July 27th, 2007:

One World Trust: Accountability in Action: Extract From Global Accountability Newsletter: Issue 15, July 2007
 
The website Royaldutchshellplc.com is a gripe site established by John Donovan and his father, Alfred, to stream information to the public about the Shell Group, a collection of oil, gas, and petrochemical companies.  John Donovan’s use of the website to blow the whistle on Shell’s environmental abuses in the Sakhalin project exhibits the power an individual website can have in holding a global organisation to account.   
 
A ‘gripe site’ is traditionally one “devoted to the critique and/or mockery of a person, place, politician, corporation, or institution.”1  However, with the right contacts, a gripe site can become much more than simply a soap box.  As The Royal Dutch Shell plc website shows, a gripe site can have a profound impact on global organisations. 
 
Donovan’s battle with Shell began over breaches of contract with regards to sales promotions campaigns he and his father devised that were used to attract customers to Shell petrol stations.  Shell and the Donovans settled out of court.  But it was after Shell apparently made disparaging remarks about the Donovans that John set up Royaldutchshellplc.com. 
 
Donovan “wanted the site to become a magnet for people who had a problem with the company.”2  The site has not only cost Shell billions of dollars in Russia, but Prospect Magazine reports that the Ogoni tribe of Nigeria also use the website to spread information about Shell’s activities in the Niger Delta, and that even Shell insiders unhappy with the company use it.3
 
Royaldutchshellplc.com is just one of many examples of how the Internet makes it possible for concerned individuals to initiate discussion about global organisations, post and share information about organisational actions and their impact, and provide a common forum for affected stakeholders.  At the very least, ‘gripe sites’ such as this have a valuable watchdog function and remind global companies of the power of public opinion – thus forcing them to confront weaknesses in their own accountability.
 
1 Wikipedia, ‘Gripe Site,’ http://en.wikipedia.org/wiki/Gripe_site
2 Brower, Derek, ‘Rise of the Gripe Site’, Prospect Magazine, February 2007, http://www.prospect-magazine.co.uk/article_details.php?search_term=shell&id=8209
3 Ibid.
  read more

One World Trust: Accountability in Action: Extract From Global Accountability Newsletter: Issue 15, July 2007

Accountability debates often focus on powerful organisations, whether formal or informal.  This makes sense – the benefits of accountability can be most felt when powerful organisations adopt the necessary policies and put them into practice.  However, with the focus on organisations, the growing power of the individual has often been overlooked.
 
As online publication becomes easier, through innovations such as blogs and websites such as YouTube, millions of people are finding a voice.  With the right combination of luck, judgement, timing and the Internet an individual can have a great deal of influence.  Yet, this individuality of the Internet means users are often acting outside of an institutional framework.
 
Whilst most bloggers have readers in the tens or hundreds, some have acquired followings in the hundreds of thousands.  With such large readerships these bloggers are starting to challenge the dominance of traditional media outlets.  Their online editorials signify a progression from the commentating on news stories reported by the mainstream media to setting the news agenda themselves. 
 
A notable example is the attention brought by US bloggers to the remarks of Senator Trent Lott, then Senate Minority Leader, at the 100th birthday party of Senator Strom Thurmond in December 2002.  Speaking of Thurmond’s run for President, which was on a segregationist platform, Lott said:
 
… if the rest of the country had followed our lead [that of Mississippi, which had voted for Thurmond in the election], we wouldn’t have had all these problems over all these years…
 
Whilst reporters from mainstream media outlets were present at the party, it was the action of bloggers that brought consistent attention to the remarks and eventually forced Lott to resign as Minority Leader.1
 
Similarly, the use of videos posted through YouTube is having a remarkable impact on the way in which the American 2008 Presidential campaigns are being run, with greater online content and the emergence of “attack ads” unaffiliated with any campaign.2  Another example is the “gripe site” of www.royaldutchshellplc.com.  The site has played a watchdog function on the activities of Shell, and has acted as a central point for the gathering of complaints.3  With the power of the internet harnessed for both whistleblowers and scandalmongers, it is clear that such great influence can be positive or negative.
 
