 SHELL
Royal Dutch/Shell Group of Companies
Statement of General Business Principles
 Introduction |
The following reaffirms the general business principles that govern how each of the Shell companies, which make up the Royal Dutch/Shell Group of Companies conducts its affairs.
The Group is a decentralized, diversified group of companies with widespread activities, and each Shell company has wide freedom of action. However what we have in common is the Shell reputation. Upholding the Shell reputation is paramount. We are judged by how we act. Our reputation will be upheld if we act with honesty and integrity in all our dealings and we do what we think is right at all times within the legitimate role of business.
Shell companies have as their core values honesty, integrity and respect for people. Shell companies also firmly believe in the fundamental importance of the promotion of trust, openness, teamwork and professionalism, and in pride in what they do.
Our underlying values determine our principles. These principles apply to all transactions, large or small, and describe the behaviour expected of every employee in every Shell company in the conduct of its business.
In turn, the application of these principles is underpinned by procedures within each Shell company which are designed to make sure that its employees understand the principles and that they act in accordance with them. We recognize that it is vital that our behaviour matches our intentions.
All the elements of this structure - values, principles and the accompanying procedures -are necessary.
Shell companies recognize that maintaining the trust and confidence of shareholders, employees, customers and other people with whom they do business, as well as the communities in which they work, is crucial to the Group's continued growth and success.
We intend to merit this trust by conducting ourselves according to the standards set out in our principles. These principles have served Shell companies well for many years. It is the responsibility of management to ensure that all employees are aware of these principles, and behave in accordance with the spirit.
| Objectives |
The objectives of Shell companies are to engage efficiently, responsibility and profitably in the oil, gas, chemicals and other selected businesses and to participate in the search for and development of other sources of energy. Shell companies seek a high standard of performance and aim to maintain a long-term position in their respective competitive environments.
| Responsibilities |
Shell companies recognize five areas of responsibility:
 To Shareholders |
To protect shareholder's investment, and provide an acceptable return.
| To customers |
To win and maintain customers by developing and providing products and services which offer value in terms of price, quality, safety and environmental impact, which are supported by the requisite technological, environmental and commercial expertise.
| To employees |
To respect the human right of their employees, to provide their employees with good and safe conditions of work, and good and competitive terms and conditions of services to promote the development and best use of human talent and equal opportunity employment, and to encourage the involvement of employees in the application of these principles within their company. It is recognized that commercial success depends on the full commitment of all employees.
| To those with whom they do business |
To seek mutually beneficial relationships with contractors, suppliers and in joint ventures and to promote the application of these principles in so doing. The ability to promote these principles effectively will be an important factor in the decision to enter into or remain in such relationships.
| To society |
To conduct business as responsible corporate members of society, to observe the laws of the countries in which they operate, to express support for fundamental human rights in line with the legitimate role of business and to give proper regard to health, safety and environmental consistent with their commitment to contribute o sustainable development.
These five areas of responsibility are seen as inseparable. Therefore it is the duty of management continuously to assess the priorities and discharge its responsibilities as best it can on the basis of that assessment.
| Economic Principles |
Profitability is essential to discharging these responsibilities and staying in business. It is a measure both of efficiency and of the value that customers place on Shell products and services. It is essential to the allocation of the necessary corporate resources and to support the continuing investment required to develop and produce future energy supplies to meet consumer needs. Without profits and a string financial foundation it would not be possible to fulfill the responsibilities outlined above.
Shell companies work in a wide variety of changing social, political and economic environments, but in general they believe that the interests of the community can be served most efficiently by a market economy.
Criteria for investment decisions are no exclusively economic in nature but also take into account social and environmental considerations and an appraisal of the security of the investment.
| Business Integrity |
Shell companies insist on honesty, integrity and fairness in all aspects of their business and expect the same in their relationships with all those with whom they do business. The direct or indirect offer, payment, soliciting and acceptance of bribes in any form are unacceptable practices. Employees must avoid conflicts of interest between their private financial activities and their part in the conduct of company business. All business transactions on behalf of a Shell company must be reflected accurately and fairly in the accounts of the company in accordance with established procedures and be subject to audit.
| Political Activities |
| Of companies |
Shell companies act in a socially responsible manner within the laws of the countries in which they operate in pursuit of their legitimate commercial objectives.
