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SAKHALIN ENERGY NIGHTMARE CONTINUES: LEGAL ACTION BY SEIC EMPLOYEES AGAINST THE COMPANY

By John Donovan

Seven LNG employees of Sakhalin Energy Investment Company (SEIC) in which Shell retains a 27.5% stake are taking legal action against SEIC for breaching Russian Federation Labor code.

SEIC, now owned by Gazprom, has been officially notified by the Sakhalin RF Oblast Labour Department of the breach. John Black, SEIC Legal Counsel received the official notification from the head of the Department.

We plan to publish later this month full information from an extensive dossier which includes some 120 SEIC internal emails detailing SEIC management deliberately breaking Russian Federation Law, infringing human rights, removing civil liberties and putting the lives of employees in danger. We understand that before the employees took legal action, they tried to resolve the matter with management and relevant local authorities. The damning dossier contains all correspondence between Russian Federation authorities and SEIC Legal/HR. It includes comment from senior SEIC management arrogantly dismissing the Russian Federation Labor Departments objection.

One email from senior management states:

“the RF Labor Departments objection is only important if the matter ends up in Court”.

Since a court hearing is imminent, by Shell managements own admission, the matter has indeed become important.

The emails provide proof of a breathtaking disregard of Russian Law, including the condoned use of illegal contracts.

As an appetiser of what is to come, we have printed below extracts from SEIC internal email correspondence indicating the chain of events. Basically SEIC HR asked the legal department for advice. SEIC Legal sided with the Russian Federation Authorities. SEIC HR ignored their advice.

1st Email – SEIC HR Advisor asking SEIC legal for clarification

Ladies,
I would like to record the meeting and at the same time get the process including payment process absolutely clear, so I can start preparing the presentations in LNG. In case we have to go to court I want to have a clear audit trail and be able to explain how we approached the problem. This also of course for our internal comms processes.
I am still a bit unsure on how best to describe the second option…have tried….but please correct where I go wrong. Much appreciated.
Same for the payment process…donot spare me….I rather suffer know than when I stand in front of the troops ! 

2nd Email –  SEIC Legal Employee says they should follow RF Labor Departments advice

Labour Department was contacted and their advice/recommendation (not mandatory requirement, but if there is a court dispute, Labour Department is usually involved as expert in those matters where law is silent or gives room for equivocation) and I gave my final view that I strongly recommend to follow the advice given by Labour Department.
Now the issue on HR side (HR in general, I do not purpose any specific HR function) – making the text of announcement, calculations, staff communication etc.
If I can help with anything else, please let me know, but I see I gave clear response to your request. 

3rd Email – Senior Manager acknowledges non RF compliance and allows the operation to prevail. Name edited.

All,
Apologies for inconvenience. LNG HR ADVISOR is not here at present but working from LNG. He will set a new meeting with you all to finalise this issue.
I do however understand from him that especially the view from HR is not coinciding with view of Legal. 

4th email –  HR response – Agreeing with breaking Russian Federation law.

We do support our original point of view.

5th email – HR showing concerns about decision

…this is becoming a bit embarrassing. Could you please provide me with a text I can communicate at the LNG plant. If we are working against the law we have a serious problem. Things are brewing there….and NOT only among Russian staff. If an accident happens with somebody who is on duty and we donot have our act together ….well I do not even want to think about that. I expect an investigation/audit soon at the LNG plant which will also focus on the duty roster. 

6th email – HR showing concerns about decision

I assume it cannot wait until I am back as this first group collectively (and probably in their right) donot want to sign/agree. They are however a reasonable group of people and not “hardliners”.  We must avoid a situation where e.g. an accident happens at the LNG plant and the labour inspection finds that we have staff working there under illegal contracts….just to name one nightmare.

7th email – Senior HR person says to continue with operation as it’s only important in court and…

QUOTE “4) If an individual after the warning still does not comply/want to work on duty, he will be dismissed via an official order.”

According to documents being filed with the court, Mark Wojcik, SEIC General Manager HR, personally signed and implemented a policy which broke Russian Federation Labor Code, breached human rights, removed civil liberty and put employees’ lives in danger. Anyone who objected to this illegal operation was threatened with the sack as is plain from the email extract above. Wojcik was the recipient of all correspondence from the employees’ legal team: “Markarov Legal Services”.

An internal investigation has already been carried out at SEIC. The LNG HR advisor was removed and is being transferred overseas. Mark Wojcik is also being transferred overseas. Wojcik and the LNG HR advisor are both on secondment from Shell. Royal Dutch Shell secondees have allegedly exploited the legal rights of local Russian Nationals. 

We understand that Jeroen van der Veers legal counsel, Roger Parkins is aware of this matter which suggests the same applies to van der Veer. Its importance cannot be overstated. The blatant deliberate multiple breaches of Russian Federation Law could provide the pretext for further renegotiation by the Putin regime of Shell’s already substantially diminished stake in a mega project plagued with problems, mostly due to the mendacity and gross incompetence of Shell/SEIC management.

