FOCO & Friends of the Earth Argentina vs. Shell Capsa

Date filed

28 May 2008

Keywords

Countries of harm

Argentina

Current status

Blocked

Sector

Oil & Gas

NCP

NCP Argentina

Allegations

FOCO and FoE Argentina filed a complaint against Royal Dutch Shell’s Argentine subsidiary, Shell Capsa, for violating domestic law and ignoring the Argentinean government’s sustainable development campaigns and policies. The complaint alleges that the irresponsible actions at the company’s oil refinery in the Dock Sud industrial area have put the health and safety of neighboring residents in danger.

The affected community, called Villa Inflamable, is home to about 1,300 families who live in extreme poverty and lack access to basic sanitation, clean water and other essential utilities. Many of these problems stem from the socio-economic vulnerability of the inhabitants of the area. For decades, they have been living with the toxic fumes produced by Shell Capsa’s oil refinery. The complaint notes that the refinery was closed for seven days in August 2007 after Argentina’s national environmental authority found multiple violations of national environmental law.

Relevant OECD Guidelines

Outcome

The case was filed simultaneously with the Argentine and Dutch NCPs because the complainants believed the violations are a systemic problem in the global operations of Shell.

Despite the existence of parallel legal proceedings, in September 2008 the Argentine and Dutch NCPs accepted the case (with the former taking the lead). The Argentine NCP prepared a list of “considerations” and asked the parties to respond; both complied.

In April 2009, three members of the NCP visited Villa Inflamable to interview residents and see the conditions.

However, Shell Capsa refused to participate in the NCP process or even recognize the NCP as the appropriate body for addressing the concerns

In May 2009, the NCP indicated that it may close the case, but offered the parties the possibility of participating in a roundtable meeting outside the specific instance process. The complainants indicated that they would be open to such a meeting.

In November 2009, the Argentine NCP announced it would close the case and publish its findings, including the fact that the company refused to cooperate. However, the case remained pending and Shell Capsa refused to respond to the complaint until the court case against it was closed.

In June 2012, the NCP again requested that Shell Capsa provide information about the actions it had taken in relation to the allegations and an update on the parallel court case.

As of May 2016 still no action had been taken by the NCP in this regard. The complainants have repeatedly asked the NCP to make a determination on the allegations and issue a final statement.

In July 2017, a new meeting was held with FOCO since the company alleged that it had already carried out social development activities in the neighborhood, continuing with its position of waiting until the end of the judicial process to make a decision on whether to participate in a dialogue with the other party, within the framework of the specific instance.

In November 2018, the company Raízen purchased the Shell Capsa refinery, so the Argentine NCP contacted Shell officials to request clarification if said purchase could somehow change the evolution of the specific instance. The NCP also contacted the claimant, FOCO.

One year later, in November 2019, the legal representative of Raízen sent a note to the Argentine NCP informing them that Shell Capsa, on that date called “Raízen Argentina SA”, had
changed its shareholding composition effective as of 1 October 1 2018. By virtue of this change, the controlling shareholder of the company became “Raízen Combustiveis SA”, a company incorporated under the laws of the Federative Republic of Brazil and domiciled in that country

In February 2021, the Argentinean NCP closed the case with reference to the case’s time frame excessively exceeded 12 months after the receipt of the complaint.

The complainants feel that the NCP failed to adequately communicate with the complainants about decision-making and time-frames. The complainants also feel that the NCP was stalling on purpose to avoid handling the complaint.