Whereas traditional media organisations have internal accountability – with editors being ultimately accountable for published material – bloggers are independent and lack such an institutional framework.  There is no editor, no lawyer, and no proprietor to be persuaded of the public interest case for a story.  Even under the UK’s notoriously strict libel laws bloggers are effectively able to circumvent the risk of the large financial penalties that can come with an adverse court judgment. They can limit liability through a company that holds few assets, as little is needed to publish a blog.  In the USA, where the Constitution places great value on the freedom of speech, there are even fewer legal risks.
 
This lack of internal accountability and the possibility of circumnavigating legal accountability brings into question how bloggers, and other individuals online, are accountable.
 
To address the absence of accountability mechanisms and concomitant concern that there is power without responsibility, there have been some attempts to develop self-regulating Codes of Conduct.  One of the most high profile is that started by Jimmy Wales, founder of Wikipedia, and Tim O’Reilly, who coined the term “Web 2.0”.
 
With a series of “opt-in badges” for different levels of enforcement, the O’Reilly-Wales proposal have proved very controversial, prompting attacks as well as support from within the blogosphere.  However, the proposal lacks any enforcement mechanisms – and it is unclear what form an effective enforcement mechanism could take.  With the ease of online anonymity, and the opprobrium of others worn as a badge of pride for some, forms of self-regulation that rely on social norms and pressure may be ineffective in this sphere where there is little to be lost.
 
It is not the case that the Internet is a lawless place; fraud is still fraud, and activities that would be criminal offline are criminal online too.  But where is the line drawn in the often casual, conversational manner of the Internet that can be accessed by millions not just heard by the few?  With the international and individual nature of the online world, it is difficult to transpose the accountability mechanisms of the offline world, from courts of law to social norms.
 
Furthermore, with the borderless nature of the Internet, who would enforce?  Is it the state’s responsibility? Consumers?  Registries?  Or even families and partners?  With the lack of the institutional frameworks of accountability present in traditional media organisations applying to bloggers, yet the unquestionable ability of such individuals to impact the ‘non-Internet’ society, these questions are starting to be asked and need to be addressed.
  Claire Wren
 
 
1 Scott, Esther, “Big Media Meets the Bloggers: Coverage of Trent Lott’s Remarks at Strom Thurmond’s Birthday Party”, Case Study, Kennedy School of Government, 2004 (http://www.ksg.harvard.edu/presspol/Research_Publications/Case_Studies/1731_0.pdf)
2 Wood, Gaby, “From the web to the White House,” The Observer, 8 July 2007 http://observer.guardian.co.uk/review/story/0,,2121069,00.html.
3 See Accountability in Practice. read more

By Joe Carroll
 
David O’Reilly, CEO of Chevron Corp. July 27 (Bloomberg) — Chevron Corp., the second-largest U.S. oil producer, posted its highest quarterly earnings ever after gasoline prices rose to a record and the company sold its stake in Dynegy Inc. at a profit.

Second-quarter net income climbed to $5.38 billion, or $2.52 a share, from $4.35 billion, or $1.97, a year earlier, San Ramon, California-based Chevron said today in a statement. The profit increase, at 24 percent, was the biggest among the world’s five largest investor-owned oil companies. read more

HUNTS VS. WELLS: Talks settle one impediment to drilling in Beaufort Sea.

By WESLEY LOY
[email protected]

Published: July 27, 2007
Last Modified: July 27, 2007 at 05:33 AM

Oil giant Shell and North Slope whaling captains this week struck a “conflict avoidance agreement” designed to keep offshore drilling from disrupting subsistence hunts.

The deal wraps up months of negotiation between the captains and Shell, which hopes to drill exploratory wells this year in the Beaufort Sea.