Shell lost its majority stake holding after the author of this article supplied the Russian authorities with evidence in the form of leaked Shell internal documents, which allowed Oleg Mitvol, the so-called “Kremlin attack dog” to threaten a multibillion dollar lawsuit. Shell surrendered its majority shareholding in response to the threats. According to a report in The Wall Street Journal last week, Shell lost 1.1 billion of its reserves as a consequence of running up the white flag.

The prospect of a further renegotiation and further loss of reserves will not be welcome. The new evidence of a blatant disregard of putting the lives of employees in danger, shows that the denials issued by Shell last week to The Sunday Telegraph and Channel 4 News about North Sea platform safety was just another large helping of Shell PR hogwash.  As always, the company puts production and profits first, in line with its infamous “Touch Fuck All” safety culture. 

RELATED EMAIL CORRESPONDENCE WITH MICHIEL BRANDJES, COMPANY SECRETARY AND GENERAL COUNSEL CORPORATE OF ROYAL DUTCH SHELL PLC

—–Original Message—–
From: John Donovan [mailto:[email protected]]
Sent: dinsdag 5 februari 2008 11:28
To: Brandjes, Michiel CM RDS-LC
Cc: van der Veer, Jeroen J RDS-CEJV; Brinded, Malcolm A RDS-ECMB; [email protected]; [email protected]; Ruddock, Keith KA SI-LSEP

Subject: SAKHALIN ENERGY NIGHTMARE CONTINUES

Dear Mr Brandjes

I have printed below a self-explanatory draft article. Shell/SEIC is invited to point out any factual inaccuracies in the article. We will delete any information which you state is categorically untrue. You are also invited to provide comment for publication with the article on an unedited basis. No other publisher offers Shell this facility. If we do not hear from Shell / SEIC today, we will assume that the basic facts are true and unchallenged and will state as such in the article. Dependent on your response we may take these matters up with the Russian Authorities to seek comment.

I am please to say that our website is an increasingly powerful magnetic for insider information, as demonstrated by the fact that since 21 December, there have been over 20 articles and features in the mainstream news media based on information we have provided from our growing network of insider sources. This includes the “Channel 4 News” feature broadcast on TV Friday evening relating to Shell safety. I also had an interesting conversation with the BBC yesterday on the same subject.

Best Regards
John Donovan
Royaldutchshellplc.com

(THE DRAFT ARTICLE SUPPLIED AS PART OF THE EMAIL WAS FUNDAMENTALLY THE SAME AS PUBLISHED ABOVE. IT IS PUBLISHED AT THE FOOT OF THIS ARTICLE)

Further email to Mr Brandjes: Tue 05/02/2008 11:59

Dear Mr Brandjes

I should have added that there is no problem if you need more time before responding. If so, please let me know today. We are more interested in accuracy and fairness than in speed.

Best Regards
John Donovan
Royaldutchshellplc.com

EMAIL RESPONSE FROM MICHIEL BRANDJES

From: michielbrandjes
Sent: 06 February 2008 07:37
To: [email protected]
Subject: RE: SAKHALIN ENERGY NIGHTMARE CONTINUES
Sensitivity: Private
Dear Mr. Donovan,
 
This is one of those matters where Shell does not see a need to respond to you. However, 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 materials forwarded 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,
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

Email response to Michiel Brandjes from John Donovan, copied to Jeroen van der Veer etc as per initial email…

Wed 06/02/2008 08:26

Dear Mr Brandjes

I note the refusal to accept “the accuracy of the materials”. There is one silly mistake introduced by me. Sakhalin is of course not in Siberia. So we know that the information was inaccurate to that extent.

When we supplied Shell with an email purported to be from David Greer, you pointed out that it was a forgery. That matter turned into a major story because although it was indeed a forgery, the astonishing information supplied by the SEIC insider source turned out to be devastatingly true and led to the resignation of David Greer.

In this instance the important point is that you have not denied the fundamental fact that 7 SEIC employees are suing Shell on the basis set out. If a legal action had not been brought you would have stated as such and that would have been the end of the story.

Consequently, I am proceeding on the basis that litigation is underway on the basis stated, but that Shell disputes the accuracy of the materials. If Shell disputes my conclusion, then please let me know immediately.

Kind Regards
John Donovan
Royaldutchshellplc.com

As no further response was received from Mr Brandjes, readers can draw their own conclusions.

DRAFT ARTICLE SENT TO MICHIEL BRANDJES: SAKHALIN ENERGY NIGHTMARE CONTINUES By John DonovanSeven LNG employees of Sakhalin Energy Investment Company (SEIC) in which Shell retains a 27.5% stake are taking legal action against SEIC for breaching Russian Federation Labor code. SEIC has been officially notified by the Russian Federation of the breach.

