Today, The Wall Street Journal published an article entitled “Chairman Works to Recast Shell”. The story is focused on Jorma Ollila, the Chairman of the world’s second largest company, the oil giant Royal Dutch Shell Plc. The article highlights his role “as keeping a hawkish eye on Shell’s corporate culture. That means making sure environmental and safety issues get the attention they deserve...”
The timing is unfortunate in view of the publication of an email sent yesterday to Ollila by a former Group Auditor of Shell International, Bill Campbell, making serious allegations against Shell management in respect of safety issues.
Campbell accuses Shell CEO Jeroen van der Veer and the Executive Director of Shell Exploration and Production, Malcolm Brinded, of subverting an internal investigation report relating to the Brent Bravo North Sea platform explosion in 2003 in which two employees lost their lives. Shell admitted liability and was fined £900,000 UK pounds ($1.8 million) for breaches of UK Health & Safety regulations.
Campbell had carried out a safety audit on the platform in 1999 which revealed a deeply flawed management culture in which safety records were falsified and production allegedly given a higher priority than the safety of Shell employees. Campbell claims he was subsequently removed from his oversight role because he continued to ring alarm bells about an alleged failure to rectify the safety short-cuts his audit had exposed. Because Brinded allegedly turned a blind eye to his warnings, two Shell workers paid with their lives in the subsequent explosion.
The entire email, which is devastating to the credibility of Shell management, can be viewed via this link: http://royaldutchshellplc.com/2007/07/02/shellnewsnet-former-shell-group-auditor-bill-campbell-throws-down-gauntlet-to-shell-chairman-jorma-ollila/
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”.
The email which Bill Campbell sent yesterday to Jorma Ollila confirms that despite the claim of hawk eyed scrutiny by Ollila, safety remains a major problem at Shell particularly in view of Campbell’s ominous warnings that a catastrophe, potentially involving the loss of life of more Shell employees, is only a matter of time. The warnings could be more easily dismissed if not made by a former ShellGroup Auditor with immense expertise in offshore safety matters.
The continuing 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”.