Shell under fire for pipeline

Thursday, 16 May 2002

Shell comes under fire at AGM over $18 billion gas pipeline project in occupied territory
[London] Campaigners attending Shell's Annual General Meetings, taking place simultaneously in London and The Hague today, will highlight the reputational risk the company faces over its proposed involvement in the massive 'West - East' pipeline project in occupied East Turkestan (Chinese: Xinjiang Uighur Autonomous Region).

Royal Dutch / Shell Group is leading a consortium which is set to partner Chinese energy company PetroChina in building the 4,000km pipeline which will link East Turkestan with Shanghai. The consortium would hold a 45% stake in the project, with the remainder retained by 90% state owned PetroChina. The deal, worth an estimated US$18 billion, includes exploration and extraction of gas in the Tarim Basin as well as operation of the pipeline. Tibet campaigners oppose Shell's involvement in the project out of solidarity with the Uighur people, and because it provides investment capital for PetroChina, the company that is also exploiting the natural gas resources of Tibet.

Dr Enver Tohti, an exiled Uighur living in London said. "This project is part of China's attempts to consolidate political control of my country, which it has occupied for over half a century. My people want development, but not like this." Alison Reynolds, Director of Free Tibet Campaign added. "As the Tibetan people are finding with PetroChina's operations in Tibet's Tsaidam Basin, these major projects do not bring benefits to the population from whom the resources are stolen, but serve as a mechanism to encourage more Chinese people into the area."

Shell has signed a joint agreement with United Nations Development Programme to carry out social impact assessments for the project, but there are fundamental difficulties in conducting meaningful impact assessments in a country where freedom of speech is limited and opposition to government priorities may be construed as political dissent. In 2000, the World Bank's independent inspection panel visited Tibet where social impact assessments for a resettlement project had been conducted, apparently to Bank standards. The panel found a "climate of fear" in the area and the assessments were totally discredited.

Shell's Business Principles maintain that the company "will conduct business as responsible corporate members of society√Čto express support for fundamental human rights in line with the legitimate role of business and to give proper regard to health, safety and the environment consistent with their commitment to contribute to sustainable development." However Shell may be asked by PetroChina to sign the final agreement for the West - East pipeline before it is in a position to know whether it will be possible to carry the project out in a way that does not undermine these principles. The only way for Shell to preserve its reputation is to abandon the project.

For more information contact: Alison Reynolds, 020 7833 9958, Mobile 07711 843884

The PetroChina campaign coalition are: Free Tibet Campaign, International Campaign for Tibet (ICT), Milarepa Fund, Students for a Free Tibet and the US Tibet Committee. Attending the Shell AGM in The Hague are Tsering Jampa, ICT-Europe and Erkin Alptekin, General Secretary of UNPO (Unrepresented Nations and Peoples Organisation)


The West East pipeline is a major component of China's 'Western Development Plan', which also includes projects in Tibet, such as the Sebei - Lanzhou gas pipeline which PetroChina has already built and is operating, taking natural gas from Tibet's Tsaidam Basin for industrial growth in eastern China. Shi Xingquan, vice president of PetroChina told China Daily in December 2001 that the Seibei pipeline would ultimately connect to the West - East pipeline to 'ensure a sufficient gas supply of both pipelines'. The West - East pipeline may eventually allow China to tap into the vast gas fields of Russia or Turkmenistan.

The other members of the consortium led by Royal Dutch / Shell Group are Hong Kong and China Gas Co Ltd and Russia's largest gas company Gazprom. Shell has expressed an interest in getting ExxonMobil, which was a rival for the project at one point, to join the consortium. BP withdrew from the bidding process in September 2001, stating that it could not "add value" to the project. Tibet campaigners expressed the view that this was in recognition that the project would be in conflict with BP's commitment to human rights. BP retains a 2.2% stake in PetroChina; an investment that cost the company $578 million. Tibet campaigners have previously tabled a shareholder resolution at the BP AGM, instructing BP's Directors to divest from PetroChina. The resolution received the backing of shares valued at the time at £3.8 billion.

Like Tibet, East Turkestan has been occupied by China for more than half a century. During that time the human rights abuses and cultural persecution of Tibetan and Uighur peoples have been appalling. Political dissent is ruthlessly suppressed and torture is commonplace.

PetroChina and the Chinese state are exploiting the natural resources of occupied territories that rightfully belong to people under subjugation. These oil and gas projects are part of China's strategy to consolidate political control of the so-called 'Western Regions'. Tibetans and Uighurs will derive little or no benefit from the exploitation of their resources, which will facilitate population transfer of Chinese into these areas and pose a significant threat to their culture and environment. In other parts of the world, oil, gas and mineral extraction projects have often exacerbated political tensions and led to bloody conflicts. Tragic events in the Niger Delta, in Indonesia and in Colombia amply illustrate this. As the US State Department recently noted: "Where indigenous peoples clash with development projects, the developers almost always win".

The people of Tibet and East Turkestan want development and an end to decades of poverty and deprivation that the Chinese occupation has brought. But the oil and gas projects are not designed for their benefit. They are designed for the consolidation of Chinese control over the region, and for the benefit of Chinese in the east. In September 2000, Jiang Zemin said that developing the west "will help develop China's economy, stabilise local society and contribute to China's unity" (China Daily, 18 September 2000). Li Dezhu, a Minister of the State Nationality Affairs Commission in a paper published in a Party Journal in June 2000, wrote that the Plan would"thoroughly recognise and accelerate economic and social development of the western region and the minority nationalities in particular, thoroughly recognise the extremely important significance it has for solving China's current nationality problems, and elevate ideological unification to the policy and planning of the Central Committee. (Qiu Shi, 1 June 2000)

Exiled Uighur communities have called on Shell not to help PetroChina exploit their resource heritage. Through this partnership with PetroChina, Shell will be assisting China to realise her political objectives.