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Multilateral regulation

Broken promises: how Shell’s non-compliance with the OECD Guidelines harms people and the environment

Shell in breach of the OECD Guidelines for Multinational Enterprises

Authors: ; Friends of the Earth
Publisher: Friends of the Earth , 2006

Full text of document

This briefing outlines some of the areas where Shell is not complying with the OECD Guidelines for Multinational Enterprises. Based on these examples it also argues that voluntary self regulation is not enough to protect the environment and communities from the activities of companies.

The brief lists a number of relevant OECD Guidelines and presents examples of Shell non-compliance with these guidelines. Examples include:

  • Work on the Sakhalin II project in Russia is expected to cause damage to wild salmon spawning areas and the last remaining western Pacific grey whales
  • Oil spills and severe air pollution due to gas flaring in the Niger Delta, Nigeria, have resulted in loss of aquatic life and mangroves
  • In the year that a new environmental law adopting the air quality guidelines established by the World Health Organisation was introduced in Durban, South Africa, SAPREF (Shell’s joint venture with BP) would have violated the law 117 times, had it come into force
  • The exposure of Shell workers to toxic pesticides and oil waste in Saõ Paulo, Brazil, has resulted in severe medical problems amongst workers. In 2005 Shell was forced to submit to a government order to take steps to protect workers by providing medical examinations. However, the company still does not.
  • Inadequate disposal of toxic waste in Saõ Paulo, Brazil, does not reflect company best practice .

The paper concludes that changes to company law in order can lead to greater transparency about the impacts of company operations and to place some basic minimum obligations on company directors in relation to these. These changes would not tie up companies like Shell in red tape, but rather tie them down to ensure they begin to make real efforts to deliver on the commitments that they have already made. In the UK context the brief is calling for amendments to the UK Company Law Reform Bill.