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Is Royal Dutch Shell a racist company?

By Alfred Donovan

(Correspondence with Shell on 10 December 2007 relating to this article is published at the foot of the article)

At first sight this appears to be an outlandish question to pose about the world’s third largest transnational corporation in terms of revenue – an oil giant operational in over 143 countries. However, a mounting pattern of evidence about Shell’s behaviour in relation to its employees in non-Western countries suggests this is a legitimate question.

We have previously published information about Shell employee retirement fund machinations in South Africa: –

Shell ‘improperly used’ surplus pension money (January 28, 2006)

http://royaldutchshellplc.com/2006/01/28/personal-finance-shell-improperly-used-surplus-pension-money/

Shell already had an unfortunate history relating to South Africa. During the 1980s, Shell was accused by anti-apartheid activists of supporting and sustaining the apartheid regime while pursuing business opportunities in the County.

We are also aware of current litigation relating to Shell employee retirement funds in respect of several hundred Malaysian employees.

We have now been supplied with extensive information and documents relating to litigation launched against Shell on 20 November 2007 by unionised Shell employees in Ethiopia accounting for almost 90% of the Shell Ethiopia workforce.

The information includes correspondence involving Shell Ethiopia Limited Workers Union and senior Shell executives such as Mr Rob Routs, Executive Director Oil Products and Chemicals.

We have published the Statement of Claim lodged with the Federal First Instance Court on 20 November 2007. It alleges that after Shell decided to sell up its business in Ethiopia (it has already taken the first steps in that regard), Shell improperly decided to unilaterally change a long existing system of early retirement benefit which reduces severance benefit paid to members by up to 70%. The Statement of Claim says of the change: “It is made with bad motive and evil spirit and it is illegal”.

It also alleges that Shell’s action “violates human rights of employees.” 

The Statement of Claim points out that a few years ago Shell took over Agip Ethiopia and accepted 34 employees, 13 of whom opted to avail themselves of the special early retirement scheme, thereby receiving 55 months of salary. The employees who remained have been rewarded for their loyalty by potentially losing up to 70% of the severance payment their former colleagues have already received.  This is of course a glaring injustice.

Staff hit by Shell’s retirement fund machinations believe the funds earmarked for severance entitlement of ordinary employees are being diverted to benefit senior managers. This is confirmed in the Statement of Claim. Some employees believe the machinations are designed to buy the silence of management in relation to issues such as tax evasion and environmental pollution e.g. the expensive soil remediation exercise being undertaken at Akaki depot (a site previously used for storage of agrochemical samples).

We are advised that as a result of the machinations Shell will save $500,000 USD while local management team members will each receive additional payments of $100,000 USD, all at the expensive of ordinary Shell employees in Ethiopia.

The Statement of Claim points out that the change to the system is in absolute contradiction with the basic ethical values claimed by Shell, including “Honesty, Integrity and Respect for People”. This phrase is taken from Shell’s STATEMENT OF GENERAL BUSINESS PRINCIPLES known as the SGBP which have been promoted in multi-million dollar global advertising campaigns, such as “Profit and Principles”.

Profits and Principles

http://www.corpwatch.org/article.php?id=238

Link to STATEMENT OF CLAIM

http://royaldutchshellplc.com/2007/12/03/shell-employees-statement-of-claim-against-shell-ethiopia/

Link to Ethiopian news article about the case

http://www.addisfortune.com/Labour%20Union%20Sues%20Shell%20Over%20Severance%20Benefits.htm

Correspondence prior to the issuance of proceedings by the Shell Ethiopia Limited Workers Union provides evidence that the union was extremely reluctant to resort to litigation.

On 7 September 2007, the Shell Ethiopia Limited Workers Union sent a “Letter of Appeal” to Xavier Le Mintier, Senior Vice President of Shell Oil Products Africa. The letter contained the following sentence: “We also believe Shell is a responsible corporate citizen that cares for the employees, environment and other stakeholders in line with its core values of Honesty, Integrity and Respect for People.” The union pleaded for the “kind consideration” of its petition letter, which included an attachment with five pages full of signatures of relevant Shell employees.
 
The union received a reply dated 17 September 2007 from George Brunton, VP of Oil Products East Africa promising to arrange a meeting “shortly”.

On 26 September the union sent a letter to Rob Routs asking him to intervene. On the same date, the union received a letter from George Brunton offering a meeting date of 4 October. The meeting was pre-empted by Shell’s unilateral decision to proceed with its plans regardless of union pleas expressed in correspondence.

On 12 November, despite the continuing deep concern of employees and the impending prospect of litigation, all Shell employees in Addis Ababa, Dire Dawa and Gondar were invited to attend an “Invitation for Cocktail” at the Shell Social and Recreation Club. The stated purpose was to enable staff to meet Paddy Milner and George Brunton, Shell executives who had recently taken up senior appointments in Shell Oil Products Africa. A cocktail party conducted against the backdrop of Shell’s plans to exit Ethiopia and short change employees on their early retirement benefit was a bizarre concept to say the least. As could be expected under the prevailing circumstances, the astonishingly tactless shindig was boycotted by the entire union membership as a sign of protest. 

