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The Ecumenical Council for Corporate Responsibility, Oxford: Press Statement RE ROYAL DUTCH SHELL PLC

NEWS RELEASE
from
ECCR
www.eccr.org.uk
The Ecumenical Council for Corporate Responsibility, Oxford:
15 March 2006 for immediate release
RESPONSIBLE INVESTORS BACK SHELL SHAREHOLDER RESOLUTION
The oil and gas giant Royal Dutch Shell has accepted a strongly worded shareholder resolution for debate at its 2006 Annual General Meeting. It has the backing of 130 shareholders representing almost 1 million shares.
The resolution was initiated by the Ecumenical Council for Corporate Responsibility and calls for ‘a major improvement in Shell’s performance in terms of community and stakeholder consultation, risk analysis, and social and environmental impact analysis’. It was delivered to the company at the end of February after weeks of building shareholder endorsement.
The motion, whose supporters include the Joseph Rowntree Charitable Trust in the UK and major faith-based fundholders in the USA, focuses on the social and environmental impacts of Shell’s activities in County Mayo in Ireland, the Niger Delta and Sakhalin Island in Russia.
ECCR will present the resolution at Shell’s AGM in The Hague on 16 May and is keen to build further support from registered shareholders to ensure a substantial AGM vote.
People who do not own Shell shares are being asked to lobby their insurance companies and pension providers, who almost certainly have holdings, to vote for the resolution.
NOTES FOR EDITORS
Further details regarding the resolution are available on the ECCR website – www.eccr.org.uk – and from Christopher Hall, ECCR Oxford Group ([email protected], tel. +44 (0)1869 338 225), or Miles Litvinoff, ECCR Co-ordinator ([email protected] , tel. +44 (0)20 8965 9682).
Royal Dutch Shell Plc’s 2006 AGM will take place on 16 May simultaneously in The Hague, Netherlands, and by live telelink at the Novotel London West Hotel and Convention Centre in Hammersmith, UK.
ECCR is an ecumenical organisation founded in 1989 to promote corporate responsibility in companies and in the churches. Its work arises from concern that companies should adopt worldwide operational standards for their environmental and ethical practices, and from the need for faith communities to monitor their own corporate responsibility through socially responsible investment of their financial resources in such a way that their faith credentials are respected.
ECCR has been engaged with Shell for the last 12 years. In 1997 it tabled a shareholder resolution which the Chemical Engineer said 'could signal a change in the way multinational companies, many of which have Gross Domestic Products as large as a medium-sized country, do business throughout the world'. Four years later Sainsbury’s Environment Manager said that the ECCR resolution sent warning ripples throughout the corporate world and strengthened the arms of those who were working internally to get companies to clean up their act.
ends
ROYAL DUTCH SHELL Shareholder resolution for the Annual General Meeting 2006
The Resolution set out below has received the support of over 130 shareholders with nearly one million shares – enough for it to be put on the agenda at the AGM to be held in The Hague on Tuesday 16 May, and simultaneously at the Novotel London West Hotel in Hammersmith.
It is now important to drum up support for the Resolution. Even those who do not have shares in Shell can help by lobbying their insurance companies and pension providers, who almost certainly do have large holdings, to ask them to vote for it.
Ordinary Resolution
At this the first Annual General Meeting of Royal Dutch Shell, the shareholders request that, in the interests of the good reputation of the Company, and the avoidance of costly delay to, or interruption of, production, and for the present and future peace, safety, environment and prosperity of local communities directly affected by the Company’s operations:
1. the Directors undertake, in all the Company’s international exploration and development operations, to collaborate with local stakeholder communities in order to reach, before project works begin, a mutually acceptable Memorandum of Understanding based on an independently conducted and transparent Social and Environment Impact Assessment;
2. the Directors undertake on the acquisition of companies (or assets and operations of other companies) to exercise due diligence in respect of risk, by subjecting social and environmental reports relating to business operations and activities to qualified independent assessment, and to revise the Company’s plans or adopt alternative methods of extraction and refinement in the light of such assessments;
3. the Directors institute rigorous policies in risk assessment and community consultation particularly when proposing to use unproven techniques such as untested gas production and processing on peat and in proximity to occupied dwellings, or when operating in ice-congested waters;
4. the Directors ensure, through proper oversight by the Board’s Social Responsibility Committee, that all policies, procedures and standards on environmental and social issues are rigorously enforced at all stages of project planning and operation;
5. the Directors report to the shareholders by the 2007 AGM how the Company has implemented these measures.
Pursuant to Section 376(1) of the Companies Act 1985, I/We, the undersigned, being a member of ROYAL DUTCH SHELL plc (the “Company”) and having at the date hereof the right to vote at the annual general meeting of the Company, hereby require you to give notice to each member of the Company entitled to receive notice of the next following annual general meeting of the resolution set out above and of the statement set out overleaf.”
