(Graphics from the Guardian article: Unloveable Shell, the Goddess of Oil)

“Although Shell has extracted more than £30bn from the area, the people who live on the land survive on less than 60 pence a day, with barely any roads, schools or hospitals. Many of the Ogoni people who have spoken out against this scandal have been killed by the Nigerian state.”

By Johann Hari

At the moment, foreign victims of UK corporations are left with almost no ability to answer back

Article first published: 08 June 2006

At first glance, it seems almost comically boring, a triple dose of political Mogadon. The Company Law Reform Bill appeared for its second reading in the House of Commons yesterday, and although it’s easy to see why the biggest reform of Britain’s corporate rules in 150 years is a big deal, it’s hard to keep your mind focussed on the 900 pages of mind-numbing detail – until you realise one thing. There is a clear path running from these dry, jargon-packed pages to a human rights campaigner hanging by his neck on a rope in Nigeria and to the trashed rainforests of Indonesia.

The best guide on this long and bloody road is Hannah Ellis, chair of Britain’s Corporate Responsibility Coalition (Core). She is campaigning – with the support of more than 200 MPs and all the major human rights organisations – to have the Bill amended to include a very basic principle. “At the moment, a British company director is held responsible for losing profits, or for being corrupt,” she says. “So why shouldn’t he be held responsible for environmental or human rights abuses his company commits too?” Ellis wants to see every British company legally required to audit the impact they have on human rights and the environment every year – at the moment, many don’t even bother to look – and, crucially, for the victims of any abuses to be able to sue them in a British court.

Enter bloodied victims, stage left. At the moment, the foreign victims of British corporations are left with almost no ability to answer back. Ellis suggests a crop of corporations which might face legal action if the law was amended to make them answerable for killings and burnings abroad.

One of the most obvious contenders is Shell for its oily behaviour in the Niger Delta. Ken Saro-Wiwa, a human rights campaigner, described the effect Shell had on his community back in 1992: “Oil exploration has turned Ogoni into a wasteland: lands, stream and creeks are totally and continually polluted; the atmosphere has been poisoned.

“Acid rain, oil spillages and oil blowouts have devastated Ogonia territory.”

Not only has their environment been destroyed; the people of the Niger Delta have seen none of the profits. Although Shell has extracted more than £30bn from the area, the people who live on the land survive on less than 60 pence a day, with barely any roads, schools or hospitals. Many of the Ogoni people who have spoken out against this scandal have been killed by the Nigerian state. Shortly before he was seized on ludicrous trumped-up charges, Saro-Wiwa said: “This is it. They are going to arrest us all and execute us all for Shell.” Although Shell vociferously denies responsibility, their close business partner swiftly hanged Saro-Wiwa, and a major critic of the corporation was conveniently silenced.

It has not stopped. In a recent report, Amnesty International said that 10 years on, government security forces – protecting the interests of Shell and other oil companies – are still destroying villages that cause trouble. Even Shell Nigeria’s own former head of environmental studies, J P Van Dessel, said in 1996: “It is clear to me that Shell was devastating the area.” If the Company Law Reform Bill is amended,” Ellis says, “the Ogoni people could begin to make Shell answer their charges in a British court.

There are other alleged crimes being committed by British corporations, Ellis says, that will rebound even more terribly on us at home. For example, the world’s second-largest rainforests, in Indonesia, are being systematically destroyed by British corporations, in an act of environmental vandalism that will make the effects of global warming on our rainy island even more extreme.

Friends of the Earth recently documented that the Indonesian island of Sumatra has lost 70 per cent of its rainforest cover in the past few decades due to logging – and for what? To clear space to make palm oil, a product that you certainly have in your lipstick, bars of soap, margarine and bread. Britain is the second-biggest consumer in Europe. At the current rate of destruction, the rainforest will be almost gone in 12 years, and the orang-utan, one of our closest cousins, will be extinct.