The litigation is similar to the current legal proceedings brought by several hundred Shell employees in Malaysia which as indicated also relates to retirement benefit issues. In 2004, a Malaysian Judge decided in a case brought by 399 former Shell employees that the deduction made by Shell from employee retirement funds was “unlawful”. Many of the relevant former employees are elderly and sick. We understand from a reliable source that 34 of the original 399 have already died. In March 2007, Malaysian Court of Appeal judges overturned the 2004 judgment. Astonishingly, when announcing the decision in court, one of the Appeal Court judges stated as grounds for the decision:

“We don’t believe a company like Shell would do anything like this to employees”.

We managed to obtain a leaked copy of the judgment dated 30 March 2007. In paragraph 26 on page 24 it was stated in reference to Shell…

“…to deduct employer’s EPF contributions from the lump sum would not only expose them to accusations of illegal action and fraud on employees but would result in no employee getting any benefit from the RBF and in the RBF becoming a futile exercise, and it is inconceivable that those companies would embark on such an absurd, pointless and perilous undertaking.”

This confirmed that part of the bizarre reasoning for reversing the 2004 decision was on the grounds that Shell would never act fraudulently or unethically. They obviously had not heard about Shell’s horrendous track record of engaging in fictitious trades, securities fraud, price fixing cartels, theft of intellectual property, bribery, corruption and many other misdeeds recorded in Wikipedia, with cited independent and highly reputable sources of verification.

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

Unfortunately the integrity of the Shell Malaysian litigation is complicated by the fact that the entire judiciary in Malaysia is tainted by a corruption scandal in which one of the Appeal Court Judges responsible for the inexplicable decision in favour of Shell, is personally implicated. Shell is highly influential in Malaysia because it is a long-standing business partner of the sleazy and repressive Malaysian government and the Malaysian national oil company, PETRONAS.

The good news is that as reported by The Borneo Post last month, the “399” group has been given leave to take their case to the Malaysian Federal Court for a final decision on their case.

http://royaldutchshellplc.com/2007/11/21/the-borneo-post-former-employees-allowed-to-appeal-over-pension-funds/

Given the similarity in the issues being litigated, we would recommend that the employee groups suing Shell in Ethiopia and Malaysia should get into contact ASAP. They may be able to assist each other with similar fact evidence. 

Shell would never dream of mistreating Shell employees in Western Countries in such a reprehensible way because they know they could not get away with it. Indeed, Shell quickly settled a retirement funds related class action law suit brought against it by its American employees, while it has dragged out for many years the retirement fund lawsuit brought by its Malaysian employees. 

Apparently employees in Malaysia and Ethiopia are viewed by Shell management as being an inferior class of human beings who can be cheated and intimidated with impunity. In the latter regard we have evidence that the management of Shell Ethiopia is pursuing a strategy of harassment and bullying of staff associated with the legal proceedings.

We also have evidence of intimidation used by Shell against its Malaysian employees. The case of former Shell production geologist, Dr John Huong, provides a classic example. Dr Huong, a deeply religious man, was subjected to a campaign of intimidation and humiliation after he blew the whistle internally on management misdeeds at Shell which were in blatant contravention of Shell’s SGBP. Unfortunately for Dr Huong, like employees in Ethiopia, he thought that Shell management was genuine in the pledges given to stakeholders to uphold the claimed core ethical principles. However his appeals for the intervention of Jeroen van der Veer and Malcolm Brinded were ignored. Mr Brinded is famed for turning a convenient blind eye to management misdeeds and has a track record of putting profits before the well being of Shell employees.

Instead of taking heed of the alarm bells rung by the courageous whistleblower, Dr Huong, Shell ended up suing him for defamation. It has relentlessly pursued the action launched in June 2004 despite being aware that Dr Huong, a Malaysian national, has never published a single word, defamatory or otherwise, about Shell. Eight Royal Dutch Shell companies have also collectively sought his imprisonment for alleged contempt of court. For over three years Shell injunctions have robbed Dr Huong of his right to freedom of expression.

The information considered by Shell to be defamatory was in fact drafted and published by the author of this article – Alfred Donovan, on my own website (in collaboration with my son John). Within days of proceedings being issued by Shell against Dr Huong I sent a faxed letter direct to the Malaysian Judge hearing the case explaining that we, not Dr Huong, had drafted and published the relevant articles. I also sent a copy of the letter to Shell’s lawyers.

http://www.shellnews.net/2004%20Documents/letters/letter_faxed_to_malaysian_high_court5july04.htm

However, Shell has inexplicably chosen to sue Dr Huong who for 27 years worked loyally for Shell, rather than me and my son (a long term Shell shareholder) – Englishmen who have freely admitted publishing the allegedly defamatory information on a U.S. located website.

