Sunday, August 12, 2007

David and Goliath - How Alfred Donovan took on Royal Dutch Shell

Independent news website has the story of Alfred and John Donovan and how their small grudge-match against Royal Dutch Shell cost that corporation billions in Sakhalin-2.

Huliq accepts citizen-journalist news reports, of which this is article is one, and penned by John Donovan himself.

The tale is ultimately written as a warning
to all large corporations to not underestimate the power of private citizens in the internet age. For a meager $4/week, 90-year old Alfred Donovan, a disgruntled marketing consultant, was able to take on Royal Dutch Shell. According to One World Trust:
Donovan's battle with Shell began over breaches of contract with regards to sales promotions campaigns he and his father devised that were used to attract customers to Shell petrol stations. Shell and the Donovans settled out of court. But it was after Shell apparently made disparaging remarks about the Donovans that John set up

Donovan "wanted the site to become a magnet for people who had a problem with the company." The site has not only cost Shell billions of dollars in Russia, but Prospect Magazine reports that the Ogoni tribe of Nigeria also use the website to spread information about Shell’s activities in the Niger Delta, and that even Shell insiders unhappy with the company use it.
It was these reported Shell insiders and the information they provided that would later prove to be crucial in deciding Royal Dutch Shell's withdrawal from the Sakhalin-2 project. Oleg Mitvol, a senior environmental official for the Russian government(a.k.a. the "Kremlin Attack Dog") admitted in a November 2006 interview with Argus Energy that information supplied by the Donovan's was crucial to his case:
Who will take Sakhalin Energy to court?
Mitvol:: "I will take them. I have documents proving that the Sakhalin Energy management was aware that the company violated technical standards, but carried on trying to meet project deadlines and refused to stop work. I am confident of winning my case in Stockholm".

What documents are these? Where are they from?
Mitvol: "I have email correspondence between executives in Sakhalin Energy management from 2002. I received these letters from John Donovan, owner of the anti-Shell website I received them on 19 October and forwarded them to Sakhalin Energy with a request for an official reply. But I have not received any reply so far. I presume that they are in shock".

How could you prove that these documents are genuine?
Mitvol: "They appear genuine and we have special services working to prove this. Once they have been verified, we will have enough evidence to take Sakhalin Energy to court. If we win, the Sakhalin 2 consortium should pay compensation for all the environmental damages — which will come to over $10bn — as well as compensation to the state for loss of revenues caused by the additional delays".

Where did you get the figure of $10bn from?
Mitvol: "This figure was calculated by a group of experts, including Rosprirodnadzor. It is a rough figure. In November, we will set up a special commission comprising Russian and international experts to assess the cost of damages".

Do you think that environmental approval for Sakhalin 2 will be revoked?
Mitvol: "I do not know. Sakhalin Energy has a strong lobby in the government. The fact that Rostekhnadzor [Russia’s technical watchdog] is reluctant to sign the document to revoke the environmental approval supports this view".
Reportedly, Royal Dutch Shell officials were stunned by the internal documents and information that Mitvol had obtained via the Alfred and John Donovan, and originally suspected industrial espionage. It was later revealed that the documents were forwarded by disgruntled or whistle-blower employees of Royal Dutch Shell.

For other significant details of the story, I forward readers to the original John Donovan article.

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