A shareholders' resolution backed by Pirc, the corporate governance consultancy, and Friends of the Earth to force Shell to establish an independent audit of its environmental and human rights policies was defeated by a margin of about eight to one following the annual general meeting in London.
Even before a poll of votes was taken at the meeting, the company had managed to defeat the motion, with more than 316 million out of 357 million proxy votes cast in its favour.
But the protesters, who claim Shell is implicated in the deaths of 2,000 people in the Ogoniland region of Nigeria and widespread pollution there, hailed a concession by the group's outgoing chairman, John Jennings, that he accepted the principle of independent verification.
Calling for shareholders' trust, Mr Jennings said Shell had for 20 years operated under a set of "clear, open and published principles and procedures in these matters" drawn up by Sir Geoffrey Chandler, a former Shell executive now supporting the protest movement.
Mr Jennings, who is due to retire next month, said the directors shared the concerns of the resolution and admitted there was great value in the principle of having the reporting process externally verified. They had a problem in auditing policies as opposed to actions, he said. "We are searching for that process. Some [group] companies are more advanced than others. The process is in its infancy."
Shell UK is today due to publish its first health, safety and environment report following on the heels of a recent group-wide HSE report. Over the next two years every group company would implement internationally recognised standards in these areas, Mr Jennings said.
He was speaking after a hotly contested but gentlemanly debate initiated by Canon Christopher Hall, of the Oxford Ecumenical Council for Corporate Responsibility.
In a passionate plea to shareholders who packed the Queen Elizabeth II conference centre, Mr Hall said they were not attacking the company but supporting the rights of human beings the world over.
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