But can the corporations responsible be held accountable under British law? No. Not our problem, guv. (Not until hurricane season, anyway). Up until very recently, the UK’s largest supermarket, Tesco, did not use any of its £2bn-a-year profits to figure out if the palm oil it sells you is sourced from the wrecked rainforests of Indonesia. They will “be ready to participate” when “the issues are clear”, they said in their explanation of why they refused to make the issue clear by checking their own supply lines. Only after massive pressure did they admit that some of their palm oil is from uncertain sources and make rote promises to look into it – but the ongoing ambiguity could make them another candidate for prosecution for potential environmental crimes if the current Bill is reformed.

At the moment, the proposed Bill asks company directors to “consider” the environmental and human rights consequences of their actions, but it puts in place no legal measures – none – to make them do so. This is the classic New Labour approach to corporate abuse, which is to stress voluntary adherence to voluntary codes. But how many people would follow Asbos if they were voluntary? Has anybody suggested the new measures on knife crime should be up to the whim of the offender, on the grounds that young thugs can be “trusted” to see the rules are “in their own best interests”?

Corporate CEOs will only ever respond to the bottom line, and it is preposterously naïve, at best, to suggest otherwise. If they do not deliver maximum profits to their shareholders, they will be sacked and replaced with somebody who will. The only way to make them behave better is to make it cost. A lot. Mega-bucks prosecutions from their victims in the corruption-free British courts are one way to make it happen. But the Government – bowing to corporate pressure – still clings to its belief in a unified globalised economy where there is only fractured, localised legal responsibility. This is virtually a charter for corporate abuse.

At his show-trial, Ken Saro-Wiwa warned: “I and my colleagues are not the only ones on trial. Shell is here on trial too … for there is no doubt in my mind that the ecological war that the company has waged in the Delta will be called into question sooner or later, and the crimes of that war will be duly punished.”

If we amend that dry, dull Bill sitting in the House of Commons, we may yet wring some hope from Wiwa’s dying cry.

j.hari@independent.co.uk

The Independent on Sunday

Sunday, 5 December 2010: By Andy Rowell and Eveline Lubbers

Ken Saro-Wiwa was framed, secret evidence shows

Compelling new evidence suggests the Nigerian military killed four Ogoni elders whose murders led to the execution of the playwright and activist Ken Saro-Wiwa in 1995.

The evidence also reveals that the notorious military commander Lieutenant-Colonel Paul Okuntimo, whose troops were implicated in murder and rape, was in the pay of Shell at the time of the killings and was driven around in a Shell vehicle.

Since the time of Saro-Wiwa’s death, Shell has insisted that it had no financial relationship with the Nigerian military, although it has admitted paying it “field allowances” on two occasions. It has consistently denied any widespread collusion and payments. However, The Independent on Sunday has gained exclusive access to witness accounts that were to be used in evidence in the case of Wiwa vs Shell, brought by Ken Saro-Wiwa’s family. The case was settled last May for $15.5m, just days before it was due to start in New York. The settlement meant the testimonies were never made public.

They provide fresh insight into Shell’s financial and logistical involvement with the Nigerian military and with Lt-Col Okuntimo.

One of the key witnesses due to testify was Boniface Ejiogu, Lt-Col Okuntimo’s orderly in the Internal Security Task Force, a coalition of army, navy and police. Mr Ejiogu testified to standing guard as victims were raped and tortured while Lt-Col Okuntimo was in command. Asked if he ever saw his commander receive money from Shell, he said he witnessed it on two occasions.

Mr Ejiogu described in detail how, just days before the Ogoni elders were murdered, he drove with Lt-Col Okuntimo to Shell’s base in Port Harcourt, where the officer received seven large bags of money. “I was there when other soldiers were carrying the Ghana Must Go bags,” he testified. The bags were so heavy the soldiers had difficulty carrying them, and one fell open. “The thing opened,” Mr Ejiogu said. “I saw it was money in bundles. He said, wow, this is money. I say, yes man, it is money.”

On another occasion, Mr Ejiogu witnessed four bags being given by a Shell security official to Lt-Col Okuntimo at the official’s house late at night.