Shell companies do not make payments to political parties, organizations or their representatives or take and part in party politics. However, when dealing with governments, Shell companies have the right and the responsibility to make their position known on any matter which affects themselves, their employees, their customers, or their shareholders. They also have the right to make their position known on matters affecting the community, where they have a contribution to make.
| Of employees |
Where individuals wish to engage in activities in the community, including stading for election to public office, they will be given the opportunity to do so where this is appropriate in the light of local circumstances.
| Health, Safety and the Environment |
Consistent with their commitment to contribute to sustainable development, Shell companies have a systematic approach to health, safety and environmental management in order to achieve continuous performance improvement.
To his end Shell companies manage these matters as any other critical business activity, set targets for improvement, and measure, appraise and report performance.
| The Community |
The most important contribution that companies can make to the social and material progress of the countries in which they operate is in performing their basic activities as effectively as possible. In addition Shell companies take a constructive interest in societal matters which may not be directly related to the business. Opportunities for involvement - for example through community, educational or donations programmes - will vary depending upon the size of the company concerned, the nature of the local society, and the scope for useful private initiatives.
| Competition |
Shell companies support free enterprise. They seek to compete fairly and ethically and within the framework of applicable competition laws; they will not prevent others from competing freely with them.
| 9. Communication |
Shell companies recognize that in view of the importance of the activities in which they are engaged and their impact on national economies and individuals, open communication is essential. To this end, Shell companies have comprehensive corporate information programmes and provide full relevant information about their activities to legitimately interested parties, subject to any overriding considerations of business confidentiality and cost.
| Our Early Years in Venezuela |
The Shell Group operations and exploratory campaigns in Venezuela through the Caribbean Petroleum Company, in a rural context in which coffee was the main export product. In 1914 the successful drilling of the Zumaque 1 well in Mene Grande, Zulia State, was finalized, and became the first commercial well. By 1915, one hundred and twelve oil fields has been discovered in Venezuela. In 1975, Shell reached a production rate of one million barrels of crude oil per day.
| Urdaneta West Field |
The Urdaneta West (UDW) Opertaing Services Agreement (OSA) was signed with Lagoven, today PDVSA, on the 19th November 1993. The area covered by the Agreement is located in the Northwest section of Lake Maracaibo, and covers a total of 1500 km². The nearest town is Barranquitas, which is located on the coast of the area, and is a fishing community some 80 km. South of the city of Maracaibo. All of the area covered by the Agreement is offshore in Lake Maracaibo, with water depths ranging from 0 to 35m, on average 15m.
A total of 52 wells were drilled in this area between 1956 and 1986, verifying the presence of three main reservoirs. Only one of these - the Rio Negro reservoir - had been commercially developed. With the signing of the OSA, SVSA began to operate 7 active wells in the Rio Negro reservoir. Other wells in the area had been either abandoned or suspended by Lagoven.
The OSA established a 20 year development period for the area.
| Health, Safety and Environment Management System (HSE-MS) |
Shell Venezuela, S.A., is committed to carrying out its operations in a manner consistent with sustainable HSE. To this end, the company has established its policies, procedures, legal obligations and competence requirements in order to continually improve its performance and keep risks as low as possible (ALARP).
Shell Venezuela, S.A. complies with all Venezuelan and International regulations, and has improved its HSE management by setting up a management system based on business principles and elements, which permits an effective control of the dangers inherent in its operations.
The HSSE-MS is defined as:
"The company structure, responsibilities, practices, procedures, processes and resources for implementing health, safety, environmental and security management".