Shell International Petroleum Company Limited made the following statement in a legal document submitted to The World Intellectual Property Organisation in May 2005 on behalf of the Royal Dutch Shell Group in regards to me and my website:

“The… Group… have been aware of the site since the beginning and whilst they would not endorse or agree with many of the comments made by the Respondent on the website, they have taken the view that the Respondent is entitled to express his opinions and to use the Internet as a medium for doing so.”

Why is an Englishman entitled to use the Internet to criticise Shell but not a Malaysian? Frankly I believe that Shell managements persecution of Dr Huong is a disgrace and an outrage.

Taking into account all of the forgoing – Shell’s dubious track record in South Africa and the current retirement fund litigation underway in Malaysia and now in Ethiopia, it is difficult to avoid the conclusion that Shell management has a decidedly different attitude towards people dependent on their race. 

Under the circumstances it seems legitimate to ask if there is a colonialist mentality lurking in the higher echelons of the Anglo-Dutch oil giant. If so, such exploitative, out-dated and evil behaviour must be exposed and Shell shamed into treating all people equally and fairly, irrespective of nationality.

ARTICLE ENDS

This article is in response to the recent email we received: –
Dear Mr John Donovan: Warm Greetings from Shell Employees in Ethiopia

http://royaldutchshellplc.com/2007/11/26/dear-mr-john-donovan-warm-greetings-from-shell-employees-in-ethiopia/#comment-58131

Correspondence with Royal Dutch Shell Plc on 10 December 2007

Email sent to Mr Michiel Brandjes, Company Secretary and General Counsel Corporate, Royal Dutch Shell Plc (which contained a full draft of the above article)

—–Original Message—–
From: Alfred Donovan [mailto:alfred@shellnews.net]
Sent: maandag 10 december 2007 1:32
To: Brandjes, Michiel CM RDS-LC

Cc: van der Veer, Jeroen J RDS-CEJV; Brinded, Malcolm A RDS-ECMB; Routs, Rob J RDS-ECRR; Wiseman, Richard RM SI-LMAPF; Hess, Beat W RDS-ECBH; Brunton, George; Milner, Paddy SSA-DAD

Subject: Subject: Litigation brought by Workers Union of Shell Ethiopia Limited

Dear Mr Brandjes

I have supplied below a draft article relating mainly to the litigation brought against Shell by almost 90% of its employees in Ethiopia. We will happily publish unedited any comments Shell may wish to make. If Shell states that anything stated as fact is categorically untrue, we will take the appropriate action.

If you need time to investigate this matter or discuss it with your colleagues, then you only have to ask. You have taken up this offer previously in respect of a different subject. We are more interested in accuracy, than publishing before Shell has had a reasonable opportunity to respond, particularly when we are dealing with sensitive issues, as we are in this instance. I doubt that any other publisher is as fair or as accommodating as we are in such matters. 

I am sure you will understand that if there is no response by close of business today, Monday 10 December 2007 i.e. no indication that you dispute the facts or would like more time to respond, we will assume that Shell accepts that the information stated as fact is correct and will say so in the article. When the draft is finalised it will be printed on www.royaldutchshellplc.com and on USA news websites.

Best Regards
Alfred Donovan

REPLY FROM MR BRANDJES: 10 December 2007

From: Michiel Brandjes
Sent: 10 December 2007 16:33
To:
alfred@shellnews.net

Subject: RE: Subject: Litigation brought by Workers Union of Shell Ethiopia Limited
Importance: High

Dear Mr Donovan,
 
As explained previously on a number of occasions, the lack of a rebuttal from, or comment by, Shell does not in any way constitute an acceptance on Shell’s part of the accuracy of any of the points made by you, whether now or in the future, and whether on this or on any other matter, and we continue to reserve our position accordingly in respect of those matters
 

Best Regards and a Merry Christmas,
Michiel Brandjes
Company Secretary and General Counsel Corporate
Royal Dutch Shell plc

Registered office: Shell Centre London SE1 7NA UK
Place of registration and number: England 4366849
Correspondence address: PO Box 162, 2501 AN  The Hague,
The Netherlands

Internet: http://www.shell.com

REPLY TO MR BRANDJES: 10 December 2007

Dear Mr Brandjes

We appreciate that you have taken the trouble to respond and will publish your comment unedited.

With regards to the correspondence with the domain name registrar in China, if my ownership of the www.royaldutchshellplc.com domain provides any form of registration priority which could prevent anyone other than Shell from obtaining future registrations relating to your company name, then I will happily cooperate  in any action you may wish to take in this connection.

On a personal note, it is typical of your gentlemanly conduct to send your greetings for the Christmas season. You have always acted decently and fairly in all dealings with us throughout our extensive contact in the past year. 

Best Regards and a Merry Christmas
Alfred and John Donovan

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