Another witness, Raphael Kponee, also due to testify, was a policeman working for Shell. On a different occasion, he saw three bags being loaded into Lt-Col Okuntimo’s pick-up truck by his driver and another driver in front of the security building at the Shell base. Shell officials have admitted that money was paid to the officer, but purely as field allowances for his men, who were protecting Shell property in Ogoniland.

MrEjiogu also offers compelling evidence as to who may have murdered the four Ogoni elders at a meeting on 21 May 1994. Saro-Wiwa was due to speak but was turned away by the military. Mr Ejiogu said he heard Lt-Col Okuntimo tell his task force commander to “waste them… in the army you waste them is when you are shooting rapidly”.

Within 24 hours Saro-Wiwa was arrested and charged with the murders. It was implied that he had had the elders killed because of their moderate stance on Ogoni issues. Despite an international outcry, he was hanged in November 1995, following a sham trial described by the then British prime minister, John Major, as “judicial murder”.

A Shell spokesman said yesterday: “Allegations concerning Okuntimo and Shell are not new. There is a lack of any credible evidence in support of these allegations. Shell Petroleum Development Corporation and Shell at the time spoke out frequently against violence and publicly condemned its use.”

Selection of comments published with article:

ROYAL DUTCH SHELL SETTLEMENT OF WIWA COURT CASE

Monday, 12 July 2010

By James Moore, Deputy Business Editor

BP will not be able to rely on support from the British Government if it is the target of a takeover bid, it emerged yesterday, as rivals considered whether to take a tilt at the embattled oil company. A spokesman for the Department for Business, Innovation and Skills (DBIS) declined to comment on reports that the US oil major Exxon, has been in contact with the Obama administration over a possible bid for its beleaguered FTSE 100-listed rival. But a spokeswoman for the DBIS said: “Takeovers and mergers are commercial matters for companies.”

BP has been reeling ever since the Gulf of Mexico oil spill in April, with its stock-market value halving as a result. The shares closed last week at 364.75p, although that is still up by about a fifth from the low point reached when the company’s initial efforts to plug the leak had failed.

BP’s chief executive, Tony Hayward, has been in the Middle East to attempt to lure investors amid suggestions that a rival could use the company’s current weakness to launch a takeover bid. There has also been interest in the shares from Libya.

While the Government’s statement about merger policy suggests that Britain would allow a deal to pass, such a move would create huge controversy given the number of American takeovers of British companies thought to be in prospect over the coming months. The Conservative Party has traditionally adopted a hands-off approach when it comes to foreign deals. The coalition Government also stopped short of intervening on BP’s behalf after it was the subject of bitter criticism from President Barack Obama, whose handling of the disaster has been sharply criticised in the US.

However, a bid from an American company would still be likely to put pressure on Vince Cable, the Secretary of State for Business and a former chief economist at BP’s rival, Royal Dutch Shell.

Kraft’s hostile takeover of Cadbury sparked anger because the US food group was seen as having taken advantage of Britain’s laissez-faire approach when it comes to foreign takeovers, and because of the way that UK takeover rules work. As Kraft strung out its bid, Cadbury’s share register became filled with short-term speculators who were keen to net short-term profits by giving the green light to a takeover.

As the oil giant grapples with the financial effects of the spill, talks about an £8bn asset sell-off to help meet the costs of tackling the disaster in the Gulf are reportedly under way. Assets that could be disposed of include BP’s substantial stake in the giant Prudhoe Bay oilfield in Alaska. A sell-off of assets worth about $10bn (£6.6bn) would help to give some assurance to the markets about the company’s ability to meet the escalating costs of cleaning up after the leak.

However, the sale of a stake in Prudhoe Bay – one of BP’s prize assets which produces 390,000 barrels of oil a day – would be a bitter pill for the company to have to swallow.

Other sell-offs being considered by BP are its stake in the Argentinian oil producer Pan-American Energy, as well as its operations in Venezuela, Colombia and Vietnam.

