Shell defeats Pirc's call for openness

Rebel shareholders claim partial success in securing environmental accountability

Pressure groups battling Shell over its human rights and environmental record yesterday claimed partial victory despite being massively defeated in an attempt to open up the multinational group's practices to outside review.

A shareholders' resolution backed by Pirc, the corporate governance consultancy, and Friends of the Earth to force Shell to establish an independent audit of its environmental and human rights policies was defeated by a margin of around eight to one following the annual meeting in London.

But the protesters, who claim Shell is implicated in the deaths of 2,000 people in the Ogoni region of Nigeria and widespread pollution, hailed a concession by the group's outgoing chairman, John Jennings, that he accepted the principle of independent verification.

Calling for shareholders' trust, Mr Jennings said Shell had for 20 years operated under a set of "clear, open and published principles and procedures in these matters" drawn up by Sir Geoffrey Chandler, a former Shell executive now supporting the protest movement. Mr Jennings, due to retire next month, said the directors shared the concerns of the resolution and admitted there was "great value" in having its practices externally verified. There was a problem in auditing policies as opposed to actions, he said. "We are searching for that process. Some [group] companies are more advanced than others, the process is in its infancy."

Shell UK is today due to publish its first health, safety and environment report following on the heels of a recent group-wide HSE report. Over the next two years every group company would implement internationally recognised standards in these areas, Mr Jennings said.

He was speaking after a hotly-contested, but gentlemanly debate initiated by Canon Christopher Hall of the Oxford Ecumenical Council for Corporate Responsibility. In a passionate plea to shareholders who packed the Queen Elizabeth 2 conference centre a stone's throw from where Parliament was reassembling in Westminster yesterday, Canon Hall said they were not attacking the company but supporting the rights of human beings the world over.

It was a demand which he said was supported from his prison cell by Ken Saro-Wiwa, the activist who was executed fighting for the rights of the people of the Ogoniland region of Nigeria where Shell is alleged to be abetting the Nigerian military government.

Later, Canon Hall said the company had moved its position, but they had not received a full answer yesterday. "A sledgehammer has been used to crack a very small nut in the shape of this resolution. But this acorn has taken root and the landscape will be transformed", he added.

Anne Simpson of Pirc, who seconded the motion, was more positive. Shell had accepted three of the five points in their resolution and it had moved its ground on outside verification. "They have accepted its desirability; it's just a question of when and how."

Earlier, she said the annual meeting was the first where issues such as these had been addressed. Environmental issues were at the heart of Shell's business. She called for international benchmarking of environmental standards and for them to be independently audited, highlighting Ernst & Young's audit at BP. "We are moving from a trust me to a show me world" she said.

The wide-ranging debate also took in the price of petrol in the Western Isles.