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A message for Shell: Follow the law or get out


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5 Jan 2016

OUR expert columnists here at The Manila Times continually remind of us of critically important issues we might otherwise have overlooked in our efforts to cover day-to-day news, a mission that is challenging even under the easiest circumstances.

One of those issues was brought to our attention again by Atty. Dodo Dulay, whose “Flipside” column yesterday addressed the incredible situation in which major oil company Pilipinas Shell – the local component of global oil giant Royal Dutch Shell BV – has been allowed to evade compliance with the 1998 Oil Deregulation Law for nearly 18 years up to now.

As Atty. Dulay pointed out, that law stipulates that oil refiners must publicly list at least 10 percent of their common stock shares. The only other refinery operator in the Philippines, Petron, did so more than 11 years ago, in 2004.

Shell has offered a variety of creative excuses throughout the years for avoiding compliance with this unambiguous requirement, to the extent that any announcement by the company that they are “working on an IPO listing” or “hoping a listing can be done by such-and-such time” is treated as a joke by the local media and industry observers. As it has apparently become long-standing policy in the Department of Energy not to press Shell too hard to make good on its occasional casual acknowledgements of the law, it seems the government believes the whole issue is a joke as well.

It is not a laughing matter, however. The “public float” provision in the Oil Deregulation Law is a vitally-important protector of public interest. With the removal of a great deal of the regulatory constraints on the oil industry – a generally prudent move that encourages industry growth and helps to ensure reliable supplies of fuel and other petroleum products – mandating a public stake in the industry, even a small stake, serves as a kind of check against the worst kinds of monopolistic abuse that could otherwise be carried out by fully-private companies.

If they have the wherewithal to do so, the Department of Energy or the Office of the President should order Shell to comply with the law forthwith, allowing only the necessary time (perhaps 90 days) for the preparation of a share listing. If the Executive branch is unable to gather up the courage to do its job and enforce the law – a development which would be disappointing but not particularly surprising – then the Supreme Court should intervene, as Atty. Dulay suggested in his column.

Pilipinas Shell still does, of course, have the choice not to comply, and while it would not be an ideal or preferred outcome, they can simply take their refinery elsewhere; they should not be laboring under the illusion that the country could not adjust to its absence. The bottom line, however, is that the status quo cannot be permitted to continue a moment longer than is necessary to correct it: It is a disservice to Filipino consumers, and makes a mockery of Philippine laws and all other efforts to fairly monitor and regulate vital industries.

We wish to make a point of recalling that Pilipinas Shell has been carrying out its “corporate social responsibility” with activities beneficial to deserving individuals and communities. Four years ago, its corporate peers in the Federation of Philippine Industries gave it an award for being the most outstanding in the CSR field.

That presents a paradox.

How can Shell have a heart of gold in doing philanthropy and be worse than a scrooge and in fact be a lawbreaker?

We hate to say this but it deserves to be told: Do business respectful of the law, Pilipinas Shell, or shut down your refinery.


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