SOURCE ARTICLE

Workers in Waveland, Mississippi, wear protective clothing as they clean up the oil that continues to wash ashore from the Deepwater Horizon oil spill: Getty Images

Transocean, the Swiss owner of the doomed Gulf of Mexico rig, faces the wrath of Americans as the cost of oil catastrophe reaches $3bn

By David Usborne

Sunday, 11 July 2010

Companies partnered with BP in developing the crippled Macondo well in the Gulf of Mexico could possibly also be targeted in the sweeping criminal investigation under way in Washington, Eric Holder, the US Attorney General, will say this morning.

Any switch of attention to the other players in the disaster, likely to include Transocean, owner of the doomed rig, may offer partial relief for BP which so far has been alone in taking the wrath of the White House and shouldering the costs of the catastrophe, which last week topped $3bn (£2bn).

“There are a variety of entities and a variety of people who are the subjects of that investigation,” Mr Holder says of his department’s probe, in an interview with Bob Schieffer of CBS, to be broadcast in the US today. “For people to conclude that BP is the focus of this investigation might not be correct.”

Transocean, based in Switzerland, saw its shares rise by more than 4 per cent on Friday at the news that a Louisiana judge had ruled against a request by the Obama administration to reinstate a six-month ban on deep-ocean drilling pending the end of the BP investigation.

But Transocean, which has grown in recent years, out of a series of mergers and acquisitions, to become the world’s largest deepwater driller, was on the defensive last week about its broader record, both as a corporate entity that pays its taxes and over worker safety and human rights.

The company, already under attack from leading US senators over plans to pay out $1bn in dividends, was forced to react to a New York Times article detailing numerous recent Transocean controversies, including an ongoing tax evasion investigation in Norway, the loss of eight lives off the coast of Scotland when a support vessel capsized, and allegations by human rights groups of business being conducted in countries blacklisted by the US.

While not responding directly to the article, the company issued a statement saying it was acting within the law in Myanmar, where as recently as this spring it was allegedly involved in a drilling site where another of the stakeholders was identified as a Singaporean business that itself has been linked by US officials to money launderers for the Myanmar military junta.

It emerged, meanwhile, that Transocean had acknowledged in filings with the US financial authorities that, in the past, some of its equipment has been forwarded through Iran and that it once had a stake in a Syrian company. Both Syria and Iran have been subjected to US business sanctions.

As for investigations of possible tax evasion in Norway, the company has said it could result in fines and assessments in excess of $800m.

Transocean has publicly blamed BP for the Gulf blowout, even though there were far more of its people on the rig, the Deepwater Horizon, when it exploded on 20 April, than from BP. But pressure on the company has been growing on Capitol Hill. Late last month, senators warned it against moving forward with dividend payments, though there is little sign of the company heeding this.

“Many things remain unclear about what happened on the Deepwater Horizon,” the senators wrote in a letter. “Before your company begins to reward its shareholders, we urge you to follow BP’s example by withholding further shareholder rewards until investigations of this are complete.”

At the end of June, Senator Max Baucus revealed he was looking into whether Transocean had exploited loopholes in the US tax system by moving its corporate headquarters to Switzerland. Previously, the company was based in Houston, Texas. Then it moved its nameplate, but few of its executives, to the Cayman Islands. From there, it went to Zurich.

“Transocean’s questionable business practices may be at fault for costing lives and livelihoods on the Gulf Coast, and now there are questions regarding its tax practices as well,” the senator said. “Hardworking Americans pull their weight by paying the taxes they owe every day and American companies must do the same.”

BP was also tangling last week with one of its minor partners in the crippled well. The Houston-based Anadarko oil company, which owns 25 per cent of the well, stated it was declining a request from BP that it share some of the clean-up costs.

“We are disappointed they have failed to live up to their obligations,” BP spokesman Mark Salt said late on Friday. “Anadarko’s refusal to pay its share will in no way affect BP’s commitment to stop the leak, clean up the spill, and pay all legitimate claims as quickly as possible.”

Engineers for BP were meanwhile preparing to take the current containment cap off the gushing well and replace it with one with a better seal. The company is accelerating efforts to complete the first of two relief wells in the hope of stopping the leak before the end of July.

SOURCE ARTICLE

RELATED ARTICLE: Standard Chartered behind BP’s crisis fund

By Mark Leftly

Sunday, 13 June 2010

Senior US politicians are pushing President Barack Obama to seek $100bn in damages against BP for the Gulf of Mexico oil spill in an attempt to kill the company.

