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You are here: Home / Media / Archive / 2001 / 8_feb_shell

8_feb_shell

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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