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8 february 2001
shell publishes full year results
foe calls for moratorium on oil and gas
exploration in protected areas, and
investment switch to renewables
Shell's "windfall" profits
Royal Dutch Shell will tomorrow (Thursday
8th February) publish its Full Year Results.
it is anticipated that they will indicate a
record increase in profits and turnover -
buoyed up by high fuel prices.
Their third quarter results published last
November indicated that Net Income was up 60%
(to $9,606 million) as compared to the same
nine month period for the previous year.
Exploration and Production adjusted earnings
(of $2,313 million) were almost double those
achieved a year ago.
What is Shell doing with this profits
windfall?
A look at its website (www.shell.com) or a
glance at some of its literature, might raise
hopes that the mega-corporation is "…surfing
towards a sustainable future".
In its recent glossy brochure "People,
Planet and Profits", Mark Moody-Stuart,
Shell's chair wrote "My colleagues and I are
totally committed to a business strategy that
generates profits while contributing to the
well-being of the planet and its people. We
see no alternative."
And yet, a look at Shell's actual
operations indicate that the corporation is
using its profits windfall to explore for oil
and gas in some of the world's most
environmentally sensitive areas.
In Pakistan, for example, Shell has
entered into a joint venture with Premier Oil
to explore for gas in one of the country's
oldest and most famous national parks. A
coalition of Pakistani environmental
organisations have filed a petition against
Shell in a Karachi court, claiming that the
company's actions are illegal (see below for
full case study).
In Bangladesh, Shell has formed a joint
venture with the Scottish power company Cairn
Energy, to explore for fuel in the Sundarbans
mangrove forest. The region represents of the
world's most important wetlands and is home
to the largest remaining population of Bengal
tigers.
What should Shell be doing instead?
Scientific and political consensus is now
building about the devastating, human social
and environmental costs of climate change.
For example:
… Last month, the Intergovernmental Panel
of Climate Change (IPPC) representing 2000
scientists, warned that global climate change
is likely to be much more severe than
previously feared, mainly as a result of the
burning of fossil fuels like oil. … Earlier
this week, a report by members of the United
Nations Environment Programme's (UNEP)
financial services initiative, indicated that
the impact of climate change could cost the
world over US$300 billion a year. Losses due
to more frequent tropical cyclones, loss of
land as a result of rising sea levels and
damage to fishing stocks, agriculture and
water supplies, is likely to hit the world's
poor hardest.
Shell is well placed to address the cause
of these problems, and help reduce the
world's dependence on fossil fuels. And yet,
the corporation presently invests less than
1% of its turnover in renewable energy, such
as wind, solar and wave power.
Friends of the Earth is calling on Shell
to end immediately all oil and gas
exploration in protected areas, and to switch
investment to renewables.
What will Friends of the Earth be doing to
persuade Shell?
Friends of the Earth will this year be
building a major campaign to change Shell's
corporate behaviour. We will be mobilising
our supporters and the public at large, to
raise the issue with their pension providers,
banks and insurers, most of whom are
shareholders in Shell.
We will be working in close co-operation
with Milieu Defensie (FOE Netherlands), since
Shell is domiciled in both the UK and The
Netherlands.
case study:shell in pakistan court over
pakistan park scandal
Kirthar National Park was established in
1974 to protect endangered wildlife including
the unique Sindh ibex, desert wolves,
leopards, striped hyena, rare wild sheep and
imperial eagle. Covering more than 740,000
acres of forests and valleys 80 miles
north-west of Karachi, it is essential to the
water supply of the city's 14 million people.
The park also contains Rannikot Fort, one of
the world's oldest, which dates back to 3500
BC.
Shell has formed a joint venture with
Premier Oil, and plans to explore Kirthar
National Park for gas.
A coalition of environment groups in
Pakistan has reacted by filing a petition
against Shell, claiming that the
corporation's activities would be illegal
under Federal Pakistani wildlife laws and
under Sindh state-law. But they are concerned
that Shell is using its influence to get the
relevant laws amended to their liking. Under
the current military regime, laws can be
amended by key officials without reference to
Parliament:
… Last month, the Governor of Sindh
province amended the local wildlife laws to
allow pipeline construction in the park.
Before he took up the post of Governor last
year, Mohammed Mian Soomro, was a director of
Shell-Pakistan. … Final permission for
drilling will have to be granted by
Pakistan's Federal oil minister, Usman
Aminuddin. He is a former executive of a
Shell subsidiary, Burshane.
Since 1998, Shell has been involved in
exploration in Dureji Wildlife Sanctuary in
the Pakistan province of Baluchistan - an
area important for Sindh ibex and rare
mountain sheep. Local environmentalists claim
that access roads built for heavy machinery
have damaged the delicate mountain
environment, increased erosion and increased
access for poachers. They say that the
seismic testing has also caused disturbance
to wildlife populations, and that one rig was
constructed in Hamilag range right in the
heart of a sensitive zone - against the
recommendations of the Environmental Impact
Assessment. Dureji was recently downgraded
from a Wildlife Sanctuary to a Game Reserve,
as a result of the damage.
Farhan Anwar, an Executive Member of
Shehri-Citizens for a Better Environment, a
local environmental NGO in Pakistan said: "We
have already seen the damage that Shell's
activities can have on wildlife, such as at
Dureji Wildlife Sanctuary. We find it quite
outrageous that they are now planning to
plunder one of our most precious national
parks - in Kirthar - home to some of our most
endangered species. Shell's project is
illegal. Our law clearly prohibits any kind
of mining or exploration activity in these
areas. But now this massive corporation is
using its influence, and contacts with
ex-Shell employees now in Government, to
trash our wildlife laws. We call on British
investors with money in Shell to ask this
company how it can defend its actions".
Craig Bennett, Habitats campaigner at
Friends of the Earth said: "Shell claims that
it cares about poor people and the
environment, yet its massive profits are
being used to open up and plunder some of the
world's most precious and sensitive
areas.
Shell should – today – end exploration in
these areas and switch investment to
renewable energy such as wind and solar
power. If it doesn't, then its claims to care
about the planet and its people will be
nothing but hot air.
We want the public, banks and pension
funds to challenge Shell to stop putting
profits before people and the planet".
Photos of Kirthar National Park available
from FoE Ewni
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