We will shortly publish full information from an extensive dossier which includes some 120 SEIC internal emails detailing SEIC management deliberately breaking Russian Federation Law, infringing human rights, removing civil liberties and putting the lives of employees in danger. We understand that before the employees took legal action, they tried to resolve the matter with management and relevant local authorities. The damning dossier contains all correspondence between Russian Federation authorities and SEIC Legal / HR. It includes comment from senior SEIC management arrogantly dismissing the Russian Federation Labor Departments objection.

One email from senior management states:

“the RF Labor Departments objection is only important if the matter ends up in Court”.

Since a court hearing is imminent, by Shell managements own admission, the matter has indeed become important.

The emails provide proof of a breathtaking disregard of Russian Law, including the condoned use of illegal contracts.

As an appetiser of what is to come, we have printed below extracts from SEIC internal email correspondence indicating the chain of events.  Basically SEIC HR asked the legal department for advice. SEIC Legal sided with the Russian Federation Authorities. SEIC HR ignored their advice.

1st Email – SEIC HR Advisor asking SEIC legal for clarification

Ladies,
I would like to record the meeting and at the same time get the process including payment process absolutely clear, so I can start preparing the presentations in LNG. In case we have to go to court I want to have a clear audit trail and be able to explain how we approached the problem. This also of course for our internal comms processes.
I am still a bit unsure on how best to describe the second option…have tried….but please correct where I go wrong. Much appreciated.
Same for the payment process…donot spare me….I rather suffer know than when I stand in front of the troops ! 

2nd Email –  SEIC Legal Employee says they should follow RF Labor Departments advice

Labour Department was contacted and their advice/recommendation (not mandatory requirement, but if there is a court dispute, Labour Department is usually involved as expert in those matters where law is silent or gives room for equivocation) and I gave my final view that I strongly recommend to follow the advice given by Labour Department.

Now the issue on HR side (HR in general, I do not purpose any specific HR function) – making the text of announcement, calculations, staff communication etc.

If I can help with anything else, please let me know, but I see I gave clear response to your request. 

3rd Email – Senior Manager acknowledges non RF compliance and allows the operation to prevail. Name edited.

All,
Apologies for inconvenience. LNG HR ADVISOR is not here at present but working from LNG. He will set a new meeting with you all to finalise this issue.
I do however understand from him that especially the view from HR is not coinciding with view of Legal. 

4th email –  HR response – Agreeing with breaking Russian Federation law.

We do support our original point of view.

5th email – HR showing concerns about decision

…this is becoming a bit embarrassing. Could you please provide me with a text I can communicate at the LNG plant. If we are working against the law we have a serious problem. Things are brewing there….and NOT only among Russian staff. If an accident happens with somebody who is on duty and we donot have our act together ….well I do not even want to think about that. I expect an investigation/audit soon at the LNG plant which will also focus on the duty roster. 

6th email – HR showing concerns about decision

I assume it cannot wait until I am back as this first group collectively (and probably in their right) donot want to sign/agree. They are however a reasonable group of people and not “hardliners”.  We must avoid a situation where e.g. an accident happens at the LNG plant and the labour inspection finds that we have staff working there under illegal contracts….just to name one nightmare.

7th email – Senior HR person says to continue with operation as it’s only important in court

and QUOTE “4) If an individual after the warning still does not comply/want to work on duty, he will be dismissed via an official order.”

According to documents being filed with the court, Mark Wojcik, SEIC General Manager HR, personally signed and implemented a policy which broke Russian Federation Labor Code, breached human rights, removed civil liberty and put employees’ lives in danger. Anyone who objected to this illegal operation was threatened with the sack as is plain from the email extract above.

An internal investigation has already been carried out at SEIC. The LNG HR advisor was removed and is being transferred overseas (a novel concept being removed from Siberia, rather than the other way round). Mark Wojcik is also being transferred overseas.

We understand that Jeroen van der Veers legal counsel, Roger Parkins is aware of this matter which suggests the same applies to van der Veer. Its importance cannot be overstated. The blatant deliberate multiple breaches of Russian Federation Law could provide the pretext for further renegotiation by the Putin regime of Shell’s already substantially diminished stake in a mega project plagued with problems, mostly due to the mendacity and gross incompetence of Shell/SEIC management.

Shell lost its majority stake holding after the author of this article supplied the Russian authorities with evidence in the form of leaked Shell internal documents, which allowed Oleg Mitvol, the so-called “Kremlin attack dog” to threaten a multibillion dollar lawsuit. Shell surrendered its majority shareholding in response to the threats. According to a report in The Wall Street Journal last week, Shell lost 1.1 billion of its reserves as a consequence of running up the white flag.

The prospect of a further renegotiation and further loss of reserves will not be welcome.

The new evidence of a blatant disregard of putting the lives of employees in danger, shows that the denials issued by Shell last week to The Sunday Telegraph and Channel 4 News about North Sea platform safety was just another large helping of Shell PR hogwash.  As always, the company puts production and profits first, in line with its infamous “Touch Fuck All” safety culture. 

DRAFT ENDS

 

 

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