The Wall Street Journal: Shell’s Safety Problem: ‘I am suspicious of you Mr. Donovan…’

Article published March 15, 2007, 5:56 pm:

Comment section updated Sunday 18 March 2007 – forthright exchange between Bill Freeman, former “Environmental Engineering guru for Shell in America for 11 years”, and John Donovan. Latest exchange highlighted in bold print.

THE ARTICLE

BP has been criticized for its safety standards since the deadly Texas City refinery explosion in 2005. But Royal Dutch Shell was a far more dangerous company to work for in the past two years.

Thirty-seven Shell employees and contractors died last year, the company reported in its annual filing with the SEC yesterday, compared with just seven BP employees. In 2005, 36 Shell employees died, compared with 27 BP employees. BP had about 97,000 employees at the end of 2006, compared with 108,000 for Shell.

“Our safety performance in 2006 was mixed,” CEO Jeroen van der Veer said in the filing. “We have responded by reinforcing our safety focus through a dedicated global safety function that will improve compliance with standards and procedures worldwide.” The company says it has created a new position, a global vice-president for health, safety and environment. Its safety record was reported yesterday by the Financial Times (subscription required).

According to the filing, nine of Shell’s deaths last year were due to kidnappings and assaults in Nigeria. Eight other Shell workers died of other causes in Nigeria, the company’s most dangerous locale.

As Energy Roundup noted yesterday, van der Veer got a raise last year, unlike Lord Browne. As the Financial Times has noted (subscription required), one reason for Lord Brown’s pay cut was BP’s safety record.

Mark Gongloff

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Comments
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How about ExxonMobil? I don’t know, but I’ll bet they’re far better.
Comment by Maury Lorenz – March 15, 2007 at 6:20 pm

I find this article without merit. It reports oil industry accidents, then tries to compare BP with Shell, which is comparing apples and oranges. What expertise does Gongloff have in the safety/risk/operations area? I wonder if Gongloff has ever been to Nigeria? Nigeria is a very difficult country to operate in. If you remove Nigeria from the list of countries Shell operates in (over 40), that leaves 19 deaths. Having worked for Shell 35 years I can tell you Shell takes all deaths very seriously, even kidnappings. Mr. Gongloff appears not to like oil companies as he is trying to create a judgment of Shell’s CEO which is ludicrous. If not, what was his motive here? I am unimpressed with this person and think he is simply a trouble maker trying to create news rather than reporting it. It would be interesting to evaluate his work, safety record, and expertise. My guess is he is a secular progressive.
Comment by Bill Freeman – March 15, 2007 at 10:08 pm

Much like our war efforts (Iraq, now), we think we can extract a dangerous substance in remote, dangerous areas without anyone being at risk. The zero-risk mentality is at the bottom of this. I think when people own up to the fact that oil extraction (as well as fighting wars)is an intrinsically risky activity, that’s when the safety records will actually improve. I agree with Bill Freeman, the comparison of BP to Shell is meaningless and out of context.
Comment by G. Elliott – March 16, 2007 at 12:49 am

Bill Freeman says in his comment that Mark Gongloff is not a safety expert.

I would like to draw his attention to an article authored by me about Bill Campbell, the former Group Auditor of Shell International who is an expert in safety matters. The article can be found at http://www.mondaq.com/article.asp?articleid=46640

In particular, please read the three documents authored by Mr Campbell who is in a position to judge Shell and its CEO, Jeroen van der Veer. What he has to say about Shell and its safety culture is astonishing and should be a matter of great concern to Shell employees.
Comment by John Donovan – March 16, 2007 at 3:32 am

So take out the 9 deaths in Nigeria – 28 deaths is okay? What about the sorry results when compared to their peers; what about their participation in the illegal rubber cartel; what about the SNAFU in the Sakhalin Islands; and what about the global warming nonsense? The Board and officers have barely changed from the crew that brought us the false reserve estimates – they fail utterly to accept any responsibility. Management should be replaced!
Comment by Byron Furseth – March 16, 2007 at 9:10 am

Mr. Donovan. First, I do not believe Mr. Campbell can anywhere judge Shell and its total operations. He is one man covering a very large company. He also cannot judge Mr van der Veer either, which is simply nonsense. I worked as the Environmental Engineering guru for Shell in America for 11 years (retired in 1999) and am very familiar with audits done by HS&E. I worked in this area for 27 years. I have conducted numerous audits and partnered with Safety engineers who were on the audits with me. I have even conducted process safety audits by myself. I also had access to Sr. Management and know their position on negative audits. I never saw, and repeat never saw, any Sr. Management person ever dismiss a serious deficiency from an audit. In fact it was Shell’s policy to shut down facilities if environmental or safety matters violated the law. I also know that Mr. Campbell does not know about how the complete company complies with regulations. He may have found a problem at one site whereby employees did not perform their jobs correctly. But you do not condemn a company simply due to one incident. I am suspicious of you Mr. Donovan and would like to know what is your stake in Mr. Campbell’s sitation. My guess is you are a novice reporting what someone else says and is truly clueless about how audits are reviewed by Management. You also do not know what happened behind the scenes nor have access to the audit results. You only have Mr. Campbell’s word. I find your word “astonishing” simply rhetoric to capture attention like most leftist blogs do. I did read much of the report you referenced and wondered how you could think Mr. Campbell actually knows the CEO so very well when he is not in Sr Management. Again, Mr. Donovan, what is your stake here? Is it simply your citizen responsibility or are you making money in this endeavor?

