New company, same old Shell

Article 26 Jul 2005 admin

This report was first published in Platform’s carbon web newsletter, issue 1.


Forty-two years since the official opening of the Shell Centre, Tuesday 28th June was perhaps the most significant day yet in the life of that prominent building on the South Bank. Those who photograph it from the London Eye will not notice the difference, but it has been relegated from being one of Shell’s two global headquarters to not much more than the base of just its UK operations. Simultaneous votes at shareholder meetings of Royal Dutch and ‘Shell’ Transport and Trading approved the merger of the two companies, which for 98 years have jointly owned the group. The unified Royal Dutch Shell will be headquartered in Den Haag, but its shares will be listed on the London Stock Exchange, rather than split between London and Amsterdam. With Shell’s share of the FTSE 100 going up from below 4% to 9.4%, with BP at 10.1%, some are talking of sterling looking like a petro-currency. Fund managers will be snapping up Shell shares to try and balance their portfolios with the FTSE. Although the merger itself was prompted by pressure from investors following the reserves scandal of last year, it was the culmination of changes begun in the late 1990s to move away from the company’s committee culture, towards a leaner, hierarchical structure more typical of oil companies. Those internal changes happened at exactly the same time as Shell’s public campaign to reinvent itself, following the crises of the Brent Spar & Ogoni in 1995. Ironically, just as Shell was publicly talking of a newly open, listening company which stakeholders were invited to “Tell Shell” what they thought, it was making its decision-making much more centralised, taking it away from country managers, and even further from affected communities. While the company was publicly stating that it valued both “profits and principles”, that it was responsive to a “triple bottom line” in which social and environmental goals were as important as financial ones, staff were told internally to focus ever more closely on purely financial performance.

Shell’s ethical performance has not improved was seen in the shareholder meetings that discussed the merger, also attended by representatives of fence-line communities, who live nextdoor to Shell facilities. They talked about the health problems caused in their communities – by repeated leaks and explosions at Shell’s refinery in South Durban (South Africa), by continuous pollution from gas flaring in the Niger Delta and by emissions of toxic gases from its oil depot in Pandacan (Manila, the Philippines). By dumping of toxic wastes from pesticide production in Sao Paolo (Brazil), and by failure to clean up its former refinery site in CuraçSao (Netherlands Antilles), By persistent emissions of dangerous gases at Shell refineries in Port Arthur (Texas) and Norco (Louisiana), and by irresponsible construction activities on its gas developments in County Mayo (Ireland) and Sakhalin Island (Russia). These are some of the things Shell’s neighbours have to live with.

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