The objectives of the HSSE-MS are:
· To demonstrate that business process controls are in place to ensure that hazards and effects to health, safety, security and the environment are systematically identified, assessed, controlled and recovery measures put in place should control de lost.
· Constant monitoring of the development of the actions derived from the application of the System.
· Identification of the areas of health, safety, security and the environment which should be improved.
| Occupational Health |
The Health, Safety and Environment Management System is applied to Occupational Health through the Health Risk Assessments, where all physical, chemical, biochemical, biological and psychological agents are identified and assessed, setting control measures in order to keep them as low as reasonably practicable. During 1999, Health Risk Assessments were carried out in our operations areas.
Relevant health information has been developed and distributed for our employees, their families and the community, such as: Food Hygiene, dengue fever, HIV and Acquired Immunodeficiency Syndrome (AIDS).
Our activities on Lake Maracaibo require a high standard of health care for its employees and to achieve this it has been necessary to define a medical system designed to cope with particular problems posed by a remote and dangerous environment. Offshore Medicine is the health care available to all those who work offshore. It includes emergency care, hygiene and the problems caused by the work environment.
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| Industrial Safety |
Building on the solid performance gains of the previous year, 1999 was a year of continuous improvement. This built on the roll out of the Health, Safety and Environment Cases during the latter half of 1998, which helped to include the Hazard and Effects Management Process (HEMP) as a key part of every work activity.
During 1999, Shell Venezuela, S.A. achieved a combined Lost Time Incident Frequency (LTIF) of 1.7 and a Total Recordable Case Frequency (TRCF) of 3.4 against set targets of 2.4 and 5.0 respectively. A similarly dramatic reduction was apparent in the severity of incidents reported: from a median level in 1999 according to the Shell Group Risk Assessment Matrix.
The familiar theme of "Trabaja con Seguridad tu Familia te espera" (Work Safely, your Family awaits you) has retained its effectiveness as a means to implement the "Blues Letters" of personal Health, Safety and Environment empowerment included as a central part of our Policy to allow all personnel to stop any activity if an unsafe act, condition or procedure is detected.
SVSA has successfully implemented STOP (Safety training observation program) in its installations and in its main contractors sites, contributing to the results sown before, and helping to change the worker's attitudes, and behaviour towards Safety. Additionally, SVSA has produced several in-house videos on safety related matters such as: HSE Living Policy, Scaffolding, Confined Spaces, Slips, Trips and Falls, Electrical Safety, and so on, further strengthening the awareness and competence aspects needed for hazardous tasks.
SVSA strives to improve its Safety performance continuously. In fact, during the last three years we have consistently beaten our targets achieving low incident rates in the Shell Group.
To SVSA, it is obvious that the different initiatives we have promoted have all paid off, most notably: staff empowerment, the family oriented safety campaign, management visibility, single point responsibility and accountability and requirements for contractors HSE Plans.
| Environment |
Declarations of Support for the HSE Policy
Shell Venezuela, S.A., will seek to reduce atmospheric emissions, liquid effluents and dangerous and non-dangerous solid wastes in its operations, and where practicable, will eliminate them.
We are committed to:
·Continue to improve our environmental performance
·Prevent contamination
·Comply with environmental legislation, and other regulations and norms as set out in the HSE Management System
·Guarantee the monitoring and audit of environmental matters
·Establish objectives and targets, taking into account viable and available technology
·Publish details of our environmental performance
In Shell we are all committed to an environmental performance we can be proud of. In all our activities we always take a responsible approach, and our environmental management policy applies globally. This does not mean that we operate in exactly the same way everywhere, but we do have minimum expectations for our major risk areas.
We also have assurance processes in place to confirm that the policy is being followed and that the minimum expectations are being met. These include using independent experts to verify our HSE performance data and to certify the environmental management systems of our major installations.
Environmental Monitoring
During the year, several environmental monitoring activities area carried out in our operations, that involve air emissions characterization, air quality assessment in the community of Barranquitas, and jointly with the ICLAM (Institute for the Conservation of the Lake Maracaibo Basin) and the principal operating companies in the Lake Maracaibo a regional monitoring study is being carried out.
