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Shell’s North Sea history of safety violations, blackmail and blacklisting

Paying For The PiperBy John Donovan

Violation of this court order, Shell warned, could result in the families and survivors concerned being ‘subject to bodily imprisonment: Faced with such legal harassment, even case-hardened lawyers involved in the proceedings reeled in disbelief

A book first published in 1996, “PAYING FOR THE PIPER”, provides more evidence of the dark side of Royal Dutch Shell, which also reflects on its current Chief Ethics & Compliance Officer: Mr. Richard Wiseman.

The book reported on the industrial relations crisis which erupted after the world’s worst offshore disaster in which 167 oil workers died on 6 July 1988 in an explosion and fire on the Piper Alpha North Sea oil production platform, operated by Occidental Petroleum.

Extract from the Introduction

The strikes which followed in 1989 and, more comprehensively, in 1990,were of a very special type. They did not immediately seek direct material gain. Rather, they questioned the totality of assumptions upon which the system of offshore production had been based: most fundamentally managerial authority and legitimacy in the area of health and safety. By 1990 the overall death toll of the offshore industry since its inception had reached over 400. This made it the most dangerous industry in the UK.

The book also covers the consequences of the Shell Cormorant Alpha disaster in February 1992 when eleven oil workers were killed when a helicopter on route from the Cormorant Alpha platform to the Safe Supporter “flotel” just 200 yards away, crashed into the sea immediately after take-off.

It reveals how Richard Wiseman was involved in trying to fend off litigation from the relatives of the victims and the survivors. As will be seen, “Shell sought and obtained interim interdicts in Scotland and injunctions in England against bereaved families and survivors, some 63 individuals in all. They were to be prevented from pursuing an award in the American courts. Violation of this court order, Shell warned, could result in the families and survivors concerned being ‘subject to bodily imprisonment: Faced with such legal harassment, even case-hardened lawyers involved in the proceedings reeled in disbelief”.

After all the threats and harassment directed at the plaintiffs, Shell eventually settled the claims, just as they have each time I have sued the company.

I also note that Shell engaged in blacklisting tactics to intimidate its employees. What a lovely company.

PAYING FOR THE PIPER

AUTHORS:

Charles Woolf son is Senior Lecturer in Industrial Relations, University of Glasgow.
John Foster is Professor of Applied Social Studies, University of Paisley.
Matthias Beck is Lecturer in Economics, University of St Andrews.

ISBN No. 0-7201-2348-8

Extracts from page 420 to page 423 relating to the Cormorant Alpha disaster:

The Fatal Accident Inquiry heard that, in contravention of these regulations, it was not the current practice on any Shell installation to inform the standby vessel of helicopter movements (Jessop, 1993: para 26.4). The Cormorant Alpha installation manager, whose ultimate responsibility it was, admitted that he did not ensure that these regulations were complied with. Nor did the senior Shell Helicopter Landing Officers who carried out periodic audits of the on- board Helicopter Landing Officers.

The decision of the Procurator Fiscal’s office not to prosecute, despite Shell’s apparent admission of breach of regulations with respect to standby vessel precautions, was surprising. The relatives of the victims and the survivors embarked on litigation against Bristow in the UK, and then in the courts of Texas and Louisiana against Shell and Exxon, Esso’s US parent company. They were seeking compensation beyond that which, under the outmoded Warsaw convention on aviation accident compensation, restricts payment to those involved in a civil aircraft disaster to a sum in the region of £90,000. With the prospect of US litigation, Shell sought and obtained interim interdicts in Scotland and injunctions in England against bereaved families and survivors, some 63 individuals in all. They were to be prevented from pursuing an award in the American courts. Violation of this court order, Shell warned, could result in the families and survivors concerned being ‘subject to bodily imprisonment:

Faced with such legal harassment, even case-hardened lawyers involved in the proceedings reeled in disbelief. Shell confirmed: ‘the action reflects the company’s belief that the appropriate forum for a resolution of this matter is Scotland:4o Any reference to imprisonment, said Shell, was ‘legal jargon.

Shell’s attempt to block compensation cases in the US courts proved not entirely successful and the initial interdicts sought in the Scottish High Court and south of the border were recalled.41 Then, in late December 1994, a Texas district court judge in Brazoria County ruled that Exxon ultimately controlled the Shell-Esso joint venture operating installations like Cormorant Alpha and was responsible for its aviation policy. Judge Neil Caldwell ruled that Exxon could be held to conduct its business from the State of Texas, despite the company’s attempt to avoid jurisdiction being granted by ‘moving’ its registered headquarters in the US and other legal manoeuvres (Caldwell, 1994).42 In Judge Caldwell’s view there appeared to be:

reasonable grounds to allege that the co-venturers SUKL/EEPUKL (Shell UK Ltd/Esso Exploration and Production UK Ltd.) appear to have been responsible for the crash of the G- TIGH because of their unrelenting push to reduce NPT (non-productive time) by way of reducing WOW (waiting on weather). By using the Super Puma G- TIGH (upgraded equipment) in storm conditions when WOW had previously caused NPT (non-productive time). the co-venturers (Shell/Esso) achieved their goal of reducing NPT and, not coincidentally, caused the death of eleven (11 ) men and permanent disability of a remaining six (6). (1994: para. 53)

The ruling potentially opened the way for US-level settlements to be awarded to the victims of the disaster, although further legal challenges from Shell/Esso continued.