Both sides hailed the agreement, which settles one of several problems facing Shell before it can put its two drilling ships to work. read more

27 July 2007

Workers for oil giant Shell have hit out at plans to sell off five North Sea platforms.

The OILC union said employees on Cormorant Alpha, North Cormorant, Dunlin, Alpha Tern and Eider installations are unhappy the company is considering transferring them to new owners where their working conditions could suffer.

OILC General secretary Jake Molloy said: “The workers are very unhappy and have suggested a variety of actions to make Shell rethink, including strike.”

Oil Profits Before Safety

By John Donovan

Bill Campbell, a much respected former Group Auditor of the oil giant, Shell International, this week took the exceptional step of writing to all members of the UK Houses of Parliament – every MP and every member of the House of Lords – to bring to their attention a “Touch F*** All” safety culture at Shell.

He explained in his letter (reprinted below with his kind permission) how the lives of Shell employees working on an oil platform in the North Sea were lost after Shell senior management put profits before safely instead of taking appropriate action after a safety audit led by Campbell discovered a corrupted safety regime. read more

Even at top, Exxon Mobil feels earnings pinch: No. 1 oil company sees profit, production fall; Shell earnings rise despite drop in output

Kristen Hays, Houston Chronicle – Texas
Published: Jul 27, 2007

Even the oil industry’s mightiest can be humbled in a world with diminishing access to oil and ever-increasing costs of getting it.

Investors roughed up Exxon Mobil Corp. on Thursday when the world’s biggest oil company fell short of Wall Street expectations for the first time in six quarters, with a 1 percent drop in profits and production. read more

By Sam Fleming
27 July 2007

ROYAL Dutch Shell trounced arch-rival BP with a bumper set of earnings, but boss Jeroen van der Veer failed to dispell doubts about the firm’s troubled production pipeline.

Profits stripping out one-time items rose 6pc to £3.4bn, thanks to a Rolls-Royce performance by Shell’s fleet of refineries, which benefited from record industry margins. Shell’s figures added to signs of a comeback almost as dramatic as BP’s decline.

Its shares have managed a 13pc gain over the past six months, twice the rise by beleaguered BP which is under attack from American Congressmen because of Alaskan oil leaks and the fatal Texas City fire. read more

ANDREW JOHNSON, The Express
Published: Jul 27, 2007

BOOMING oil prices sent Royal Dutch Shell’s profits soaring 17 per cent to nearly $15billion (GBP7.5billion) for the half-year to June.

A strong performance from refineries and petrol stations enabled the company to shrug off a 2 per cent drop in production to 3.2million barrels a day. The shares fell 42p to 1972p.

Shell did better than rival BP where profits fell 8 per cent because of refinery shutdowns. Chief executive Jeroen van der Veer expected the good times to continue. He said despite rising energy prices, demand remained strong in emerging markets such as India and China, as well as in the US. Shell is making progress in moving its refining focus from the United States to the Far East and in developing what van der Veer described as “new legacy assets” designed to fuel growth for decades to come. read more

July 27 2007

ROYAL Dutch Shell said it has recently received government approval for the acquisition of the ProJET retail marketing assets comprising 44 service stations and 14 vacant land sites.

The 44 ProJET stations will be rebranded progressively to Shell stations over the next three months, Shell said in a statement.

“However, from today, as part of the transition from ProJET to Shell, all existing ProJET retail sites will begin to carry Shell fuels, even as rebranding work is under way,” said Datuk Mohzani Wahab, managing director of Shell Malaysia Trading Sdn Bhd and Shell Timur Sdn Bhd. read more

 Friday 27 July 2007

Three polar bears are shown on the Beaufort Sea coast within the 1002 Area of the Arctic National Wildlife Refuge in this undated handout file photo.

Royal Dutch Shell expects to drill in the Arctic off the north coast of Alaska this year, despite legal challenges from environmentalists and native groups, its chief executive said on Thursday.

