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Forbes: Shell CEO: Cutting Fatalities a Priority

Associated Press 05.08.07, 4:00 PM ET

Royal Dutch Shell PLC Chief Executive Jeroen van der Veer, angered by the high level of casualties at the company in 2006, has made the issue a priority this year, according to the company’s annual sustainability report issued Tuesday.

A total of 37 workers for Shell, most of them contractors, lost their lives on the job in 2006, one more than in 2005.

According to data provided by Shell, most of the workers who died were killed in car accidents, drownings or were victims of violence in the Niger Delta.

In an interview published in the report, van der Veer is asked in “terms of environmental and social performance, what got you really steaming mad in 2006?” He replied “fatalities.”

He added one of the company’s priorities in 2007 is “reducing fatalities. Absolutely. We need to learn from the industry and improve on process and personal safety.” Shell said earlier this year it has set up a special safety program.

Also, van der Veer said he’s still “angry” about antitrust violations found at Shell, even though those involved are no longer with the company.

In 2006, Shell was fined 108 million euros by the European Commission for participating in a cartel in the Dutch bitumen market from the mid-1990s to early 2002.

The commission also fined the company 161 million euros last year for its role in a synthetic rubber cartel between 1996 and 1999. Shell sold its rubber business involved in the cartel in 1999.

In the sustainability report, the company said it launched the first companywide code of conduct in late 2006, which includes guidance for projects revised to integrate environmental and social considerations earlier into major decisions.

Shell operations in a number of countries, including the United States, already had codes in place but it’s Shell’s first companywide code, the report said.

Regarding the Sakhalin II project, van der Veer said he believes it still can respect its environmental and social promises after Gazprom took control of the project.

On April 18, Shell and the other shareholders in the Sakhalin II oil and gas development project in Russia’s Far East signed a final agreement to cede control of the venture to Russia’s state-run Gazprom.

Last October, Russia’s environmental watchdog threatened to suspend crucial licenses, citing violations of environmental permits. Shell said in the report that “these alleged violations would not have caused long-term environmental damage.”

The company said Sakhalin Energy, which manages Sakhalin II, resubmitted its Environmental Action Plan to the authorities in March.

Sakhalin II will add nearly 100,000 barrels of oil a day equivalent to Shell’s production at its peak, the report said.

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