Biodiversity
Since 1995, Shell Venezuela, S.A., through its Environmental Department, has supported the investigation project developed by the General Fauna Department of the Ministry of the Environment and Natural Resources (MARN) concerning some of the ecological aspects of sweet water dolphins.
As a result of this support, MARN now has good information on the lake dolphin (Sotalia fluviatilis), one of two kinds of sweet water dolphins present in Venezuela, which are considered in a "vulnerable" state as regards population.
| Environmental Performance |
Atmospheric Emissions
Atmospheric emissions such as carbon dioxide, sulphur oxides and nitrogen oxides, among others, are generated from fuel combustion and venting processes that occur in SVSA's operations and can contribute to increment phenomena such as Global Warming and Acidification, as well as local air contamination.
Spills
SVSA monitors all spills, which take place at its facilities, whether of hydrocarbons (crude oil and its derivatives), chemicals, due to equipment failure, human error, corrosion, sabotage/theft and others, such as adverse weather conditions and other natural phenomena.
During 1996 and 1997, as a result of the start up of operations in the Urdaneta West Field, the highest number of spills occurred. In subsequent years, a downward trend is observed as a result of the implementation of controls, including training programmes and environmental awareness programmes for SVSA and contract personnel.
Waste
During 1999 the controlled disposal of hazardous waste generated by SVSA increased by 89% applying environmentally safe and approved solutions such as: oil based cuttings/mud treatment using a thermal desorption method; disposal of water based muds into the Gulf of Venezuela; disposal of contaminated water/fluids through chemical treatment and further injection into the production water stream sent to PDVSA; spiking of spent lube oil into the production stream and recycling of lead batteries.
Use of energy
SVSA monitors the use of energy in its industrial facilities and office areas in order to minimize and thus utilize energy resources in a sustainable way.
As a result of the decrease in drilling activities, for the 1998-1999 period, there was a 24% reduction in the use of energy.
| ISO 14001 Certification |
SVSA is at this time in the process of obtaining ISO 14001 external certification, which in Europe is equivalent to the Eco-Management and Audit Scheme (EMAS); it is expected that certification will be obtained by the end of this year, with a commitment to maintain certification in future.
In addition, these systems allow SVSA to maintain a better control of its operations, which implies a reduction of the risk of internal or third party fatalities, environmental damage control, and thus places the company on the way to reaching its goal of becoming the company of first choice due to its environmental performance.
For this purpose, the process of implementation of the HSSE-MS, started in 1998, contains an environmental ISO-14001 certification.
Employee of the Month
The health, Safety and Environment Policy of Shell in Venezuela is very clear when it states that "all employees must plan and develop their daily activities according to the HSE policy, and activity must be suspended when the employee believes hat it can not be carried out in accordance with the policy, the employee must stop the activity and immediately advise the supervisor".
This authorization and responsibility on the part of the employees seems very simple to carry out. Nevertheless the company started a HSE campaign, which had as its principal target to make clear from the highest authority and all the way through the company, its commitment and leadership regarding HSE. As well as the total stoppage of work when risk is involved, one of the successful and exemplary programmes for spreading safety behaviour amongst our employees and contractors is the prize given to "The HSE Employee of the Month".
The fact that an employee can take the initiative to communicate the HSE standards to the different contractors and subcontractors in a rapid and effective way, and can follow up and control this information: the communication of the marine operations standards, the organization and communication of all emergency procedures in buildings, adaptation and elevation of the diving standards both for the organization and for contractors, are all powerful examples of the effectiveness of the programme.
