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SHELL BUSINESS PRINCIPLES – GENUINE OR CON TRICK?

By John Donovan

Shell has for many years supposedly operated within an ethical code which, according to its current shell.com webpage on the subject, was first published in 1976.

This does not tally with the relevant pages in “A HISTORY OF ROYAL DUTCH SHELL, Volume 3,” about the history of the code – known in the 1990’s as the Shell Statement of General Business Principles.

Apparently they were first drafted in 1962, restated and first published in 1976, made freely available to the public from 1981 and reformulated in 1997, for the first time including human rights.

(According to the current version, they were last updated in 2005.)

The principles pledge “safe conditions of work” (Page 243).

In reality Shell management operated a “Touch F*** All” safety policy on North Sea platforms, which cost Shell workers their lives. Safety records were routinely falsified. After the Brent Bravo explosion, Shell admitted responsibility for avoidable deaths and received a record breaking fine.

According to page 307/8, relating to Shell business principles, criticism from Shell employees “should be considered an asset…” 

In reality, Dr John Huong, who worked diligently for Shell for decades as a production geologist, was sacked after criticizing deliberate deception of Shell shareholders over claimed oil and gas reserves. Dr Huong is a deeply religious man with a conscience, so he did not fit in. The exact opposite of The Reverend Fraudster Sir Philip Watts.

Eight Royal Dutch Shell companies subsequently joined forces to obtain an injunction in an unsuccessful attempt to stop this website from publishing criticism emanating from Dr Huong. So much for another claimed virtue of the code: transparency. Shell buried Dr Huong in injunctions and threats of imprisonment. 

A Shell executive, Mr John Johns, suffered a similar fate for his misplaced faith in the claimed principles.

Both Shell employees were deceived by comments and pledges about the principles made by senior executives, including Mark Moody-Stuart.

EXTRACTS FROM PAGE 357

Mark Moody-Stuart, Group managing director, stated in 1996 that the public at large now demanded to be convinced that a company practised what it preached. This had clear implications for how Shell companies put their messages across: ‘a fine line had to be steered between a willingness to listen to others and maintaining the courage of one’s convictions’.

The following is a reference to the code in an extract from a letter that Moody-Stuart sent to the Guardian in response to their publication of an extraordinary article: “Unlovable Shell: Goddess of Oil” in November 1997:

“the Statement provides, for our employees to follow and for the outside world to judge us by, an ethical framework which is mandatory, not optional: just having those principles is not enough.  In the past: an oil company could say “trust me” and expect that to be enough.  Today, people say, “tell me” “listen to me” “show me”.  Trust has to be earned by transparency.  That’s one of the most important lessons we’ve learned in Shell”.

(Link to more extracts from the Moody-Stuart letter, published by the Guardian)

The supposed existence of and undying commitment to the ethical code was also used to bolster confidence in the integrity of the oil giant with oversight authorities.

For example, Form-20F declarations filed with the U.S. Securities & Exchange Commission, which contained false information about the volume of Shell’s hydrocarbon reserves, made repeated reference to Shell’s business principles. Each such return was signed by a Shell executive director.

In reality, under the management of Moody-Stuart, “value creation teams” had been formed to conjure up proven oil and gas reserves from thin air. The deception, fraud, lies and cover-up, resulted in the biggest scandal thus far to engulf the company.

Many companies doing business with Shell no doubt felt, as we did, an extra sense of protection knowing that the company supposedly operated within an ethical framework.

Soon after it became apparent that a Shell executive had repeatedly stolen ideas we disclosed to him in strictest confidence, we raised the subject of the code (and continued to do so through the years).

Instead of honouring the pledge’s made in the code, Shell decided to back the thoroughly dishonest executive who had rigged a contract tender process so that a company which had not run in the race was miraculously awarded the contract. The company had a close association with the Shell executive.

We had rung alarm bells far and wide during Moody-Stuarts reign, warning that Shell management was unethical. 

This is an extract from a leaflet distributed to Shell employees at Shell HQ buildings in London and The Hague:

I caution all businesses contemplating trading with Shell UK Ltd to be on their guard. In my experience, they are masters of double talk and double-dealing. It has at times proved almost impossible to extract the truth from this company.

Bearing in mind that Shell has pirated a series of ideas that Don Marketing disclosed to them in confidence, I take the view that they should fly a “skull and crossbones” flag over Shell-Mex House as fair warning to all who enter.

A press statement released by Shell gives some idea of the scope of our activities. We were told that it was drafted by an irate Shell Chairman.

People must have thought we were unhinged, but subsequent events described above, including the forced resignations of three Royal Dutch Shell executive directors, proved that our warnings were well founded.

We wondered at the time whether legal action could be brought against Shell based on non compliance with the pledges contained in the code?

Hence the self-explanatory correspondence below:

Letter to Shell General Counsel and company Secretary, Mr Richard Wiseman, dated 2 June 1997

Initial response letter from Mr Wiseman dated 3 June 1997

Considered response letter from Mr Wiseman dated 5 June 1997

Faxed letter to Mr Wiseman (Shell Legal Director) dated 22 April 2004

Response email from Mr Wiseman also dated 22 April 2004.

It struck me that although Shell said in its very carefully crafted response that “there was no intention to create a document for use in the court”, that does not necessarily rule out the possibility that the promotion of the code, on a global basis (e.g. the Profits & Principles campaign), has not created a right to bring legal action when Shell fails to honour its pledges.

In other words, although it might not have been Shell’s intention to create a document for use in the Courts, perhaps they inadvertently did so?

If there is no legal redress, then such codes amount to no more that a confidence tricksters charter when used by unethical multinationals, such as Royal Dutch Shell, to pretend otherwise.

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