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Shell’s dismal track record on transparency

“Shell is very different from Enron. We were criticized for that some time ago and I’’m glad we have a absolutely rock-solid way we do business. It’s all completely transparent, as far as Shell is concerned.”

By John Donovan

Following publication of my article Shell false pledges of transparency and openness contributors to this website have been accused of hating Shell. That is not the case.

Many of us do, however, take great exception to the hypocritical claims made by successive RDS Chairman and CEO’s over many years that Shell operates within an ethical code – the General Business Principles – which includes a pledge of transparency.

Shell Group Chairman Sir Mark Moody-Stuart preached transparency while conspiring with senior colleagues to hide information from Shell shareholders.

During a Bloomberg interview in 2002 with his successor Sir Phillip Watts, reference was made to transparency.

The following is an extract from his exchange with Guy Collins of Bloomberg on 8 February 2002: –

COLLINS: I want to ask you about Enron and any parallels there. Do you have any off balance sheet liabilities? Do you have trigger mechanisms in place that make you vulnerable to changes in the share price or credit ratings?

WATTS: Shell is very different from Enron. We were criticized for that some time ago and I’’m glad we have a absolutely rock-solid way we do business. And, if you read our annual report, you read our footnotes and all the details, everything is in there. It’s all completely transparent, as far as Shell is concerned.

The reality was very far removed from the pledges of transparency.

On 9 November 2003 Royal Dutch Shell Group Managing Director/Boss of Exploration & Production, van de Vijver, sent the following infamous email to the Group Chairman, Sir Philip Watts complaining that he was: –

becoming sick and tired about lying about the extent of our reserves issues and the downward revisions that need to be done because of far too aggressive/optimistic bookings.

The Shell reserves scandal burst into the public domain in January 2004.  Sir Phillip and van de Vijver were forced to resign.

Jeroen van der Veer was also complicit in the reserves scandal and as Bill Campbell (a retired Shell International HSE Group Auditor) will testify, also reverted to the Shell management cover-up culture in respect of the Shell Brent Bravo scandal.

His successor, Peter Voser became mired in cover-up scandals not only at Shell, but also at UBS Bank. See Peter Voser and the UBS scandals.

I had hoped for better things from Ben van Beurden on the transparency front, but when it came to choosing between financial considerations and transparency, he instructed Simon Henry not to co-operate with police searching Shells’ HQ in February of this year.

(Mr. Van Beurden is heard on the intercept warning Henry not to volunteer any information that is not requested if approached by the police and discussing the ramifications for the company’s share price.)

An approach directly opposite to being transparent.

Articles ends

The above includes some extracts from my 2011 article: Shell is very different from Enron.

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