________________________________________________________
Registered shareholders, who support the above resolution (and statement overleaf) and wish to cast their votes for the Resolution to be moved at the 2006 AGM of the ROYAL DUTCH SHELL plc, are invited to sign and send their proxy cards, when issued by the Company, to: ECCR, c/o The Knowle, Deddington, Banbury OX15 0TB, UK
Tel: +44 (0)1869 338225 Fax: +44 (0)871 750 3483.
It is also likely to be possible to register the appointment of a proxy at www.sharevote.co.uk
ECCR has actively engaged with Shell since 1994, initially in relation to issues in the Niger Delta. Seeing no change, in 1997, along with the Pensions and Investments Research Consultants (PIRC), we sponsored a resolution on environment, human rights and local communities.
In 2001 an ECCR delegation visited Nigeria to check on progress and we have continued to raise questions with the Company.
Our involvement with the Corrib gas field development, off County Mayo, Ireland, began in 2002 when we were contacted by concerned residents. We provided an international observer to the Irish National Planning Board hearings in that year, which rejected the Company’s application. We raised questions with the Company then and subsequently. However, the day after the 2005 Shell AGM five local Mayo residents were imprisoned for denying the Company access to their land, leading to national public demonstrations against Shell.
We believe the issues faced by the Company largely stem from:
• failing to carry out effective and complete environmental and social impact assessments of new developments or modifications to existing facilities, in contravention of its own guidelines;
• failing to develop and abide by memoranda of understanding with local communities.
Experience in the three different areas outlined below indicates the importance of supporting this resolution.
(1). Corrib, Ireland
The first application for developing the Corrib Gas project was made by Enterprise Energy Ireland in 2000. This involved a sub-sea tieback to a gas processing plant 9 km inland. The consequences of this highly unusual development concept included the need to run a production pipeline though a populated area and through unstable Atlantic bog terrain.
When Shell took over Enterprise Oil in 2002 it adopted, without change, this production concept. This was despite significant local opposition, which centred on the routing of the high-pressure production pipeline 70 metres from people’s homes. Residents instead proposed that the gas be processed offshore before being piped past their homes.
Although Shell claims engagement with local communities, it has consistently rejected this proposal, usually on cost grounds.
The cost of an offshore platform is approx. 300 million Euros. The value of the Corrib Gas field is at least 8 billion Euros. The gas was meant to be ashore in the summer of 2003, but Shell’s conflicts with local residents have put paid to any immediate prospect of this happening. The return on Shell’s investments will be delayed until a mutually acceptable Memorandum of Understanding is reached.
The only way that the field can be developed is with local consent.
(2). Bayelsa State, Niger Delta
Shell Petroleum Development Company (SPDC) Nigeria has met resistance in the Niger Delta in large part as a result of poor stakeholder engagement, lack of transparency, and perceived environmental and human rights abuse.
SPDC understands the critical necessity of effective project management if it is to sustain its Gbarain-Ubie Integrated Oil and Gas Project (IOGP) operations in Bayelsa State and profit-making in the long term. SPDC’s practice thus far in
the preparatory stages of the IOGP is hindering the success of the project.
However, the IOGP presents an opportunity to resolve past issues and lay the foundation for sustainable mutual benefits to SPDC and the 92 communities in the project area. As the highest investment ever to be made in the region, it could represent a new era of positive stakeholder engagement, community development and standards-based operations. With such improved relationships, the Company
is more likely to gain community support for this and other activities, as well as the favour of shareholders and NGOs.
SPDC needs to engage effectively with the stakeholders – especially the impacted communities – so as to ensure that the process delivers environmental, social and financial benefits.
(3). Sakhalin, Russia
Shell’s Sakhalin II project has the potential to threaten the future of a Russian island the size of England, and the communities and species which rely on the natural resources there. There is concern that Shell’s activities have already resulted in the 100 remaining critically endangered Western Gray Whales being exposed to excessive noise levels. The whales’ only feeding habitat will be threatened by the risk of oil spills in sea-ice conditions, which Shell has no recognised technique for cleaning up.
Local communities meanwhile are fearful that the fishing industry which supports one third of the island’s economy will be destroyed. Dredging activity in Aniva Bay has resulted in reduced fish catches and lost business for local fishing companies. Inland, Shell’s inability to apply environmental measures to river crossings has seen salmon spawning areas ruined.
The root of these problems can be traced back to Shell’s original environmental and social impact assessments. Shell made its decisions on project design before gaining essential information on biodiversity and local people. The ineffective project management has compounded problems and seen costs double to US$20 billion. As a result, the project is far from meeting international expectations or standards.
Sources: for background documents please see www.eccr.org.uk
ROYAL DUTCH SHELL plc Shareholder resolution for the Annual General Meeting 2006 Supporting Statement The Ecumenical Council for Corporate Responsibility (ECCR) proposes this resolution because of significant concerns relating to the loss of production, environmental costs and reputational risk faced by our Company.

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