REUTERS/HANDOUT/U.S. Fish and Wildlife Service Alaska Image Library

Jeroen van der Veer: final decision still 12 months away

By Russell Hotten, Industry Editor
Last Updated: 3:38am BST 27/07/2007

Royal Dutch Shell’s chief executive Jeroen van der Veer said there were no plans to halt preparatory work on possible investments in Iran, despite renewed pressure about the risks of operating in a country where America has imposed economic sanctions.

Speaking yesterday as he unveiled a 20pc rise in second-quarter profits, Mr van der Veer said a final decision about whether to embark on the huge gas project was still 12 months away, but work would continue. read more

Last Updated: 2:13am BST 27/07/2007

Royal Dutch Shell
£19.72 -42p
Questor says Hold

The sixth straight quarter in which Royal Dutch Shell profits exceeded market forecasts is more confirmation for those who believe chief executive Jeroen van der Veer’s rejuvenation of the oil major is under way.
  
The refining and marketing side is very strong, as is the chemicals arm. Profit from the oil products division, which handles refining, leapt 42pc to a record $2.94bn. Record US gasoline prices have been driven by rising demand and refinery shutdowns. read more

Despite Big Numbers,
Costs, Production Woes
Are Weighing on Growth
By RUSSELL GOLD and GUY CHAZAN
July 27, 2007; Page A2

•  The News: Exxon Mobil reported disappointing results on higher costs and somewhat lower production, despite near-record prices for oil.

•  The Big Picture: Oil-company profits have suffered as increasingly expensive rigs, equipment and services are used to tap bigger and more-complicated projects.

•  The Outlier: While rivals’ earnings were mostly lower, Shell’s net profit surged 18% in the quarter, as strong refining margins compensated for a production drop. read more

Martyn Wingrove
Published: Jul 27, 2007

HIGHER refining margins and liquefied natural gas sales have boosted Royal Dutch Shell’s second quarter earnings by 20% to $7.56bn.

The Anglo-Dutch company’s strong downstream operating performance bucked the industry trend of falling earnings and beat analysts’ expectations.

Shell’s positive result compares well with its European rivals BP, Repsol of Spain and Eni of Italy which have all reported lower second quarter profits.

‘We have delivered another set of competitive results, driven by operating performance,’ said Shell’s chief executive, Jeroen van der Veer. ‘I am pleased with our progress in downstream and exploration. read more

Lorna Siggins, Western Correspondent
Published: Jul 27, 2007

Artists participating in a festival which opens in north Mayo this evening have expressed concern over Shell E&P Ireland’s sponsorship of the event.

Galway poet Rita Ann Higgins and Leitrim singer Mary McPartlan said they had “no idea” that Shell was supporting Feile Iorrais 07, an annual international folk arts festival which runs until August 4th in Erris.

Shell’s sponsorship is not included in the festival programme, but it is on the festival website. read more

Published: Jul 27, 2007

(Updating to include CEO comments)

SYDNEY (Thomson Financial) – Woodside Petroleum Ltd, Australia’s largest oil and gas producer, said Friday its board has approved an expenditure of 11.2 billion Australian dollars on the development of the Pluto liquefied natural gas (LNG) project in northwestern Australia.

The company, 34 percent owned by the Royal Dutch Shell group, said the project is based on Woodside’s Pluto and Xena gas fields located about 190 km northwest of Karratha, in permit WA-350-P. read more

By Rebecca Bream and Maggie Urry
Published: July 27 2007 03:00 | Last updated: July 27 2007 03:00

Royal Dutch Shell beat analysts’ expectation with an 18 per cent rise in second-quarter earnings, in contrast to BP, which reported lower earnings this week.

Shell yesterday announced second-quarter profits of $8.67bn (£4.22bn). On a current cost of supplies basis, stripping out the effect of changes in prices on inventories, Shell’s figures were 20 per cent higher at $7.56bn.

Downstream businesses, such as refining, marketing and chemicals, accounted for much of the rise in profits, but the results were also boosted by profits on divestments of $660m in thequarter, compared with a $232m loss in the same period of 2006. read more