell’s Fenceline Neighbors We believe our experiences provide a reasonable basis for our absolute opinion. around the world Global Community Monitor / A project of the Tides Center
36 The Other Shell Report Endnotes
1 SAPREF, Social and Environmental Performance Report 2002 Norco area. . .” Steve Clark, Shift in Priorities, BUSINESS 46 Dan Lawn et al, Sakhalin’s Oil: Doing It Right — Applying 2 SDCEA and Danish Fund for Nature, 2002, Comparison of REPORT, 31 July 2001, available at Global Standards to Public Participation, Environmental Refineries in Denmark and South Durban in an Environmental http://www.businessreport.com/pub/19_24/environment/. Monitoring, Oil Spill Prevention & Response, Liability and Societal Context—a 2002 Shapshot. 22 Shell media release, Proven Reserve Recategorisation Standards in the Sakhalin Oblast of the Russian Federation, (a publication of Sakhalin Environment Watch and the Pacific 3 Following Internal Review: No Material Effect on Financial Robbins, et al, The Settlers Primary School Health Study, Draft Environment & Resources Center), November 1999. Final Report, University of Natal Faculty of Medicine, Durban Statements, 9 January 2004 47 23 Alan Quartly, Oil Wealth Flows Past Russia’s Islanders, BBC Institute of Technology’s Department of Environmental Health, Michael Harrison, Shell Chief Faces Nigerian Challenge, THE NEWS WORLDWIDE, 24 September 2003, available at University of Michigan (USA), 2002. INDEPENDENT, (London, England), 2 February 2004. http://news.bbc.co.uk/2/hi/europe/3129608.stm. 4 Personal Communication by Mr. Mustafa, Shell consultant, 24 Shell official website, “SPDC [Shell Nigeria] is committed to 48 December 2003. ending routine gas flaring by 2008 through effective Auditing Chamber of the Russian Federation on the Sakhalin II Production Sharing Agreement Report, Section 3.2, 21 5 Personal Communication by Mr. Mustufa, Shell consultant, economic utilisation of the gas for the benefit of Nigeria”, available at www.shell.com. March 2000, p. 15. This report focuses on the results of a 2001 & 2002. complex evaluation of the use of government property 25 6 Refinery Reform Campaign media release, LegalActionAgainst Okon Bassey, Oil Spill: Community Cries Out, THIS DAY, (Port provided on the basis of the right for use of mineral resources Shell, 3 June 2003 Harcourt, Nigeria), 12 January 2004, available at to subjects of entrepreneurial activity on the basis of http://www.thisdayonline.com/archive/2004/01/12/2004 retribution, in particular the payment of taxes, collections, 7 The Philippine House of Representatives, Question of Privilege 0112news35.html. and other payments to the federal budget, as well as of Rep. Rosales, Journal No. 58, 4 March 2003, pp. 10— 26 insurance payments to government non-budget funds during 12. Andrew Pendelton et al, Behind the Mask: The Real Face of Corporate Social Responsibility,CHRISTIAN AID, (London, the execution by them of the Production Sharing Agreements 8 Job T. Realubit, Court Order Gives Pandacan Oil Depots a 20- England), 21 January 2004, available at ‘Sakhalin-1’ and ‘Sakhalin-2’ and the fulfilment of the day Reprieve, THE MANILA TIMES, (Manilla, the Philippines), 1 http://www.christian- conceptions of the Auditing Chamber, adopted at the May 2003, available at aid.org.uk/indepth/0401csr/index.htm. Alan Detheridge, a Collegium of the Auditing Chamber of the Russian Federation www.manilatimes.net/national/2003/may/01/top_stories/2 Shell representative, confirmed this level of Shell’s on April 17 1998 based on the results of a thematic 0030501top4.html. expenditures during a face-to-face meeting with Christian Aid evaluation of the organization of levying of taxes and 9 From the Shell official website, Shell in the Philippines: in 2003. payments into the budget during the execution of the Production Sharing Agreement in correspondence with the Background on Pandacan Scale-Down Project, available at 27 Dr. Antony Wong, Head of the Department of Toxicology at federal law ‘About Production Sharing Agreements’ at http://www.shell.com/home/Framework?siteId=ph- the Hospital das Clínicas of the University of São Paulo enterprises and organizations of Sakhalin RegionÅh. en&FC2=/ph-en/html/iwgen/about_shell/pandacan_ (HC/USP), Report on Environmental Contaminations of the scaledown/zzz_lhn.html&FC3=/ph- Town House of São Paulo. 49 Id. en/html/iwgen/about_shell/pandacan_scaledown/psd_hom 28 Jack Doyle, Riding the Dragon: Royal Dutch Shell & the Fossil 50 The Natal Mercury, 10 October 2003 e_1114.html. Fire (Environmental Health Fund, 2002), p. 50. 51 eThekwini Municipality Multi-Point Plan (MPP). 10 DOE Seeks Permanent Solution to Oil Depot Issue, INQUIRER 29 Id. 52 South Durban Community Environment Alliance GIS record of NEWS SERVICE, 2 May 2003. 30 Id. complaints. 11 Id. 31 Id. at p. 51. 53 Personal communication by SAPREF, December 2003. 12 Id. 32 From The Lonely Planet website 54 The Natal Mercury, 15 January 2004. 13 Id. www.lonelyplanet.com/destinations/caribbean/curacao. 55 SAPREF press release, Power Failure, 21 April 2004. 