If such an action were to be taken and won, the Ftse 100 flagbearer would almost certainly collapse into bankruptcy. Many prominent US figures would welcome this as suitable punishment for the environmental devastation off the Louisiana coast.

The news will heap further pressure on an embattled board, which meets tomorrow to decide whether to suspend dividend payments, vital to UK pension funds, as up to £1.8bn goes out to investors each quarter.

On Wednesday, BP bosses will meet with Mr Obama, who has called on BP to suspend dividend payments while it struggles to keep the oil spill under control. The clean-up costs are already approaching £1bn, less than two months after the explosion that killed 11 people. Most analysts have forecast that the disaster could cost BP around $20bn as a worst-case scenario, though Credit Suisse has suggested as much as $37bn.

It is understood that a group of senior congressmen from Mr Obama’s Democratic Party are pushing the President to sue for up to $100bn. These would include punitive, as well as physical damages, effectively representing a punishment to the company and a broader industry deterrent to breaching safety regulations – even though it is not yet clear that BP failed to meet its responsibilities.

The congressmen are understood to have taken their lead from a 1987 case involving Texaco, which was forced into bankruptcy after a $10.53bn damages claim was awarded against the company, even though that amount was later severely cut. Rival Pennzoil made the claim, believing it had a binding agreement to buy Getty Oil before discovering that Texaco had beaten the company to the prize.

A source close to the politicians said: “There are US congressmen who understand the heartbeat of the Obama administration that are looking at [Texaco]. There is a real chance – 30 per cent, perhaps a bit more – that BP cannot survive.”

If the argument sways Mr Obama, it will devastate leading British figures who have tried to defend BP. On Friday, Richard Lambert, the director-general of the CBI, argued that BP “is of great importance to both the US and UK economies” and that the company is committed “to meeting all legitimate claims”.

A BP spokesman said: “Damages would be down to US authorities. BP wouldn’t want to speculate at this stage.”

BP’s share price has been battered since the spill started, losing nearly 10 per cent just last week to close at 391.9p.

Related articles

• Cameron warns Obama over criticising BP
• Who is really to blame? Some inconvenient truths
• Leading article: Beyond buck-passing
• Simon Evans: How can Hayward stem the flow of vitriol from the US?

SOURCE ARTICLE

Sean O’Grady

Monday, 7 June 2010

A drill ship uses a flare to burn gas and oil from a pipe connected to the broken Deepwater Horizon oilwell

America faces a problem, a dilemma so fundamental that not even the political skills of Barack Obama can disguise it, heightened by, but not originating in the BP affair: She either risks her environment by drilling for more domestically sourced oil, or she accepts the need to import more from a turbulent world – jeopardising her “energy security”.

Curiously, it was George Bush, the toxic Texan, who told Americans to give up their “addiction to oil”, but at least he was realistic enough to recognise that they wouldn’t, and that renewables would never take up the strain.

Only by sacrificing the pristine natural wilderness in Alaska and parts of America’s coastline could the US ever hope to stop being beholden to the Middle East, central Asia and other areas of political instability for her hydrocarbons. Eventually, and much against his instincts and campaign vows, Barack Obama came to the same conclusion, and relaxed drilling rules; but he may have to execute another U-turn, or be forced to do so by state leaders such as Arnold Schwarzenegger, and issue a moratorium on new drilling sites. Or he could just bash BP and hope the real issue goes away.

Yet, stark as it is, America’s dilemma is nothing to the existential one BP now faces. Its US interests are immensely important – more than a third of its worldwide revenues and a similar proportion of the profits it makes from exploration and production – the “upstream” part of the business that went so spectacularly wrong in the Gulf of Mexico.

