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The Guardian: Shell's critics come back with a vengeance

AGM protests

Shell's critics come back with a vengeance

Campaigners queue up to attack oil group's 'hypocrisy'

Terry Macalister
Wednesday May 17, 2006
The Guardian

The young man in the checked yellow shirt, khaki shorts and climbing boots stood out from the army of grey-haired and smartly dressed pensioners who made up the bulk of the Shell investors. But his message to the oil company at its annual meeting yesterday – that it was “astonishingly hypocritical” – was far from unique.

A procession of speakers took the podium in The Hague and via video link in London to berate the chief executive, Jeroen van der Veer, for what they saw as his failure to live up to his promises.

“You said, Mr van der Veer, that you take care of biodiversity. Perhaps that is in the way tat the mafia 'takes care' of its enemies: gets rid of them,” said the yellow-shirted Mark Brown, from the campaign group Rising Tide.

More than 400 million people from the world's poorest communities could lose their lives as a result of climate change, Mr Brown said, and yet Shell was investing most of its cash into making things worse by producing more oil.

The Anglo-Dutch group has spent the last 10 years trying to clean up its image and demonstrate a commitment to corporate social responsibility. While rivals such as America's ExxonMobil have ploughed ahead with “business as usual”, ignoring environmental and other protests, Shell and BP changed tack. Shell's epiphany came after two public humiliations: over the disposal of the Brent Spar platform and the state execution of Nigerian poet and anti-oil activist Ken Saro-Wiwa in the mid-1990s.


Shell was not just worried about the financial impact of a boycott but also concerned that a poor image made it hard to recruit graduates and do business with new host governments. The Anglo-Dutch group established the Shell Foundation as a legally independent charity and pumped in $250m (£133m) for social programmes in areas where it operated. It also began to talk about “sustainable development” and opened talks with campaign groups.

As climate change rose up the public agenda, Shell embraced this as an issue. It has started to invest more heavily in renewable energy schemes, but the vast bulk of its cash still goes into new oil and gas production. However, more care and consultation have gone into looking at the environmental and community impact of schemes such as the Sakhalin oilfield in eastern Russia, and there were signs that Shell was winning its image battle. Two years ago a Greenpeace campaigner put it this way: “There are no angels in the oil industry but there are progressives and regressives and within that context it is fair to say that Shell and BP are on the side of the progressives.”

Now the same critics are hardening their approach again. Some argue that the gap between rhetoric and reality is so great they feel more cynical about Shell and BP than they did previously.

Craig Bennett, head of Friends of the Earth's corporate accountability campaign, said: “You will see a lot of advertising from these companies highlighting their green credentials but this is all about trying to boost the morale of their staff and ultimately it's all superficial.”

WWF, the conservation group, is equally angry about what it sees as disingenuous methods used by the oil group to counter concerns about potential disruption of whale breeding near the Sakhalin project. “It certainly infuriates us when Shell sets up a panel of experts and then ignores the panel's recommendations. A lot of this [corporate social responsibility] is just box-ticking. It's business as usual really,” WWF said.

James Leaton, WWF's oil and gas policy officer, said shareholders should be just as concerned about conservation, the environment and human rights as the finances and operations of the business. “If Shell or BP can't get these kinds of issues right then you should worry about what else they are struggling with. Look what happened to Shell's reserves,” he said – referring to the controversy the company ran into last year over its grossly overstated oil reserves.

Legal force

Campaigners now say voluntary responsibility is failing and the only option is a legal requirement to look after local communities and other stakeholders. For their part, Shell and BP are frustrated that they put a lot of effort into social responsibility and are attacked, while small oil and gas firms and foreign state-owned giants often attract no criticism.

Certainly Mr van der Veer made no attempt to hide from the criticism at the annual meeting yesterday. Speaking about Sakhalin he told investors: “You may be concerned that this project could harm the endangered whales that feed nearby in the summer. So are we. That's why Sakhalin Energy supports research, works with scientists and took their advice to put pipelines further away.”

On climate change, he said: “Curbing carbon dioxide emissions while energy needs are expanding so rapidly is a profound challenge but one we can't duck.”

BP argues that big oil companies are never going to win any plaudits for their social engagement or environmental record but it is still the right thing to do. “We do want a positive public image but that only follows on from a positive business performance. There is no point in having the one without the other,” said a BP spokesman.

But that is never going to convince Mr Brown and his friends at Rising Tide, as he made clear to Shell directors yesterday. “I have no respect for your board … the lies, distortions, greenwash and propaganda that emanate from The Hague and London.”

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One Comment


    [email protected]
    17 May 2006
    Your report on Shell’s AGM (Shell’s critics come back with a vengeance, May 17) omitted to mention the constructive criticism of the oil giant’s performance embodied in the ethical shareholder resolution initiated by the Ecumenical Council for Corporate Responsibility. ECCR’s resolution was tabled with support from 130 shareholders and the World Council of Churches. Besides the better known cases of Sakhalin and the Niger Delta, ECCR was prompted to act by Shell’s conflict with local communities in Ireland over the Corrib gas project. The company has admitted that it played a role in the gaoling of the “Rossport Five” small farmers for contempt of court last year.
    ECCR has had dialogue with Shell since 1997, when it brought the first environmental resolution to a UK company AGM. This year our resolution called for improvements in Shell’s governance and performance in reaching agreement with local communities, in its risk and impact assessment, and in using its social responsibility committee.
    Shell marginalised ECCR’s resolution, placing it at the end of an otherwise routine agenda and allowing almost four hours to elapse before the item was introduced. Company chairman Aad Jacobs encouraged out-of-order and in one case a blatantly frivolous interruption from the floor before the resolution was voted.
    With the onerous legal requirements needed to bring a shareholder resolution in the UK – unlike the ease of the process in the USA – it is no surprise that not one ethical shareholder resolution was brought in the UK in 2005. Nor that many people are increasingly disillusioned with the failures of voluntary `corporate social responsibility’ to deliver urgently needed benefits for disadvantaged communities and the environment.
    Miles Litvinoff
    Co-ordinator, Ecumenical Council for Corporate Responsibility
    PO Box 500, Oxford OX1 1ZL, UK
    [email protected]