14 Jerome Aning, Atienza Sued for Allowing Oil Firm to Operate 33 Section on Chemicals and Air Pollution of the Laboratory for 56 Southern Star, ‘Black Wednesday’, 23 April 2004. in Depot, INQUIRER NEWS SERVICE, (Manilla, the Philippines), Environmental Technology, Department of Foreign Affairs of 57 12 May 2003. Venezuela, Research of Air Pollution on the Island of Corporate Europe Observatory, Shell Leads International Business Campaign Against Human Rights Norms, CEO Info 15 Joel R. San Juan, UP Moves to Get Back Pandacan Oil Depot Curacao, 1982. Brief, March 2004, available at Land, THE MANILA TIMES, (Manilla, the Philippines), 10 July 34 Central Environmental Management Service of Rijnmond http://www.corporateeurope.org/norms.pdf. 2003, available at (DCMR), Environmental Research Shell Curaçao, 1983. www.manilatimes.net/national/2003/jul/10/top_stories/20 58 Id. 35 Epidemiology Department of the Public Health Service of 030710top3.html. 59 Curacao, The Curaçao Health Study, 1996 Id. 16 Id. 60 36 Norbert George, Kingdom Policy Fatal for Curaçao, 2003. Center for Constitutional Rights, Wiwa v. Royal Dutch 17 Id. Petroleum/Wiwa v. Anderson/Wiwa v. Shell Petroleum 37 Rudie Kagie, The Last Colony, 1982. Development Company, Synopsis, available at 18 Shell official website, Shell in the Philippines: Community 38 http://www.ccr- Activities, information detailing various social projects and Caribbean Research and Management Institute, Memo dated ny.org/v2/legal/corporate_accountability/corporate events that surged in frequency beginning in the year 2002, 24 Sept 2004; RPM Bak, Effects of Chronic Oil Pollution on a available at http://www.shell.com/home/ Caribbean Coral Reef, 1987; Government of the Netherlands Article.asp?ObjID=sReYTC75tj&Content=46. Antilles, National Environmental Report, 1992. Framework?siteId=ph-en&FC2=/ph- 61 Id. en/html/iwgen/about_shell/pandacan_scaledown/zzz_lhn.h 39 Environmental Services Curacao, Environmental Report, 62 tml&FC3=/ph- 1997. Id. 63 en/html/iwgen/about_shell/pandacan_scaledown/psd_comr 40 Sakhalin Environmental Watch website The US Supreme Court heard oral arguments on the case, el_011604.html. www.sakhalin.environment.ru. Sosa v. Alvarez-Machain, brought under the Aliens Tort 19 Claims Act, on March 30, 2004. The Philippine House of Representatives, Question of Privilege 41 International Whaling Commission, Report of the Scientific 64 of Rep. Rosales, Journal No. 58, 4 March 2003, pp. 10— Committee, Section 10.7.5, 22 July 2001, p. 54 Katherine Griffiths, Lies, Cover-Ups, Fat Cats and an Oil 12. Giant in Crisis, THE INDEPENDENT, (London, England), 20 April 42 Sakhalin Environmental Watch, Report on the Fisheries Values 20 2004. This section of the report was compiled from the following of Aniva Bay, May 2003. sources: (1) Shell-Norco, Good Neighbour Initiative, (2) the 65 Corporate Watch & Transnational Resource & Action Center, 43 Refinery Reform campaign, and (3) Commonweal, Norco SEIC ESHIA 2003, Volume 2, Chapter 1, Existing Environment Tangled Up in Blue: Corporate Partnerships at the United Studies Project: A Victory for Collaboration, available at and EIA 2002, TEOC Volume 7, Book 1-EIA, Chapter 1, Nations, September 2000. Baseline Environment. www.commonweal.org/norcovictory.html. 66 Jack Straw, UK Foreign Secretary, Local Questions, Global 44 21 “. . . Also, in March [1999] DEQ made the largest Breeding only in Far East Russia, the Steller’s sea eagle is a Answers, 10 September 2001. A speech on globalisation at compliance settlement in its history, with Motiva Enterprises species protected by the Japan-Russia Migratory Bird Treaty the Museum of Science and Industry, Manchester, England. Act, and also is designated as a natural treasure (Cultural LLC, for air and water quality violations at the company’s 67 Properties Protection Law) in Japan and considered under UK Company Law Review Steering Group, Modern Company Norco and Convent refineries. The settlement, part of a Law for a Competitive Economy, Final Report, June 2001. nationwide case against Motiva, will result in a $500,000 domestic rare wild animals and plants (Species Preservation 68 cash payment to DEQ and $4 million in “BEP” [beneficial Law). IUCN considers it an endangered species. CORE webite www.corporate-responsbility.org. environmental projects] agreed to by Motiva. To satisfy the 45 Richard A. Fineberg, Seismic Risk and the Onshore Pipeline BEP requirements, the company has committed to spending . . Portion of Sakhalin Energy Investment Company’s Sakhalin II . $750,000 for an ambient air monitoring network for the Phase II Phase 2 Project: Unanswered Questions, 25 January 2004.
The Other Shell Report 2003 37 This report was published by:
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Environmental Health Fund 41 Oakview Terrace Jamaica Plain, MA 02130 Tel: + 617 524 6018 Sakhalin Environmental Watch Humane Care Foundation Curaçao Fax: + 617 524 7021 Komunisticheskyj prospect 27a Pimpiriweg 28 Office 301 Curaçao, Netherlands Antilles 693 007 Juzhno-Sakhalinsk Tel: +599 (9) 521 62 08 Russia Email: [email protected] Email: [email protected] Website: www.sakhalin.environment.ru