The question is not so much whether BP survives unscathed in the US as much as how it retreats from there. In the worst case, the US authorities could force the firm to divest its drilling rights in the Gulf and elsewhere, leaving the downstream end – refining oil to make and market petrol, chemicals and plastics – badly exposed, if not unviable. Vertically integrated oil has been a way of life for all the world’s big players since the stuff was first found. Replacement oil from oil sands in Canada are too small and expensive to make up for the loss of US production. A sale or float of BP’s American interests would leave one of our few world-class firms dismembered, an historic moment in declining British industrial prestige and power.

The only remote parallel to such a move was the strangely autonomous Shell Oil company of the US, which lived a life almost completely divorced from its Anglo-Dutch Shell namesake from 1922 until the 1990s, an early example perhaps of American insularity and exceptionalism but also the fact that the US business, especially in California, had simply become so large it had to move out.

In any case, for 60 years and more, all the US Shell firm and its rest-of-the-world counterpart had in common was the famous name and a subtly different version of the instantly recognisable red-and-yellow logo and livery. When Tony Curtis tried to pass himself off to Marilyn Monroe as the heir to Shell Oil in Some Like It Hot, it was a (slightly) more plausible claim than it appeared, given the separate corporate structure of the US firm. The two Shells were owned and run by different people; Americans, out of Houston, and non-Americans, from London and The Hague.

Perhaps such a detached future may be the best thing for British Petroleum’s interests in the US. Even if they were demerged, both BP firms would still be huge. Is that the future for BP America? Or American Petroleum, as we may soon have to call it.

Independent Article

By Sarah Arnott

Tuesday, 18 May 2010

Shell will become the latest major corporation to face investor questions about tar sands developments at its annual general meeting (AGM) today.

Demonstrations outside the meeting in The Hague will be calling for an end to tar sands exploitation, while inside the hall the Anglo-Dutch group’s executives will be quizzed by shareholders on the financial risks.

Some 142 investors have backed a special resolution calling on Shell to give more details on the financial, environmental and human rights risks of tar sand, which make up a third of the major’s resource portfolio.

The responsible investment charity FairPensions, which co-ordinated the action, was behind a similar special resolution put to rival BP’s AGM last month, garnering support or abstention from 15 per cent of voting shareholders. Royal Bank of Scotland has also come under pressure from environmental groups for underwriting tar sands projects.

Shell has already responded to the tabling of the resolution, engaging in a “sustained dialogue” with shareholders about the risk assumptions of its tar sands plans, according to FairPensions. But investors want more.

So far Shell’s tar sand projects, at Athabasca in Canada, involve open cast mining. But the majority of its undeveloped resources will require the more controversial “in situ” method, where steam is injected down deeply drilled wells to boil the bitumen out of the ground. The technique leaves less of an immediate scar on the landscape, but has a much higher carbon footprint because it is so much more energy intensive.

Shell is tight-lipped about the in situ projects and investors backing the resolution are calling for “substantive disclosures” on the plans.

The resolution will be formally proposed today by the Co-operative Asset Management. “Oil and gas companies go to extraordinary lengths – and endure formidable risks – to satisfy our demand for a fuel [which] must diminish if we are to stay within acceptable levels of global temperature increase,” Niall O’Shea, the group’s head of responsible investing, said. “We appreciate Shell’s willingness to enter into dialogue and we agree there are no perfect solutions – but continued success as a company will depend on the providence of their investments.”

The campaigners hope the sight of BP still battling the oil spill in the Gulf of Mexico will underline their concerns about the financial risk of unconventional oil. “The Gulf of Mexico spill has proved that environmental and social risks are also financial risks, and has made the need for shareholders to carefully scrutinise the risk management strategies of oil majors abundantly clear,” Catherine Howarth, the chief executive of FairPensions, said. “Shell’s AGM will provide one of the first opportunities for investors to act on this responsibility.”

SOURCE ARTICLE

Tony Hayward, the chief executive of BP, said that his company hoped to increase production in the Iraqi field it has agreed to modernise from one million to three million barrels a day over the next 10 years. His counterpart at Royal Dutch Shell, Peter Voser, made a similar commitment on the two fields Shell is involved with.

The Business Interview: Shell may seem an unlikely climate campaigner, but their UK chairman is crossing his fingers for an international deal on CO2 emissions at Copenhagen

In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading