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Shell Response to UK Guardian article
<HEAD><TITLE>Progress and a sustainable future</TITLE>
The following article has been contributed by Mark Moody-Stuart,
chairman of Shell Transport and Trading. It is in reply to an essay in
The Guardian on 15 November 1997. The article has been submitted to the
paper for possible publication. </P>
Shell; progress and a sustainable future</B></FONT>
Issued 25th November 1997.</B>
Big enterprises are fair game, and it's always open season. Like most
institutions, Shell has become accustomed to comment and criticism. This
is useful; but criticism must lead to dialogue of ideas as well as
words. So, having seen our company branded as "Unloveable Shell", I want
to enter the debate on behalf of one hundred thousand Shell employees
around the world - and their families - who feel personally affected
when the company is attacked.
</P>
Those people are Shell. We are individuals with firm values and social
commitments who share the belief that it is possible, and desirable, to
run a profitable business without sacrificing values to profit. We see
the business as a contributor to present prosperity and future progress.
Some look back at the history of the 20th century and see it as
dominated by some sort of evil empire, with Big Business playing the
arch villain. Others believe that business has enabled widespread
economic and social progress, in the course of a turbulent era when the
unpredictable often seemed to become the norm.
<P>
In Shell, we subscribe to what we believe is the positive view. History
has not been the perfect midwife but it brings forth progress: progress
which we who have benefited from it have no right to deny to those who
now seek what we take for granted - from running water, through reliable
power and transport to internet access. To those who say that material
prosperity undermines traditional values and cultures, I would say that
poverty and the social tensions it breeds are far more destabilising.
<P>
Certainly we should try to learn from the past, but the future starts
from where we are now and whatever your perspective, there is no doubt
that today we live in a world which is far richer, in material terms,
than at any other point in its history. The challenge is to spread the
benefits of material progress to those who have too little. Many people
worry about it - business plays a real part in doing it.
<P>
We believe that Shell resources - human, technological and financial -
are helping to shape a future where the benefits of economic development
bring higher living standards for an increasing proportion of the
world's population.
<P>
In the 1997 Human Development Report published by the United Nations
Development Programme, 25 years of human progress in Oman is described
and the country hailed as "a global pace setter in human development".
That progress was funded by oil development - but it was the Government
and people of Oman who applied that oil income wisely. Industry is never
more than a contributor to the process - that is why the results vary
from the spectacularly good to the near disastrous. The UNDP report
shows how remarkable progress can be achieved by sensible policies
coupled with economic development. Well worth a read if you are not
hooked on wallowing in unrelieved gloom!
<P>
Shell's primary role is as an economic actor: creating wealth, providing
employment and giving broad economic stimulus. We have a responsibility
to give a return to the people and pension funds who have entrusted us
with their money, people who come from a very broad spectrum of society.
And so far, the world has discovered nothing to replace the workings of
the free market as the most open and efficient way of allocating capital
- one of the fundamental ingredients of economic development. At the
most basic level, our operations meet human needs for heat, light and
transportation - the building blocks of progress.
<P>
But in doing this, we also believe that our business must uphold certain
values that are completely separate from purely commercial
considerations, and accept that it has responsibilities beyond its
economic contribution. To that end we have, and have had for years, a
published statement of the principles which govern the way we operate.
They cover business integrity, political activities, health, safety and
the environment, the community, competition, communication and more
recently human rights. In other words, the Statement provides, for our
employees to follow and for the outside world to judge us by, an ethical
framework which is mandatory, not optional but just having those
principles is no longer enough.
<P>
In the past, a political party, or a bank, or an oil company could say
"trust me" and expect that to be enough. Today, people say "tell me -
listen to me - show me". They want to understand policy and see proof of
performance. This "show me" world demands openness almost without
limitation on anything from road or runway construction to the funding
of political parties. Trust has to be earned by transparency. That's one
of the most important lessons we've learned in Shell in recent years,
and as an institution I believe we're not alone in learning it.