As well as the special mention, the employee becomes a part of the permanent gallery of prize World Investment News Ltdrs. This generates motivation, pride and a sense of belonging to the employee and to the company, which also guarantee that the family remains safe, healthy and united.
| Sustainable Development |
Community Relationships
Since the beginning of Shell Venezuela S.A.'s activities in the reactivation of the Marginal Urdaneta West fields, in Lake Maracaibo, a parallel social investment project was initiated in the Community of Barranquitas, in Zulia State, which is very close to the area of our operations. We have called it the "Barranquitas Project", and it has been designed to guarantee Sustainable Development.
Jointly with the community, critical areas were identified which requires immediate attention. Based on this, a plan was designed which has been carried out under a tripartite agreement (Barranquitas Community, local Authorities and Shell Venezuela, S.A.) The plan includes the educational aspect through total reconditioning of the School and the training and professional improvement of teachers and the students, as well as a Cultural House and other strategic sites.
It is worth highlighting the achievement of the Foundation for the Organization and Development of Barranquitas (FUNDAORDEBA). The local young people of the community to improve their standard and quality of living. These youngsters were directly involved in the construction of the FUNDAORDEBA headquarters, in which workshops, courses and other formation activities are continually taking place. These training activities will continue thanks to agreements with non-governmental organizations, such as "New Dawn", amongst others, and public institutions.
It is planned to continue the project, giving special attention to health requirements. We will begin with the relocation and construction of the Out Patients Clinic and all that this implies. Furthermore, we will continue our commitment to link these activities to the recently inaugurated Hospice "Amor y Fe", located in San Francisco, Zulia State, a worldwide pioneering institute for the treatment of people suffering from Huntington's Disease (St. Vitus' Dance), which is an hereditary disease, affecting many of the inhabitants of the Barranquitas community.
Huntington's Corea is an hereditary disease which causes the patient to lose control of the voluntary muscles, at the same time as it destroys the mind, and memory causing the sufferer to lose the ability to think and reason, and the capacity to walk and eat. This terrible disease is found in various communities in Zulia State, with the greatest concentration being in the community of Barranquitas, in the Rosario Municipality of Perija, and the San Luis district of the Municipality of San Francisco.
For the past 20 years, a group of researchers from different countries, headed by scientist Dr. Nancy Wexler have been studying this disease closely. Amongst the latest discoveries is the identification of the gene which produces the disease, which is a very important breakthrough in this investigation: there is much more work to be done. But it is now possible to envisage a cure in the future.
Given that the "Barrabquitas Project" collaborates in attending the health requirements of the community, a joint strategy has been formed between the Association of Friends of Sufferers of Huntington's Corea, a non-profit Venezuelan civil society, and the Hereditary Diseases Foundation located in Coumbia, USA, to complete, open and put into operation the Rest Home "Love and Faith", located in San Francisco, Zulia State, a world wide pioneering institute for so as Patients who are critically ill are cared for so as to attend them in a whole body way, that is not only the medical and investigation aspect, but also nutrition, housing, clothing, treatment and education, this last not only for the victims but also for their family members and the community itself, which tends to reject and isolate the victims because of the peculiar effects and isolate the victims because of the peculiar effects which this disease produces in the patients.
| Support to Local Industry |
Shell Venezuela, S.A., has aimed to promote the participation of local industry in a national context in the bidding processes, with the purpose of supporting the economic development of the region and the companies, contractors, suppliers and related businesses, and has adapted its working systems to demanding and high standards in general, including those of Health, Safety and the Environment. In 1999 the local content in the awarding of contacts reached over 90% and taking into account the amounts awarded through contracts and purchase orders reached 70%.
What does Sustainable Development mean to Shell Venezuela, S.A.?
SUSTAINABLE DEVELOPMENT: Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.
-United Nations World Commission on Environment and Development
The Shell Companies in Venezuela are committed to contribute to sustainable development through the integration of economic, social and environmental considerations in the decision making process in their respective business activities. In addition to complying with legislation and exercising environmental due diligence, we will continuously improve the overall environmental performance of our operations and products while ensuring short and long term commercial success. We will set measurable targets and reports our progress on a regular basis. All employees and contractors are committed to and accountable for performing their activities in line with out sustainability principles. |
