Fenceline Community and FoE NL vs. Royal Dutch Shell

Allegations

The complaint accuses Shell of withholding information from local residents and employees about the environmental, health and safety impacts of its Pandacan oil depot, which is situated in the heart of densely populated Manila. The complaint also alleges that Shell’s plans and procedures to mitigate potential hazards at its oil depot were insufficient and that Shell was improperly involved in local political activities.

Relevant OECD Guidelines

• Version 2000 Chapter II
• Version 2000 Chapter II Paragraph II.11
• Version 2000 Chapter II Paragraph II.5
• Version 2000 Chapter III
• Version 2000 Chapter III Paragraph III.4 Subparagraph III.4.E
• Version 2000 Chapter V
• Version 2000 Chapter V Paragraph V.2 Subparagraph V.2.A
• Version 2000 Chapter V Paragraph V.2 Subparagraph V.2.B
• Version 2000 Chapter V Paragraph V.5
• Version 2000 Chapter V Paragraph V.6 Subparagraph V.6.A
• Version 2000 Chapter VI
• Version 2000 Chapter VI Paragraph VI.0

Outcome

After promptly conducting an initial assessment and accepting the case, the Dutch NCP engaged in extensive communication, including numerous meetings, phone calls, letters and e-mails, with both parties throughout the process. Developments in parallel proceedings at the Philippine Supreme Court initially delayed the specific instance procedure, but the NCP eventually decided that its handling of the case would not prejudice the local legal proceedings and decided to move forward on the case. In mid-2008 the NCP engaged a local expert, who had been mutually agreed-upon by the parties, to conduct initial fact-finding, interviews, and assessment of the situation in Manila. Two members of the NCP and a member of the NCP secretariat visited Manila in November 2008 to discuss the issues with the local expert and the Philippine parties to the complaint. The NCP members also brought in two independent Dutch health, safety, and environmental experts to conduct research at the Shell part of the oil depot.

In early 2009 the NCP attempted to bring the international and local parties together for mediation meetings in Manila, but the NCP was unsuccessful in getting the parties to agree on the terms and topics of the mediation, the issue of relocation of the depot being at the core of the issue. Unable to get the parties together for mediation, the NCP closed the case and issued a final statement in August 2009, more than three years after the complaint was filed. In its statement, the NCP dismissed two of the complainants’ allegations (although it could not fully investigate or verify one of them) and upheld one claim, noting that Shell had failed to comply with the OECD Guidelines’ clause on disclosure of non-financial information, including environmental reporting, in its interaction with local communities and stakeholders. The NCP’s statement includes a number of recommendations to Shell for improved implementation of the Guidelines in its operations.

The complainants blame the NCP’s failure to reach a mediated solution on Shell’s obstinacy and obstruction of the specific instance process. As an example, they cite Shell’s unreasonably high confidentiality requirements during the procedure – a situation that the NCP itself, in its final statement, found “regrettable” and counterproductive, but was powerless to do anything against. The complainants believe that while the NCP genuinely did its best to come to a mediated solution, its hands were tied as it lacked the authority to force a large company like Shell to even come to the negotiation table. The Guidelines’ voluntary nature and the absence of consequences attached to breaching of the Guidelines means that the NCP is unable to compel companies to take the OECD Guidelines seriously.

The case casts an ominous light on the current functioning of the OECD Guidelines’ specific instance mechanism and highlights the urgency of strengthening and upgrading the Guidelines in the 2010 review. In this regard, the Dutch NCP’s “Further Reflections” at the end of its final statement provide some constructive guidance.

One result of the case is that Shell Philippines has initiated an “independent” risk assessment of the Pandacan depot and invited some local residents and stakeholders to participate. However, a large group of local citizens and community leaders have questions about the “independence” of the initiative. The questions were directly posed to Shell Philippines, but the company has declined to respond.

More details

Documents

• statement

  31 August 2009

  The Dutch NCP has issued the final statement on the case

  NCP Netherlands
• press release

  31 August 2009

  Press release on final statement statement by the NCP

  NCP Netherlands
• file

  15 May 2006

  The complainants filed complaints regarding Shell's activities in both Brazil and the Philippines in one document.

  FoE International
• press release

  15 May 2006

  The complainants issued a press release about the filing of the OECD complaints against Shell for the worldwide violations of the OECD Guidelines in Brazil and the Philippines.

  FoE International