<P>
At the same time, we are conscious of the growing gap between what
companies can deliver and what society expects of them. Issues like the
responsibility of business in relation to human rights or environmental
priorities can be represented as right versus wrong - with business in
the wrong. But business organisations do not have the power to solve,
unilaterally, complex environmental, social or political problems. How
many of our critics would want to give us that power? I believe that it
would be dangerous for us as business to have that power. We can act
only within the legitimate role of business. And only broad dialogue and
debate can clarify what should be accepted as "legitimate".
<P>
Last year, we embarked on a series of round-table discussions on
Society's Changing Expectations to increase our understanding of new
demands and perceptions and to identify solutions. More recently, we
followed this up with an extensive MORI survey around the world. We did
this not only to gain a deeper insight into what people think of, and
want from us, but also to provide a basis for constructive debate about
the legitimate role and responsibilities of business. To the best of my
knowledge, we were the first to do anything like this on such a scale,
as well as being the first company to accept and publicly debate the
dilemmas facing multinationals.
<P>
We are conscious that in helping to create the future, we are working
with natural resources which are also part of our children's heritage.
So our activities must be based on support for sustainable development;
on 'meeting the needs of the present generation without compromising the
ability of future generations to meet their own needs'. In our 1996
Annual report we acknowledged the need to take prudent precautionary
action in response to possible climatic effects of increasing
atmospheric carbon dioxide concentrations.
<P>
One aspect of this is the recent announcement of a new core business,
Shell International Renewables. The world is in the early stages of
transition to new, affordable, energy sources, and there is no doubt
that these sources will play an increasingly important role as the 21st
century unrolls. In Shell, we have a '50/50 vision': that by 2050, 50%
of world energy will be supplied by renewables. Our aim is to invest now
to help this happen through the normal pattern of technology
development, commercialisation and optimisation, not by long-term,
large-scale government subsidies. An energy enterprise like Shell has
the future as a day-to-day companion. Decisions taken today concern
projects that will come to fruition in 10 or 20 years time.
<P>
Our investment programme is not only long-term, it is also the largest
commitment by any private company. The nature of our business, and our
business principles, mean that where we invest we are looking not only
to stay, but to take responsibility for and contribute to building long-
term relationships. In Peru, we are involved in a project called
Camisea, which is a potential large scale development of natural gas. It
offers enormous prospects for Peru and its people, but it also proffers
huge challenge, particularly in relation to the environment and
indigenous peoples. The Shell company concerned had to meet the
justifiable concerns and sensitivities of local communities, regional
authorities and the national government, as well as a range of non-
governmental organisations. From the start, the company made a priority
of communication. A long time before it signed the license agreement
with the Peruvian government, a consultant was asked to help decide who
were the stakeholders it should talk with about the best way to approach
the project.
Then, the company began communicating with a wide spectrum of people
both inside and outside Peru. Not just to tell them what it intended,
but to get their feedback on its ideas and their advice on how to
proceed in the most acceptable way. As a result, the development will be
shaped to provide a minimum of disturbance to the environment and to
local people, and its progress will be independently monitored by an NGO
network of 35 organisations. The success of the whole Camisea project
relies on its being a long-term partnership for the benefit of everyone
involved.
Looking to the future does not mean you should forget the past,
including its problems. No institution which has been around for 100
years can look back and have no regrets for what was done in a different
historical or social context. Times change, knowledge increases,
expectations expand, civilisation develops. My concern is simply to
ensure, for the sake of our employees, investors and all those affected
by our company's activities, that the reality of the contribution a
business like ours can make to progress and a sustainable future is not
completely obscured by a distorted perception. Like history, we have not
been perfect. But history and economic development has brought to
millions of people the benefits of real progress which Shell companies
all around the world have been a significant part of that progress. And
we intend to continue to be.
</P>
Mark Moody-Stuart<BR>Chairman of The "Shell" Transport and Trading
Company plc
</P>