Now Mr. Furseth. It appears you are simply a complaining person who is clueless about how the oil and gas industry operates. First, no one said any deaths were okay. I stated 19 deaths occurred outside of Nigeria, a very difficult country to work in, and Shell takes them all seriously. Second, not knowledgable about the supposed rubber cartel. What blog did you get it from? Global warming nonsense? What does that mean? Lastly, you accused the complete Management Committee of reporting false reserves which is not true either. Further, the complete Management Committee was not aware of this false reporting. The persons responsible on the Committee were instructed to turn in their resignations. Sounds like Shell acted responsibly to me. What would you have them do? In my view, Shell has an excellent Management Committee.

Both of you guys are novices and I hope anyone who reads your comments see this. For me it is easy to see through your novelty. Lastly, these statements are mine alone through experience, but does not represent Shell’s views.
Comment by Bill Freeman – March 16, 2007 at 5:33 pm

No company wants accidents, but the working environment has so much to do with it, it makes comparison difficult.
Comment by Duane Clanton – March 16, 2007 at 5:43 pm

If you want to see a safety record that is the best go to the link below. Bear in mind that the platform that these guys work on is constantly pitching and heaving, not to mention an inherently dangerous enviornment. http://www.tdw.com/safety/safety.html
Comment by David Smith – March 17, 2007 at 2:22 am

To the Webmaster

I would be grateful if you would kindly delete my duplicated posting of March 17. The first one vanished and then reappeared.
Comment by John Donovan – March 17, 2007 at 3:30 pm

Mr Freeman. Let me deal first with the unfortunate implication in your question asking if I am “making money in this endeavour” i.e. making money out of the deaths of Shell workers. I am retired. I am not involved in any commercial ventures. I co-own (with my father) what has been described by others as anti-Shell websites. In the interest of full disclosure more information about me, my background with Shell and the websites in question can be found at

http://en.wikipedia.org/wiki/Royaldutchshellplc.com.

The sites all operate on an entirely non-commercial basis. There are no subscriptions or any other charges. We do not solicit or accept donations. We carry no advertising even though the main site

 www.royaldutchshellplc.com
receives over 2 million hits per month. As can be seen from the Wikipedia article, the site is one of two recommended by Fortune Magazine for information about Royal Dutch Shell Plc. The other site is shell.com. I received no fee for the Mondaq article (or any other articles). To make it plain beyond dispute, we have never asked for or received a single cent from writing about Shell or operating websites focused on Shell. We very much support the principles set out in the Shell Statement of General Business Principles. If Shell senior management had acted in accordance with the pledges in the SGBP there would have been no reserves scandal and no Sakhalin2 debacle.

Since 1994 we have been involved in various proceedings with Shell, including many High Court actions. We have never lost a case. Eight Royal Dutch Shell companies currently have an application before the High Court demanding that my father, who will be 90 years old in a few weeks and resides in the UK, must travel to Malaysia to be cross examined in respect of a defamation action relating to our websites. The defendant is a former Shell production geologist, Dr John Huong, who worked for Shell for almost 30 years. To the best of our knowledge, he was the first person to blow the whistle on the Shell reserves “fraud” – the term used by Mr Christopher Cox, the Chairman of the U.S. Securities & Exchange Commission, to describe the scandal. More information about me can be found at:

http://www.prospect-magazine.co.uk/article_details.php?id=8209

Although I accept from what you say about your background, that you are well qualified to comment on safety matters, with all due respect it is you who is “clueless”, to use your unfortunate term, about other matters relating to Shell. In regard to cartels etc involving Shell, I recommend the following Wikipedia article:

http://en.wikipedia.org/wiki/Royal_Dutch_Shell_Environmental_and_reputational_issues

(to which I am a regular contributor).

Turning to Mr Bill Campbell, I have never spoken to him and have no “stake” in his situation other than assisting his campaign for improved safety at Shell. The Campbell documents which I published were supplied by a Shell insider. You say that I only have Mr Campbell’s word to go on. Firstly you neglect to mention that he was the Group Auditor of Shell International. Secondly, my article was based on input from many other sources inside and outside Shell, including the leader of an offshore workers union. You will have seen from the article that I also engaged in correspondence with Shell EP General Counsel Keith Ruddock in regards to Mr Campbell and safety at Shell. Royal Dutch Shell CEO Jeroen van der Veer and other senior Shell executives and officials were parties to the correspondence. High level correspondence with Shell on certain matters is still in progress. I have never stated that Mr Campbell “actually knows the CEO so very well”. That is your deliberate twisting of what I have said. Mr Campbell has met and dealt directly with Jeroen van der Veer and other senior people at Shell. The allegations in the article came from expert sources and I went to great lengths in regards to seeking verification. Consequently, your assertions were reckless, unfounded and unfair.
Comment by John Donovan – March 18, 2007 at 4:39 am

This website and sisters royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.