In April 1995 Shell/Esso and the relatives and survivors returned to the Court of Session in Edinburgh. The companies had obtained an interdict order prohibiting the survivors and relatives from taking any steps to secure transfer of the US proceedings from a Texas State court to a federal court. Now the survivors and relatives asked for the interdict against them to be withdrawn, as they had been threatened that if the transfer went ahead, they would be summoned for breach of interdict. There was also the threat of a £1 million expenses claim for costs incurred in defending the US proceedings. US attorneys acting for the deceased were described by Shell’s QC as ‘dogs straining at the leash’.The legal moves were justified as getting ‘the handlers to order the dogs to sit down’.43 Shell did attempt, unsuccessfully as it turned out, to have the interdict enforced. An article in Shell’s house magazine for employees by Richard Wiseman, Head of Shell UK, Legal Division, put forward the company’s position: ‘We are not fighting Texas jurisdiction to avoid paying huge damages as has been alleged by the media on several occasions. Shell UK is a British company with no operations outside the UK.’44

The ability of such oil companies to persevere financially, through long and tedious court battles, is unfortunately greater than that of the pursuers or plaintiffs. Judge Caldwell’s initial determination of jurisdiction in favour of the latter could not detract from this crucial asymmetry. In the end, when faced with the imminent prospect of US court proceedings going ahead, Shell proposed an out-of-court settlement which was reached in early 1996, nearly four years after the disaster. As yet, the size of this settlement remains undisclosed. While the families received substantially greater compensation than they would have obtained in the British courts, the imposition of ‘gagging clauses’ left unanswered vital questions about corporate culpability.

From page 425

In 1996 the role of helicopters in the North Sea became a renewed source of controversy. This followed the announcement by Shell, subsequently temporarily rescinded, that the Search and Rescue facility provided by the Bell 212 on the Safe Gothia for the Brent field was to be withdrawn, following completion of the refurbishment programme. This facility had played a major role in medical evacuation and rescue over the years, including the Cormorant Alpha disaster. It was to be replaced by reliance on the Coastguard S-61, located in Sumburgh, nearly one hour’s flying time away. Shell’s primary reason for withdrawal was cost considerations amounting to £4 million per year, a burden not shared by other operators using the facility.48

From page 438

The stick was the weapon that the employers had always used, fear, in particular of blacklisting and the threat of unemployment. On Mobil’s Beryl Alpha, overtime working was again compulsory, while the company had threatened a downmanning if the workforce failed to cooperate in meeting overtime requirements.2 This kind of pressure was crucial in repressing the remaining militancy as 1990 drew to a close. Those workers who now worked offshore knew full well that hundreds of their colleagues remained stranded ‘on the beach’ with no immediate prospect of reinstatement. It was a salutary reminder of where the ultimate balance of power in the industry lay. Shell’s OPRIS bar remained in place for those who had taken action in the East Shetland Basin, although some had managed to trickle back offshore, working for other contractors elsewhere in the North Sea. But not only construction workers had to pay the price for activism. One hundred and seven catering workers were blacklisted by Shell and effectively prevented from re-employment in any other part of the North Sea. Shell had commented that it ‘did not see why other operators should be obliged to import problems onto their platforms:3

From pages 442 & 443

The only glimmer of optimism for the offshore workforce was the announcement by Shell of a ‘goodwill gesture’. The ‘temporary OPRIS bar’, the offshore blacklist, would be lifted by the company from 1 January 1991. For those languishing onshore, it meant that a four-month punishment period of unemployment now had an end in sight. Shell’s action was part of the employers’ attempt to build on the post-Cullen optimism that a ‘new era’ was about to begin in the North Sea. More immediately, a number of Opposition MPs had taken every opportunity to remind the government that the plight of the dismissed workforce remained an obstacle to any new beginning off-shore. At a private meeting with Colin Moynihan MP, who had now replaced Morrison as the Minister responsible for oil, Ronnie McDonald had reiterated the need for Shell’s blacklist to be rescinded before any progress could be made towards restoring industrial peace offshore.

Moynihan had promised to make contact with Shell management. Shell’s ‘goodwill gesture’ came the following week. As a further measure to restore its benevolent face, Shell announced a new anti-victimization initiative. In future, all decisions which resulted in the dismissal of a safety representative would be reviewed by a senior onshore Shell executive along with the respective contractor’s management. As a Shell spokesperson put it, the company wished to start the New Year with ‘a clean slate … mindful of criticisms of politicians and others to which we are not impervious’.15

Welcome though these developments were to offshore workers, they were offset by OCC’s signals that the joint employer/union arbitration panels would not now be going ahead. The employers felt these panels were not capable of dealing with the situation where there had been mass dismissals. If there was to be a single decisive illustration of the impotence of the trade unions in the face of unilateral employer diktat, this was surely it. Meanwhile, despite Shell’s ‘no victimization’ announcement, two vocal safety representatives on the Brent Bravo, one of them, Jake Boyle, a prominent OILC activist, were soon to be inexplicably ‘down-manned’. Brian Ward, Shell’s Production Director, had been quoted in the company press release on the new ‘anti-victimization’ policy: ‘The revised procedures should go a long way towards reassuring those who have been concerned about rumours of victimisation in the past, particularly on safety. Safeguards for Safety Representatives are particularly important.’16 In the North Sea, however, it was business as usual.

EXTRACTS END

The Brent Bravo “Touch Fuck All” scandal followed…

IF MR RICHARD WISEMAN WISHES TO PROVIDE ANY COMMENT FOR UNEDITED PUBLICATION, IT WILL APPEAR HERE.

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