The Independent: Bribery and corruption put fresh dent in tarnished image of Shell

By Michael Harrison, Business Editor

11 June 2004

It was not only Shell's financial reputation which took a mortal battering last year. The oil giant's ethical, social and environmental performance also went downhill.

The latest Shell Report, a warts-and-all guide to how good a corporate citizen the company succeeded in being in 2003, shows most of the indicators heading in the wrong direction.

The number of proven cases of bribes being offered or accepted by Shell employees or contractors doubled from four to eight while the proportion of countries where Shell had procedures in place to stamp out child labour fell from 86 per cent to 78 per cent.

Some 49 contracts were terminated because Shell had concerns about the willingness of partners to comply with its business principles, and one joint venture was terminated altogether.

Likewise, on the environmental front, Shell's emissions of greenhouse gases increased by 6 per cent to 112 million tons while it also missed its target, albeit narrowly, for reducing oil spillages.

A total of 6,700 tons of oil were spilled against a target of 6,500 tons with the largest spillage taking place in the Draugen field in the North Sea off the coast of Norway.

When it came to ethnic and gender diversity, it was more of a mixed bag.

The proportion of women in senior positions increased on 2002 but, at 9.4 per cent, it is still a long way below Shell's target of 20 per cent by 2008. The company missed its target of hiring local nationals to chair all its country companies, only hitting a level of 84 per cent.

In the safety arena, the news was better with Shell beating its targets both for reducing fatal accidents and total reported injuries.

Compared to the mauling the company has taken over the misreporting of reserves, missing a few environmental targets might seem small beer. But Jeroen van der Veer, the new Shell chairman, said he disagreed. "In the wave of criticism, it has sometimes been suggested that our commitment to contribute to sustainable development is an unnecessary distraction from our central task of delivering shareholder value," he writes. "In fact, I believe that the reverse is true."

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