Read the Final Statement published by the NCP 17 February 2021: English

On 28 May 2008, the NGOs Institute for Participation and Development of Argentina (INPADE) and Foundation Friend of the Earth of Argentina (FOCO) submitted a specific instance to the Argentine and Dutch NCPs alleging that Shell C.A.P.S.A. was breaching the general policies, disclosure and environment provisions of the Guidelines. Specifically, issues related to the consequences of toxic fumes coming from the oil refining of the SHELL CAPSA refinery over the inhabitants of “Villa Inflamable,” located in the district of Avellaneda, on the southeastern border of the city of Buenos Aires. This is a highly vulnerable community, with scarce resources and low income, which also suffers from lack of basic health conditions and sanitation infrastructure.

On 9 December 2008, the Argentine NCP accepted the specific instance as the lead NCP with the Dutch NCP acting as support. Separate meetings were held with both parties. From the outset, SHELL did not accept the NCP's good offices, arguing that doing so could affect its position in the Argentinean Federal Courts as a parallel judicial process examining the same matters was already underway. The enterprise requested the NCP put on hold the proceedings until resolution was reached on the ongoing judicial case.

The Dutch NCP suggested that the parties hold a dialogue on the issues not covered by the judicial case, tackling the issues of ‘supra legal’ nature. The parties however, although assisted by the Argentinian NCP, could not reach an agreement on the scope and content of a possible dialogue.

In February 2009, in view of the insurmountable differences between the parties, both the Argentinean and Dutch NCPs decided that the best option was to await the decision of the courts. The NCP periodically requested updates from the company and, in November 2015, INPADE and FOCO requested the closure of the specific instance due to the lack of progress in establishing constructive dialogue. The NCP left the possibility to use the NCP mechanism as a channel for dialogue open.

In November 2018, Raízen, a Brazilian energy company, purchased the SHELL CAPSA refinery. The ANCP contacted SHELL officials to request clarification regarding the operation of the refinery in order to determine if said purchase would change the evolution of the specific instance. The ANCP also informed the submitter of the sale. A legal representative of Raízen sent a note to the Argentine NCP that SHELL CAPSA changed its shareholder composition with the controlling member, Raízen Combustiveis SA, domiciled in and incorporated under the laws of the Federative Republic of Brazil.

Given that the company is no longer the owner of the refinery presented in the specific instance, an offer of good offices was not accepted by both parties, and considering a long time had elapsed since the reception of the case, the ANCP considers continuation of the case would be unlikely to be productive. The NCP therefore deemed it appropriate to move to issue a final statement and conclude the case without agreement between the parties.

The ANCP encouraged the parties to consider how to generate the necessary conditions to engage in dialogue and work constructively to resolve the issues raised in the specific instance. The ANCP further recommended that MNEs adopt proper conduct that acknowledges and works to prevent, mitigate, and respond to a broad range of risks involved in business. The ANCP indicated to both parties that it would be available to respond to any queries regarding the Guidelines. 

#caused #environmentaldisclosure #pollutionandwastemanagement #oilandgas #parallelproceedings #localsubsidiary #recommendations