Royal Dutch Shell safety concerns
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[edit] Developments in March 2007
In March 2007, several newspapers published articles in relation to Shell safety issues.
On 5 March 2007, The Guardian newspaper published an article under the headline “Shell safety record in North Sea takes a hammering”. It reported that Shell had been warned repeatedly by the UK Health and Safety Executive - the "HSE" - regarding the poor state of the companies North Sea platforms. The article stated that on 13 November 2006, Shell had been served with “a rebuke and a legal notice that it was failing to operate safely”. An Aberdeen sheriff's court had previously ruled in a Fatal Accident Inquiry that Shell could have prevented two deaths on the Brent Bravo platform if it had properly carried out a repair. Shell had earlier admitted responsibility for the Brent Bravo accident. According to The Guardian, on the day of the sheriff's report, the Offshore Industry Liaison Committee had complained that the Brent Bravo platform still had “leaks, dangerous stairs, and lifts left broken for six months”. The article went on to say that in the summer of 2006, Shell had said that it was in the middle of a $1bn (£515m) programme to upgrade the platforms, claiming: "Safety is and will remain our first priority." The Guardian report drew attention to the HSE website which said that Shell was “issued with 10 improvement notices during 2006” and also pointed out that “Notices are served where the HSE considers a company is operating unlawfully with unacceptable risks”. The article also revealed that “Last year, Shell was embarrassed when Bill Campbell, one of its senior safety consultants, claimed the company was operating a weak safety regime and said some employees had been falsifying documents. Shell denied the charges, but Mr Campbell has been threatening the company with a defamation case”.
On 15 March 2007, The Wall Street Journal published an article on its online "Energy Blog" under the headline: “Shell’s Safety Problem”. The article compared the safety record of Shell with its rival BP, which has been heavily criticised for its poor safety standards since the deadly Texas City refinery explosion in 2005. The Wall Street Journal highlighted the fact that “Royal Dutch Shell was a far more dangerous company to work for in the past two years” and also pointed out that according to an annual report filed by Shell with the United States Securities and Exchange Commission on 14 March 2007, 37 Shell employees and contractors died in 2006, compared with just 7 BP employees. In the same filing, Shell CEO Jeroen van der Veer was quoted as stating: “Our safety performance in 2006 was mixed” and “We have responded by reinforcing our safety focus through a dedicated global safety function that will improve compliance with standards and procedures worldwide.”
On 20 March 2007, The Wall Street Journal published an “Energy Blog” article on its website under the headline “Shell’s Record Worse Than BP’s”. The article cited a comment in a Wall Street Journal “Energy Roundup” report which said “...though BP has been chastised for its safety record in the past two years, it has not lost as many employees and contractors to death as rival Royal Dutch Shell, which employs roughly the same number of people”. The article also referred to a Financial Times story published on 20 March 2007 under the headline “Safety record is put in the spotlight” which had expanded the Shell/BP comparison to include several oil majors over more years. It quoted from the FT story: “Since 2003, the first year of the Times’s study, Shell has had more global employee and contractor deaths than the other four”. Shell has appointed a global vice-president for health, safety and environment to tackle safety problems and has pointed out that it operates in the dangerous Niger Delta, where militant attacks accounted for 9 of its fatalities in 2006. An update has subsequently been added to the Wall Street Journal article explaining why the headline has changed to “FT Data: Is Shell’s Record Worse Than BP’s? It explains “While it may be true Shell has had more deaths than BP in at least the past couple of years (which we’ve confirmed in their annual reports), it’s worth noting that these tallies are not necessarily the best measure of a company’s safety record, as they do not account for the number of accidents per worker.”
[edit] Resolution of Shell safety problems may impact on CEO succession
Concern over Shell safety issues has led to media speculation that the subject may impact on the appointment of a successor to Royal Dutch Shell Plc Chief Executive, Jeroen van der Veer, who is retiring in 2007. An article published by The Guardian on 29 March 2007, under the headline “Van der Veer - a safe pair of hands?” stated in reference to Van der Veer, “The one big area where he has fallen down is safety”. It went on to remind readers that the newspaper had revealed a few weeks earlier that Shell had “continued to receive warnings from the Health and Safety Executive that it is acting illegally with regard to safety in the North Sea”. The article concluded that “Mr van der Veer needs to bring a halt to this, and so does exploration and production boss Malcolm Brinded if he wants to stand any chance of taking over the top job”.
