Shell discovers more supplier code breaches, but terminates fewer deals

13 April 2012

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14 April 2012 | Adam Leach

Oil and gas supermajor Shell cancelled 11 contracts with suppliers and recorded 226 violations of its code of conduct during 2011.

The figures, reported in its latest sustainability report, showed while the number of violations increased from 205 in 2010, the number of contracts cancelled dropped from 40 in 2010.

The report said: “We are working with our existing suppliers to implement the Shell Supplier Principles. Beyond what we consider minimum requirements, we will conduct due diligence checks starting in 2012 to identify the level of compliance of our suppliers and contractors with the principles.”

These supplier principles include using energy and natural resources efficiently, having policies against forced labour, building local supplier capability and criteria covering health and safety and the environment.

The data section of the report also showed the number of contractor fatalities fell from 12 in the previous year to five in 2011. It also revealed the company had increased the number of policies in place to deal with child and forced labour. Shell increased the percentage of countries where its suppliers operate that have policies around forced labour from 95 to 97 per cent, and from 96 to 97 per cent in the area of child labour.

The company also said it would increase the proportion of natural gas it produces, due to rising demand for energy and pressure to reduce carbon dioxide emissions.

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