The Guardian: Campaigners attack Shell’s charity arm over Sakhalin talks

· Foundation chief spoke up for firm at Benn meeting
· Green group says body is ‘a charade and a con’

Rob Evans and Terry Macalister
Thursday September 28, 2006

An attempt by Shell to portray itself as a model of corporate social responsibility was undermined last night after Whitehall documents showed its charitable arm discussing a key commercial project with a British government minister.

The multinational oil company says the charity it funds – the Shell Foundation – is completely independent and contributes nothing towards its profits. But documents released to the Guardian under the Freedom of Information Act show the director of the charity, Kurt Hoffman, and the chairman of Shell UK, James Smith, lobbied the secretary of state for international development, Hilary Benn, in January at a meeting they had asked for.

Mr Hoffman discussed the controversial Sakhalin-2 scheme, which is expected to be one of Shell’s main money-spinners. The £11bn gas project is the target of vociferous opposition from environmental groups and is being investigated by the Russian government.

Mr Hoffman is quoted in the government’s minutes of the meeting as having said: “Shell hoped to turn their experience of Sakhalin-2 into a learning opportunity and in future to work with progressive partners to assess the impact of their work on the environment and local communities.”

Shell public relations officials confirmed last night that the Shell Foundation had not worked on or advised Shell on the Russian scheme. “Kurt Hoffman attended the meeting with James Smith and the secretary of state primarily to discuss the Investment Climate Facility, in which the foundation is heavily involved,” a spokesman said. “The secretary of state raised the issue of the Sakhalin-2 project – and Kurt commented within the context of the foundation’s views that the work of multinationals can be more fully leveraged for development purposes.”

But this did not placate environmental campaigners. Mika Minio, of the Platform group, which monitors the oil industry, said: “What is a guy from the supposedly independent foundation doing arguing Shell’s case side by side with someone from the commercial side? These documents show that the Shell Foundation is a con and a charade. It’s a PR vehicle to further Shell’s business interests.”

The Shell Foundation was set up by the company in 2000 in an attempt to improve its image after being embroiled in two damaging rows in the mid-1990s – the disposal of the Brent Spar oil rig and the execution of the poet and anti-oil activist Ken Saro-Wiwa in Nigeria.

The foundation says: “We are a legally independent charity, distinct from the Shell Group’s commercial operations and, as such, our work can have no direct financial benefit for Shell companies or associated companies in which Shell has an interest.”

Shell has given £130m to the foundation, which tackles social problems in vulnerable communities, such as easing traffic congestion, reducing deaths caused by pollution, and supporting small businesses in Africa.

According to Shell, the establishment of the charity was part of a new way of doing business in which “the pursuit of profits had to be tempered by care for the environment and concern for people”.

Backstory

The Shell Foundation was established after the dark days of controversy over Brent Spar and Nigerian operations. It is charged with addressing the challenges of sustainable development by funding projects through grants to not-for-profit and other groups working in the public interest. The organisation prides itself on being a “legally independent charity” whose work “can have no direct financial benefit for Shell companies”. Yet joint meetings with ministers – and comments made on sensitive Shell projects such as Sakhalin where the foundation is not involved – suggest the lines are blurred if not indistinguishable. Shell firmly denies this.

http://business.guardian.co.uk/story/0,,1882372,00.html

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